AuctionVcommerce.com is working to help the wholesale automotive auction industry transition from 'in lane' to 'online'. We provide infrastructure support for our Auto Auction Members in the form of customer service, technical support, marketing, and consulting. Our blog serves to provide direction to auctions who are not just looking to take their business online, but to actually build an online business!
You've come to the realization that you need to 'step it up' when it comes to the online... So what's the plan? Hire sales people? Well let's take a look at the effectiveness of that strategy with a short visual exercise...
Envision standing in the middle of a room, and the floor starts caving in. Would your first instinct be to get a new ceiling?
What do you know about the online dealer demographic? I'm not talking about your lane customers... I'm talking about Internet customers you have yet to acquire, or perhaps those who have attended your online sale at one point, but did not have the confidence to return. Where are they now? Are you tracking your online activity? Or your online relationships? Have you outlined your online marketing strategy? What type of experience does your online customers receive at your auction? What do they expect? The thing is this... you could get 500 new dealers to your online sale tomorrow, but if the overall experience is not satisfactory, then you just turned off 500 customers.
I asked 10 autoremarketers if they had an Amazon Prime Membership. Of the 10, nine responded with 'yes'. What does this tell you? Hopefully it tells you a couple of things: First, the world is changing, and the traditional way of thinking is becoming far outdated; Second, it is possible to create such a high level of online confidence that customers are willing to pay for shipping on items they have yetto purchase! Why? Dedicated online customer service, transparency in the transactional process, follow-up strategies, and personalization. In other words, Amazon, has built a foundation for conducting online business through listening to the needs of their customers, and creating an environment that incites participation. Now it's time for online auto auctions to do the same!
Just as a new ceiling will not resolve the fact that the floor beneath your feet is crumbling, adding new sales people will not build a stronger online business. The floor, just like your online business, must be reinforced. The structure should be conducive to growth. Confidence comes from knowing that every step you take is supported.
Here is an assignment: Obtain an online report to show how many customers have attended your Internet events over the course of the last year. Next, run a report to show how many customers attended your last online event. If your weekly number is less than 10% of the annual number, and your growth pattern looks like nothing short of the screen of an active EKG Monitor, then you may want to consider AVC Membership.
If you haven't heard, AuctionVcommerce is a cost-effective way to implement an online infrastructure that provides the supplemental technology support, customer service, marketing, activity monitoring, relationship management, and peer support necessary to achieve the online credibility for a virtual expansion. Technology, as well as the rules for online commerce, change frequently, requiring a dedicated focus from an industry-wide perspective. AVC is building the network, engaging the customers, and setting the standards to advance the auto auction industry into the virtual space using the same principles that made the brick and mortar auto auction a monumental success.
Although, while the principles may be the same, the approach is entirely different. The online initiative requires a global perspective. A small business mentality will keep you where you are. Online customers are not concerned with speaking to auction management unless a serious issue occurs. A solid online infrastructure will provide all of the resources necessary to conduct business from within the virtual environment. It only makes sense that online growth is heavily reliant on your ability to operate online. The fact of the matter is, technology is becoming a second language. The more fluent you become, the more online success you will achieve.
It used to be that B2B solutions varied drastically from the world of B2C. The notion that businesses had a very 'narrow market' served to justify the absence of marketing and/or an investment towards customer research and development. Well, that belief system may be true in the physical world, but the virtual realm has leveled the playing field. Still, some industries remain in the dark with regard to envisioning Internet success. Wholesale Auto Auctions, specifically, despite providing an opportunity for customers to acquire vehicles online, do not seem to view much potential in segmenting and catering to virtual prospects. However, the costs associated with providing online technology, the strength of targeted online searches, and the growing expectation of customers to enjoy a personalized online experience has prompted several auctions to review their current solutions.
