Since Americans began buying cars a century ago, shoppers always had an advantage over dealers because they knew whether they were really interested in a vehicle.
Minneapolis-based Outsell is helping dealers tip that balance of power. With the company’s help, dealers increasingly know the difference between someone who is kicking tires and someone ready to make a down payment.
The company provides digital-age marketing services for auto dealers, which can range from individualized ad campaigns to helping them master Twitter, Facebook and other social media. But it is setting itself apart with soft ware services that allow dealers to keep better track of the people who have bought from them before as well as those who have just made a trip or two into the showroom to look around.
Using some of the same data-mining tools that media companies do, Outsell helps dealers learn how deep a shopper is into the buying process, the brands they are looking at and even whether a shopper favors a vehicle the dealer has or one offered by a rival.
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Chief Executive Michael Wethington said the company’s software platform contains predictive models to help dealers make anywhere from seven to 20 times their profit. Dealers pay a monthly fee that ranges from $1,250 to $2,500, Wethington said.
Dealers typically have around 15,000 prospective customers in their databases at one time but can only interact with about 30 customers in the store at once. With Outsell, he said, sellers have access to information about far more potential buyers in their geographic market.
One feature of the software allows dealers to see a map with locations denoting all of the customers who have interacted with advertising campaigns, websites or other outreach efforts. This information helps dealers send out targeted advertisements to previously missed or underserved areas.
“It’s really about what is happening with a person in their life. Some places just blast out some marketing campaign to everyone,” said Sahil Merchant, Outsell’s director of marketing. “Each person has different needs.”
Dealers are also given a “predictive model” from millions of data points to show how likely a customer is to buy a vehicle and the exact models that customers is interested in. This feature is helping dealers better understand consumer needs, sometimes even before they have met a potential customer.
Massive amounts of data on car sales have always been available for dealers, manufacturers and buyers, and those numbers have been used to shape advertising campaigns and sales. Traditionally, sellers would have to parse through all of the data themselves and try to draw assumptions based on trends and previous sales, Wethington said. Outsell aggregates all of the data into one place and removes the need for dealers to decipher data.
“The No. 1 one thing (dealers) like to see is that it is automated for them,” Wethington said.
Outsell, which expects revenue this year in the $20 million to $25 million range, has about 100 employees and plans to add 30 this year, Wethington said. Last year, the company received its first private equity investment from Minneapolis-area neighbor Northern Pacific Group.
Like many tech companies, Outsell has a flat structure and informal environment. Some employees work at walking desks. Meeting rooms are named after superhero headquarters, like the Fortress of Solitude and the Batcave. Once a year, the entire staff sits down for a half-day of brainstorming.
When the company started, Wethington said he wanted it to be different from other places he worked, free of hierarchy.
“I was tired of being in an environment where there was backstabbing and politics,” he said, adding that dedication to employees helps grow the “collective intelligence” of the company.