Monthly Archives: August 2016

List Online To Sell, Not Advertise


carsales.com acquired a 49.9% stake in Encar.com from the SK Group in 2014 with the aim of using its number 1 market position to accelerate the growth of the business.

Encar is a clear leader in the online automotive space in South Korea by inventory and traffic with one massive difference from carsales – it had no lead attribution for its paying Dealers.

A Dealer would list their inventory on Encar with the Vehicle Detail page showing all the Dealer’s details (address, phone number, etc) and no email lead form. The phone number was the Dealer’s so there was no tracking or recording of the calls. Therefore Encar had no way of knowing how many people were making contact with a Dealer meaning there was absolutely no lead attribution to Encar from the Dealer. This makes it hard to charge for the true value the website is delivering.
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This of course flies in the face of the carsales’ business model which, being a lead based model, relies on lead attribution to carsales from the Dealer.

Even if we were never going to introduce a lead model into the Encar business, lead attribution has to be an important facet to ensuring Encar can show the Dealer real value by way of selling cars.

So planning was put in place to insert a lead form into the Vehicle Detail page and setup Call Connect which would see Encar supply the Dealer’s with a phone number where the call details can be tracked, recorded and stored in a database.
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I think it was fair to say that the Koreans weren’t sure if Korean consumers would insert their details into a lead form or if Dealers would accept a phone number from Encar that would record the phone call.

We made the website enhancements towards mid 2015 and the first month saw tens of thousands email leads and phone calls logged as Encar leads. In the 12 months after the number of leads multiplied by a factor of 4-5 and still rising.

The next phase is to introduce the Dealer’s to Lead Management to ensure every lead is treated as a car buying prospect and for the Dealer to sell cars from Encar.com.

Introducing a lead model does not necessarily have to be the panacea to driving growth but the steps required to be in a position to be able to switch to a lead model are vital in ensuring a strong, viable online auto vertical leader.


Achieving Economies of Scale


carsales push into the Spanish speaking Latin America countries of Mexico and Chile enables it to get achieve economies of scale in technology and other areas of its business.

The push has been on to deliver our web site platform and dealer applications that are successful in Australia, through Latin America with the specific goal of being able to “Spanishise” (probably a stretch to give it a word) the platform and get multiple uses from it, thus achieving economies of scale.
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We have learnt, however, that achieving economies of scale can sometimes be a false economy if not done with a complete appreciation of all the factors in the new geographical location you are entering. Just picking something up and dropping it in another country will not necessarily work.

carsales and Webmotors.com.br were keen to give Webmotors the “carsales feel” so in addition to adding the Ryvuss search engine, the three main pages being the Home page, Search Results page and Vehicle Details page were all redesigned using the carsales template.

When the development was complete we were all very excited to launch the new site but it didn’t take us long to realise that we had misjudged the Brazilian users. There were a few things they had on the old Webmotors site that they felt were super important in buying a car and were not backwards in coming forwards to tell us about it.
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Quite a few subtle changes were required to meet the expectations of the local users. This was our first lesson that picking up exactly what works in one country will necessarily be the optimum solution in another country.

What about regions within a country? Webmotors made two acquisitions of leading regional automotive web sites shortly after we invested in the business. The first was Meurcarango.com.br which was the number 1 player in the North East of Brazil. The second was Compreauto.com.br which was the number 1 player in the Sao Paulo country side.
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The plan was a simple one – let’s get some quick wins by using the Webmotors platform to drive each of the new websites. Each website would take on the same look and feel (with it’s own colours and logos) and same features. This would enable us to achieve economies of scale in maintaining one Brazilian wide platform down the track.

In both Meurcarango and Compreauto we quickly realized that the response from the user base within each region was similar to what we experienced with the Webmotors site.
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So while we won’t get economies of scale by simply putting a Spanish version of what we have in Australia, we will get enormous benefits through economies of scale across the platform driving the websites and the dealer applications. An example of where we are already achieving this is with our Ryvuss search engine which is already in use by Webmotors and Encar.com in South Korea.

Our dealer applications like Autogate is where we will see great benefits through “Spanishisation” as they are not as open to user nuances by country or region as a consumer facing website is. This is where we expect to get even bigger benefits from working on the one global platform.

All in all carsales is in a great position of leveraging from proven IP and a technology base that can move the needle in these countries. I can’t wait to see Soloautos.mx and Chileautos.cl benefiting from this.


Leading in a Global World


Not everyone aspires to be a leader or sees themselves as a leader but I bet in some part of their lives they are leading the way – and are good at it.

I’ve said in other posts and I’ll say it again, I feel lucky that over the journey I’ve enjoyed what I’ve done and what I do.

