Fortunately for me, Jeff Clark, VP of Sales for MyLiveOffer was kind enough to comment on my blog and give more insightful commentary on MLO. I’m not sure how many people go through my old comments, so I thought I would make post it up as a new post. I’ve tried to bold Jeff’s comments where possible.
I enjoyed reading your post and have added some comments to your questions or concerns about MyLIVEoffer.com and how it is different than any system currently available for buying cars online today.
I’ve read about MyLIVEoffer.com in multiple blogs and auto news sources, so I’m pretty curious about this new company. I apologize to the MyLiveOffer team if I get this wrong, but here is how I think it works.
1. Consumer searches for a car
2. Consumer finds the car he wants, and enters an offer price
3. The dealer can counteroffer: The counter offer is automated so it requires no effort from the dealer other than the original setting up of the pricing parameters…
4. Eventually the consumer and dealer come to a price: That is the goal, but it can be done rather quickly, really just minutes. According to Outsell 56% of consumers want price negotiations completed prior to entering the dealership.
There is also a bid system with a Buy It Now price and a hidden reserve. This could be a great idea, but I am a little skeptical. Here is why I think it could work:
· Experienced management team. The management team has extensive experience in the Internet, auto industry, start-ups, and search marketing. Given their business, this seems key. On the strength of management team alone, I would bet money on them achieving some success.
· Better user experience. Few people like to negotiate, few people like going to the dealership, so taking out the pain of these steps makes sense. Exactly…we want to capture some of the $14 Billion dollars that consumers spent on eBay on automobiles in 2005. Make it a better experience for the consumer and the dealer.
I think that’s where the advantages stop. The basic premise that people do not like the current car buying experience makes sense, I think Carmax’s approach has proven that, but why would a consumer prefer a transaction-based experience? There are several reasons: Time, we all don’t have nearly enough of it. Convenience of the process…imagine you could locate the car that you want at a price you are willing to pay, get financed, accessorize the vehicle, and have it brought to your home or office, or if you do go to the showroom, the delivery time is less than have of a traditional car sale. This process lends itself to a better consumer experience and stronger CSI for the dealers.
I think the MyLIVEOffer founders may have thought that eBay Motors does well, and they have a bidding/buy it now/best offer experience, so why not try it in the local market. Back in 2003 Autotrader tried something similar with auction style listings, but since they no longer offer auctions, I’m guessing it didn’t work. The adoption of this idea thus far has been tremendous. This is not the be all end all of car buying, but yet another creative mouse trap that a dealer can use to guide the consumer through the process or funnel if you will and reduce their dependency of third party lead providers, there is nothing wrong with the use of third parties, just a better way to do business.
Most people do not want to buy by bidding or negotiating. Based on the number of visitors to eBay and other auction sites I would tend to disagree with this statement. Almost every good one can buy has a fixed price; admittedly cars and real estate are a big exception. But, are they an exception because people prefer that process, or they expect that process? I think it is a little of both…consumers are condition to negotiate no matter what on high ticket items, why? Because the industry has created that model…not the consumer. I think it’s just expectations, and people would prefer an easier, process, which I don’t think MyLIVEOffer delivers, instead of it just allows them to conduct the process online. If it is online it is in turn easier, considering that we protect the consumer’s identity, and unlike eBay they have an out if they get to the dealership and something is not right. For instance we had a customer that locked in on a car online after going from dealership to dealership and he and his wife hated the process…they were told verifying things and dramatically different pricing. But we found them the car and they were thrilled with the price and the process, but when they got to the dealership something was not right, they were uncomfortable and in turn left with no obligation. No other system, allows a consumer to do what this one does with the protection that this provides and in turn allows a dealer to sell more cars at a cheaper price point thus giving them an advantage over their respective competition. It’s like email or instant messaging straight to the dealer, but with the ominous step of requiring a user to enter a credit card. The only time a credit card comes into play…is once a consumer has agreed to the purchase price of the vehicle less tax, title, tag, etc. and once again this is a call to action, that the consumer can control. If they get to the dealership and want the next model up or a nicer trim level or another model the consumer has the ability to do so.
MyLIVEoffer duplicates the functionality of emails, (There are no emails…changing hands…only offers.) and doesn’t provide enough of a different experience to make a consumer seek it out. If [I] never had to step foot in a dealership because of MyLIVEOffer, I would say it’s an interesting service, but if all it does is allow a consumer to “email” a dealer and then requires a credit card, I don’t see the benefit. (They are not emailing the dealer, they can if they choose too…but instead what they are doing is making offers that the dealer has predetermined if they have a tolerance for that offer, if they change the pricing of a vehicle the consumers that have made offers on that vehicle are automatically notified that the dealer has adjusted the pricing of the vehicle. Finally the credit card is only required if you choose to purchase that vehicle through the system, there is absolutely nothing to prevent the consumer from picking up the phone and calling the dealer at the number on the page and or even visiting the showroom and referencing the site and or the service depending on how they found the dealer.
We have launched a couple of regional portals and are now looking to launch a national portal that can drive consumers to dealers and suppliers that advertise on the system…no where on the web today is there a place to negotiate anonymously in the comfort and convenience of your home or office and not be bound by law to make a purchase…it is fast simple and easy, no more running from dealership to dealership and it takes the fear out of buying a car.
Your assessment of our application is for the most part right on target, the part that you and others sometimes have a hard time seeing is we are not a third party trail of emails and the traditional back and forth…of come on down phone calls, but instead a transaction based online offering that allows the consumer at any point to step out of the online process and right into the traditional car buying process as if they were in the showroom the entire time.
The dealer gets it, and the consumer in the end will get it…sell more cars for less money and give consumers a better way to purchase their next new or used vehicle! It is a win, win.
Jeff, thank you for taking the time to comment, it certainly provides more insight into your business.