Category Archives: Data

3 real time carsales metrics

I’ve spent the best part of the past 18 years leveraging the power of data in the online classifieds space.

When you have millions of consumers searching and finding their next car on a country’s number 1 automotive portal like carsales, Encar, Chileautos or Webmotors, data can invariably tell thousands of stories.

Here’s a few powerful “real time” metrics that only a carsales is able to provide with any credibility in their respective country’s car retail market:

Supply and demand
The Days Supply metric is one of my favourites, as it provides real value and something more accurately in the used car market that I don’t think can be replicated. It shows whether supply outstrips demand and vice versa. The beauty of Days Supply is that it can be measured for makes, models, versions, etc and for different geographical regions.

So if you were say a Melbourne metropolitan new car Dealer and a buyer has a 2015 Mitsubishi ASX as a trade in, a vehicle your used car team knows little about. Wouldn’t it be great to know that this model is the most sought after vehicle in Melbourne from a supply and demand perspective for vehicles that are less than 8 years old, have less than 60,000 kms and an average asking price of over $20,000?

What this means is that in the past 60 days 116 were sold but there are only 29 for sale which gives a Days Supply metric of 15 meaning that supply of this model for sale will run out in 15 days. Supply and demand says this is a car you should stock (all things being equal with the acquisition price).

Using the carsales LiveMarket Stocking feature, here’s the hottest used vehicles in Melbourne at 27 July 2017 (using the parameters above).

This list can be a pretty handy shopping list and reference point for any used car dealer.

Whilst Days Supply has been in available in Australian Dealers for some time, it hasn’t been used extensively from a buying perspective whilst some of the most profitable used car operations in the US use this metric to make great buying decisions.

Competitive sets
What better way of knowing what the competitive set is of a model of a car than comparing the models a consumer is searching, viewing and enquiring on?

We see millions consumers searching and finding their next car. Most consumers do not what they are going to buy next when they start their car finding journey on carsales. We see them search, view cars, narrow the search, view more cars, save cars in their Membership and finally enquire on cars, usually more than one.

By analysing this activity, we can categorically provide the true competitive set of each model of car and more often than not, the true competitive set is a little (or a lot) different to what the OEM thought was the competitive set for most cars.

The beauty of these data sets is that is always being updated and available virtually real time meaning that fluctuations in any competitive sets is quickly seen, providing enormous value to any “always on” marketing campaign.

Brand loyalty
When a consumer puts an enquiry through on carsales, many include their trade-in details with the enquiry. This information gives us a real-time view on brand loyalty, before the car has been purchased! Post enquiry surveys can then provide another level and view on brand loyalty too.

Comparing the make of a car being enquired to the make of the trade-in vehicle nominated immediately gives us a picture of brand loyalty. If I am enquiring on a Toyota Landcruiser and in the enquiry I include my Land Rover Discovery 4 as a trade-in, I think there’s a pretty good chance that I am thinking of swapping my Disco for a Cruiser wouldn’t you think?

When I am surveyed about my experience on carsales and if I bought the car I enquired on, this then provides rock solid evidence towards the brand loyalty indicator.

Using this data, brand loyalty can be measured daily and is accurate as opposed to waiting for registration details or OEM surveys.

The take out
These metrics are just three of a plethora of such metrics that carsales, Encar, Chileautos and Webmotors has available to benefit OEMs and Dealers, whether it be for effective advertising, pricing, appraising or buying cars.

Moving into Jobs Classifieds from Auto

When we started Digital Motorworks (DMi) in Australia in 1999, our total focus was the automotive industry.

This made sense since our experience was automotive and the DMi technology base out of Austin, Texas was developed for the automotive space aggregating inventory data from over 6,000 car dealers in the US at the time.

So how then was our revenue split 35% auto and 65% jobs classifieds just 3-4 years after starting?

It was about pivoting our niche core competency and getting out of our comfort zone, quickly.

