Moving the Auto Industry Forward

I’m truly thankful to be both employed and partnered with one of the top dealers in the country, Marsha McCombs Shields. Her father, Red McCombs, hired me in the early 2000s to work with Rad Weaver with one focus in mind: “sell more cars via the Internet.” What I have since learned was that the request wasn’t just to “sell more cars via the internet,” but it was to push the envelope to make sure our stores and the industry kept moving forward.

Rad and I learned quickly that the Internet was going to empower the consumer almost 10x faster than dealers (not to mention the OEM’s).   Therefore, we needed to have a laser-like focus on efficiency to service this ever-evolving demand.

Thankfully, we work for a very savvy family, which allowed us to make key investments in companies like WholesaleClicks, which provided additional online traffic. Actual online inventory became a real-time requirement; therefore, we invested and partnered with Homenet. The dealership website also became their low-funnel shopper storefront, and we did the same with Clickmotive.

I’m proud to say that each of these companies helped us sell more vehicles online and became market-leading vendors. Furthermore, their services are used by thousands of dealers today to accomplish similar efforts. What started out as “just selling cars online” became a passion for helping to move the industry forward by making key partnerships that would allow dealers to continue to thrive in an ever-competitive market.

Now you might be wondering how exactly my partner and I found these companies, and then decided they were promising enough to invest with confidence in an abundant return. Quite simply, we bet on the person first. By that I mean, we looked to see if the owner of the company has had any previous success. Have they funneled their entire life into the business (including their finances)? Do they have FOCUS?

Then take a look at their team to see who is driving their success on a daily basis. Really give thought to the viability of the concept behind their product, and ask yourself “how does this help?”

Here at Fraser McCombs Capital, we have a saying that goes “We want to be leading-edge, but not bleeding edge.” For instance, driverless cars that are being developed are bleeding edge. They are very exciting new products, companies or services, but it’s certainly not a guaranteed investment. Very few people can consistently succeed with this sort of extreme change. However, it is much more likely for a company that creates a unique process to somehow streamline moving mobile users to delivery to succeed. That’s what we want.

The same goes for your dealership. You want to partner with companies that are fundamentally sound, and have leading-edge products, but aren’t necessarily looking to sell you on taking a driverless car onto your lot in 2015. These are simple, practical companies that help by solving fundamental problems that dealers face every day.

Now that you have narrowed your horizons to quality businesses, do you prioritize spending for tools or advertising? If you haven’t already, tools should come first. I say that simply because tools help you take better care of your customers. Why would you even want to reach more customers if you can’t properly take care of the few you have now? You will want the proper tools to be in place for top customer retention and satisfaction.

Once you have all the necessary tools in place and have chosen to partner with a company for advertising, keep in mind that attribution is paramount. Can you tie every expense back to an action? Does the company that you have chosen to do business with detail what actions they will be taking? Think of it like this, you want to spend X amount per action, not spend X amount per campaign. To be successful you will have to hold your vendors accountable. This does not mean that you have to become an irritable cynic, assuming that everyone is looking to ruin you. It only means that you ask for an ROI.

Now you’re set. You can actually manage your dealership. After all, you can’t manage something that you do not control. It’s only once you brought all of these outside influences under control that you will find yourself able to focus intently on ways to be more successful.

For us, our main focus today is on mobile platforms and process-based solutions. As the customer becomes more sophisticated, dealers will need better tools to help them engage their customers. We believe these will be customer-facing tools (mobile) as well as efficiency tools to help sell more cars in the same or shorter periods of time. We also remain very interested in the “connected car” movement and how it could help us retain customers during vehicle ownership. The bottom line, we will continue to look for great technology and people who can make the automotive retail industry better.

More about Tony:

Tony Rimas, Managing Partner at Fraser McCombs Capital, also serves as the Director of Operations for the McCombs Automotive Group the 52nd largest dealer group in the United States. With an extensive and successful track record working in the entrepreneurial and automotive sectors, He was a natural fit to join Fraser McCombs Capital as Managing Partner. Fraser McCombs Capital, launched in late 2011 by Chase Fraser and Red McCombs, focuses on early-stage technology companies making products for the automotive industry. Fraser McCombs raised $37 million from 35 high-net-worth individual investors, and topped a national list of new venture funds in terms of capital attracted in the first quarter.  

Fraser McCombs is the first and only venture fund that’s managed by automotive entrepreneurs and dealers, allowing them to capitalize on an underserved market for venture capitalists. They are finding technology outside of the industry and bringing it to an industry that they understand very well.  

The fact that there is limited traditional venture capital funding in the industry, combined with Tony and Chase’s decades of work with auto manufacturers and distributors, creates a unique combination for success. With the first fund fully deployed, they are currently focused on launching a second, even larger fund in 2015.