Quinn Chow - April 2007 Presentation
Transcript of Quinn Chow - April 2007 Presentation
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The Designerly Approach to Business
Quinn Chow
Masters of Science Candidate in Industrial Design
Art Center College of Design
email: [email protected]
May 2009
April 2007 Presentation
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First a little background... Theres no doubt we love cars. We spent
$700 billion on them last year in the US.
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Theres also no question we hate the act of buying them a Ford
survey found that buying a car was one of the most unpleasant retail
experiences in life.
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This was confirmed every time we spoke to car buyers In our first
survey, they brought up issues like feeling not well-informed having
to sit in a showroom all day and going through long sales pitches.
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And when we spoke to car sellers, they expressed the same
frustration talking to dealers and salespeople, they hated having
to compete by negotiating and lowering prices and the most
valuable customers to them are the happy ones, because they
become customers.lifelong
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Its happening slowly, but sellers are changing their attitudes: The top
10 dealers in sales all point to their commitment to customer service
as leading to their success.
So the question we had to ask was: What has been stopping it from
getting better?
Well we found many reasons, but the one were tackling is
confusion.
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Right now, there are 19 dealers to go to within 15 miles of here
most representing different makes, let alone models this creates an
overload of choices.
Or when shopping online, these are a fraction of the choices the
internets been great, but its created an overload of information.
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So for car buyers, we offer Alfred, an online shopping assistant that
streamlines the entire process into a single interface. Its a website
from which buyers access beginner-friendly advice on how to
navigate all the choices and then keep track of subsequent
research by storing it on their Alfred account.
And from which buyers can add car information OFFline on the
showroom floor, by using their cell phones. This way, bridging the
gap between physical cars, and the virtual information that
represents them.
And it turns buyers into a networked community that offers trusted
ratings on everything to do with buying cars: the cars, dealers,
salespeople.
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And we do the same thing for car sellers they suffer from
confusion too.
These are the major departments, processes, decisions, and variables
involved in selling a car.. There is a definite overload here
previously, sellers deliberately used this to their advantage when
negotiating a car deal but now, this confusion is seen as a
roadblock to giving the buyer good service.
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So for them we have FastSell, a sales management toolthat, again,
organizes it all into the same workflow, and streamlines it into a
single interface
and puts it into a handheld terminal, so the seller can manage the
system from anywhere again, bringing virtual information out onto
the physical car lot.
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And then, when we integrate the streamlined buyer information with
the streamlined seller information and share it with the
appropriate checks and authorizations of course Alfred and FastSell
combine to build a transparent, trusted, and lasting relationship.
So what does this relationship look like?
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To show it, I introduce to you Ronnie Ronnie just learned she's
going to be a new mom! Which means a time of big, exciting
change, not the least of which is their car.
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She and her husband have been meaning to talk about it but they
never seem to get the time.
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And her friend, pictured here, made her wary of buying a car.. For
her, all the excitement was lost when she had to listen to loooong
sales pitches wait a loooong time for a salesperson to run around
getting answers and deal with the confusion of having to talk to
different people from different departments.
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But not Ronnie. She finds Alfred when shopping for other things
related to her new baby, in this case, baby seats.
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She clicks through to AlfredCarShopping.com, and is impressed that
instead of asking which car she wants, it asks about her: where she'll
be driving, how many people, any pets, etc only after getting to
know her, does Alfred offer beginner-friendly advice and recommend
some cars to her.
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And then it helps her keep track of further research onlineShe
really loves this because she only has a few minutes a day to look at
this stuff, so whenever she gets back to it, she only needs to log into
her Alfred account and pick up where she left off!
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It helps her offline too! At one particular dealership, Cerritos Infiniti,
she can take a picture of the circular barcode to upload that cars
information to her Alfred account!... Cool! Thinks Ronnie Way
better than writing things down and carrying all those pamphlets!
"Way better than having ME carry your pamphlets, her friend quips.
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It's at the dealer where Ronnie first encounters FastSell, a tool used
by the salesperson with it, he can add anything else they talk about
to her Alfred account.
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Out of all the dealers and all the cars she looked at that day, one of
them stands out: Cerritos Infiniti. Instead of mucking around with
sales pamphlets, information about that specific G35 Sedan Ronnie
looked at was all in her Alfred account waiting for her when she
returns home.
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There's also info about the dealer and about Justin, the
salesperson!... Key to that info are trusted, buyer-generated ratings
Ronnie and her husband are assured when the car, Justin, and
Cerritos Infiniti all check out with high ratings!... It also points out the
dealer offering fast and friendly service through their FastSell system.
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What this means is that when Ronnie goes back to the dealer, she
can allow FastSell to access to her Alfred information - no need for
wasted time on anotheor sales pitch. Her only remaining question
was to see one in Laser Red with alloy wheels, that's what her
husband preferred.
Justin checks and they don't have it. But they DO at Glendale Infiniti,
and they can start a dealer trade, on the spot, and it can be delivered
within an hour oh, and hey, this is what the car looks like.
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Ronnie and her friend decide, NAAAHHH
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The rest of the sales process goes just as smoothly. When it comes to
trade-in, it's as easy as scanning the VIN number, using his FastSell
terminal.