Within 6 months of incorporating the company in Australia, we had signed a significant sized contract with a leading Australian media company giving them exclusivity over our data aggregation and normalization services in the automotive classifieds space for the next 3 years.

We were precluded from working with other major media players in the automotive space although there was still scope for more expansion in auto.

Pretty soon after this, we learned that News Limited’s new digital arm, News Interactive, was keen to get all the job ads advertised in all News newspapers around the country seamlessly into their website.

Could our data aggregation and normalization services be used outside of automotive? There was no reason why it couldn’t but it was big change to the business focus and to our head space.

We were given some sample job feeds to test and the results were encouraging but News threw another curve ball – the vast majority of ads are encapsulated in a pdf, image or an image in a pdf. Can we extract the jobs from these file types as opposed to a more logically formatted text file?

Long days and nights followed experimenting with OCR (optical character recognition) software to integrate into our systems and the results started to come slowly at first but the samples were encouraging.

Before we knew it, The Times of London newspaper group (a News International company) had heard about our technology and sent us samples to send back. It was starting to move.

Fast forward a couple of years, thousands of man hours, lots of perseverance and DMi was processing display and lineage job ads from every News Limited newspaper in Australia, The Times of London, the UL’s largest educational group TSL Education (UK) and Emap (UK) for display online in searchable formats.

Was this in our detailed business planning that we used to underpin financing and starting the company? Not even close.

It would have been very easy for us to not try our hand at this new business and stick with automotive, after all we were automotive people with automotive technology.

Sometimes stretching your niche core competency is ok as long as you have a handle on the effort versus reward and more importantly, a handle on what it might do to your business good and bad.

The Hard Decision carsales had to Make

Very early in in the founding of, it’s founders had a pretty big business decision to make which had an easy option and a hard option; the answer would have a material effect on its life span.

Here’s a little snippet that I believe is a great example of sound business decision making.

The rise of was no accident and showed how the leaders at Dealer Management System provider Reynolds & Reynolds (R&R and now Pentana Solutions) were/are extremely astute business people who used business nous and previous learnings to make the right decision to forge what has turned out to be an incredible journey.

carsales grew out of R&R back in the late 90’s leveraging the DealerLink network between it’s dealers to seamlessly collect used car information.

R&R had a choice to make between two alternatives very early in the life of carsales:

The Easy Decision
Was to partner with one (or more) of the biggest media players in Australia to supply inventory as the infrastructure was already in place to collect the inventory and it really was just incremental revenue for not doing a real lot as well working with some of Australia’s largest and most well known brands, which could have been attractive to a small(ish) software house in Mt Waverley.

The Hard Decision
Was to go hard with which was going into the unknown of competing against these media giants (at what they considered was their “bread & butter”) as a small software services provider.

Here’s my take on two important decision points that drove R&R to making the Hard Decision to turn their back on the media giants and compete against them with

1. “If it is this f&@king hard for us imagine how f&@king hard it is for them.”
This quote has stayed with me for nearly 20 years now. R&R had been trying to get dealers to list their cars on for a little while and the process was a difficult sell even though there was a seamless, automated inventory feed from the dealer’s computer system to So when the big media players and newspapers came looking for (exclusive) inventory data deals, the leaders at R&R realised that if it is so hard for us to get inventory with our setup and relationship with the dealers, just imagine how hard it is going to be for them. They realised they had something of real value to build on.

2. They were quick learners.
R&R US acquired in 1995 and was one of the first automotive sites in the US list used cars ( and started in 1997). In 1997 R&R sold to The Cobalt Group so that it could focus on it’s non-equity strategic partnership with Microsoft’s which was launched in 1996 (an excerpt from Automotive News, 1 December 1997DealerNet was a pioneer in providing dealers with Web pages in the early 1990s. But Reynolds wanted to sell it to focus on its relationship with its new partner, Microsoft CarPoint. ‘With CarPoint, we’re better able to fulfill our mission of linking dealers to buyers,’ said Kevin Distelhorst, Reynolds director of online services).

