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My previous blog post, Google's New Car Lead Program: The Basics, I discussed Google Cars, which is Google's New Car Lead program that they will be rolling out in the coming months. It's currently in Beta testing. Once again, Google has made a huge splash with the inclusion of LiveChat, powered by ActiveEngage, into Adwords. 

Here's how it works:

As we all know, each time we enter something into Google (Chevrolet, Toyota, VW, etc..), at the top of the search results, there is the adwords sponsored result. With this new addition of LiveChat engagement, you'll see the words LIVE CHAT next to the URL. Once you click on that, a dialog box will pop up (See below)

As you can see above, it's all very neat and clean, easy to navigate. Once you enter your name & Start Chat, you'll be in a chat with a representative from that brand and prompted to enter your Zip Code, so the consumer will be able to find the dealership in their city/town. 

Have you been following Google's steady migration into the automotive world? As I mentioned before, they announced a New Car Lead program last month, and now this inclusion of LiveChat into Adwords. What do you think of Google's dive into the Automotive sales world? What are the benefits that you see? 

*Original Photo from Brian Pasch

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Why Selling Cars Isn't Your "Thing"

I know what you're thinking – who does this guy think he is? How does he know what my “thing” is. Good – I have your attention.

I find it absolutely fascinating just how many dealerships I've walked into over the past couple of months and found, you ready for this? Silence. No customers on the lot, sales people hanging out around reception, flirting, cracking jokes, texting and the list goes on. Everything opposite of what should be happening is happening.

I spent a few minutes with a client at a major franchise dealership just last week talking about this exact topic. He is at his whits end with how things are looking at his dealership but just doesn't know how to turn things around and foster a productive change at his store.

Are you, or someone you know feeling the same way? Let's bring things back to basics for a few minutes and look at a couple of ways to turn things around. Success is hanging in the balance.

Do You Dream?

Sounds cheesy I know. One of my kids favorite movies is Disney's “Tangled”. The story of Rapunzel who has been locked up in a tower her whole life and has a dream to check out the annual lantern festival on her 18th birthday. Haven't seen it yet? Sorry for the spoiler.

There's one scene in the movie where in Disney fashion, the characters break out into song about Having a dream. The essence of it is that each character had a dream at one point and for whatever reason it was taken from them. Now, back to you and I.

Do you have a dreams? Have they been taken from you due to the economy, dream stealers or a plethora of other excuses? Do you still know what you want for your dealership?

If you'd like to create positive, productive and profitable changes within your business, here are the first two steps.

  1. Define (or re-define) your dream

  2. Gain a burning desire for its achievement.

Moving on...

Willingness to Learn / Willingness to Take Action

Have you ever read any self-help “be successful” types of articles? They all seem to offer the “fail proof” way to achieve greater success. They always seems to start with putting the pen to paper and writing down goals. Goals are great, don't get me wrong. I just don't agree that they are a sustainable driving force to helping you accomplish the success you are seeking.

Don't believe me? How many people do you know that actually stick to their New Year resolutions? If setting goals gave us enough sustainable power to act, there would be no more New Year Resolutions – the world would be a better place filled with extremely thin, successful, wealthy, patient, traveling, money-saving people.

Let me submit that before putting pen to paper, one must determine the level of their willingness to learn and willingness to take action. Think about this for a second. You've clearly defined your dream and now have a burning desire. If your dream is to have a more successful dealership by selling more vehicles, take a moment to rate your willingness to learn and willingness to take action in order to make that dream happen.

If I asked you to give yourself a “Willingness” score, what would it be?

Take a minute, pull out a piece of paper and give yourself a “willingness to learn” score between 1 and 10 (1 being none, and 10 being high). What did you come up with? Now do the same for your “willingness to take action”. What? Two 10's? Really? That's amazing! Now where would your score go if I told you the only way to make this happen is to abstain from drinking coffee for one full month? Why the sudden decrease?

