Monthly Archives: December 2016

Don’t Burn Bridges

In my blog post “2 Pieces Of Career Advice“, I talked about my father giving me two pieces of advice as I started my working career which I believe have held me in good stead.

There is actually a third one that wasn’t as implicitly said as the first two were but nonetheless was something that has stuck with me – “Don’t Burn Bridges”.

I have a lived through a couple of great examples where I have benefited from not burning bridges where I very easily could have.

Example 1 – Leaving an Employer

I started with Reynolds & Reynolds just before my 20th birthday as a software developer, working hard and gaining trust over 10.5 years to be driving and building some projects in the company’s history that have truly been game changers (ie CLERA for Parts and their Internet strategy incl carsales).

When I decided to leave Reynolds with a colleague to do our own thing, we weren’t popular with the owners, board, executive, etc and then the fact that we ended up working with practically all of carsales competitors heightened any tension that was there (as carsales was born out of the Reynolds business).

Fast forward another 10 years and I found myself with the opportunity of re-joining that same ownership, board, executive, etc at carsales which I ultimately did and now feel once again part of the “inner sanctum” helping them build and run great businesses.

I could have quite easily behaved in a manner in my exit from Reynolds and even further in my competition with carsales that would have “burnt the bridge”. The fact that I (sub)consciously didn’t and acted in respect of this is something I am happy about and has proven to be the right action.

Example 2 – Re-engaging a Client

When I left the employ of Reynolds and started Digital Motorworks (DMi) as described in example 1, the first client we captured was Pacific Access who through their Yellow Pages field force, had visions of an auto classifieds vertical.

Just under a year into a 3 year contract DMi worked with Pacific Access to execute their plan which at that point they concluded it was harder than they anticipated and made the decision to close.

Pacific Access had signed DMi to an exclusive deal over this 3 years and considering we had forgone other opportunities even the short period of the contract, we were not in a position to not exercise our rights of the contract and therefore had to ensure the contractual commitments were met.

Fast forward 8 years and Trading Post (now owned by Sensis, formally Pacific Access) approached DMi to re-engage for our inventory services. The result was a very satisfactory 3 year agreement to provide these inventory services for the Trading Post brand.

Again, the manner in which we handled the contract exit the first time around could have been terminal for our relationship with the business. The fact that it was not is testament to being aware of not “burning bridges” and acting with integrity.

Moving Forward

In reality not burning bridges is not and should not be a conscious decision; you can’t agree or please everyone but the way in which you conduct yourself should be enough that repeat business not be an issue and if it is an issue, it’s probably not your problem!

A Trade In Price is not a Retail Price

One thing the Internet has done to the car sales industry is (even further) blurred the line between a consumer’s view of a wholesale (trade in) price and a retail price.

When I say “blurred the line” I really mean “created an even greater divide”.

What do I mean here? Well, a consumer now has at their finger tips a proliferation of information on cars for sale, not only in their area but all over the country. Even more, this data is updated multiple times a day.

An important part of this information is the price of their car. This is where it is blurred as the car owner can easily see retail prices of the their car but rarely the wholesale or trade in price.

So when a consumer is buying a car from a car dealer and a trade in price is provided for their car, they are hit with “sticker shock” as they are conditioned on a retail price, usually the asking price and not even the sold price, further increasing the gap.

The end result is the consumer chooses to sell the car privately online and the dealer misses out on acquiring a good car to on sell.

carsales‘ Instant Offer goes a way to plugging this gap in bringing trade in cars to dealers as an option for private sellers selling privately.

Instant Offer is a great alternative for a consumer looking to sell their car quickly without the private seller process where our partner, a reputable wholesale buyer, will inspect your car to check that it matches the details submitted online and meets the offer conditions and will then offer you a wholesale price for your car (similar to the price a dealer would offer as a trade in).

While you may be offered slightly less for your car than you would selling through private channels, this is a quick and convenient method of sale which offers you next business day payment. From there the car will usually find itself for sale through the dealer network just like a trade in would.

It’s important to remember that wholesale prices (including trade in prices) will never be retail prices – they can’t be – but like retail, wholesale is negotiable and doesn’t have to be accepted.

