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In light of the news this week that AutoTrader.com will purchase VinSolutions, vAuto founder Dale Pollak — whose company was also purchased by AutoTrader recently — stressed a message of reassurance in his blog on Thursday, emphasizing that the goal of an acquisition like this is to ultimately help dealers.

He said the industry must “understand that AutoTrader is very respectful of its role in the industry and for the need to be careful and prudent as it executes its business strategy.”

Pollak continued: “To be sure, there is no intent to buy companies for the purpose of leveraging its power or size. The vAuto, VinSolutions, HomeNet, Kelley (Blue Book) and other future acquisitions are intended to meet the present and future needs of dealers. Specifically, dealers have been frustrated for some time over the fact that they need to use a lot of different applications, many of which have limited, if any, integration.”

In fact, Pollak suggested that when companies like these share data and resources, it allows dealers to benefit.

“For example, we are working on a new stocking solution for the industry that will be game changing and only possible as a result of vAuto’s family relationship with AutoTrader and Manheim,” he noted.

“I’m sure that new and similarly powerful functionality will be developed by adding VinSolutions to the mix,” Pollak continued. “I can assure you that everyone at AutoTrader understands that they win only if and when the dealers win.”

That said, Pollak acknowledged that purchases often “don’t work out well.” But he emphasized that the companies will be cautious as they move forward  to ensure that it is done right.

“I would personally appreciate the support and patience of those that have come to know our sincerity and commitment,” he shared. “For those that don’t know, I would simply ask for you to have patience and allow us to demonstrate our commitment.”

Transaction Details

AutoTrader did not reveal terms of the VinSolutions deal but noted that it will likely close by the middle of next month.

VinSolutions offers dealers tools such as customer relationship management, Internet lead management and inventory management tools. It also provides dealer websites, sales management and desking tools, as well as social media and direct-targeted marketing campaign tools.

The company will become a subsidiary of AutoTrader.com, and the two will work together in fostering value-building methods, mostly in product development, operations and sales.

As it has done with other acquisitions in the last year, AutoTrader said the current management team at VinSolutions will remain intact.

Remaining the leaders of VinSolutions are chief executive officer Mike Dullea and chief technology officer Matt Watson.

The company is also keeping its Overland Park, Kan., headquarters.

“We are thrilled to acquire VinSolutions and add it to our best-in-class portfolio of dealer software solutions companies,” stated Chip Perry, president and chief executive officer at AutoTrader.com.

“Over the last few years, the online marketing and dealer software solutions space has continued to grow and thrive which has been important to dealers’ success, but at the same time it has become increasingly challenging and cumbersome," he added. “VinSolutions will further ramp up our dealer solutions product suite to provide dealers with a simpler, more functional one-stop-shop solution of Internet marketing software tools accessible by the dealer through a single sign-on tool.”

Dealers will be able to tap into the software tools on a flexible a-la-carte basis and won’t have to sign any long-term contracts to do so. Dealers can also work with other software vendors, AutoTrader said.

AutoTrader said that it will strive to encourage open platforms and integration throughout its software tools as well as other dealer software tools.

Additionally, the company said it plans to create policies fostering dealer-friendly data ownership rights, thus helping to safeguard confidential customer data.

“VinSolutions is a strong complement to our existing dealer software companies, and a priority for us will be to ensure the scalability of VinSolutions software and customer support and to execute on plans for how VinSolutions will integrate with vAuto, HomeNet and CDMdata to create an even more powerful suite of Internet marketing and sales related software solutions for dealers,” Perry added.

Offering his perspective, Dullea noted: “Our team is very excited to join forces with AutoTrader.com because we are both passionate about helping dealers use the Internet and innovative technology to grow their business. Together we will strive to constantly improve how we serve our dealers and how we help them attract, serve and retain their customers.”

BHPH Study Results

In other news from AutoTrader this week, during the NABD conference in Las Vegas, Howard Polirer, AutoTrader.com’s director of industry relations, revealed the results of a special BHPH study.

For instance Polirer said:

The average traditional buyer is:

—50 percent female.

—Averages 47 years old.

—Has an average income of greater than $50,000.

—About 60 percent are married.

—And these buyers tend to have an average, excellent to very good credit rating.

Meanwhile, the average BHPH customer is:

—About 58 percent are female.

—They average 39 years old.

—Averages less than $50,000 in annual income.

—44 percent are married.

—And they, of course, have a poor credit rating.

AutoTrader.com and NABD discovered that 81 percent of BHPH purchasers perform “some” or “a great deal” of research as part of their process before buying. This is compares to 19 percent who said they did “very little” research.

Moreover, Polirer revealed that BHPH shoppers use the Internet as much as traditional shoppers for general purposes; however, they do not look to the Internet for car shopping as traditional buyers might.

Interestingly, he explained, “With four out of five shoppers conducting research prior to visiting a dealership, coupled with the high percentage of BHPH customers already online, the implication is that there is an opportunity for BHPH dealers to reach and influence BHPH shoppers by tapping into the online automotive space with advertising messages and information that resonate with the BHPH customer.”

Polirer stressed, though, that it is important that dealers recognize the unique research methods of their buyers. For a BHPH buyer, the first research step would be to find financing. Whereas on the traditional end, a buyer is more interested in the model selection as a first step.

“The need for financing approval drives the car shopping process for BHPH shoppers. In fact, nearly two out of three BHPH customers enter the vehicle shopping process by securing financing or identifying a dealer as their first priority,” he highlighted. “While this information is in line with what the BHPH industry has long suspected, the key is to align your marketing messages with the shopping priorities of your customer base. Effectively communicating the right messages in your advertising may dramatically improve the chances of turning a shopper into an actual customer.”

So ultimately, the key focus of advertising should likely be on financing approval.

“Since approval is BHPH shoppers’ number one concern, messages about financing approval should take precedence in BHPH dealer advertising — both online and offline,” Polirer pointed out.

Furthermore, since many customers are looking for a dealer who can close the deal relatively quickly, Polirer said this is another key point to stress in advertising.

“The good news is that 83 percent of BHPH dealers do it in two hours or less. As a result, this message is an important one to include in your advertising. For example, ‘Get Your Car in Less Than Two Hours,’” he said.

Finally, only 37 percent of BHPH customers’ payments appear on their credit reports; however 63 percent have indicated they would like these payments reported.

So Polirer said it’s important for BHPH dealers to tell customers they can help rebuild credit when advertising.