Discussion with Ed Morse Automotive Group, Part I of II
Internet marketing companies have been serving the retail automotive industry for almost 15 years, as they continually adapt and grow along with an online marketplace. Over the past 5 years however, it has grown into a booming industry and the focus of many changes have been in the retail sales process, organization, and marketing strategy. Recently we sat with Peter Deiser, Director of E-Commerce for the Ed Morse Automotive Group (based in Ft. Lauderdale, FL and ranked 34 on Ward’s Mega Dealer 100 list for 2007) to discuss the evolution of automotive retail online. The first portion of our conversation covered in the May edition of Fuel centers on the trends that have become prevalent in today’s online vendor space as well as the traits necessary to guarantee long term success for dealers and vendors alike. Check back in Fuel’s June edition for the continuation of this discussion that moves into product marketing and budget shifts in today’s online automotive retail world.
NS: Peter - how would you describe your working relationship with online vendors?
PD: Along with others in the Ed Morse Organization, I work closely with vendors in all aspects - from vendor consideration, to contract negotiations, to day-to-day communications and reviews. We work closely with our vendors and services to ensure that we are getting the maximum return on our investment and, if need be, eliminate those that under-perform to make room for new expenditures that may offer a better ROI.
NS: It sounds like there is a constant need to evaluate and re-evaluate the services and providers you are using. Was this always the case?
PD: Just a few short years ago, an Internet vendor’s sales call was welcomed as they were few and far between. Anything “Internet” was a definite “Yes” to many dealers! In today’s market, I am amazed at the sheer volume of cold calls we receive on a daily basis. A dealer could easily spend their entire advertising budget five times over if they signed with every Internet vendor and service that is available. Dealers must take extra care now not to overextend themselves with these services. There is now a constant threat of “Internet Overkill” to consider that was not an issue in the past.
NS: So if internet vendors have grown from few and far between to overwhelming in number what, if any, are the new problems facing vendors and yourself in working with them?
PD: These days, the E-Commerce Marketplace seems to be more cutthroat on the vendor side than on the dealer side! With online services stigmatizing / criticizing their competition, it has turned into a Jungle out there! On the dealer side, we are constantly facing the problem of turnover, but the vendor side seems to have eclipsed us in this respect. It is to the point that you need to keep a spreadsheet to keep track of your vendor representatives!
NS: Has this flood of providers caused any major change in the quality or type of service provided from vendors as a whole?
PD: Different vendors have different issues! The most common problem is that the overgrowth of vendors and competition in this segment has caused the smaller companies to take a “sign up as many as you can” mentality. This is why dealers are getting so many “cold calls” these days. Vendors that are in it for a quick buck assume that they will be able to offset cancellations with new business. This mentality will cause their demise. Eventually, these vendors will rip through the market leaving only a wake of unsatisfied clients. As long as there are dealers that are quick to sign with new services without doing their proper homework, there will be vendors that will capitalize on them.
NS: You mentioned a high attrition rate for both vendors and dealers earlier, and just now brought up the current unfortunate practice of a ‘turn and burn’ sales mentality. What, if anything, can vendors do to try and correct these two pressing issues and hopefully begin to provide better service overall?
PD: The plain truth is that if vendors continue to act like, “vendors,” then they will eventually lose business and fold. There is too much competition out there now to rest solely on the fact that you have a good product to offer dealers. Everyone has a good product, right?
If you look at the real players in the vendor world, and that doesn’t always mean the biggest companies, you will start to see one thing in common: a true partnership approach is evolving. The companies in the know are offering a single point dealer contact, rather than a crew of reps that will come and go. From a dealer’s perspective, I can tell you that this approach is a necessity. Just as the rest of the world experienced a Dotcom bubble burst so many years ago, I feel that we are about to experience the same on the E-Commerce vendor side in the automotive industry. Automotive conventions are so overrun with E-Commerce products and services that it is to the point of absurdity. There are some fantastic products out there, and a few companies that offer personal one-on-one service with a professional, long-term representative. These companies will be the survivors.
NS: So the companies that merge the consistent, personal service with advanced product offerings will become ‘must-buys’ for car dealers?
PD: The vendor side is ever evolving, just as the dealer side is. What is considered a “must” today will evolve into something completely different tomorrow.
The retail automotive world is moving online in a hurry and this mass migration has attracted lots of attention from businesses trying to capitalize on servicing the shift. Over the past several years, the number and type of companies filling this position has quickly grown from a welcome, known few to a blinding, faceless many. The best way it seems to win in this fast-paced, quickly evolving landscape is to stick to the most tried and true business practices. Online automotive retail is far from reaching maturity. It’s more likely in an adolescent phase. Like all phases, this will pass and developed online partnerships will grow the industry into full-fledged maturity… but it won’t happen overnight.
Peter’s last statement touches on constant evolution of our industry, and we will use this as the breaking point between the first and second part of this interview. We will move from the evolution of customer service and vendor differentiation into a more operational discussion looking at major product evolution and what’s the next stage of vendor growth. Make sure to check back with us for the June issue of Fuel.
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