Here's why goal-setting isn't the first step to success. All of us have goals, most of us haven't really determined whether or not we have the willingness to make them happen. Often the only thing that stands in the way of achieving dreams is our willingness to learn new ways of doing things and our willingness to take necessary action. Are you willing to do whatever it takes to make your dreams a reality or would you prefer to just keep going as you are?


Stop with the shenanigans! Continuing to do business the same way with no willingness to learn or take action will just give you more of the same depressing results. If you aren't picking up what I'm putting down right now, then selling cars and being profitable just isn't your thing.

Now - Stop blaming the economy and other lame excuses for your lack of success. Achieving your definition of success is in your capable hands. Define your dream, determine your level of willingness, and enjoy the results. You deserve it.

Michael Cirillo is the Executive VP at AutoVelocity™ and works with dealerships to help them achieve greater success through their marketing efforts.

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How Important Is Price Really?

For those of you who know a little bit about me, you know that I  worked in the print media and advertising industry for nearly a decade and grew up around the industry my entire life. I want to spend a couple of minutes discussing some concepts that I am more than confident will help your dealership in attracting new and returning customers so that you can start seeing more (and better) results for your dealership immediately. That's right - I just said "IMMEDIATELY".

A little bit of background first:

Over the years, you've probably noticed that the ads you see in the newspaper or in magazines haven't really changed much. They consist of a bunch of pictures of vehicles and the prices associated with those vehicles; Starbursts with low finance rates, or bold letters promoting the BIGGEST SALE EVENT OF THE YEAR! Everything always seems to revolve around price.

There's no doubt that price is an important topic, but maybe not as important as you might think - especially if your aiming to get a fresh influx of new customers walking onto your lot.

To demonstrate, let me encourage you to drive down any auto mile wherever you are, and take a look at the signage that dealers are placing near the roadway with hopes that it will capture new business. What do you see? 

  • Employee Pricing Event

  • Red Tag Sale

  • Really Big Sale

  • Year End Clearance

  • Inventory Blowout - unbeatable pricing!

Everything revolves around price!

Not even in the market!

Have you ever considered what percentage of people in your area are even in the market to purchase a vehicle? Think about it. What good is busting your chops over showing people how low your finance rates are, or how low your prices are when majority of people aren't even in the market to buy? Don't believe me? Consider this example.

Have you ever found yourself thumbing through a consumer electronics flyer from the weekly paper? If you're like me, you do it all the time. I'm sort of a gadget geek. But what happens when you get to the appliance section of the flyer? You slam the thing shut or throw it away? Why do you think that is? 

Vehicles are much like appliances. When you have appliances that are working, purchasing new ones are the last thing on the totem pole of priorities aren't they? So it is with vehicles. When people have a vehicle that is working, they aren't really in the market. All the best pricing and finance rates in the world won't do a hill of beans for your efforts in attracting new business.

Plenty of Fish in the Sea...Just Not Where You're Looking

Have you ever heard that saying before? It's absolutely true. There are plenty of fish in the sea. The problem is that by focusing primarily on price, you and all of your competitors are fighting over a very small portion of in-market consumers. Have you ever wondered why your print ads aren't getting you the results you want? Have you considered why your website isn't producing the leads that you want it to? 

When you really take a look at it, Dealers that enter the arena prepared to battle over price may not realize that they are fighting over around 2-5% of the entire population. That's really the percentage of people that are in the market to buy a vehicle today. So much effort for so little potential! It's kind of depressing isn't it?

Let's use the odds in your favor. In order to start seeing immediate (measurable and duplicate-able) results for your marketing efforts, you may be required to change the way you think a little, and perhaps; change some of your current process to meet consumer expectation. All in the name of profitability.

What Drives Consumers to Buy?

If only 2-5% of consumers are in the market to purchase a vehicle today, have you considered how you could tap into the other 95-98% of the market that perhaps would be willing to purchase a vehicle but may not necessarily be in the smaller percentage that cares about price?

It's absolutely vital for every dealer that wants to start selling more vehicles, products and services to understand what drives consumer purchase decisions in order to offer something really unique and actually tap into a never ending pool of customers. Let's take a look at a couple of examples of what drive consumers to purchase.