At the end of the day it is in an auto verticals interests to ensure buyers and sellers (dealers and privates) have efficient methods to transact on cars in a retail and/wholesale environment.

Dealers and privates need to take advantage of the “network effect” a good online auto vertical brings. That is, the more sellers, the more buyers.

Take 2: Who has the No 1 Auto Classified Website in the World?

carsales is the number 1 auto classified website in the world.

Ok, there, that’s my answer to the common question of “where is carsales?” after my last post Who has the No 1 Auto Classified Website in the World.

How do I make this assertion now? (note: no I wasn’t told or advised to and I don’t feel obliged to!)

The best way I can answer this question is to quote the last paragraph of my last post:

At the end of the day, all of these websites are businesses and we all know that, as my esteemed former colleague used to remind me, “you can’t bank wank” – in other words, making money has to be the overriding measurement.

There you go, carsales is the number 1 auto classified website in the world because of the financials it delivers compared to the size of the opportunity, ie Australia’s comparative size in population & cars sold compared to the UK, US, China, etc.

A close second would have to be (although it is number 1 in terms of market cap) which has done an incredible job in the UK with others such as (probably number 1 in terms of revenue), and (number 1 in terms of traffic) probably there abouts, all being great online businesses.

I could write another dozen posts with a different website in each post putting up a claim to be the number 1

Three areas where carsales is very strong compared to the before mentioned businesses are in private sellers, display advertising and adjacency businesses. These three business units help to make carsales the incredible business it is today.

The private seller business in carsales is an absolute standout compared to the majority of other online auto vertical businesses around the world. This is an area where large general classified business (horizontals) have really taken the space but carsales has managed to get and maintain a strong holding with the Australian consumer because “it works”.

The display advertising business of carsales has been a unique success story that has been able to deliver quality, premium audiences to automotive focused businesses, particularly OEM’s where a proliferation of data from consumers going right through their car finding journey has made it the most qualified advertising medium available.

The adjacency businesses are the newest of the three with the sale of tyres online through, vehicle finance through Stratton Finance and car inspections through Redbook Inspect the standouts. Each of these businesses are partnerships carsales has entered into that leverage the carsales audience while still keeping an entrepreneurial style to ensure they grow as standalone businesses in their own right while delivering value to carsales through smart integrations.

Let’s not forget too that if carsales is doing well then it’s dealer clients must be doing well as it’s business model for the biggest part of its business is directly tied to what it delivers its dealers – leads which leads (pardon the pun) to sales.

The truth is, I could write another dozen posts with a different website in each post putting up a claim to be the number 1 auto classified website in the world.

I won’t do that but it does show one of the reasons to why this is a fascinating space to be involved in.

Who has the No 1 Auto Classified Website in the World?

What if I said to you that the number 1 online automotive vertical website in the world in October 2016 was in Switzerland?

I can, for the first time, compare sites from different countries on the same measures…..based on my traffic health algorithm on 72 websites in 38 different countries

It is not unusual for us to visit a new country and have 3 players swear they are number 1 in online auto classifieds.

One points to traffic, another to inventory and another to dealers (who needs revenue and profit anyway?).

At the end of the day……making money has to be the overriding measurement

Everyone wants to be number 1 and it seems this is especially so in the online world where to claim yourself as the number 1 player in your niche is vital for advertisers, investors, etc.
This is hard enough to decipher within each country so how do we determine what automotive vertical website is the number 1 site globally?

From an online automotive vertical aspect, I see businesses claim number 1 in their country/region based on anything they can measure has them in front – visits, unique visitors, inventory count, dealer count – and the numbers can be near on impossible to test from outside the business.

You can’t do it by visits, inventory or dealers because a website operates in a country that has a large population with a huge car market will naturally have more visits, inventory and dealers – this does not make them the number 1 in the world.

I’ve wrestled with this for some time as carsales looks to strategically partner with more online automotive businesses around the world and I look at peers, competitors and targets so I’ve come up with a measure that for the first time doesn’t care how many visits, inventory or dealers are on the site.
So getting back to who is number 1, how’d I come to this conclusion and what exactly is number 1 in?

