Autobytel.Com Case

In 1999 Autobytel.com was leader in the online car referral business amongst a very competitive market. The online car referral concept was based on giving the consumer a way to shop for automobiles online that didn't involve going to a dealership and dealing with high pressured sales. When time came to buy the automobile they had selected, the service provider would send the purchasers information to a qualified dealership in their area to process the sale with little to no haggling involved due to the level of information the purchaser had at their disposal. The way these online referral companies were able to make money off this process was to sign up qualified dealers around the country and charge them a fee to send motivated buyers their way, and to offer a large compliment of services that aided the purchase of the vehicle to the automobile purchaser. Though Autobytel.com was experiencing record growth in the online car referral industry it still was not able to create positive earning off the services they were providing. Like many Internet companies this was a problem that plagued their companies due to the large over for the revenue they received and they new if they were to remain a viable company something needed to be changed.

In order for Autobytel.com to turn their current offering into positive earnings, there are many thing that need to be looked at create more added value proposition to both of their customers, the automobile buyer and seller. For the automobile buyer, besides getting a great deal on an automobile what separate Autobytel.com from the other online referral companies are the additional services they provide in the buying process. And the key selling feature of Autobytel.com to the dealership is that of exclusive rights to a territory. Though both of these propositions add value to the customers, neither has been truly leveraged to produce the greatest revenue possible. So by focusing on what each customer group is really looking for in the online automobile referral experience and being able to relay these value added features through focused marketing should allow for steady progress in the fight to create positive earnings.

Autobytel.com had many services that complimented the online referral business that they tried to use to differentiate them from the rest of the market in order to add value for the automobile buyer. Financing options, insurance quotes and even loyalty programs have already been put into place, but from the buyers perspective there hasn't been really any value added benefit since many of the other online line referral companies have similar offerings. To be successful they need to develop a program either with guaranteed pricing or with some other value added feature that would allow for more seamless quoting from the dealer. Right now they still get contacted from the dealership in order to complete the sales cycle and get the final sale price, if this step could be eliminated and truly made into an online sale would be something perceived as value add proposal. The main problem with a program such as this is that the dealerships involved would then have even less control of the sale and it would be cutting into already tight margins that they are always working hard to increase, but this would free up dedicated sales people to these online referrals to more hands on selling even though the rate of return is lower. This kind of imitative would be perceived as a benefit to both customer groups

One of Autobytel.com's key deliverable to the dealerships they were selling this service to was that of the exclusive rights to referrals for the vehicles they represent for the territories for which are located. This value to the dealership needs to be