My role as carsales Director International is multi faceted in that I am a leader in the carsales core business as part of the Executive Leadership Team, I am the leader of our International team and I get to be the leader of some great businesses in other countries.
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I used the word “leader” three times there; not to be egotistical, the word isn’t in my title or job description but because it is a part of my role that I consider the most important; and it is one I enjoy.

So what does a leader mean? No doubt you would have read a few posts defining leadership and comparing a leader to a manager. I see it as setting the vision, the strategy, coaching, being part of the team, making the tough calls, not always being right, listening and sharing your experiences.

Most of all it is about making the right connections with people. I’ve said it before that I inherently believe “people do business with people they like”. This includes the leader and doesn’t mean you don’t make tough decisions that aren’t going to please everyone; it does mean that you need to earn their respect in the process.

I “got out of the way” of the best players and let them play

Leading is something I have undertaken from a business perspective and in my football career. You’ve probably read about how leaders should “hire the best people and get out of their way” and I completely subscribe to that.
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When I first joined carsales I had the task of bringing our LiveMarket product to life. I really enjoyed the first few months of not having to lead a team or worry about anything but the task at hand. This didn’t last long as I soon found out that I really missed leading a company, leading a team. Now I get to lead multiple, diverse teams and enjoy the challenge!

From a football perspective I was never the best player (or second or even third best) in any side I played in but I was able to successfully lead sides from a very young age (senior playing coach at 26) by getting the respect of my team mates and leading by example. I also ensured I “got out of the way” of the best players and let them play.
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This is the way I approach it from a business perspective as well. For instance, we have a controlling interest in Soloautos in Mexico and Chileautos in Chile. The first part of leading these businesses is to get to know the people, understand them and develop a relationship with them. This is essential to be able to lead these businesses from Australia with our carsales International team showing great leadership in taking these businesses along the journey.

it’s not that we are smarter than you guys, we’ve just seen it before

Our two minority positions in Webmotors in Brazil and Encar in South Korea are not too much different because as strategic investors in these businesses, the people inside look to us to show leadership in best practices to accelerate the growth of their businesses.

As a strategic investor in these businesses, carsales is using its experience and intellectual property as leadership pillars but it is all wasted without “walking the walk” after “talking the talk”. As I have said many times to our global friends “it’s not that we are smarter than you guys, we’ve just seen it before”.

If we can’t lead the way with this as the cornerstone, we’re in a bit of trouble (just my opinion).


A Unique Search Filter in Brazil


Webmotors‘ cars for sale search has a filter for bullet proof cars. To us at carsales, this is just one example as to why our global platform needs to accommodate nuances of local markets. After all, if we were based in Alaska and were moving globally to Australia, air conditioning may be a search filter that would need adding.

It makes sense in Brazil because there is a reason bullet proof glass is a must have new car after sale accessory – at some point it will most probably be needed.
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Just before the Rio Olympics news came through about a Russian diplomat being the victim of a robbery where two guys on a motorbike pulled up beside his car, smashed his window and demanded his watch; a gun was pulled by one of the robbers, the Russian diplomat pulled the robber into the car, took his gun and shot him.

For us in Australia it is an amazing story. I’ve been traveling to Brazil for carsales and our Webmotors business very regularly over the past 3 years and unfortunately I don’t find it amazing; “only in Brazil” as Fernanda from Webmotors would say.
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You learn very quickly that in traffic (and believe me in São Paulo there is plenty of it!) you do not sit there with your window down waiting for someone to come and relieve you of some valuable items.

Take a story that happened to one our Webmotors’ team members which is not an uncommon one). He was sitting in São Paulo traffic waiting for the lights to change when a motorbike pulled up with two guys on it. The passenger uses the handle of a pistol to bang on the driver side window to check if it was normal glass or bullet proof glass. It was bullet proof – pretty easy to tell the difference with the butt of a pistol – so they move on to test another car.
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He wasn’t so lucky the next time however when he had a flat tyre and was changing it on the side of the road. Two guys came up casually, waited for him to finish changing the tyre, produced a gun and drove off with car. Bullet proof glass doesn’t help when you aren’t in the car I suppose.

A lot of more expensive cars go an extra step and are fully armored. It is an after market item that has to be considered and factored into the price of driving a nice car.

I’m sure every country is different when it comes to options required in cars and why Brazil be any different!


An Example of Easy E-commerce (the way it has to be)


carsales.com launched tyresales.com.au a few years back as a complimentary market for our consumers and dealers to benefit from.

It differs from our core businesses as it is pure e-commerce as opposed to the marketplaces we run that introduce buyers and sellers. We have learnt that e-commerce is somewhat different to an online marketplace but there is one thing that is the same – they both have to be easy.

carsales.com.au is easy because of its superior search technology, easy design, quality data, the largest, cleanest inventory in the market and most of all because “it works”. We are striving to make Tyresales.com.au “just work” too and here’s an example of it working.
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Last month I had my car booked for a service at Ritter Land Rover on a Friday. From my previous service I knew that I was most likely going to need new tyres so I had a choice – get on the front foot to order them myself ensuring I get a good deal or I could just wait until Ritter called me to say I need new tyres which they would source, taking away my control and most likely costing me more.

