3. Purpose of a Dealership
• Managed to maximize wealth of dealership owners
– Choose better over bigger
– Achieving “profile” lets you be average, at best
– There is always a better way – always explore alternatives
7. EpiCenter
EpiCenter helps Dealers organize and manage their
Reconditioning Inventory
Benefits:
Decrease Age of Inventory = Get vehicles Front Line Ready faster
Track Tech performance = Operational efficiency & Cost Savings
Apply Cost controls = Improve Cost to Market Ratio
8. Executive Summary
What is it?
• EpiCenter is a web based application
empower Dealers to improve
service operations-primarily in their
process
• Track and prioritizes Customer and
inventory
• Improve communication internally
vendors
• Manage Costs over time as EpiCenter
process
Why EpiCenter?
• Dealers have a hard time accounting
for their reconditioning inventory
• The service department has
conflicting priorities which need to be
managed
• Inventory gets old and costly
• Service Communication is scattered
and not organized
Business Model
• ReconTrak is a SaaS business that is
entering the market as a niche
product with the intent to capture
share and expand with new product
penetration over 3-6 month
development cycles.
9. Description
Bottom Line:
Get your inventory to the front line faster
Value Proposition:
EpiCenter is a exhaustive, one-stop Service Management tool for mid-
optimize their service operations. Dealers can utilize each module to
internal communication, client communication, vendor management,
auction coordination. The product streamlines administrative tasks
communication and consolidating data inputs resulting in direct cost
inventory holding costs in addition to improving the customer
11. Purpose of a Dealership
• Managed to maximize wealth of dealership owners
– Choose better over bigger
– Achieving “profile” lets you be average, at best
– There is always a better way – always explore alternatives
17. Competition
Direct
• Rapid Recon
• greenCLOUD
• AMT Technologies
Indirect
• Excel
• Google Docs
• Existing DMS
• vAuto
How we win
• RO creation and storage
history
• Focus on Analytical
Reporting
• Vendor integration
• New Module Development
• Regional Target Market
• Usability/ease of use
• Elegant design – Data
Visualization
• Domain Expertise
19. SaaS Model
• Subscription Model – No contract but offered at discount
• EpiCenter will be the anchor product
• A new module each Development Cycle (3-6 months)
• Free customer service and data hosting up to 2,500 vehicles
– Small premium added at various storage thresholds
• Long Term Service Model
– Account Managers – Free Support, efficiency consulting
– Boots on the Ground = Customer Insight for future products
• Company Focus
– Maintain a 90%+ retention rate (LT = 95%)
• Requires a strong Customer Service Department and Account Management Team
– Maximize Customer LTV
– Cross Sell with each Development Cycle
20. Pricing Strategy
• Tiered Pricing Scheme
EpiCenter - $500
• Midsize Dealers >30
cars/month
EpiCenter - $200
• Smaller Dealers <30
cars/month
• We will Price Discriminate
• Bundling & discount
opportunities will exist with
new modules
• New Modules will be sold ala
carte if necessary but at a
premium (Base = $500 for
Midsize)
21. Revenue Streams
• Recurring Subscription Revenue
• New Customers
• New Product penetration
• Aggregated Industry Data collected over time
• Partnerships
22. Cost Drivers
• Main Cost Driver = Human Capital
– Requires a strong development team
– Strong account management team
• Salaries, Taxes, Healthcare, Benefits, equipment
• Dec = $20K Marketing Expense
– NADA Expo
23. Products
Goal: Own the service department
EpiCenter – Recon Solution
AuctionPro – Module for auction and dealer communication
VendorPro – Tool for vendors to understand dealers needs
SupplierPro – Tool for dealers to manage suppliers
DispatchPro – Real time shop Scheduling
AdvisorPro – Compete Service Center Management System
CustomerPro – Mobile app for customer alerts
GaragePro – Lite Version for body shops/small garages/dealers
33. Meet the Team
Scott Kunes, CEO
Scott has been in the automotive retail
sector for ten years. He has worked at
the corporate level of Dealer Groups and
now is active General Manager of two
franchised dealers. Scott has been
recognized for his expertise in automotive
retail and most recently was featured in
Automotive News “Top 40 Under 40.”
