AUTO SALES – AUTOMOTIVE DIGITAL MARKETING: CarWoo!, that company with the quirky name and slightly different approach to sending car buyers to dealerships, has inked a partnership with AOL Autos. The deal, scheduled to launch in late September, will funnel AOL Autos consumers through the young company’s service, allowing buyers the chance to “quickly and easily negotiate great market prices on their chosen vehicle while retaining their privacy.”
Sounds great for car buyers.
For dealers, it’s a little more complicated – but the benefits could be significant, provided that the assumed increase in volume doesn’t impact the quality of their leads. The partnership puts ‘the CarWoo! way’ front and center in the competitive game of lead referrals, thanks to what Tommy McClung, CarWoo’s chief executive officer, calls AOL Autos’ natural fit for their service. “AOL is one of the largest portals out there,” said McClung. “They have a tremendous amount of volume, and a strong brand. They focus tremendously on the consumer buying experience.”
McClung says that CarWoo! will power the AOL Autos “Best Offer” program. The partnership is based on consumers who actually go through the company’s verification process, meaning that CarWoo! pays AOL when a buyer is qualified and they enter the program. “If the consumer doesn’t go through the process, AOL makes nothing,” said McClung. “If a dealer makes an offer, and that consumer doesn’t view it, then AOL makes nothing. This way we make sure we don’t put dealers in front of consumers that aren’t going to buy.”
Right now, that basic approach is working for Jay Melo of San Francisco Honda. “All things equal, all cars included, I probably sell 4 out of 10 CarWoo! leads,” said Melo. “There are times I’ve won a bid, and I haven’t even been the lowest bidder. It’s all about engaging with the buyers.” Overall, said McClung, CarWoo! has a 15 to 20 percent close rate on referrals sent to dealers. “It’s not just about the price shopping element,” said McClung. “What’s intriguing is that dealer professionalism and responsiveness is a key element. If you have a dealer that’s super responsive, price becomes less important. More than 68 percent of the time, the lowest price doesn’t win.”
Other issues play into the success or failure of a sale, to be sure. Melo says that it works well in tech-savvy San Francisco, where people are more acclimated to dealing with digital programs, and, as a result, more apt to be ready to buy. Inventory availability is also a big factor, but ultimately, Melo said that success with CarWoo! depends on the nature of the bids received. “If dealers are realistic with their pricing, it will educate buyers as to what the realistic market is on a car. But everyone has to be in the same ballpark.”
As far as the lack of personal information, that didn’t seem to bother Melo or Dave Erickson of Volkswagen of Downtown Los Angeles – though it’s important to note that both were referred to DrivingSales by CarWoo. To be sure, anonymity throughout the bidding/negotiating process is a twist that offers interesting results. In some cases, consumers feel more empowered to interact with dealership sales reps. In the course of engaging through the CarWoo! system, the combination of “verification” along with the increased comfort level of the buyer leads to more information about intent and buyer motivations.
That’s enough, says Erickson. “They have the highest closing ratio, and they are the lowest cost lead.” Erickson, like Melo, claims to sell four or five cars out of 10 CarWoo! monthly leads. “What works best for me is the chance to engage with buyers prior to submitting the bid. If you’re a friendly person, and responsive, it helps.” Erickson says that for his market, the determining factor is often location, followed by vehicle availability and responsiveness. “First things first, it’s all about location,” said Erickson. “And it’s important to be responsive right away. The engagement platform with the customer is very valuable.”
Ultimately, it seems, the success of CarWoo! – and the partnership with AOL Autos – will be driven by GenY and Millennial buyers, digital natives who are used to transacting online and who expect the process to be transparent, interactive and competitive.
–CarWoo!: 15 to 20 percent close rate on referrals sent to dealers.
–AOL Autos: Approximately 8.2 million monthly users
–CarWoo! Dealer Plus: $299 per month, $15 per viewed offer
CarWoo, Aol Autos
Note: Interviewed dealers were referred by CarWoo!