Amin Saleem writes: “Since the article on AutoeBid appeared the company has grown from strength to strength”.

Although we were not able to carry our growth plans over the last year due to our previous investment falling through, we now have a significant business loan as well as angel investors helping to finally grow the business.

We did previously consult with mentors and considered most of the aspects covered in their suggestions; we took on board what the experts suggested and allowed ourselves the opportunity to take stock.

We took the decision to stop all marketing and advertising activities in order to be able to evaluate where our business was coming from as well as spend time in improving the service and make appropriate changes. Since then the business has continued to grow without any advertising/marketing spend, predominantly through enjoying the fruits of previous hard work in marketing the business, repeat business and recommendations.

AutoeBid has gained new market share by creating ‘Powered By’ solutions for a number of major online portals and will continue to grow the business by cross-selling our service to existing corporate clients.

As a result of some of the research we have carried out, we realised that a large percentage of potential customers were interested in part exchange as a condition of purchase; we are therefore now launching a new part exchange solution that will enable clients to get dealers nationally to bid the price up on their part exchange, providing a way to guarantee that customers can get rid of their part exchange and still enjoy a fabulous discount on the new car they wish to buy.

The new investment in the business will finally allow us to realise the potential in our unique business model in the UK as well as our new launch in Germany and an additional 14 countries over the coming years.”

Expert Views – Money

Andrew Colwell, Marketing Director, LBM has two main problems with its website: not enough people are “engaging” (they visit the site but don’t buy) and the firm is not capturing visitor information for proactive marketing.

Getting engagement is about generating confidence, so the firm should seek third-party accreditations such as “kitemarks” for its probity. These should come from national motoring bodies (implying this is a reputable car dealer) and online payment specialists (implying this is a reputable e-commerce site). Personal testimonials would also inspire confidence.

By generating a permission based, opted-in web visitor database, AutoeBid creates its own prospect marketing database. This could be incentivised using Air Miles or the like and would generate information relating to customers’ existing car ownership, or even insurance. This would allow AutoeBid to email the appropriate offers intelligently. Customers should be encouraged to update their data annually and care should be taken not to infringe data protection laws.

Robin Tidd, Ex-Chairman, CIMA Members in Practice

Amin Saleem needs business mentoring as much as he needs financing. The target market must be narrowed to those more ready to buy a new vehicle online. He must identify the relatively few makes and models that account for the majority of vehicles those buyers acquire. Then he must strike affinity with the dealers in those models and, more particularly, with their financing arms so finance can be offered, effectively through Autebid, with every sale. It is the offer of finance that drives many young buyers to the dealer – not only availability of the vehicle.

From a mentoring and financing perspective, Mr Saleem needs a business angel with significant experience and a strong network in the auto sector, one who also has an empathy with the internet sector. He should require access to network, business guidance (time) and agreed funding (money). Remuneration to the angel can be part equity and part cash, generated from increased turnover. This aligns their interests.

Jonathan Sharp, Business Adviser, Business Link Devon and Cornwall

The business model presented by AutoeBid clearly has potential for success. The difficulty the business faces is purchasing behaviour. We can assume that many customers who visit the website will not know how to take part in a reverse auction and may be daunted by the new process.

Effective customer communication is therefore essential from the outset. Putting a real-time demonstration on the website, perhaps giving a contact number for one-to-one advice, will certainly put customers at ease and build confidence in the process. It’s also important that customers understand the benefits reverse auction offers and cost savings they stand to gain.

By turning the new business model into a unique selling point, small businesses can integrate the benefits of the new purchasing process with the brand itself. With the cost benefits inherent in reverse auctions combined with the AutoeBid brand, this brand value can then be transferred to any product lines planned for the future.