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And Justin has make, model, history... All the information he needs to
help Ronnie decide on the value of her car".
Note that there's still the same questions being asked before, and
Justin still needs to access the same databases, it's just that he
throughout it all.
stays
at Ronnies side
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It's the same when it comes to negotiating the price and the
financing. The transparency makes it a cooperative process. Ronnie's
done her homework and it shows.
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When everything's agreed upon, it's just a matter of hitting "print"
and paperwork is already filled out both Justin and Ronnie benefit
equallyNo muss, no fuss, just a signature.
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So Alfred's streamlined flow of buying information made Ronnie feel
confident she was making the right purchase on the right terms
FastSell's streamlined workflow made Justin's sale quick and
trustworhy The end result? A lasting relationship
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The nice little surprise for Ronnie when she gets home is a free car
care kit she gets when she describes and rates her buying
experience thus helping future buyers through Alfred and adding
to the community!
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And FastSell has gone already gone through Alfred to start Ronnie on
her next phase: owning and maintaining her new car she can
schedule her first service right there It seems Ronnie will get to see
Justin, and the crew at Cerritos Infiniti, in a few months.
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Alfred and FastSell are my recommendations for Risoria's entry into
this market What market is that?
First FastSell competes for small-and-medium dealership spending on
Dealer Management Systems and Customer Relationship
Management systems...
And assuming small and medium makes up two-thirds of all the
dealers in the US, multiplied by their average spending yearly on
these systems, we get a market potential of $320 a year
Our plan is to capture that market $22,000 at a time but why
would a car seller pay this?...
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Simple FastSell offers bottom-line savings.
When presented with early prototypes, Justin Soto, Used Car Sales
Manager at Pacific Honda said the integration and real-time
communication between departments saves time and the
structured working process saves them errors so he sees being able
to cut 1 or 2 support staff, which equals $67,000, or 3% of their
personnel costs.
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And it means top-line growth.
Paul Conant, General Manager at Cerritos Infiniti, says his happiest
customers are the ones that get their car quickly, and that happier
customers lead to referred and repeat business A lifelong customer
to at Cerritos Infiniti is worth easily more than $300,000.
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FastSell is the best way for sellers to seamlessly tap into a projected
47,000 car buyers a year Where do these buyers come from?
Alfred's buyer community.
Our primary target are the 1.6 million new families a year in the US.
In an initial survey, "good service" ranked just as important as "low
price" in the purchase decision however when narrowed to a new
family demographic, "good service" ranks so these are the
people most interested in the friendly service Alfred and FastSell offer.
And this demographic is also 40% more likely to buy a car online
than any other demographic Why is that? Because life's changes
demand it.
higher
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This is the type of marketing that will address that putting Alfred in
places new families will most likely be.
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But we won't ignore secondary markets. We want to hit other likely
car purchasers: college grads starting their first jobs, and teenage
new-drivers marketing to them can take on some unique forms,
such as producing an Alfred widget, so young users can rate and
review cars, just as they would music or movies, on MySpace.
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So whats it take to launch FastSell and Alfred?... Here are the major
activities Risoria must take on in the next 7 years.
We focus on design and development of FastSell, needing half a
million dollars to get FastSell to soft launch into alpha installations by
Year 1.
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After testing and refinement, we officially launch FastSell locally after
Year 2 this lets us continue to refine the product, while gaining
some sales to fund the development of Alfred.
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The goal is to time the national expansion of FastSell to start when
Alfred goes live in Year 4.
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And so Year 5 is where we see the biggest outlay of investment A
cumulative $2.8 million through 5 years to fund the marketing of
Alfred. We need to build a critical mass of users to a) make the buyer-
generated ratings meaningful and b) protect us from competitors
who try to build a similar community.
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As Alfred gets a foothold, that downstream buyer demand I talked
about will kickstart sales of FastSell reversing the flow of cash and
breaking even in Year 6.
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For our business model, we are assuming 2.2% market share by Year
7. This means $8.4 million in revenue, with $3.7 million in ebit, and
positive cash of $1.7million.
This represents 100% year-on-year growth, which we are confident
we can achieve for two reasons the first is the growth in internet-
assisted sales: it grew from zero in 2000 to 30% by 2006 and its
showing no sign of slowing down the second is other innovators in
this area like CarMax and MSN Auto experienced 2 to 300% growth
in their first years of inception.
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In conclusion did we make the car buying experience a joy?
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I presented prototypes to sellers and this is what they had to say
Paul Conant, general manager said this system is very useable
Rocco Calundruccio, a student here but some of you dont know is
a former Jeep salesman wishes he had this when he was selling
cars and Justin Soto, sales manager said theyd for sure consider
running FastSell
And I did an online survey asking car buyers opinions on Alfred and
FastSell a Honda Accord owner said it seems to have all the info I
need in one spot a recent purchaser of an Acura RSX said this
could build a healthier relationship between the salesperson and him
or her and a Mercedes owner simply said this idea is fantastic.
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So the answer is YES, we are making a joyful car buying experience
but I think a more worthwhile question to ask now is, and this is very
particular to what we do here in Grad ID is the solution worth
implementing for Risoria?... Ill let Johann and Larry answer that
but first I want to say one more thing...
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...Thank you!