Firm Grows Fast but Patiently
When it came to hitting the market with a slew of software applications for car dealerships, Scott Barrett says his 88-year-old boss, Jim Moran, taught him something important: patience.
When it came to hitting the market with a slew of software applications for car dealerships, Scott Barrett says his 88-year-old boss, Jim Moran, taught him something important: patience.
Barrett, president of JMsolutions, recalls talking ambitiously to Moran about marketing a package of system applications for virtually every dealership operation, including sales; finance and insurance; service; and inventory management.
Barrett says Moran, chairman of JM Family Enterprises Inc., a $9.5 billion dealership-services firm, advised him: “We're here for the long-haul; we're here for value; it's not going to happen overnight.”
Says Barrett: “I found that amazing coming from an 88-year-old man. It was a lesson in patience.”
Still, JMsolutions has been like a teenager experiencing a growth spurt.
In addition to expanding its product lineup eight-fold in less than two years, the company rapidly is increasing its customer base. “We grew 100% last year and expect to do the same this year,” Barrett says.
The firm added 711 customers last year, bringing the total to 1,500. On the client list are six of the largest dealership groups in the U.S., including AutoNation Inc., the nation's biggest dealership chain and an original JMsolutions' customer.
About 18 months ago, the newly created subsidiary sold a single software product, AAX, a used-vehicle inventory management system. Now there are eight different system applications, each sharing a uniform computer-screen interface.
“Our vision was always to have a suite of products,” says Barrett.
Dealers can purchase one, some or all. Individual prices ranging from $500 per month to $2,500 per month, Barrett says.
To him, the ideal high-volume dealership would operate with all these:
AAX. The original offering and still the “cornerstone,” this inventory management system now applies to new vehicles, as well as used units. It provides buy-sell advice, appraisals, values and an “ideal-inventory” model.
Mobile AAX. Using a hand-held device, it lets inventory buyers and appraisal specialists download auction run lists and access Black Book values.
DealerUps. This customer-relationship management tool allows dealers to keep in touch with buyers. It also monitors the sales process, offers an electronic version of the desk log and lets managers “see exactly where you are with a customer,” says Barrett.
ProFi Menu. It's an electronic version of an F&I menu.
ProCal Desking. This analyzer structures deal options for customers. Figuring in down payments, interest rates, selling prices and trade values, “it allows the desking manager to put together multiple deals,” says Barrett.
PinPoint. Dealers use this reporting system to monitor sales results, penetration levels and customer traffic.
Xchange Lane. It brings systematic inventory management to wholesale and auction operations.
The Bird Dog Club. If dealers offer their customers cash spiffs for referrals, this system automatically pays them. The idea originated from Alabama dealer Gary Linam after he was “embarrassed when a customer approached him at a baseball game and said he was still waiting for a promised $100 referral check,” says Barrett.
Barrett says about 25 dealers have purchased the entire systems package. The AAX inventory manager is the most popular single item, with about 1,500 subscribers.
About 22,000 dealerships are in the U.S. today, but all of them aren't would-be customers. “These tools are not for the likes of a small dealer out in Texas,” Barrett says.
Rather, he says, the potential customer base consists of about 7,000-8,000 dealers who run big operations and need a systematic approach to business.
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