Entrepreneur develops niche with online car dealers

Entrepreneur develops niche with online car dealers

Mike Wethington, a self-described serial entrepreneur, spent four
years figuring out where to invest the $9 million he collected from the
sale of his first business, a company that designed call centers and
network control centers for large corporate clients.

What he and business partner Bart Greenwood came up with was a
doozy: With an eye on the burgeoning trend of online shopping, they
started a sales-and-marketing firm to help auto dealers nationwide
attract prospective buyers via the Internet.

Dubbed Outsell, the company was founded in 2004, grew to $1.9
million of revenue by the end of 2006 and is on track to reach $6
million this year.

Considering that Wethington’s present client list includes only
about 500 franchised auto dealers — just 2 percent of the country’s
21,000 dealers — you can see why he’s bullish about the company’s
prospects.

"It’s a trillion-dollar industry" made up largely of small to
midsize business owners who are struggling to adapt to the new world of
Internet retailing, Wethington said. "Most of them don’t have the
technology or expertise to effectively attract and service consumers in
the online world."

And many of them are perfectly happy to pay an average of nearly
$10,000 a month for the help, although fees can range from $300 to
$14,000 a month, depending on the level of services desired.

Outsell has developed a broad array of marketing programs, including:

— Live chats: More than 360 dealers use this elaborate
instant-messaging system operated by Outsell specialists equipped to
answer questions from prospective auto buyers who are linked to the
system by "live chat" buttons on a dealer’s Web site. The service is
offered from 6 a.m. to midnight, seven days a week, and is scheduled to
go to 24 hours a day later this year.

The Outsell specialists are armed with desktop programs that give
them instant access to data on auto prices, inventories, mechanical
details and features, with experienced workers handling five to 10
chats simultaneously. Information about live-chat prospects, as well as
those who call or e-mail their questions, is forwarded to dealers to
add to their lists of solid leads.

"What they do is turn a virtual (online) customer into a live one,"
said Peter Lawless, marketing director for Apple Auto Group, a
three-dealership company that was Outsell’s first Minneapolis-area
client. The result is that 15 to 20 percent of Apple’s sales today are
linked to the Internet, he said.

— E-mail marketing service: Eighty dealers subscribe to this
service, which designs online marketing campaigns and sends promotional
newsletters to a list of the client’s customers and prospects.

The e-mails, often with accompanying videos, tout cars and services,
offer coupons and sale information and provide safety tips and other
lifestyle information. They are sent once or twice a month, a total of
about 750,000 e-mails, up from 5,000 when the service started early in
2005.

"That gives you an idea of just how fast this online marketing business is growing," Wethington said.

— Total marketing and sales service: Sixty dealerships have chosen
this comprehensive service since it started early this year. It
includes a rapid-response telephone and e-mail service for prospects
who don’t wish to use the instant-messaging system and a consulting
service that designs advertising programs to promote client websites.

Perhaps most important, Outsell also helps clients select the most
effective vendors of prospective buyer lists, then follows up to make
the initial contact with the prospects.

The results can be eye-fetching: "Our Internet sales have tripled
since 2004," said Cam Stewart, general manager of Honda Cars of Rock
Hill in South Carolina, one of Outsell’s early clients. "(Outsell) is
providing us with 500 productive leads a month."

Better yet, "it’s a lot cheaper than having our own online people,"
said Stewart, who employed two online salespeople before opting to join
Outsell. 

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