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AUTOBYTEL.COM ACCREDITED DEALERS' COMMITMENT TO BUSINESS MODEL ENABLES THEM TO MAINTAIN ENTREPRENEURIAL SPIRIT, WHILE DELIVERING HIGH CUSTOMER SATISFACTION MARKS
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| Autobytel.com Accredited Dealers discuss the bottom-line implications of the Autobytel.com business model at the National Automobile Dealer Association show. |
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Jun 10, 2004 22:40:54 |
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Description:
San Francisco, CA - February 7, 1999
Autobytel.com Accredited Dealers outlined the tangible benefits of Autobytel.com for both dealers and consumers today at the National Automobile Dealers Association (NADA) show in San Francisco, CA. On hand to discuss the implications of the Autobytel.com business model were three members of the Autobytel.com Dealer Advisory Board: Doug Waikem, President, Waikem Auto Group (Columbus, OH); Tom Vann, Owner/General Manager, Hillsdale Chrysler-Plymouth-Dodge-Jeep (Hillsdale, MI); and Al Babbington, Vice President of Marketing, First America Automotive Group (San Francisco, CA).
Commitment Ensures Viability of Dealership
Autobytel.com has been offering forward-thinking automobile dealers a new way to sell cars and trucks since its inception in 1995. From its beginning, Autobytel.com has focused on revolutionizing the automotive sales process by creating an entirely new business model for selling vehicles, one that utilizes technology to lower a dealer's overall costs while allowing cost savings to be passed onto consumers.
"We've long felt our business model is the key to the future success of dealers in North America," said Mark W. Lorimer, President and CEO of autobytel.com inc. "According to various research firms, dealer consolidation will continue at an increasing rate over the next decade. I predict that the dealers left standing are going to be the ones who have reduced their expenses to increase their profitability. Dealers who believe they can simply maintain the status quo by increasing gross revenues and passing their expenses onto the consumer are wrong."
"When history looks back at what Autobytel.com brought to the table-it won't just be Autobytel.com's superior technology that's considered, it will be the innovative selling process. It's what we've all been striving for," said Doug Waikem, owner of the $100 million Waikem Auto Group, one of the first Autobytel.com Accredited Dealers.
The Autobytel.com business model requires that dealers completely commit to the program by establishing an Autobytel.com department within their dealership. The department is staffed by salaried, rather than commissioned, Autobytel.com Managers who have been trained at Autobytel.com University and are capable of quoting competitive pricing, assuring a time-saving, hassle-free buying experience for the consumer. Nearly four years after Autobytel.com's launch, demonstrating the real benefits of this sales model to both dealers and consumers is finally possible.
Reduced Expenses = Satisfied Customers and Increased Profits
According to the company's calculations, a dealership that sells 100 vehicles via Autobytel.com spends approximately $21,400 on personnel, marketing and delivery costs, while selling the same number of vehicles through the traditional process costs nearly $126,500 (according to NADA, J.D. Power and Associates, and Autobytel.com dealer data).
Waikem, Vann and Babbington report that the implementation of the Autobytel.com business model has enabled them to significantly lower expenses-on average, they are tracking a 48% reduction in marketing and personnel expenses on vehicles sold via Autobytel.com.
Due to this savings, dealers can offer consumers much more competitively priced vehicles, while still retaining a fair profit margin. Just as important, Autobytel.com Accredited Dealers are able to create long-term, customer-service oriented relationships with consumers, insuring the dealership's viability for the next century.
"The Autobytel.com business model lets us offer Autobytel.com customers a lower price, by cutting our expenses considerably through different compensations plans, minimal marketing expenses and even a faster turnaround on vehicles, which reduces the interest we pay," explained Waikem.
Consumers Biggest Winners
Autobytel.com has changed the way America buys cars. In fact, the change has been so dramatic that some manufacturers are enacting one-price selling policies in an attempt to deliver the same "no-haggle, no-hassle" experience found when buying through Autobytel.com. This move by manufacturers effectively takes the power away from both consumers and dealers. Instead of rewarding dealers who have control of their businesses and are able to deliver lower prices than the dealership down the street, manufacturers are demanding that consumers support dealer operations by paying a fixed price.
