Which carsales moves were most critical?


After an article I wrote a little while ago (6 moves that drove carsales) I was asked by a number of people “were there any one of these moves that if not made, could have been terminal for carsales?”.

The 6 moves I talked about were introducing Private Sellers, adopting the Sell Your Car Until Sold model for Privates, moving to the Lead Model for Dealers, Acquired Trader Assets (cars, bikes, boats, etc), creation of Mediamotive and the implementation of an All Car Search, all in chronological order.

It’s a really interesting question and really who knows; I’ll have an educated guess nonetheless remembering I was not in the carsales business for ANY of the 6 moves I talked about although I was very close in running DMi, an independent technology/data services provider working with carsales’ competitors.

I can safely say that if carsales hadn’t have introduced the Lead Model in 2002 they would have been in a lot of trouble and most probably terminal.

At the time they were one of 3-4 auto vertical sites with the same business model trying to make a dollar; none were profitable and carsales was the only business whose sole focus was the online auto vertical space.

Almost immediately the currency for ALL websites listing dealer cars online was the number of leads they delivered and because of this model and the actions around it (like the mandated use of Autogate Lead Management), carsales were delivering a minimum of 4-5 times the leads of their competitors.

They had differentiated themselves from their competitors with a profitable business model and had created the ultimate barrier to exit for dealers – they become an integral part of the process for dealers to sell cars.

carsales made the car buying process all about the car and not about who was selling it. This flew in the face of virtually every dealer at the time who were convinced it was their brand, the dealership, that drove the sale.

Do people really care who they buy a used car from? No, they care about getting the right car at a fair price. This was true then and holds true today.

So what about the other points? Well, there could be an argument mounted that if they hadn’t have introduced private sellers in 2000 they may not have made it to 2002 for the next two important moves.

When they introduced Sell Your Car Until Sold (also in 2002), there is no doubt that this pushed their private seller business to relative levels no other auto classified vertical site in the world has reached.

But the fact that this was done in the same year as the Lead Model makes it hard to say that if they hadn’t had made the move it could have been terminal. In isolation, yes.

As for the last 3 moves, no they would NOT have made carsales terminal had they not been made. These moves just helped to accelerate the business.

Acquiring the Trader assets was very nice, gave the company added breadth and strengthened their offering but if it wasn’t done, carsales was going nowhere.

Establishing Mediamotive has been fantastic for the business in terms of diversifying and maximising revenue but again, the business wouldn’t have been terminal.

Same with All Car Search; excellent differentiator and driver of sustained growth but not terminal if not done but did have high risk in terms of potentially reducing dealer leads in favour or private leads (this did not happen).

All 6 moves weren’t without a high degree of calculated risk even if they all wouldn’t have risked the company.

To reiterate, I wasn’t working with carsales for any of these moves but I was working with carsales’ competitors at the time and saw first hand the impact each move had on them.


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