A great misconception many auctions share is the belief that online customers are satisfied, simply because they do not receive calls stating otherwise. Reports demonstrate another story. One auction had over 300 online attendees over the course of a year, but seemed to average 15-25 customers week to week. No one can really say what happened to the other 275-285 customers, but I can tell you this... Many online customers report the inability to reach anyone at the auction, much less get the support they need on sale day. Yet, several auctions continue to promote their online events in an effort to obtain more customers despite the lack of a retention effort or having a customer service operation in place. For the sake of visualization, picture holding a strainer under the faucet and waiting for it to fill up. Even as a thought, it's a very frustrating concept.
Whether an auction has 2 online attendees per week, or 200... the potential for growing this segment is higher at this very moment than it will ever be. The industry is evolving, and the pressure to adapt is going to rapidly increase as the next generation of buyer-reps, raised on technology, begin to fill the positions once occupied by generation 'kick-the-tires'. These individuals will never step foot in an auction. Meanwhile, many alternative online solutions will have emerged with the strategy to eliminate the auction process altogether. Auctions with an unfriendly approach to online facilitation will, without a doubt, serve as the best advocate for these type of platforms, and the impact will be felt by the auto auction industry as a whole.
The irony is that, while each auction continues to look to more technology for their solution to online growth, the answer actually lies in the most traditional concept of business development... customer service. I have always preached the philosophy of humanizing the live Internet auction experience, letting customers know that they are working with people, not computers. However, I find that I need to now convey this message at the other side of the equation. The unseen customer is not familiar territory for the traditional brick-and-mortar auction, nor does this client meet the profile of the typical auto auction demographic. If this was the case, we would not be having this discussion. So how does an auction build a relationship with, and meet the needs of a customer it has never met? Well, much in the same way they would build any clientele - dedication to understanding the customers' needs, and delivering.
The Internet, itself, provides a low-cost expansion opportunity for any business willing to play by the online rules of customer engagement. Companies are implementing online strategies such as personalization, where customer behavior is analyzed, and a response is generated based on activity. The most popular examples of this effort are the communication attempts that follow a transaction - most notably, the request for a review, or product suggestions based on prior purchases. Companies like eBay, and Amazon have mastered this initiative. In the Online Auto Auction industry, auctionVcommerce.com (AVC) is pioneering the effort for obtaining customer feedback, and building the auction's online reputation. AVC is building the bridge that connects auto auctions to online customers.
Then there is still that matter of immediate support...
With the use of marketing platforms, credentialing services, simulcast, and other 3rd party vendors, the layering of technology could force an auction customer, or the auction itself, to make up to 3 support calls for a single issue. Most vendors will provide support for their technology, but reference the next vendor to continue to identify the resolution. Alternatively, auctions that have elected to provide dedicated online support via an AVC Membership have improved customer acquisition and retention efforts by managing online support throughout the entire process. In addition, AVC maintains support channels that are accessible to auction customers 24/7. With a broad scope of technology across the industry, AVC can proactively address customer concerns, and help auctions to operate more efficiently. Most importantly, AVC is a shared-service, which allows the auction a cost-effective approach to building the online foundation.
At the end of the day, it is all about meeting the expectations of the online customer, and it should be an industry-wide effort. The technology companies can provide the algorithms, email blasts can be sent to the mass mailing list stored in the auction database, but ultimately, the experience will have the most impact. In the words of Maya Angelou...
“People will forget what you said,
people will forget what you did, but people will never forget how you made them feel.”
When I first began consulting with auto auctions regarding their online initiative, as a regular practice I would audit the customer experience. Many times I found that lane bidders were given the upper-hand when it came to close decisions, and I expressed this concern to several auctioneers who would explain,"When it comes down to it, I'm going to give it to the guy who got up this morning, got in his car, and drove down to the auction." Even the auctions were discriminatory in that they imposed a fee for purchasing vehicles online, and provided very little in the way of technical assistance during the sale. In fact, most auctions had built a dependency on the technology vendor for end-user support despite the fact that there were many user-related issues that did not stem from the software. The universal perception seemed to be that the Internet provided existing customers the opportunity to be lazy. Some auctions also believed that it was a direct competitor to their lane business. For these reasons, little emphasis had been placed on allocating any further investment or resources towards the Internet as a potential opportunity for a new business segment.
