Finding the Serious Buyer

When it comes to shopping for cars, the Internet has put amazing new tools in
the hands of consumers. But separating the serious buyers from those who are
just kicking virtual tires has remained a problem. Now, Autobytel is trying to solve it.

The Irvine, Calif.-based automotive marketing services company is launching a “multi-level” program to separate the car-buying
wheat from the chaff, so to speak.

The company said its new Autobytel Quality Verification System is designed to
validate purchase requests submitted over the Internet — by calling every
customer’s primary phone number for verification; using proprietary
technology to delete requests submitted with bogus names; testing each e-mail
address; and implementing screening at the Web site level.

Statistics from Autobytel’s sites (,,
and indicate that by 2003 the online car buyer will be a
different customer, one more reflective of the general population and less
familiar with shopping online, the company said.

The new system is designed to allow dealers to spend more time with serious
buyers and less time educating non-serious customers about the process.

Some estimates show that about three quarters of all car shoppers now
research vehicles online before stepping onto a dealer’s lot. Autobytel
generates revenue through the fees it charges dealers (car buyers pay no
fees). And there’s lots of online competition, including eBay Motors, AOL
Auto and MSN Carpoint, just to name a few.

Clearly having happy car dealers who close sales is key in the online auto
segment, and anything Autobytel can do to further that aim may translate out
to the bottom line.

Autobytel is one of those Internet companies that has never reported a
profit, and in fact for the six months ended June 30, the company lost $19.1
million on revenues of $41.6 million.

“Ensuring that customers submitting Purchase Requests on our Web sites are
serious buyers is key to Autobytel’s success,” said CEO Jeffrey Schwartz.
“While we may experience some short-term loss in Purchase Request volume, the
long-term benefits of our Quality Verification System should benefit (us),”
Schwartz said.

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