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AutoTrader Acquires VinSolutions – An Auto Industry Insider’s Perspective

AutoTrader Acquires VinSolutions – An Auto Industry Insider’s Perspective


While I was working as a speaker at the VinSolutions sponsored “Internet Battle Plan” 3 day dealer training workshop in Kansas City on Wednesday May 18th, Sean Stapleton (VinSolutions Chief Sales Officer) approached me and said he wanted to update me on an important announcement regarding VinSolutions… He then told me about the Autotrader.com acquisition of VinSolutions and showed me the AutoTrader issued press release announcing the deal.  Was I surprised? Not really... My initial perception and response to Mr. Stapleton was along the lines of “Well, that makes more sense than most of the acquisitions I have been privy to, and congratulations on a job well done.”

 

Internet Battle Plan V

Shortly after Sean Stapleton updated me, we were joined by Mike Dullea, Matt Watson and other C-level VinSolutions executives.  To say that they appeared pleased with the breaking news would be quite the understatement! I can understand the enthusiasm and could not help to think about all the implications this deal could have for the industry and now I am sharing some of my thoughts with you.   First of all, let me state up front that in no way has this article been solicited, nor has it been written at the direction of VinSolutions, this is pure and simply the impressions and opinions of a veteran car guy (me) who has been working in the digital marketing space since AutoTrader.com began.

 

AutoTrader.com “Becomes One with Vin” Capabilities



As I write this story, I am listing to Sean Stapleton’s amplified voice as he explains the power of having one system that integrates all of a dealer’s internet marketing, website, CRM, desking, finance and service in one platform that is accessible via the web or a mobile phone. It is an impressive vision and I can understand why dealers want it and why AutoTrader.com wanted to be the company to bring it to them. From both a revenue development and a dealer satisfaction perspective, it makes a lot of sense.

 

I Have Seen This Before (NOT)

On a personal basis, having been through the acquisition of multiple marketing system providers while working at Reynolds and ADP over a 12 year period, I am amongst the first observers to recognize that not all acquisitions result in achieving the vision that inspired that acquisition in the first place. The typical challenges include the integration of old technology with new technology and the difference in culture between smaller high growth companies and larger mature organizations that take longer to make decisions and act on opportunities. As a result, many entrepreneurs move on shortly after these acquisitions and often the products either are fully integrated and live on as a part of the DMS offering or the product loses its competitive advantage.  This can be compounded by the departure of the entrepreneurs who kept an acquired product ahead of the curve.  After observing several of the other acquisitions that AutoTrader has made, comparing them with a DMS company might be inappropriate since it seems to me that AutoTrader has taken a different path.  For the most part, AutoTrader seems to be letting each company operate on their own while allowing their acquisitions to leverage the extensive resources within AutoTrader to help the new members of their family of companies to grow.  

 

The AutoTrader Difference

This makes a lot of sense because AutoTrader is also an entrepreneurial high growth technology company so they probably have a better understanding of how to maintain the momentum of the companies they bought rather than scaring the management away. After speaking with Dale Pollack (vAuto) during the Automotive Leadership Roundtable Awards in Miami, and with Joe Vraneza (KBB), combined with observing what AutoTrader has done so far with their Kelley Blue Book and VAuto acquisitions… This is one auto industry observer (me) who believes that Chip Perry (AutoTrader) knows what he is doing by purchasing VinSolutions and how to get the most out of the company in the long term.


AutoTrader’s Growth Trajectory

Sometimes I forget that AutoTrader has not always been the market dominating internet advertising company that it is today and that just like vAuto and VinSolutions it was a start up internet company that has experienced extraordinary growth in a short period of time. As a result it seems Chip Perry knows exactly how to help the companies he has bought to scale through the different stages of growth they will most definitely experience with AutoTrader’s support. Chip is definitely one of our industry’s most innovative thought leaders and this acquisition could have more impact than any other he has made so far because of the impact of all the technology in every department of the dealership: New, Used, Finance, Service, Parts, BDC, Internet and Marketing.


DMS² Concept

While I was speaking with Sean Wolfington, a VinSolutions shareholder and entrepreneur, he described what VinSolutions offers dealers as a “Dealer Marketing System” that is every bit as significant to the dealership as their “Dealer Management System”.  Wolfington stated “Most dealers spend too much money with too many companies who do online marketing; search, banner ads, websites, CRM, desking, finance etc and the systems don’t integrate. VinSolutions has grown so fast because dealers like an “all-in-one” dealership marketing system that gives them everything they need for less money and it is integrated with whatever DMS system the dealer choses to use...” 