Fast forward a year to 1998, R&R US knew they had given up something that was potentially huge and missed their first mover opportunity (imagine their grief now, 20 years on when they see valued at ~$2.6b). Generally speaking the US market is 2-3 years ahead on the take-up of new technology and/or processes which gives us in Australia an opportunity to learn.

Hindsight is a wonderful thing and it’s easy to say now that the right reign was pulled when the wrong one could have been so easy had the media companies in Australia actually got their act together.

I take my hat off to the leaders of R&R who made it happen.

Note: All views are my own and not those of Limited or Reynolds & Reynolds (now called Pentana Solutions)

4 Data Driven Lessons

LiveMarket brings a live market view to new and used vehicle management for car dealers to make smarter decisions when buying and selling cars.

The beauty of LiveMarket from a demo perspective is that the data is the dealer’s actual data and it is live; no canned demo data setup to prove a point.

I was with a used car manager of a franchised dealership showing carsales’ LiveMarket product a little while ago. As I dug a little into his inventory in LiveMarket I found an interesting stat. He was only selling from 60% of his inventory, the other 40% were all well over 180 days old.

…other 20 were just a drag on net profit…

So as far as the dealer principle (business owner) was concerned, the monthly units sold, gross and turn were coming from 50 used vehicles when in fact it was coming from just 30. The other 20 were just a drag on net profit as their holding costs keep stacking up.

“why would I change it and risk not making targets?”

I focused on this as I saw it as an opportunity for the used car manager to improve his business (and his standing in the business) by pricing to the market to improve velocity (sell from the entire inventory) and ultimately improve overall gross. I was wrong.

“I’m consistently meeting my sales and gross targets with the stock mix I have now, why would I change it and risk not making targets?”. Fair point.

What would the dealer principle, the owner of the business, want though? If he could see the used car mix through the lens we were looking at I know what he’d want and so did the used car manager!

The decision was made though. LiveMarket wasn’t for him. He was happy meeting his goals and didn’t want “extra work”.

I learnt four lessons from this process:

1. Giving a more complete picture of a business through data isn’t for everyone.

2. As a business owner you need to have the data to be completely across your business.

3. As a business owner you need to ensure the people you employee and trust are driven to run the business as if it was their own with the same goals you have.

4. Data doesn’t lie so you need to ensure you are selling the dream to the right person in the business (i.e. the person who will benefit the most from the data).

I’m sure we’ve all been there before.

Great Lesson For A Startup – Realising The Real Value & Finding Your Core

Sometimes a company’s real value is not what their core offering is. Here is the story of such company that I was involved with and was fortunate to find their niche.

In the mid 90’s there was a bit of a fad in the US automotive industry around touch screen kiosks to showcase new models and to show new and used cars they have for sale. This was particularly good for dealers with multiple sites and to place these kiosks at shopping Centres, etc. The downside with this was that they were cumbersome to update meaning as soon as they were updated they were out of date.

“it’s all about the data”

Two guys out of Austin, Texas built on the concept and made their kiosk offering Internet connected, dialing into the car dealer’s computer system to retrieve the inventory details so that no matter where the kiosks were located they were automatically updated daily. On top of this, it simultaneously gave the car dealer a seamless and integrated Internet strategy for their web site. This was cutting edge stuff in 1995 and Digital Motorworks Inc (DMI) was born.
Their business model revolved around selling the Internet kiosk package to dealers, particularly targeting the big dealer groups who would pay monthly fees on a per kiosk and/or website basis. Not a bad model in theory especially considering there were over 20,000 car dealers in the US. By 1997 they were finding it difficult to get cut through at a dealer level “knocking on doors” and this was slowing growth (and affecting cash flow). They were doing it tough after such a promising start.

…the kiosk software was not their most valuable asset; it was in fact the software process and infrastructure they had created to automatically extract…

Through 1998 I was busy implementing the same business model for Reynolds in Australia and caught up with the DMI guys at the National Automobiles Dealers Association (NADA) conference early on in 1999. The change in their attitude from the last time I had met them was immediately noticeable and I quickly learnt why – “it’s all about the data”.