"When shopping for any item-be it groceries, appliances or cars-consumers want to be an active participant in the process. They need to know that they received a great deal, not that they paid a fixed price determined by the manufacturer of that product," said Lorimer. "When consumers choose to purchase via Autobytel.com, they have all the tools necessary to make a smart choice. Similarly, dealers who understand the business model and are able to profit while delivering high customer satisfaction experience a certain amount of pride that will never be found at a one-price shop."
Autobytel.com has shown that the dealers who want to succeed and prosper are ready for a change-and they don't need to be forced into it by new one-price selling practices. Trend-setting dealerships realize that customer satisfaction is ultimately what will keep them in business.
"Consumers are rapidly embracing the concept of shopping via the Internet," said Al Babbington, Vice President of Marketing of First America Automotive Group, a group of over 20 dealers in Northern California. "We are seeing a direct correlation between the increase in purchase request volume from Autobytel.com and the decrease in foot traffic in our showrooms."
Customer testimonials arrive daily touting the benefits on online car buying: "I can't even imagine not using Autobytel.com," said Dan Waterman, a repeat Autobytel.com customer at Waikem Motors. "The process was easy, straightforward, and the price was nearly $5,000 less than what I was quoted at my local dealership."
A Win-Win for Consumers and Dealers
Successful businesses make money and have profits. The trick is do it more efficiently so everyone wins and the profits are not at the expense of the consumer. As Tom Vann of Hillsdale Chrysler-Plymouth-Dodge-Jeep says, "You win the game because you know how to control your expenses."
"Autobytel.com customers don't want to drive us out of business-that's not their goal," says Vann. "All they want to know is that they got the best deal possible-that no other dealership could beat the deal. If, in reality, we are still able to net more profits than the dealer down the street, our customers are just as happy. That's what Autobytel.com enables us to do."
"Selling cars this way is a win-win situation," said Autobytel.com's Lorimer. "In order for the dealerships to stay in business, they must remain profitable. Though most consumers believe that dealerships make thousands of dollars on each new car they sell, the reality is that they are lucky to clear $100 on a new car sale. That's why Autobytel.com's unique business model is so important to the future of the economy as a whole."
According to Lorimer, 31% of the value of a car is tied up in distribution costs. This means that worldwide, almost $310 billion is spent getting a car from the factory to the consumer's driveway. Autobytel.com's ultimate goal is to move some of those dollars back into the economy and put them to work. With the Internet's ability to disintermediate costs, huge amounts of capital are freed up to be put to use elsewhere.
Success Depends on Education
Tom Vann has long been an evangelist of the concept that reducing expenses will ultimately lead to greater profitability and long-term customer satisfaction. In fact, Vann has always espoused the concept of lowering expenses and runs his traditional sales in the same up-front, consumer-oriented manner in which he runs his Autobytel.com department. Still, the inherent efficiencies in the Autobytel.com business model have enabled Vann to reduce his marketing and personnel costs on Autobytel.com sales by 34%. "In the past, our concepts for a profitable dealership model fell on deaf ears," says Vann. "With the advent of the Internet, and, in particular, Autobytel.com, more and more dealers have begun to pay attention to the way we run our dealership."
"The re-training of the North American dealer body is no doubt one of the most challenging missions Autobytel.com has faced since it launched," said Lorimer.
In order to maintain its commitment to this mission, Autobytel.com was quick to develop dealer training programs that educate dealers on how to get the most from the Autobytel.com business model. Monthly training sessions, combined with field representation and the company's highly sophisticated Dealer Real Time®U.S.Pat.Pend (DRT) system, make Autobytel.com the leader in dealer education. This position has enabled the company to maintain its lead in both dealer and customer satisfaction. |
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