 

Wolfington went on to say, AutoTrader's digital advertising has consistently delivered a lot of leads and sales to dealers and now they can give their dealers a system to convert more leads to sales and that helps them generate their own leads to all their profit centers: new, used, finance, service and parts.

 

As I continued to discuss the events of the day, and all the things that must have happened leading up to the announcement by AutoTrader that they had agreed to acquire VinSolutions, Sean Wolfington went on to say; “Mike Dullea (CEO) and Matt Watson (CTO) built an extraordinary technology platform and leadership team with talented guys like Kendall Billman and Sean Stapelton, the best salesperson in the industry... They are the best at what they do and Dullea is a relentless leader who had the vision to build a fantastic company and team.”


What Does It All Mean To Car Dealers?

If you are a dealer or general manager, you have GOT to keep an eye on what types of marketing and sales solutions this marriage between AutoTrader.com and VinSolutions produces… Keep up to date on the babies that result, because if your competition does and you do not, it could cost you market share and profitability.  I will personally be paying very close attention to the results of AutoTrader.com purchasing VinSolutions, because after 30 years in the car business, I know when something has the potential of changing the rules of our game, and this combination of the biggest automotive advertising company online with the most integrated opportunity management system I have ever seen (VinSolutions) certainly has the potential to change the automotive marketing and sales landscape.  To draw an analogy, think about how the emergence of the iPhone has driven all of Apple’s competitor’s towards producing better cell phone handsets and operating systems… This AutoTrader and VinSolutions combination has similar potential.

 

Written by Ralph Paglia

Vice President

Tier 10 Marketing

www.Tier10Marketing.com

cell: 505-301-6369

rpaglia@gmail.com 


Views: 771

Tags: AutoTrader Acquires VinSolutions, Insider Perspective, Sean Wolfington, VinSolutions

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Comment by Jason Manning on May 31, 2011 at 10:10pm

I think we've become automotive centric as well Mike and I really appreciate your response.  I've been a fan of Vinsolutions for quite some time even though I have only test driven your CRM and monitored the design of your dealer sites.  I'm impressed.  While the automotive industry has become "specialized" in many aspects, I feel "specialized" will move forward to "customized."  A customized CRM, site, inventory manager etc is what I look forward to in my dealer's future and the automotive industry as a whole.  "I'll have that and that and that and that and let's also include that."  I believe dealers will soon see the need to become customized in each unique market with vendors that will supply their unique solutions and secure their dealer's data.  I'm sure your company will evolve to that level.  I'm sure competition will keep your there.

 

I only have a concern about the data leak that could happen or could be happening when Autotrader acquires a business (vAuto, Homenet, KBB and now Vinsolutions in a short span of time).  The terms "affiliate," "partner," "subsidiary," and so on are ways that data can leak back to the consumer.  I am well aware of how automotive vendor contracts are written and have great concerns with these acquisitions.   As a dealer, watching Autotrader continue to provide the consumer "Reality Check" sale data, makes me concerned that dealers may be losing control of their data through vendor products and creative or deceptive contracts and new acquisitions by vendors etc.

 

I hope you keep moving forward with your company and I wish you best of luck.  We will be watching and also watching out for our best interest.  Data leaks are becoming a primary concern in our industry as we see "data companies" being gathered by corporations, inventing consumer automotive data products, privy to our industry, in the past.  We hope you can show us how you protect our data and ensure it is not shared in any way, shape or form to the consumer by your company or any of its partners, subsidiaries, or affiliates etc.  I'm sure you're well aware of how important transparency is to all businesses now-a-days.  I hope you understand our concerns.  It would be disheartening to find out that data was being shared through a "loophole" in a contract(s) between dealers and their vendors.  This is also why I have decided to focus on an outside CRM company at all costs.  A lot of power that Carmax retains is in their control of their data.  I want that.  I've seen the outstanding results before and have been part of it directly.  I believe dealers can have that with Open Source  developers.

 

Thank you again for your response.  I really appreciate you taking the time.

