Big Challenges Call for Big Solutions

So the market in the auto industry the last few months has been... less than ideal for everyone involved. The lack of processors and chips, and now the war in Ukraine has had devastating impacts on the supply chain. Customers have been searching for longer for the right car, and dealers have had to search longer for the right customers with an inventory that usually doesn't inspire a ton of confidence, especially if you are looking for a certain trim or unique model. These new retail market challenges have inspired some innovative solutions from new players in the industry, with many of these solutions originating in Silicon Valley. When times are tough, innovation happens.

A Case Study

One company that has been able to aid dealers and consumers alike in adapting to this new environment is DrivenIQ. Luckily, I was recently able to interview the CEO and talk with him about what he brings to the table, as well as how DrivenIQ can offer value to retailers. This firm is a new-ish start up founded in 2019 that provides valuable data and website traffic details to interested parties on the dealership side. It is a fully-remote company (trendy right?) with no apparent geographically centered client base. They work with about 400 dealers across the nation, from small to large. DrivenIQ brands itself as a 1st party data technology solution that essentially makes finding the car you want easier to the consumer, and selling the car to the right buyer easier to the seller. Everything is about data these days. Hardly a new idea, but when done right can provide a lot of value.

Strike While the Iron is Hot

Research has shown that in 2015, the average consumer visited 5.5 dealerships before making a new vehicle purchase. In 2019 that number had dropped to 2.2 dealership lots on average, and currently in 2022 the average guy looking for a new ride only goes to 1.1 dealerships before deciding on a car. If someone drives to the dealership, they are ready to buy it seems. Why is this? During the pandemic, most of society took to the internet more to do their research beforehand. Who wanted to risk getting sick by talking to salespeople when you can search all of the inventory online? New habits were solidified over time, and now it seems this new consumer behavior is here to stay.

Now, to market to your potential customers the placement of the right ads to the right people means the most. Remember back in the day when every town had dealership row? You could drive for miles and pass every manufacturers dealership, stopping at the ones that caught your eye. Now, people instead stay home, login to CarShoppingWebsite.com, and click on the ads that catch their eye.

The Man Behind the Operation

I recently got on a Zoom call with DrivenIQ CEO Albert Thompson, an extraordinarily motivated individual with a vision for the future of car shopping. We covered a lot of topics, from how he deals with stress to his vision for the future. Unlike many, Albert firmly holds that the dealership model is here to stay, as long as they are able to adapt and anticipate the changes coming in the future. His company speacializes in providing unique data (this is rare) to customers for finding a perfect match between buyers and sellers. When I asked what value his company brings in particular, he responded "It is a saturated market, and most companies are buying from the same ultimate data set from these larger providers." DrivenIQ possesses over 500 million first party records, and work with around 37 other data partners to aggregate and collect as many pieces of the puzzle as they can. He thinks this unique data is something that many of his "data competitors" are unable to match.

"We possess data that ultimately covers over 94% of the population here in America, it really is pretty incredible the amount of data out there on everyone." - Albert Thompson, CEO of DrivenIQ

These changes and hyper-focused marketing strategies have enabled their partners to increase ROI by about 1200% on average, according to their research.

"We use CRM data, point of sale data, and other inputs to essentially create micro-audience strategies for retailers and enterprises to help them market and re-market to those audiences" - Albert Thompson

The Trade-in Process is Ripe for Disruption

Mr. Thompson also recently launched a new company called DriveBid, which is basically an online auction site where someone who wants to sell their car can post it and let local dealers bid on it in real time. Albert described it as "kind of like the stock market but for your car." Dealers would normally detest this idea and shrug it off... "if you want us to buy your car, then come talk to us" type of mentlity. Well, in the current market dealers have less leverage than ever... so if they want the inventory they can compete for it. This project is still getting off of the ground, but it is inspiring to see someone such as Albert trying to disrupt various parts of the car buying process... on both ends.

-JWK, feel free to subscribe for more industry insight