34. Meet the Team
Ben Peterson, Consultant
Ben has been a product manager at
FactSet for 5 years. He is actively
pursuing his MBA at the University of
North Carolina, Kenan-Flagler School of
business and expects to graduate in
October 2015. Ben’s interests are in
process management and operational
efficiencies.
Slide Purpose: Provide a visual cue on what the presentation is about
Pitch Talking Points:
Question: Why is a dealership in business?
Increase Wealth for Owners
How?
Focus on the listed suggestions.
What’s the point?
In this Pitch we will show how EpiCenter can help you accomplish each of these goals.
Segway: Problem we are solving.
- Slide unaltered and sourced from NADA slide deck
Pitch Notes:
This Slide frames our pitch and value prop. Dealers ultimately want to increase owners wealth by following the ensuing guidelines.
Our Pitch will focus on each guideline by showing how EpiCenter can provide value at each level
Pitch Talking Points:
Old inventory is bad
Depreciation costs are only one piece of the puzzle
Opportunity cost of capital can also erode value
Cuts into Gross PUVR
Keeps money tied up which can’t be used for additional purposes
Profitable dealerships control levers to maximize their gross PUVR and/or increase their inventory turn
Unless you are simply a showroom, holding old inventory is not a good business practice
Segway Question: Dealers obviously understand this so what’s the problem?
Pitch Talking Points:
Dealers, like any retail business, hold inventory. This inventory is expensive and depreciates
Depreciation is a real cost and it can’t be recouped despite a dealer’s perspective*
NADA’s latest estimate puts monthly depreciation at 1.5% which in isolation isn’t much, but is amplified over time and over 10s of thousand dollars of inventory
A dealer that has held 50 used vehicles at an average of 15000 for 30 days would see a depreciation expense of nearly $7000
Slide Note:
*(http://www.firstinnovations.com/news-events/news/why-dont-dealer-owned-vehicles-depreciate)
Pitch Talking Points
Reconditioning is a necessary part the a dealers operations.
According to NADA 66% of all used vehicles are sourced from trade-ins. These vehicles need to be inspected, serviced and detailed to ensure they are ready for resale.
Problem: Most dealers don’t have a good way to account for these vehicles as they go through the multi-step reconditioning process. Customer Service ROs often get prioritized ahead of recon inventory which leads to more delays. Parts may not be available, body shop work needs to be ordered or outsourced.
Communication is also a problem as the car goes through many touch points in the process. UCMs need to approve several steps but may not be informed or may not be at the office.
Overall it is a logistical problem
All, this leads to an average days in reconditioning time of 10+ days (need source)
Imagine the time and cost savings if a UCM could manage this process online from his office or mobile device
Pitch Notes
The auto retail market has been changing over the years.
Information has become more symmetric empowering consumers
Gross Margins on each sale have been shrinking
Dealers can overcome these challenges 3 ways
Improve their operations
Sell more volume quicker
Drive Revenue from other departments - F&I, Service etc.
Slide Notes:
Pain Points
Dealerships:
Mismanaged Process costing money in holding costs and technician labor costs
Mismanaged internal communication
Time lost, expensive admin labor
Tools limited to excel and crude databases
Several applications to log in to that don’t talk to each other
All this adds up to costs
Customer
Dealerships – Service Management, internal communication, inventory management, customer interaction
Vendors – Dealer to Vendor Communication and automation, data feeds
Auctions – Dealer to Auction Communication and automation, data feeds
Customers – Mobile app for communicating with service centers
Service Centers/Detailers/Oil Change Centers – Module to communicate with Customers
Beachhead Customer
Dealerships – Middle tier
Purchasing Motivation
Efficiency leading to cost savings, time savings, and more time for selling and driving business
Product Description
EpiCenter is a exhaustive, one-stop Service Management tool that dealerships can use to optimize their service operations. Dealers can utilize each module per their need to improve inventory turn, internal communication, client communication, vendor management, cost management, and auction coordination. The product streamlines administrative tasks while centralizing communication and consolidating data inputs resulting in direct cost savings on labor and inventory holding costs all while improving the customer experience and allowing dealers to stay more competitive in the service marketplace.