1. Emotional needs / wants: We all have them and because of that,advertising how your products and services can fill an emotional need will actually help you penetrate a larger market and get your business in front of more interested people.

I'm a perfect example of this. A couple of years ago, when my wife and I received news that she was expecting our second son, one of the first things we discussed is how our small sedan would no longer fill our transportation needs (Emotional need #1 - necessity). Could you imagine two car seats, potentially two strollers not to mention half the house that you have to pack up when you have kids, all crammed into the back of a small sedan? We went from not being in the market to being in the market in a matter of days.

The more we thought about what we would need, other issues came up. Safety (emotional need #2), Comfort (emotional need #3), Room (emotional need #3), Vehicle features (emotional need #4) and so on. Price wasn't even on our mind yet because we were too busy formulating our list of needs.

Then came the emotional wants. Status (emotional want #1), luxury (emotional want #2), add-ons (emotional want #3) get the picture.

You see, not everyone is in the market to purchase another vehicle. Everyone however, is in the market of fulfilling their emotional needs and wants. While all of your competitors are engaged in the price battle over a small percentage of the market, you could be addressing the demand of a larger market and funneling those consumers into your dealership. You will never run into a short supply by focusing your energy on the things that everyone wants fulfilled – Their emotional needs.

When you have your approach set up correctly, you've strategically provided the right information and uncovered the emotions of your customers, the results will be like magic.

2. Reciprocity: Have you ever heard of the law of reciprocity? This is something that successful marketers have been using for decades and let me tell you, it works extremely well! Most cultures have this law hard-wired into the back of their minds. To simply define it, let me sum it up as I give you something and as a result, you give something in return.

Often I find dealers practicing this law, but in reverse. Customers often have to make a purchase before they can get the value added offer, when really it should be flipped the other way around. Give something of value to the customer first, build the relationship and they will reciprocate by making a purchase from you.


Whether you want to believe it or not, it doesn't really matter. The definition of insanity is doing the same things over and over again and expecting a different result. If you truly want to increase the profitability of your dealership, stop focusing so much energy on pricing. Remove yourself from that never-ending uphill battle and re-target your efforts into fulfilling the emotional needs/wants of consumers. Provide value by offering the right information first and let the law of reciprocity take you all the way to the sale. 

Your success starts here.

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If you want to Sell MORE Cars…

Remember “Macro” Versus “Micro” 

The goal is to sell more cars, more often and more profitable. The question is how can we do this? How can we stack the deck in our favor to ensure consistent success? The answer is to sell on a Macro level versus a micro level. First, let me explain the difference between the two. “Micro” selling is the way the typical sales consultant sells… one deal at a time, working off of “Ups” or referrals. “Macro” selling is when you are able to sell multiple units at a time or sell to multiple people at a time. For example “Fleet” sales is a form of macro selling, if you have a company that wants to buy several units in one deal. Sometimes this might be better than selling one unit at a time and sometimes it’s not. You might be thinking how can you even say something like that Sean…? Simple, with a lot of “Fleet” deals, there might be multiple units getting delivered however; they are discounted or heavily discounted because the client is buying multiple units in one transaction. So, is it better to sell one unit at a $2,200 (total) gross or sell four units in one fleet transaction for a TOTAL gross of $4,000? That is a good argument. On one hand you are making $4,000 on the other hand you are obviously NOT maximizing on gross. Before I give you my opinion, I want to share with you some statistics that might BLOW YOUR MIND!

  • You have a six percent closing ratio off of OEM leads (Leads from your manufacturer)
  • You have an eight percent closing ratio from 3rd party leads… but remember that over 70+ percent of the leads you get from 3rd parties originates from search engine optimization and or search engine marketing
  • You have a 14-16 percent closing ratio from leads you generate through SEO and SEM initiatives and or from leads from your dealership website.

*** (Here is the MIND BLOWING PART)

  • On average you have a 27 percent closing ratio from membership buying services like:
    • Costco
    • BJs
    • Sam’s Club
    • AAA
    • Etc…
    • As a matter of fact Costco had a 35 percent closing ratio!

