Deny Your Customer, and Your Customer Will Deny You!

One of the hardest parts about transitioning an old school business to the modern age of digital, is the belief that everything must be done in person. "Customers have to be able to kick the tires!" "You have to shake the customer's hand, and look them in the eye!" These statements are the low-hanging fruit of digital disruption. What if that isn't what the customer wants. What if the customer wants a choice?

To quote Rear Admiral Grace Hopper,"The most damaging phrase in the language is: `It's always been done that way.'" If your intention is to build an online business, then you must succumb to the expectations of the online customer - And why wouldn't you? These customers are not typically 9-5 oriented, and they are willing to explore your information. They will chat, call, or navigate through your self-help portal any time, day or night, if you let them. While searching your site, they may have a quick question that they will just as quickly dismiss if they have to pick up the phone, and make a call. However, when a customer has the option to send a message via chat, then they actually initiate the sales process. This is an advantage that is completely overlooked by traditionalists.

Online customers are not the type to hound you about implementing new features. If you have it, then you have it. If you don't, they will keep it moving until they find an online business that does. Without the burden of travel, online customers are able to sift through businesses like the pages of a newspaper... (which they no longer receive, because they prefer to read the digital version). In other words, you need to know your customers before you decide to make decisions for them. Deny your customers the service options they want, and they will deny you the business you need!

Think Outside the Blocks!

What Message Are You Sending To Online Customers?

The Customer Perspective
Your lane customers show up to the sale, and they are welcomed with greetings from the staff, Early Bird Specials, free lunch, a chance to win prizes by participating in physical activities after the sale... It's all part of the physical auction experience. The online customer logs in... no incentive to attend, no acknowledgment of their presence, the fear that floor bidders will be shown preference, and an added fee for the privilege of being able to purchase online. What are we saying to online customers?

This scenario is the condensed version all of the discouraging factors I have seen at various auctions throughout the country.  These practices were implemented through the direction of the simulcast vendor, the perception of the auctioneer, and despite the absence of research and development. Live Auction Broadcasts were sold to the auctions as an enhancement, not as a virtual expansion. Therefore the perception not taken into consideration was that of the online customer. This is probably due to the fact that, back then, online attendance was extremely low, and online options were limited.

Why Do We Tax the Online Customer?
I remember working at the auction, and having the simulcast provider sell us on the idea that we could make money by charging our online buyers an added fee for the convenience of shopping online. Looking back, I see that this was a tactic to counter our reaction to the investment we would be making in licensing the software. Now, compared to other platforms, it's almost as if customers are being fined for attending the online event. Additionally, when a buyer makes the decision to purchase vehicles, he has to factor in that added cost, which reduces the motivation to buy. I think it's safe to assume that motivated buyers lead to higher conversion rates. I am also going to assume that the revenue from the buy-fee would be more lucrative than an online tax. 

The Digital Revolution
In the last issue, I distributed an article on digital disruption, and the impact it has had on Fortune 500 companies. The moral of the story was that managers who did not direct a healthy initiative towards virtual development were unable to compete with advancements in online automation that reduced operating costs and created greater efficiency for customers within their industry. They also went on to point out that the digital revolution is reaching all industries. Let's look at the evidence in wholesale remarketing. Auctions are now beginning to compete with former consignors as new platforms are emerging, branding dedicated marketplaces for companies like GM, Hertz, and most recently, the dealerships. In order to counter this disruption, we need to focus on the advantages the online auction facility brings to the digital customer. We have to undo all of the wrongs, and eliminate anything that may discourage customers from online participation.

How To Counter The Attack 
AuctionVcommerce was developed for this exact purpose. So of course we're going to recommend membership. In the midst of this digital revolution, it is imperative to align your organization with others  looking to preserve the future of the industry. You can continue to enhance your technology as part of the plan, but at the end of the day... Did you provide your online customers with a memorable experience? Were your online customers able to enjoy your virtual facility without unnecessary inconveniences? Most importantly... will your online customers be back?

Current Position
In our review of the auction data that we have accumulated over the last 5 months, we have made the following assessments: Across the board, the ratio between online attendance and online participation is extremely low. Increased attendance, for the most part, does not impact the percentage of participation as it should. Active bidders tend to be the same core group week to week with a small variation of random participants. Meanwhile, there also seems to be a dedicated group of observers, or at least, attendees with ongoing records of low to no participation. 

What Now?
Collectively, we are developing the standards that will serve to transition the traditional auction model to the virtual space. Our goal is to open the discussion with Auction Owners, Officers, General Managers, and anyone else involved in the decision making process. You have read my personal point of view on auction fees, and online incentives. I would like to know where you stand on both of these issues. Please respond with answers to the following:

1. What is your point of view with regard to online fees?
2. What incentives do you currently provide, or would you be willing to provide to online customers?

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Stabilizing your Online Auto Auction

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.

To learn more, visit www.auctionvcommerce.com

"Think Outside the Blocks!"

Auto Auctions - Meeting the Online Expectations

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.”

Online Auction Customers: Better Support for 2016

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. 

Why Wouldn't Auto Dealers Source Inventory Online?

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.

The Online Impact

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!