Without question, the adversity towards the Internet stemmed from technology being introduced without the establishment of a revenue-generating, online business model. Simply stated, the cart was put before the horse. Without any guidance, the auctions were left to perceive the Internet as nothing more than a value-add. Basically, it was 'there' if customers wanted to use it, and if we're being completely transparent, in most cases it was a requirement imposed by larger consigners. While I have seen some improvement over the last couple of years, there are still many mountains to climb in this area.
Customer Service is a major artery when it comes to the anatomy of a business, and it is imperative that auctions looking to grow their online segment provide an effective solution for support. The goal of the virtual expansion should be to attract new customers that are not in the geographical proximity to drive to the sale each week. In this endeavor, auctions need to make the effort to learn more about this demographic, and appeal to their level of comfort with regard to participating online. In order to do that, the auction should be collecting data, and structuring an online promotional strategy to funnel customers at a National level. However, this would require more staffing, and a significant marketing budget.
With AuctionVcommerce, auto auctions now have an affordable opportunity to establish a sound online infrastructure complete with customer service, modern support channels, and marketing. The estimated cost for a solitary effort, including the software and personnel would be anywhere from $3,000-$7,000 per month. However, with an AuctionVcommerce Membership, the cost is only $600/month. In addition, AuctionVcommerce has the collective view of nearly allonline auction technology, and actively works with vendors to identify and troubleshoot issues. For auctions using the same technology, this means a preventative approach to sale day catastrophes that could result in the loss of online customers.
The bottom line is that the virtual world has it's own set of rules and requirements for developing online success, and the upcoming generation of Auction Customers are being seduced with technology. AuctionVcommerce is the solution to help Auto Auctions meet the online expectations. If you are an auction interested in becoming a member, or a dealer interested in buying or selling through our network of online auctions, call 855-998-8266 ext 700 for more information.
I am a huge fan of the auction arena. The energy... the excitement... the sense of urgency to get the bid in... I get it! However, I'm also a huge fan of efficiency, opportunity, technology, and, well... heat!
Old-school mentality dictates that purchasing vehicles requires the buyer to be able to kick the tires, listen to the engine, and physically touch the unit. I used to have the same mentality when it came to shopping for clothes. Now I do about 50% of my clothes shopping online. With the amount of data available, and with the feedback from other customers, I am becoming more comfortable making online purchasing decisions.
The point is... the online opportunity cannot be ignored. The comfort level is increasing. While the traditional auction experience is great, there are times when convenience and selection are going to take precedence. Condition reports are becoming more sophisticated, and auctions are working to provide a better online experience. Logistics companies are improving cost and efficiency with regard to transportation, and simulcast delivers the energy of attending a live sale. As the climate changes, extreme temperatures may make bidding from a heated/air conditioned office seem a lot more desirable. At this time of year in the northern part of the country, you can kick the tires, but the auction is not responsible if you lose a toe! (Pretty sure that's written in the policies.)
I am not attempting to persuade everyone to leave the auction lanes just to bid online. I am merely pointing out that online auctions are a great option for sourcing inventory, and nearly every auto auction in the country is currently enabled to provide this convenience. So the question remains... Why wouldn't an auto dealer source inventory online?
I would love to hear your responses below, and if by chance, you are looking for an online auto auction in any particular geographic area, click here to search now.