People believe that if they are in a “Membership Buying Program” they will get a better deal. Numbers do not lie. Most dealerships and most sales people sell the hardest way “One at a time”. There is a better way… “Macro Selling”.

What you need to do is start a “Membership Buying Program” for your dealership. Here is a very serious example of how I did this myself when I was a manager at a dealership in New Jersey. I created a membership buying program through my dealership for law enforcement. I worked with a company called www.njcops.comit is both a FREE newspaper as well as a website. It goes to EVERY law enforcement division in the state of New Jersey. For example:

  • Every Police Department in NJ
  • Every Sheriff Department in NJ
  • Every Correctional Facility in NJ
  • Every State Trooper Barrack in NJ
  • Every Federal Agency located in NJ
  • EVEN Law Enforcement from outside NJ like NY, Maryland etc… views this publication.

I created a full page ad in the free publication as well as full digital marketing and branding on their website . I came up with a complete value package proposition (An AWESOME, “Why Buy From Us”).  Basically the ad said “Show me your badge and we will…” But it wasn’t JUST for the officers… it was for EVERYONE at the police department including dispatch etc… And their spouses and their kids and… Do you get it? It was for EVERYONE. Sound familiar…?? There is ALWAYS a sale going on EVERYDAY at your dealership at EVERY dealership. Same concept, Perception is REALITY! We wanted EVERY single person reading NJ COPs Magazine and website to think and know that if they or ANYONE they knew wanted or needed ANYTHING automotive… Sales, Service, Parts, Finance, Special Finance, Body Shop, Aftermarket. There was NO OTHER PLACE OTHER than Sean V. Bradley and my Dealership!  

We literally signed up 22 different Police Departments in 1 week! And we sold a ton of cars! Let me explain further, when I say that we signed up 22 police departments in 1 week. That means that 22 different police departments as well as every one of their officers, employees, family and friends. Anytime anyone needed anything automotive they came to me and my dealership. We were our own Costco, BJs, Sam’s Club, AAA. We eventually moved beyond just law enforcement. We created a membership buying program for the military, teachers, firefighters and more.

What you need to do to start selling on a macro level versus a micro level is:

  • Understand the difference
  • Identify which “Macro” audience you want to target first. It might not be law enforcement or military. For example if you are highline and you are in Clear Lake Texas (Right next to NASA), you might want to target NASA…
  • Create a POWERFUL “Value Package Proposition” for your targeted Macro Audience.
  • Create a POWERFUL Marketing Campaign to fully engage your new audience
  • Get ready to sell a lot more cars!

If you have ANY questions about this article or if you would like me to help you identify what “Macro” opportunities you have in your area, please feel free to email or call me

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Self Driving Cars

A car that drives itself? For the past few years, Google has been working on an autonomous vehicle. In other words, a car that can drive itself. As you can see in the video, they perfected such an idea. One of the first volunteers for Google's self-driving car was a man by the name of Steve Mahan, who is visually impaired.

The Self-Driving Car took Mr. Mahan to pick up his dry cleaning, to Taco Bell for a quick bite and then back home! It's absolutely incredible what technology can do in today's world! Additionally, this past week, Google was approved by the state of Nevada to work on testing several different self-driving cars on the road. And, the rumor is that Self-Driving/Autonomous vehicles could become a reality by the year 2020.

While everyone agrees that it's still a work in progress, the license that Google was granted in Nevada to do testing is certainly a step in the right direction. During their tests, they'll be monitoring the car's capacity and ability to brake, acceleration, and steering. According to Google, the car uses "artificial intelligence software, a GPS, and an array of sensors to navigate its way through traffic."

So, what's your take? Would you want to own one? Or, would you feel more at ease if you had full control of the wheel?


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Click Here to Visit A Whole New World

Imagine you are blind, it's 9:00 AM and you just walked from the tarmac to witness the training of a brand new Automotive Internet Sales team.  You're excited to meet the people and watch them learn as you learn.  You've got your note taker all charged up and you get a phone call from the lead trainer saying he missed his flight and won't make it until the end of the day...but that he's done you a big favor and                          called the dealer and there on their way to pick you up.  What do you do?


