DealerElite Q&A: Chip Perry, President and CEO; Alan Smith, Senior Vice President, Dealer Sales – AutoTrader.com

DealerElite:         AutoTrader made several new-product announcements during the NADA convention. Tell the DealerElite audience a bit more about those.

Chip Perry:          We spent a lot of time in 2010 talking to our dealers and to consumers to find out what they would like to see added to our site and then did a lot of testing to make sure we got them right.  The result is the suite of products we call “Solutions ’11,” which includes our Front Line Listings new car listings enhancement; our Connections Bundle, which features new ways for consumers to connect with dealers via chat, web links and social media; and our Promote By Payment feature, which allows dealers to highlight the affordability of a vehicle. The reaction to these products so far has been very positive.

Alan Smith:         We took the opportunity at NADA to talk to dealers about these new products and local consultants will be working with dealers across the country to determine their current needs and see how these enhancements may fit into their current advertising programs.

DealerElite:         There’s been a lot of buzz since late last year on AutoTrader.com’s acquisition spree.  Can you fill in our readers on some of the strategy that went into buying Kelley Blue Book, vAuto and HomeNet?

Chip Perry:          First off, all three companies are very well known in their spaces – vAuto and HomeNet among the auto industry and Kelley Blue Book among both car shoppers as well as dealers and OEMs.  Thus, all three made sense as acquisitions as they are leaders in their spaces.  What intrigued us about each company separately and all of them together with AutoTrader.com was the opportunity work with them to create new value that didn’t exist before for auto marketers and auto shoppers.  We’ll be creating value for customers that is far greater than the sum of the parts we’re putting together.  One of the early integrations will be adding AutoTrader.com’s Trade-In Marketplace program to the Kelley Blue Book valuations.  The TIM product is the only one like it in the country – the only program that gives an instant offer backed by a company like AutoTrader.com – and we think connecting TIM to Kelley Blue Book has the opportunity to be really powerful.  We’ll be sharing more details about this in the near future.

DealerElite:         For those not familiar with TIM, please give a bit more background for our dealer audience.

Alan Smith:         A consumer using the TIM product inputs a variety of information about their existing vehicle into a web-based system.  This information includes the car’s make, model, color, condition and more.  At the end of the process, the consumer is given an instant offer for their vehicle backed by AutoTrader.com.  The offer is based on a database of hundreds of thousands of vehicle transactions which is updated daily.  The owner can take that offer to a participating TIM dealer and if the car matches the information submitted, the dealer gives the owner a check for that amount in exchange for their vehicle.  The shopper can choose to use that money for a down payment on a new or newer car or take the check with them. Many dealers are using TIM as an “industry expert” source of valuations and find it a big help in working with their customers on determining and agreeing on an amount for the customer’s trade-in.  The consumer feels good because they know they can never get less than the TIM amount and the dealer has the flexibility if necessary to sweeten the pot a bit to help land the sale of another car. Also for the dealer, TIM is a great way to source quality, used car inventory.  We’ll also be supporting TIM and our TIM dealers this year with a national cable television advertising campaign.

DealerElite:       How does AutoTrader approach working with dealers?

Alan Smith:       About two years ago we shifted our focus from sales to consulting. We know that AutoTrader’s success is based on the success of the dealers and manufacturers that advertise on our site, so we want to be sure in working with dealers that we’re solutions oriented – bringing to dealers solutions that meet their needs – whether it’s selling more cars or operating more efficiently, etc.  This shift is about being a true partner and helping our dealers to be successful with both their current and future AutoTrader.com solutions, as well as sharing dealership best practices and insights on online consumer behavior. Our goal is to make our ad campaign tag line “We Work For You” real.

DealerElite:       How can a blog like DealerElite help dealers?

Alan Smith:       DealerElite is a great forum for dealers to talk about what’s working for them and what’s not, and to share industry best practices.  We get a lot of value from DealerElite as it helps us keep a pulse on what’s important to dealers, what we’re doing well and where we can improve.

Chip Perry:        We’re eager to engage in and follow conversations with dealers and hear what they have to say in any forum – whether it’s a dealer talking to one of our 800-plus sales people fanned out across the country, meeting at a trade show or industry event like NADA or interacting online on a forum like DealerElite.  It’s this interaction that helps us understand dealers’ needs and how AutoTrader.com can help meet those needs.  We’re always open to feedback and insight into how we can make AutoTrader.com better and better serve our customers and the car shopping public.