 

Very Truly,

Jason Manning

 

Comment by Keith Shetterly on May 31, 2011 at 12:22pm
Mike, now THAT was pretty cool.
Comment by Mike Dullea on May 31, 2011 at 12:21pm

Jason- I have to admit I also once thought that these open source solutions and companies like Salesforce could be used in Automotive but reality is: No OEM Certifications + No DMS Certifications + No Vin Decoding + CRM's that are not built around VIN numbers that know when a car is sold and attach service data= NO use in the Automotive Space. 

 

I am the CEO at VinSolutions and as Matt mentioned we use salesforce- Why? Our system is so Automotive Centric it does not perform in any other industries and is built specifically for transacting Automotive Sales and Service- so we had to go elsewhere even though we built our own product. 

 

Good Luck with your vision and if you would like to speak about this at anytime just let me know. 

Comment by Matt Watson on May 24, 2011 at 6:24am
@Jason Keep us up to date on your efforts. Have you ever seen a demo of VinSolutions? At VinSolutions we have 15 dedicated people working continuously to innovate and enhance our platform. So we are always here if you need us!
Comment by Jason Manning on May 23, 2011 at 10:02pm

@ Matt, ultimate control is ultimate power.  Carmax enjoys ultimate control with their internal custom systems.  I've experienced them first hand.  I believe I can find support to help with the design and ultimate control costs.  I'm also considering SugarCRM for the same low cost purpose.  Zoho has a "drag and drop" design feature that makes things even easier for an ultra low cost.  These customizations are appetizing to a dealer who has a market, customer base and strategy that requires a specific direction.  I'm not so sure that "one size fits all" fits anymore.  There is too much technology and low cost choices to consider.

Comment by Matt Watson on May 23, 2011 at 7:01pm

@Jason Manning: At VinSolutions we use salesforce for 200 employees and it is awesome... but it is very expensive. It is roughly $100 per user per month. So for an average car dealership it would cost much more than a normal automotive CRM solution. Plus, and this is the best part, when you buy salesforce.com.... it doesn't provide any usable functionality! Just a vanilla account list, contacts, and task list. You have to hire people to customize it to add automotive specific features. We have 3 full time employees to manage our salesforce system.

 

The problem with all of those solutions is they are very generic and must be tailored for any business that wants to use them. But that would give you ultimate control.

Comment by Ralph Paglia on May 23, 2011 at 6:02pm

William Phillips - Your comment smacks of "Sour Grapes" and your status as a supplier makes me wonder how you would know anything about any dealer targeted solution (other than your own) being over priced.  Dealers get many different pitches and proposals on a daily basis and they are the ultimate drivers of determining the market value of anything they buy... And suppliers endeavor to sell. The sheer fact that AutoTrader has so many THOUSANDS of dealers signed up to a plan is validation in our free enterprise market system that their product is priced where it should be.  Any vendor who is at a couple hundred out of 17,000+ franchised dealers MAY want to consider the possibility that THEY are the ones over priced, hence the resistance to their product or service.

 

I am the first person to negotiate and grind AutoTrader rates at every opportunity, but I am also smart enough to know that if their product was truly over priced, as many dealers would not have purchased it.

Comment by Keith Shetterly on May 23, 2011 at 3:34pm

@Jason Manning:  Absolutely a good point.  Salesforce automation in vehicle retail has suffered more than a bit from tailored solutions that don't play well together.  I think of the DMS access by a CRM as an example of that--and so the solutions from outside this vertical market run up on a lot of data and interface barriers.  Some examples are how the DMS data is integrated, whether it is a two-way interface, what formats (XML, etc.) to lead providers expect, how is email (including attachments) handled, and is there a custom report facility available.  And more, as I start to think about it, but I'm long-winded enough here.  :)

 

If you would like another opinion or set of eyes on what you are considering, just let me know.

 

Thanks!

Comment by William Phillips on May 23, 2011 at 6:11am
Auto trader and VIN a perfect marriage. Two over priced products that are good at selling dealers but don't perform. Dealers are enraged at AT and personal experience with VINs lies that they where not in this to sell it. Con grads to the put together artists at VIN for the profit they got from AT. Some one needed to get back what AT has raped from dealers over the years. Say what you got to say to get the cash. Congradutions, I'm jealous of what they got but disgusted with how they got it.
Comment by Larry Bruce on May 23, 2011 at 5:03am

Ralph you heard me say this at the battle plan this week "DIAA".

 

Data

Information 

Activation

Action

 

ATC has a lot of data, it remains to be seen if they can turn that data into information, activate it and then act on it.  Only time will tell. 

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