Quite naturally, you're terrified.  Here you are in the airport, with zero agenda, thirty minutes away from the biggest moment in your career and you want your mommy.  But of course you represent the number one training/consulting firm in your industry, so you gotta take this shot.  You've been through the trainings, you know this stuff and you can teach it.  You just have to let them get to know/like/trust and believe you.  You make that your only mission...well, that's if you think like me!


I experienced this firsthand and let me tell you; it was exhilarating!  Standing there with seven brand new Internet Coordinators, three more experienced ICs and an internet director with over fifteen years in the car was the rock star stage spotlight all over again.  We conducted preliminary introductions, then began to synergize!


Throughout the week, my goal was to show them not only how much I knew…but how much I truly cared about their success.  We discussed the numbers, we talked about the minds of the prospective customers and even dove into how important their personal success is to the entire automotive industry.  I had to show the entire place, that although I don’t have physical sight, I do have an amazing vision…and if they bought into it, they would reap the benefits.  Wow, did they ever.


I felt the love and respect from the moment I walked in the door.  From the managers, to the frontline employees, even a few customers expressed how they felt the excitement of change…an upgrade in quality.  My career was completely altered by these encounters.  I now have even more esteem for my company because I was privileged enough to come into contact with a dealer group that was tired of the old and ready to completely embrace the new.  We…were able to introduce them to the “new” they were searching for and more.  As per their testimony, it also changed the lives of the people with whom I interacted.  This is what Dealer Synergy is all about, a new approach to doing business in the automotive industry.


More importantly, this experience inflated my self-confidence balloon.  I already knew there was nothing I couldn’t accomplish, but the ability to transcend that belief into others was what I questioned.  Honestly, I thought I lacked it.  Well…I was proven absolutely positively wrong!  If you're thinking there’s something you can’t do, you’re more than likely in the wrong column as well.  Here’s the Bottom line…If I can jump on an airplane to a far away/strange land by myself and make out alright, then don’t tell me you can’t succeed at selling some cars over the internet!

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Money Motivation

Money Motivation


Do you enjoy it small, or would you love to increase the size of your paycheck?  Coordinators round the world are being asked this question every day.  No one likes a sub-par paycheck.  If we can agree there, then I would like to share some action steps you can take that will be sure to enlarge the numbers in your bank account.


The first thing we have to realize, understand and embrace; is that as internet coordinators “WE ARE IN SALES!”  The individuals who do exactly this in life (not just in our business) are the ones who prosper.  In order to be successful here, every day on the phone we must sell three things…and here they are:

  1. Ourselves
  2. The Dealership
  3. An Appointment with the Dealership.


When we make or receive a call, we have to be the most friendly, /excited, /knowledgeable business person in our galaxy; and then we must sound like it. What do real business people do?  First off, they always know the name of the person with whom they’re speaking.  If you catch yourself asking “by the way, what is your name?” more than sixty seconds after your greeting, then you might be guilty of being unprofessional.  When people are preparing to spend (especially large amounts), they want to talk to professionals…don’t you?  In addition to the old rebuttal, we need to internalize: How about this, if we don’t handle our calls in the most professional manner possible, we could NEVER expect people to buy vehicles from us...OK?


“Here at XYZ Motors”…Do you find yourself using this sentence starter?  You could be selling your dealership.  This is exactly what you want to do if you are truly money motivated.  Think of it this way: a dealership is worth lots of money right?  If I constantly sell the dealership…then over time I’ll make lots of money…it’s that simple.


How do we sell appointments you say?...Good Question!  The easy answer is to sell the aforementioned products extremely well.  If we do a great job of selling the dealership and ourselves as a package, the appointment is a synch…unproblematic.  However, we do understand appointments to buy cars aren’t selling like hotcakes these days; so here are a few extra incentives you can put on the table for your prospects.