So I decided to use Tyresales.com.au to find my tyres, buy them and have them delivered to Ritter in time for my service. This is an absolute plus in buying tyres on Tyresales for consumers and dealers.

One of the benefits of being a carsales dealer is that they have the opportunity of accepting tyre fittings from Tyresales which then provides the opportunity to up sell know a service. For a consumer, combining a service with tyre replacement just makes sense.

The process of finding the tyres I need was dead set easy, even for someone as car illiterate as I am. Not only did I find tyres easy, I found quality tyres that were 22% off retail price which for 4 tyres added up to a $600 saving. The real beauty of it though is that before I paid for the tyres online, I had the option of selecting the dealership I wanted the tyres delivered to.
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So in virtually 1 swoop I found the tyres I wanted, paid for them (with real savings) and had them ordered for delivery to Ritter in time for my service on the Friday.

Come Friday I took my car to Ritter for a service and when I picked it up, 4 new tyres were making their mark on my Land Rover.

The process couldn’t have been easier or more convenient, exactly the way e-commerce should be (and thank you Ritter for the same in service!).


Did I Read The Contract?


Is a contract like a manual for a DIY home item? You have a quick scan and think “how hard can it be”.

How many of us sign up for a build or service at home without fully reading or understanding every detail of the contract? I dare say it would be the vast majority of people and this is where companies can profit.

When you build a pool, the pool company goes into detail about the engineering, layout of pipes, etc in order to provide a quote and plan to follow for the various trades required. Every aspect of the pool is clearly shown in a detailed engineering drawing of the pool build including every pipe from the pool back to the filter/pump area. There can be 20-30 pipes running upwards of 10 metres each.
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Since a detailed drawing is done with precise measurements of all aspects of the pool build including all pipes, the fine print is clearly designed to get you as an extra charge. The pool company know exactly how far each pipe has to run before the build and would be factored in to the price that is agreed on. This is clearly deceptive and designed as a profit maker for the pool company and this is not the only extra that creeps in.

So you can imagine the surprise when during the construction of the pool you are hit with an unexpected invoice for ~$6,000 extra citing “extra pipes”. The fine print of the contract only allows for the first two metres of each pipe and the rest is charged per metre. This is never discussed during the pricing process.

Something that should have been picked up in the contract. Most probably.

Something that is designed to catch you out as an extra. Definitely.

This extra is “cream” to them. Why? Because we don’t read and/or understand the contract.
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It is not illegal but that doesn’t make it right. I would imagine most people would get annoyed, complain, fight but have to cop it to get their pool finished. I would also imagine the pool company think they are extremely good at business to keep getting away with it.

The lesson is to read and understand the contract you are entering, after all that is what they are for.


2 Critical Factors in an Ecommerce Site


carsales.com has made its mark with online marketplaces. How hard can it be to take that into ecommerce?

Like anything, it’s not hard when you know what you don’t know. Simple right? Let’s look at it.

carsales.com.au is an online marketplace connecting buyers and sellers of cars. Tyresales.com.au is an ecommerce site where buyers purchase tyres through the online store and have them delivered to a Tyresales accredited dealer for fitting.
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Put simply, an online marketplace connect buyers and sellers but doesn’t play a part of the actual transaction whereas an ecommerce site is all about facilitating the transaction and providing the goods purchased online.

We have found from a website perspective that changing wording, colors and layout on both sites can move the needle as far as generating leads or sales, vital metrics. Above all, they both have to be easy to find what you want and easy to action.

There are however, two factors in an ecommerce site that are material to success:

Price
Price on an ecommerce site is absolutely vital. Online buyers will shop around to find the best deal so it is ultra competitive. Remember, the price is the price on an ecommerce site, there is no haggling as you are paying without talking to anyone whereas the price on an online marketplace is generally “negotiable”; the marketplace connects buyers and sellers to then make the deal.

A competitive price on carsales.com.au is important to attract buyers but it is not the be all and end all. On Tyresales if the price isn’t the most competitive we will lose the sale to one of the many competitors out there.
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Supply
Once a buyer has purchased something through an ecommerce site, it is imperative that the goods are supplied in the timeframe given. Not doing so ruins all goodwill which effects word of mouth recommendations, could create negative online reviews and most definitely cancels out a repeat purchase.

We have found on Tyresales that these two factors are critical in creating a trusted site that is top of mind when drivers need new tyres.

These are only two differences between the online marketplace and an ecommerce site (there are plenty more) and wow, they take some experience to get it right.