Digital Dealer
By Jim Roche
There's a buzz in my computer these days, and it's not the hum of the hard drive. It's the buzz about that new digital phenomenon: the e-marketplace. So, what's all the buzz about and what will its impact be?
If the Internet is an electronic superhighway, then the e-marketplace is an electronic bazaar. It's a place (portal) where businesses with disparate practices can come together, exchange ideas, barter for raw materials and goods, adopt standardized processes to cut costs and forge new solutions to old problems.
The first players in the automotive industry's e-marketplace were the dot-com companies that allow consumers to gather information on automotive features, availability and prices. In some cases, the actual sales, financing, and insurance transactions are even conducted over the Internet.
In response to these dot-coms, Ford/General Motors/Daimler Chrysler recently conceived their own vision of an online business-to-business exchange. Proposed in February 2000 (and already reportedly being scrutinized by the Federal Trade Commission), this enterprise will be open to all auto manufacturers around the world, in addition to their respective suppliers, partners and dealers.
All this aside, many analysts are skeptical of the long-term success of e-marketplaces. A recent report from the Peppers and Rogers Group suggests these Godzilla-like marketplaces will only succeed if they find vast numbers of both buyers and sellers willing to share information and participate in standardized processes over the long haul.
But one thing is certain: dealers need not fold up their tents in this virtual bazaar and go home. In fact, the dealer is more important today than ever. Where brand loyalty was once tied to reliability and design, today it emanates more from the total ownership experience. And who has control of the ownership experience if not the dealer? With technological support, the nation's 22,000 franchised auto dealers should be able to leverage one-to-one communication and win the e-commerce game. To do so, they must target sets of customers, identify their needs and develop tailored marketing campaigns-and then make sure their ownership experience is totally satisfying.
Building customer loyalty via constant contact with customers should be the present mission of the automotive dealer within the e-marketplace. Though most dealerships don't have the market and technological know-how to do this, some of the tools to forge new relationships with their customers via one-to-one marketing efforts are already there. Today, a dealer can go to a click-and-mortar site like carabunga.com and fulfill any one-to-one marketing need based on actual consumer behavior and other factors: For example, perform analysis on a customer database to identify a target group (1998 Taurus owners with more than 30,000 miles who have visited a dealership in the last year) and then design an e-mail, letter, postcard or teleservice promotion customized for that group. With a click of a button, the request is fulfilled and delivered to the target consumers within a matter of hours.
In the future, however, as dealers consolidate into dealer groups or band together based on region or other commonalities, initiatives in the e-marketplace will change to further streamline the printing business supply chain and other communications media and reduce one-to-one marketing costs. Portals that dealers use today to locate parts and used cars will evolve into resources for locating and getting bids on marketing and direct mail services-or training and consulting resources. Eventually, even buying and selling dealerships may occur in the e-marketplace.
But for now, Internet-enabled customer relationship management (CRM) is where the real buzz is. With CRM comes power-the power to change the ground rules of competition itself-away from making the product to providing value-added services, building customer loyalty and ensuring a positive overall owner experience. The power to be in the driver's seat, you might even say.
Jim Roche is president of carabanga.com, a wholly owned subsidiary of Newgen Results Corporation. jroche@dealeronline.com