Tentative appointments:

People seem to be more afraid than ever of commitment.  Appointments give the impression of rigidity, so what can we do to flip the connotation?  Use the word tentative to soften the word appointment.  Statistics show that American people keep sixty percent of their commitments…no matter how strenuous.  What does that tell us?  We should just get our customers to agree to show up, then follow up.  (The OH-SO important follow up…which deserves its own article entirely…as it shall have.)


Talk to your personal phone trainer or internet director about helping the customers to understand the benefits of setting appointments verses just popping by the establishment.  Dealerships are once again worth millions and should be treated with respect.  As doctors, lawyers and realtors, so are car guys.  Maybe we could title them something a bit more astute like:…“Vehicular professionals”…I’m taking suggestions.


Either way, having a more professional approach to our jobs will help us to grow our compensation.  I’ll leave you with an old saying from the old See-Do-Get wisdom vault, “If we wanna get paid more, then we gotta do more for what we get paid for.”  Think and comment about it…THANKS!  Until next time, go out there and sell more cars, more profitably, more often!!!

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Johnstown Used Cars

To sell Johnstown Used Cars you are competing with a great number of negative regional factors.

1. Numerous direct Johnstown Used Car competitors (like a big city)
2. Small Town Price Haggling Mentality
3. Johnstown Used Car dealers have a bad reputation with public
4. We moved Locations which has endangered us of losing some customer base and being seen as the newcomers in our new location

How do you combat things like this in such a short period of time that they become as least costly as possible?

We have successfully been competing in this market because of a few great advantages that we offer. As a part of the Thomas Automotive Family we've been in business for over 100 years, everyday improving for the car consumer. We offer the best in programs for our consumer. Programs like our 4+ year warranty reimbursement, where you can buy a used car extended warranty that is 4 years or more and if you never need it we will refund you the value of the warranty.

Another program is our No Pressure Sales Environment. Changing the public outlook on the car industry is no easy task but this great program takes on that challenge. Involved in this program is the fact that we pay our sales people a salary, so they don't feel the need to pressure our customers into buying a car that doesn't fit their needs just to make ends meet. Inside this program is built in our No Haggle, Market Pricing. We give you the best deal upfront so there is no need for the consumer to argue with another adult over what is fair.

The Thomas Rewards Card program is a loyalty program that is very popular with our consumer. We give you 10% back on every dollar you spend at our dealership. For example, keep bringing your car to be serviced at our dealership and build up your rewards dollar value up to $500 then just take that off the price of your next new or used vehicle. What a great deal!

Finally, and our favorite, is that we give back to the community here at Thomas Team Honda. We give to many charities and even have charity car cruises that help children and families in our area. We extended our hand to the less fortunate in our community and we hope that this type of business sense expands around the area.

Let us know if there is more we could be doing as, like I said, we strive everyday to get better. We'd love to hear from you. Visit our website hyperlinked at the top of this post or just give me an email at
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For Real Results, Don’t Forget Your CRM!

There is endless chatter about social media in the dealer marketing world these days and why wouldn’t there be? Over 500 million people are using one of the “Big 4”—Facebook, Twitter, MySpace, and Linked-In. In addition, of the two-thirds of Americans who now visit social networking sites, 43 percent visit them more than once a day. Significantly for the retail industry, and automotive dealers in particular, 68 percent have become a fan or friend of a product, service, company, or group on a social networking site. Without a doubt, dealers need to harness the power of social media. Most of the social media chatter and discussion, however, currently revolves around dealership Facebook pages and Twitter accounts, while almost none of it focuses on one of the most powerful tools in a dealership’s arsenal…the CRM/ILM system.

Yes, tapping social networking can be a little overwhelming and tricky, but if you utilize your CRM and ILM systems, along with some key best practices, you can eliminate much of the confusion and create a straightforward strategy. For example, knowing whether or not a customer belongs to a social site is helpful (and you can do that directly through your CRM/ILM system, with the right plug-ins); but seeing how many friends or contacts that customer has on each site gives you a powerful advantage. Based on the user privacy settings, you can actually go directly from the CRM tool to a customer’s social media page to gain even more information about that customer.