While the Internet has become as much a part of our lives as... well... breathing... Believe it or not, there are still some who feel that online sales will never become a viable source of revenue for their business. Several years back, I probably would have said the same thing when I opened my little cafe in downtown Rochester. My hours were 7am to 3:30pm Mon-Fri, and parking was a nightmare. I had to rely on walk-ins from local businesses, and I was surrounded by many vacant buildings. I did manage to secure some small catering jobs, but at best, revenue was between 9-10k a month. Food costs were nearly half of the revenue due to the fact that I had to maintain a minimum order for delivery. At that rate, I was surely destined to go out of business.
Like most entrepreneurs, I worked long hours during the day, and spent the night worrying about how I would survive. However, the anxiety became a catalyst for what I now know to be an 'SEO' strategy. SEO stands for Search Engine Optimization. (More on that later.) For now, just know that I was spending countless nights on my computer listing my website on every directory I could find. I created social media pages, and I used very descriptive keywords to engage potential customers. I didn't have much of a marketing budget, nor would it have made sense to market to a place that had so many geographical limitations. So every night, I just kept listing, and praying for a miracle!
It was probably close to a year before I really felt the impact of my efforts. You would have never have been able to convince me that I could've achieved the results that I did. My business was steady at around 12-13k a month, and I was beginning to receive random calls for catering from out-of-town visitors. At the time, I thought, "Well, that's a nice little bonus." Soon, I began to receive more calls... and then more calls... A tv show by the name of 'Hoarders' was scheduled to film in the area, and they needed breakfast, lunch, and dinner for 2 days. Another production company called because they were shooting a movie in town for 2 months, and needed breakfast, lunch, dinner, and craft services. All of a sudden, my 12k/mo business had skyrocketed to $30k. How could I have possibly won these jobs over some of my more established competitors?
Remember that SEO thing I mentioned earlier? What I didn't realize was that I had been doing something my competitors weren't. I was establishing myself as a credible business, online, to potential customers all over the country. While back-linking, and maintaining my website, I had been building my domain authority. I was engaging my customers on social media, and managing my reputation. I was coming up at the top of organic searches for caterers in the area, despite the fact that other caterers may have been in business for 30 years! I had built an online foundation that I would have never thought possible due to my surroundings, but because of the Internet, I was able to attract customers as far away as California.
The Internet provides opportunities that could never be realized through traditional business models, and for many who have been in operation for more than a quarter of a century, this perspective may be a little out of the comfort zone. Therefore, many business owners are still clinging to 'what they know' as a measure for maintaining stability. Meanwhile, a digital generation is emerging. So my advice to any business owner still standing in favor of 'old school operations' is this... Go ahead and keep your feet planted firmly on the ground... but your business on the other hand, should be planted firmly in the cloud!
What is it costing you to maintain your online auto auction? How much are you spending on the technology? The clerks? The CR writers? The integration services? Are you projecting a return on your investment, or simply folding the cost into your brick-and-mortar operation, and calling it a day? Are you waiting for 'someday' when everyone is just going to catch on, or do you have a strategy for growth? Finally, once you reach your growth potential, is your business prepared to scale?
It's a common scenario... one Online Manager... 20 different directions. Without dedicated support and an Internet marketing strategy, your online business may never scale to reach its full potential, much less pay for the cost of the staff and technology it takes to run it. Vcommerce has found a way to minimize the cost of adding additional resources through a collective approach that will serve to incite buyer confidence throughout the industry. In addition, it allows your auction to become part of a National Online Inventory Distribution Network actively represented by our team.
Auto Auctions have been asking for support, guidance, marketing services, training, and tools to compliment the online initiative. These are the seeds from which Vcommerce has grown. Still, there is a question of cost. So here's the question...If you could pay nearly the same price it costs you to run one lane on simulcast to turn your Online Manager into an online team, and market your business nationally... would you do it?
It's pretty obvious, at this point, technology is here for the long haul. More dealers are buying online, and wholesalers are beginning to purchase white-label marketplaces. Whether or not you agree or don't agree that the trend will continue, really has no bearing on the outcome. The only thing the industry can do at this point is 'think outside the blocks'.
