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May The Best Car Win

GM announced yesterday that they would be stopping sales of GM cars on EBay today, just six weeks after the start of the program. Initially, the announcement was hailed as "out of the box" thinking by GM and their willingness to leverage EBay technology to sell cars in California.

When I first heard of the program, I was puzzled. From my vantage point, Internet new car shoppers have far too many questions and customer service needs before they make a purchase to fit in the EBay model for the masses. I also wondered about how F&I sales and related upsells would be affected.

If you say that 8-15% of Internet sales leads can convert depending on their source, that percentage shows that Internet shoppers are not instant buyers. Internet Sales Managers can comment on how many emails and calls it takes to close a deal. This is part of the reason why the EBay auction model for new cars is not the panacea GM thought.


I would like to call on the ADM community to share their thoughts on why the GM and EBay tie-up did not succeed. Secondly, GM announced that they will be focusing on their National Marketing plan which includes their new 60 day money back guarantee; "May the Best Car Win".

I encourage GM storefronts to comment on the "May The Best Car Win" marketing campaign. Is this plan gaining traction with local consumers and driving in any significant traffic?

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Tags: automotivemarketing, brianpasch, ebay, gm, maythebestcarwin

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Comment by David DeSantis on October 14, 2009 at 8:02pm
I did a brief video shortly after the GM/ebay thing started, and it's on my profile. The failure of the idea was clear right from the start, that is the lack of processes and systems. Dealers are at all different stages of how they've incorporated the Internet into their business. Even with this site, everyone is talking about fifteen thousand different things that their dealership is doing or not doing. You've got vendors pushing their service/product as being the thing that's going to "revolutionize" everything. My opinion is that dealers first need to have a solid foundation of Internet processes, and Internet sales processes. The old way of "get the appointment", does not work. You have to be able to sell over the phone. It's a different type of selling, but it is what is happening NOW. The biggest problem that I see with the auto industry is a total lack of sales processes when it comes to the Internet. The sooner people realize, "The Sale Starts With Your Online Listing", the quicker they can turn their websites into a huge revenue generator.
Comment by Keith Shetterly on October 8, 2009 at 9:11am
@ Larry Bruce: "You will need commitment all the way down to the sales level, you will need a price positioning strategy and a story to go with it, and you will need to do your homework on your competition every single day. The most successful online retailer do this and a lot more, including TX Direct Auto. Online selling is their way of doing business not a sideline to get more deals".

And there you have it, thank you Larry. The fact that Texas Direct has hung so long as the biggest success story is more of a testimony to the lethargy and inertia of the "old car biz" than anything else. Appointment only, 9am-6pm Mon-Fri, 'til noon on Saturday delivery only. And they mean "appointment only".

180degrees from the car biz "norm" and over $100million in business yearly. Get the feeling you and your dealership might be headed the wrong way?

LaNeve's departure from GM . . . is another clue.

Commitment to the Internet means changing the way you look at your business. An Internet Manager . . . isn't the way to do that.
Comment by Paul Rushing on October 8, 2009 at 8:26am
On the "May the Best Car Win" program consumers are give an additional $500 rebate to not participate.

Just hope some dealers are not scooping it. They may be opening up a can of worms...
Comment by Brian Pasch on October 8, 2009 at 7:37am
Larry

The feedback on the "May The Best Car Win" program was great....I think the program has lost any initial fizzle it may have had. Ron Carter's comment is the proof.
Comment by Larry Bruce on October 8, 2009 at 3:55am
Brian interesting post, and very interesting comments, I was asked about this project by Cliff Banks several months ago when it first came out. I told him then and I still believe today it was a “Hail Mary” by GM to show they were thinking outside the box but almost no thought was put into a strategy to make it work. I am amazed that it is still believed by my Retail Brethren, both OEM and Dealer that if you can get a lot of eyeballs to your site or your store that’s it you will instantly sell more cars. GM looked at the traffic that eBay got decided that “IF they put the inventory there…they will come”. GM had no strategy at the dealer level on price positioning strategy nor did they do any level of research to understand the dynamic of competition on eBay. As a matter of fact when GM announced the program it was a surprise to eBay, there had been very little talks between the two companies before the announcement by GM.

So what does this all lead up to… well this is my comment so you’re getting my opinion. Selling on line isn’t as simple as getting the click and hasn’t been for some time. You will need commitment all the way down to the sales level, you will need a price positioning strategy and a story to go with it, and you will need to do your homework on your competition every single day. The most successful online retailer do this and a lot more, including TX Direct Auto. Online selling is their way of doing business not a sideline to get more deals. This message was not transferred to the GM dealers in the pilot and it fails as predicted and for all of the same reason other dealerships fail online with everything from SEO, SEM to listing sites ect. This is not a part time thing gentleman it is a full time endeavor you will eventually commit to now or later or you will be gone.