Imagine the selling opportunity with a customer that has over 200 contacts on Facebook alone. If this “influencer” has a good experience at your dealership, then recommends your dealership to his/her friends via a post on the wall, and those 200 contacts have their own friends, the customer’s experience becomes viral across all of those contacts. Your marketing efforts can grow exponentially by targeting just one prospect and then spreading the positive message by word of mouth or, in this case, “text of mouth”! And this is just one opportunity you can leverage combining the right CRM system and plug-ins, as well as the following simple best practices:

1. Enhance your CRM data to include social media information for each of your customers and prospects.

2. Use the enhanced data to create outbound CRM/ILM-based campaigns that target social network influencers in your database.

3. Target your social media campaigns. Don’t just email the same content asking everyone to be your friend, make the request relevant to the recipient.

4. Train your store to review the social media data (recent posts, friends, etc.), in addition to the customer’s history of interactions with your store, before they interact with the customer.

5. Measure, measure, measure!

Bottom line: just as you should never forget your CRM and ILM systems when planning your email and direct mail campaigns, be sure to include these critical systems as you map out your social media plan…it is a lot easier than you think, just try it!

Mike Martinez is chief marketing officer at For more information about izmocars and iCRM social media plug-ins, go to
Read more… will announce later today it has signed an agreement to acquire Kelley Blue Book and its properties CDM Data and CDM Dealer Services, Dealer Communications has learned.

In exclusive interviews with Dealer Communications and the Wall Street Journal, AutoTrader President and CEO Chip Perry and Kelley Blue Book President and CEO Paul Johnson talked about the background and the strategy for the deal.

It’s the second major acquisition for AutoTrader in a little over a month, which announced in September it was buying vAuto, a used vehicle inventory management tool for dealers.

Kelley Blue Book, which was founded in 1926, is one of the oldest and most well known brand names in the automotive industry. It had come close to being sold a few times the last several years, including in 2008 when an earlier deal between AutoTrader and Kelley fell apart at the finish line primarily due to the collapse of the credit markets.

Kelley Blue Book retained the services of J.P. Morgan in July to again explore the option of selling the company. “Sometimes things come down to timing,” Johnson says. “People in the industry see the future as brighter and there is a resurgence in the M&A (mergers and acquisitions) markets.”

Several firms expressed interest and submitted bids to acquire Kelley. "KBB is one of the most attractive properties in years (for sale)," says Perry, who described the competition to buy it as "competitive."

AutoTrader, whose majority owner is Cox Enterprises Inc., announced in May that Providence Equity Partners had acquired a 25% stake in the company. At the time, Perry said the investment would “enable us to pursue the many organic growth opportunities, as well as strategic acquisitions, that will help improve the products and services we offer our customers.”

Terms of the AutoTrader-Kelley deal are not being released. However, industry insiders estimate the deal was in the neighborhood of $550 - $600 million. The deal is expected to close by the end of the year.

Both Kelley Blue Book and vAuto will operate as subsidiaries of AutoTrader. Johnson and Dale Pollak, vAuto’s founder and chairman, will report to Perry.

Except for additional products and services it will receive from AutoTrader, Perry says “almost everything Kelley does now is not going to change.”

However, Kelley, in a partnership with Vast Inc., had been working on a pay-per-performance classifieds lead model for new and used vehicles since the summer of 2009 after a partnership with AutoTrader ended prematurely.

Perry says Kelley’s model will move to more of a classified subscription model that is used by AutoTrader.

The challenge for AutoTrader will be to maintain Kelley’s brand as being the unbiased source for vehicle information and valuations. The plan is to enhance the consumer experience on by custom fitting several of AutoTrader’s products for the site.

For example, classified listing model will play a much bigger role on In addition, will also get AutoTrader’s Trade-In Marketplace, which provides consumers with an instant price for their vehicle redeemable at auto dealerships across the country participating in the program.

Perry says the partnership will enable dealers to access the Kelley audience.

When asked whether AutoTrader’s buying spree was done, Perry said the company is always on the lookout for opportunities, but that most of its growth would be from products developed internally.

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