What they had discovered over the previous 18 months was that the kiosk software was not their most valuable asset; it was in fact the software process and infrastructure they had created to automatically extract the vehicle information from the dealer’s computer systems. So much so that they were no longer a touch screen kiosk provider and were now a data aggregation company! And it totally transformed the business.
They signed a deal with to provide them with the vehicle data from all of their thousands of dealers on a nightly basis. They went from having to knock on dealer’s doors to make a ~$500 per month kiosk sale to having dealer orders emailed to them at recurring ~$100 per month – an immediate 5,000 dealers at $100 per month is a lot of touch screen kiosk sales in one hit!

Fast forward 20 years and DMI today extracts, normalises and aggregates vehicle, sales, customer, parts & service data from over 25,000 dealerships across North America for a range of different clients as a fully owned subsidiary of CDK Global (formally ADP Dealer Services).

Without realising their real value and making it their core offering, they certainly wouldn’t be around today selling touch screen kiosks.

I Love The Value Of Aggregated Data For Smart Business Decisions

It is one thing to aggregate data. It is another to normalize, index, add depth and present in a way that save people and companies time and make money. Here’s an example of using aggregated data designed specifically to save its users time and make them money.

Some years ago I visited a car dealer to talk about our LiveMarket product. As we started to look at the product, he cut me off saying “all of this information is already available on carsales; every Monday morning I get my team together and we go through every one of our vehicles, see where it is positioned on carsales, adjust pricing if necessary, add comments, add photos and all that so we don’t need LiveMarket”.

I asked him how many people and how long this process takes him every Monday morning – “4-5 hours for 5 people” was the answer – No wonder they only do it once a week!
By doing what they did each Monday morning, they had an obvious appreciation for competitive live market data so I showed him how LiveMarket can do exactly what they do every Monday (plus a whole lot more) in just 10 minutes, any day you want, any time you want for every one of your vehicles. He could see how each vehicle is positioned in the market using real time data and make real time changes to make selling easier and more profitable.

The penny dropped. Using LiveMarket to get an aggregated view of the competitive live market data has not only saved the dealer a lot of time, it has enabled them to sell better, increase velocity and be more profitable in the used car department.

I love the power and value of aggregated data for smart business decisions.

4 Important Milestones In Creating A Great Product


Whilst I started as a developer I’ve never considered myself to be the traditional software developer. I’m not a tech head by any means and I don’t keep up to speed with the “latest and greatest”. By that I mean my focus has only been on the commercial outcome of a software product and sometimes that can upset those who want, what they consider, the perfect outcome.

A perfect example at was the creation of the LiveMarket product and here are some important milestones in it’s creation:

Milestone 1. A product scope was developed with a lot depth and hundreds of features before development kicked off in earnest on what was thought to be a 7-9 month project.

Milestone 2. A little over 2 months into the development cycle the product was about 30% of the initial defined scope when it was put in front of the first car dealer who immediately saw the value and signed on the spot; not for a free trial, not even for a special discount price for being the first customer. The product had enough value even at 30% completion that it could command a premium price.

Milestone 3. Three months later, with now dozens of dealers signed up and still well short of the expected development time and feature set, the owner of a large franchised dealership sent the following message to the carsales CEO – “I have to let you know that is the smartest use of technology/information and market that I’ve ever seen (and I have been filling in as Used Car Mgr for two months). Brilliant. Well Done. Congrats.“. Now imagine if it was 100% finished!

Milestone 4. Fast forward some 6 plus years on and LiveMarket is a key component for hundreds and hundreds of Australian dealers buying and selling used cars yet the product scope for LiveMarket has still not been anywhere near 100% developed; not the original scope nor the expected scope creep and new ideas that inevitably come through. It never will be finished, can’t be.

So if the commercial owners had waited until 100% of the product scope was finished before releasing it to the market, theoretically it would still be in development and not an important part of the carsales’ dealer business.