As for “Let the best car win” great concept, the problem too many people had to get their 2 cents in the program including dealers on the dealer council… subsequent result far too many hooks in the program to be of any value to the customer and incredibly detrimental to the dealer if the customer brings the car back. Was just having this conversion with Alan Hall of Ron Carter Autoland yesterday they sell 600 new per month and not one has been because of the “Let the best car win” program as he puts it “customers aren’t even asking about it, it’s a non event”.
Comment by Brian Ferris on October 6, 2009 at 10:04am
Great comment Keith. Agree completely, especially that last word!
Comment by Keith Shetterly on October 6, 2009 at 8:30am
Brian, right on! There are vendors that provide "online negotiation" suites/services that are attempting to draw the buyers further down the funnel. This is controversial for some, as it sounds a lot like "selling the car over the phone (Internet in this case) and not the appointment!):", which is a long-standing no-no. What's lurking outside all this is the flattening of car sales and competition for service: What differentiates your pluses for a buyer if they can save $250 on a vehicle that's just 20min further drive than you? Or 30min? It can be your service, which may be great relative to other dealers, but . . . what about relative to Jiffy Lubes, etc.? I think it's finance and their aftermarkets that may well become pre-eminent differentiators, but that will be a recipe component for a while. The old mantras are still true: "Best Buying Experience and Service in the Area!".

The area now, however, for better or worse isn't measured in square miles. It's measured in Internet.
Comment by Brian Ferris on October 5, 2009 at 3:27pm
Keith illuminates some very interesting points. One point I would like to expand on just a little is the concept that buyers always need to touch and feel the products before they buy. Right on!, but dealers who throw that up as a barrier to Internet sales are forgetting reality. (no reference to Keith. I don't think he is one of them). The car buying process is not an instant transaction that starts and finishes in 5 minutes. It is usually a long process that takes many months. Internet car buyers are not glued to their PC's throughout this period.

90% of car buyers shop around online. 'BUT then they also visit a few automalls. They touch a few cars. They drive a few cars. Then eventually when they know exactly what they want all they care about is finding the best deal. That could happen anywhere. On the Internet, on the phone or on the high street.

In my opinion the reason why more new cars are not sold online is because hardly any websites are up to the task. eBay is no exception.
Comment by Keith Shetterly on October 5, 2009 at 2:01pm
Very interesting thread! I still think this should have been the first step of many--rather than GM pulling out they should have expanted quickly beyond this experiment. I think I gave them too much credit that their eye was on a bigger ball than eBay.

Texas Direct Auto has a great eBay story--rather than invest in SEO of a website, they took their pre-owned sales to eBay where the shoppers already were. As folks in this thread have pointed out, new cars are option-driven which is a poor fit for eBay (or AutoTrader, for that matter, but don't get me started!).

I sold many cars on eBay, but they were PRE-OWNED. I can also list some new car specials on eBay, because like pre-owned folks are willing to accept option compromises as trade-offs on price.

This all reminds me of the arguments from years ago that the Internet was "going to change everything", then folks lost faith in that because it actually took a while longer than expected--but we are there. The same thing will happen with online sales--we are early in the modernization of car shopping. I still think one of the motivators for GM's and Chrysler's steps to reduce dealerships is the idea of fewer, more-concentrated outlets that will have more inventory and thus more likelyhood to match an Internet shopper.
Not only is GM's corporate culture having trouble digesting how to sell on the Internet, I think we as a group are having trouble digesting how far down the sales funnel the customers really are once they hit the dealerships. People still want to smell the car and feel the leather (or the new cloth, for that matter), and that won't change for a long time, I think. However, if you had the inventory to draw them to you for final selection, they can come right to the edge of the sale before they come to your door and take that test drive. Or right before you take the care to them . . . which many will already do for the sale, right now.
Comment by Brian Ferris on October 5, 2009 at 11:19am
Alex,

Your experience is very interesting, but not surprising. The big question that interests me is "how many bidders were competing for each car?" I am betting that the answer is going to be "0" "1", "2" or "very few". The primary reason for that is NOT simply because there were no buyers, but because there were not enough buyers for each separate offering. New car deals have thousands of variables. Numerous models, trims, options, trade-ins, financing terms, warranties, delivery options, and so on. You can't list each one as a separate offering. The bidding pool gets diluted like raindrops on the ocean.

To make any marketplace work you need to generate "volume of interest" i.e. lots of bids for the same "virtual" item. I use the word "virtual" because the pool of bidders needn't be competing for exactly the same car. They could be competing for the smallest discount or biggest premium to get their deal done first. We know how to do this, but eBay is not even close.

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