Future-proofing your business allows you to be prepared for any scenario, including the 'Online Apocalypse'. This means, if you are an auto auction, then you need to work at being the best online auto auction. If you are a buyer, you should expect the same level of customer service from the Internet facility as you do from the brick-and-mortar. Be sure to communicate your experience if the auction falls short, and give them the chance to improve. If you are a seller, you should research and understand the best practices for representing your inventory online, or simply ask the auction for guidance.
The 'online auto auction' is not an out-of-the-box solution. It is a new business model that requires the establishment of a good workflow from vehicle intake to disposition, an internal commitment to education & training, customer confidence built through the development of a strong online reputation, and increased visibility in the virtual space. It is the combination of effort from the auctions themselves to those they serve. At this crucial point and time, it is the old school meeting the new. So rather than proceeding into the inevitable with reluctance, consider this: Now is the time to leave the footprint of the past. The industry built on a solid foundation of integrity and community is evolving. You all have the distinct opportunity to embed the principals that have governed the success of your businesses for many years...
Reputation Management is a key component to conducting business online. That being said, this Labor Day (September 7, 2015), Auto Dealers and Consignors are going to have the opportunity to provide feedback regarding their experiences with buying and selling vehicles on the internet through auto auctions all over the U.S. and Canada. AuctionVcommerce.com will make its debut as the first, and only, online auto auction review site - connecting dealers, consignors, auto auctions, and technology vendors. in an effort to help the online auto auction industry reach its full potential.
Brick-and-Mortar Auto Auctions have always carried a reputation for providing their customers with a business modeled after their own desires. The common theme being, "This is YOUR auction." When technology was thrust upon the industry, it included every button necessary to complete a transaction. What it lacked was a method for bringing the traditional customer focus into view.
AuctionVcommerce.com is a platform designed to bridge the gap between the auctions, and their online customers. It is a respectable arena where auction customers may leave positive or constructive feedback. Auctions will have an opportunity to make improvements based on customer reviews, and will have access to a wide selection of training, support, and management products geared towards setting and accomplishing online goals. Profile matching will help dealers quickly locate online auctions within their desired geographical range. The overall objective is to improve customer confidence, encourage online participation, and increase the number of qualified online venues available in the virtual space.
The launch of auctionVcommerce.com is the first in a 2-part introduction of Vcommerce - an organization focused on developing standards for the online auto auction community. The subscription features will continue to be rolled out as we gear up for the Vcommerce Grand Opening Launch at Used Car Week in November. Interested in tracking our progress? Feel free to follow us on LinkedIn as we provide continual updates:
The auto auction business is definitely one that is rooted in traditional values, and let's be honest... it is an industry that did not exactly swoon at the idea of selling vehicles online. Of course, in their defense, it had more to do with a firm handshake, kicking tires, and interacting with customers than having an aversion to technology. The auto auction business simply has a heart.
Needless to say, crossing the bridge to the virtual space, although it has almost become a requirement, has not been an easy transition for companies that spent many years developing their close-knit communities. There were never any real guidelines, and the lack of success, even at this point, has done nothing to alter the original belief system. Yet, the technology keeps moving at lightning speed. Meanwhile, auto auctions are working hard to maintain their old-school brick-and-mortar charm while putting forth an effort to repel the prediction that, not being online, will mean 'certain death' -so to speak.
For some auctions with the infrastructure to support this virtual expansion, the change is not a threat to the operation. However, if we're talking about an auction where the General Manager is out checking in vehicles because a lot person called in sick, then posting event highlights to social media is probably not going to be high on the operational priority list. That being said, the majority of auctions are beginning to spill more of their resources over into their online facility in an attempt to future-proof their business. Long-time auction owners and Managers are becoming online entrepreneurs. The evolution is happening right before our very eyes. So if you're an auction owner, or a General Manager, I just have one question for you... When it's all said and done... will you be ready?