What I’ve done is created an index using a weighted algorithm for each automotive website around the world based on things that measure the health and stability of their traffic, namely user engagement and traffic sources. For me these metrics can tell you a lot about the online business and for the first time, I can measure websites from country to country on like for like data in order to get a picture of their real position in the market.

Like everything in online, one form of measurement doesn’t tell you the whole story but this index allows me to rank every website around the world to get an accurate picture of their traffic health irrespective of their traffic volume (although to get an “official” index a website must have over 100,000 publicly measurable monthly visits; this number is arbitrary).
This means I can, for the first time, compare sites from different countries on the same measures. Traffic health should be pretty basic and each component would have individual focus within each business. Product teams would be all over user engagement metrics; SEO experts would be working to ensure the long tail of each website is indexable; and SEM spend would be closely monitored to ensure the right spend is getting the right results.

It’s pretty easy to correlate a high SEM spend, low direct traffic and a high bounce rate and what it means – poor traffic health – but as with most metrics to measure a number 1, they usually only tell part of the story.

In any case, based on my traffic health algorithm on 72 websites in 38 different countries, the top automotive vertical website in October 2016 was (Switzerland) and businesses that are part of the carsales network including (South Korea), (Brazil) and (Chile) are in the top 5 (the website rounding out the top 5 was in Germany).

Each of these websites has very strong user engagement metrics and extremely healthy, sustainable traffic sources.
It’s interesting that some countries and in fact continents have common traits in user engagement and/or traffic sources that flow through the websites.

The regional Brazilian website indexes do not surprise me given the regional focus in Brazil where dealers and consumers alike are somewhat parochial to regional automotive websites resulting in high user engagement and positive traffic sources which sees websites that are now part of the Webmotors network high up in this indexing including,, and
Anyway, my indexing algorithm gives me a great picture of where our peers, competitors, targets and carsales network sites are at around the world irrespective of the traffic they claim, inventory or dealer count.

At the end of the day, all of these websites are businesses and we all know that, as my esteemed former colleague used to remind me, “you can’t bank wank” – in other words, making money has to be the overriding measurement.

3 Keys to Converting Online Leads

carsales has successfully operated a business model centred around the value it delivers to its clients.

The billing mechanism is online leads delivered but the model is about the sale not the lead. This is applicable to all businesses using online as a sales mechanism, not just the auto industry.

It’s interesting in our business as some clients will convert 1 in 4 online leads to a sale and another client in the same city with a similar inventory mix will convert 1 in 8 leads. Why?
The answer comes back to the way each and every lead is treated where:

a) Those who sell 1 in 4 leads want more and more leads (because they know they are sales opportunities) to the point where they will call our support centre to see what is wrong when leads drop off because they know that it means their selling will drop off.

b) Those who sell 1 in 8 leads complain about the quality of leads.

Do the clients receive the same quality of leads? Yes, leads are not vetted to send the good ones to certain clients!

The keys to converting online leads are available to all businesses:

1 Treat each and every lead as a hot prospect – the person is sending a lead or calling because they want to buy from you or use your service. In our business, more often than not a sale is made on another car in the dealer’s inventory than the one enquired on.

2 Speed of response must be immediate and is paramount – first of all a template email response and then human follow up. Consumers regularly tell us they end up buying from the dealer who contacted them first or more to the point, some dealers just don’t respond or fail to follow point 1.

3 Track and measure all leads from all online sources in the one lead management system – this is especially so if you have sales people you are relying on to sell your products/services and look after your brand. Emails can be deleted and phone calls “didn’t come in” but not so in a lead management system where email leads are logged into the system and can’t be deleted. Calls are also logged and recorded.

When you think of it, it is kind of funny how some say the Internet (or carsales in the auto space) is making it hard to compete and making it too expensive.

We have far too many clients who follow these 3 steps and are successful online for it to be true.

Sometimes ROI attribution and accountability can be a scary proposition, especially in a changing world.

Maybe go back to the “good old days” and bring back the newspaper “rivers of gold”, that will fix it.