You could put me on the fastest thoroughbred in the world, but I guarantee you that I would still lose the race. It's not what I do. Despite the fact that the horse is capable of excellence, he still requires a skilled operator. Now let's name the horse 'Technology', and envision your auction as the jockey. Are you jumping obstacles, or are you still trying to figure out how to open the gate? If you are the latter, then you are not alone.
There is no doubt that the application of technology can sometimes seem to create more problems than it resolves, especially if the auction does not have someone who is adept in troubleshooting or maneuvering around the technology at the first detection of a bug. Essentially, when an auction signs on for live, Internet broadcasting, they pronounce to the world that they are a technology business. The question is... how well has the auction established their credibility in this capacity? For example, when dealers call because they are experiencing issues attempting to get online and bid, does the auction have a reliable customer support system in place? How dependent is the auction on their technology provider? Do they have to call the support line for even the most minor administrative tasks? A huge problem for the technology providers is that they are inundated with calls that are geared less towards 'tech support', and more towards supplementing the auction's deficiency in qualified staff. Unfortunately, the snowball effect is that the technology providers receive a higher volume of support calls than necessary, and even the most legitimate requests end up buried in the never-ending sea of feature requests and minor bug fixes.
Then there is the issue with 'too much technology'. Technology companies sell technology. They are not going to tell the auction, "If you have that, then you don't need this." In the event that something goes wrong, the auction has to guess which company to call, and is almost always referred to the other company. "It's not us, it's them!" This is extremely frustrating, especially on sale day. The bottom line is that auctions have a grave need for technology intervention both prior to purchase, and throughout the relationship with the vendor.
Still, technology is only one aspect of the equation for online success. Let's forget the horse for a minute, and talk about the elephant in the room. Let's name the elephant 'Online Marketing'. There are some auctions with a great technology infrastructure, but lack the ability to strategically market their business online. Unfortunately, not many marketing companies specialize in the online vehicle auction realm since, prior to technology, auctions typically restricted their efforts to on-site promotions. Therefore, hiring a marketing company would be costly, and require a lot of effort in the way of trial and error to determine the most effective campaigns. All the while, online attendance remains low, and the cost of having an online business has now skyrocketed. To the majority of auctions, the marketing plan is comprised of a single sentence... "Send out an email blast!"
Of course, there are the exceptions to the rule. There are auctions who have raised the bar when it comes to marketing. In addition to email blasts, they have turned to social media in an attempt to captivate their online demographic. However, even with some of the most engaging posts, and well-designed collateral, the marketing effort may still fall short of the new customer acquisition effort. Here are some ways that even the most visually impressive campaigns may not go the distance:
No analytics: The marketing effort is in place, but never evaluated or improved.
Ineffective promotions. If you are giving away a grill, you are probably not marketing to the online customer.
Poor execution: The marketing brought in new customers, but they did not have a great experience.
Lack of follow-up: The auction never calls customers who have dropped off to ask about their experience in an effort to determine why they left.
So whose job is it to manage the online initiative? This is still a mystery at many auctions. In addition to the 'who', there is still the question of "what do they do?". Are they in charge of making sure events are created, and the inventory makes it to the internet? Do they interact with clerks, and auctioneers? What expectations do they relay to the online staff? Do they define the online marketing strategy? Do they set performance goals, and track milestones? Do they follow up with online customers? Do they monitor the sale? Are they effective Online Managers? or... are they actually a sales or IT person who has been appointed the title of 'Online Manager', and are expected to fill this role in addition to their pre-existing responsibilities?
The fact of the matter is that the creation of online technology left the Independent Auto Auction community with a lot of gaps to fill. There is now a surplus of technology, and a deficiency in training and resources. Many of the auctions were sold on the idea that the technology would do all of the work, and grow their business. Ultimately, they've come to realize that they can have the best horse in the race, but... they still need a jockey. Allow me to introduce... 'Vcommerce'.