Revenue Streams
Base Module
Incremental Add-ons
Efficiency Consulting (High Price with out product – included with full package)
Vendor Data Feeds
Pass through 3rd party content commission
Potential Ad revenue (limited in scope)
Aggregated Service Data – Market Data
Solutions for Dealers
EpiCenter = base required – Track internal service department - reconditioning process and wholesale inventory
Add –on Premium Modules
Parts Management and real time parts pricing – Vendor integration
Auction Management – Coordinate with Auctions
Customer Service – Prioritize Customer work along with internal work – Provide customers online work approval, tracking and invoices
Solutions for Vendors (separate Value Prop)
Parts Module
Dealer Data feeds- Track market requirements so stock the right parts
Tire Dealers – Data Feeds
Solutions for Customers
Free mobile app for approving and tracking work
Provide real time estimates of work
Schedule time (like X-time)
Solutions for Auctions
Standardized outputs and delivery/pickup logistics
Online auction capabilities
USP
Get your vehicles front line ready quicker and cheaper
Slide Notes:
Need to create a USP
Bottom Line Options? – Short and sweet
EpiCenter provides a competitive edge in service marketplace
Get your inventory to the front line faster
3 day Reconditioning turn
Pitch Talking Points:
Discuss MVP and where the product can go
Pitch Talking Points:
Better over Bigger
EpiCenter is certainly not the biggest but we are definitively a better alternative to business as usual.
Profile is only average – [Frames our Customer as Competitive and Driven – useful for sales pitch as well]
Epicenter's Customers are wired to be successful. These dealers want to spend their time adding value to their business instead of worrying about their service inventory. They are often on the move and want a solution they can take with them. Unfortunately, before EpiCenter they simply weren’t empowered with the tools EpiCenter provides.
There is always a better way
EpiCenter is the better way. Dealerships simply do not have the appropriate tools to manage their Reconditioning inventory in the long run. From day one, EpiCenter will help manage the inventory and will continue to “learn” about your operations. Over time, EpiCenter becomes even more useful as it provides historical tracking of bottlenecks and inefficiencies.
Need accurate and timely information
EpiCenter consolidates all vehicle information throughout the entire reconditioning process and disseminates that information to the appropriate stakeholders. UCM on the road are able to view their inventory alerts on a mobile device and approve each item in real time.
Management is about decision making
EpiCenter creates reports and outputs based on the service operations allowing Managers to make the most informed and wisest decisions about what parts or service to approve, or when to wholesale the vehicle. EpiCenter’s customers spend less time worry about their process and more time selling and driving value.
Pitch Talking Points:
Emphasis on how big the market truly is
Segway: Target Market
Pitch Talking Points:
Focus on who are potential customers are
We are targeting dealers with 30-200 used cars per month, 30000-200000 in recon revenue per month and 300k-2 million in monthly Used car revenues
Segway: Target Market sales strategy
Slide Notes:
These are averages. I think we may want to show the ranges instead to show breadth of the market
Pitch Talking Points:
Of the 7626 Franchised Dealers within our Target Market, 1712 are in the Midwest Region. Of those our initial beachhead customer will be those dealers in WI, IL and MN which is 613 immediate dealers to call on.
Segway: Competition
Pitch Talking Points:
Innovative vs. Laggard = Who in the market is innovating with their ideas vs. those behind the 8-ball
Slow/Fast = Who is making waves in the market vs who is floating in the wind
EpiCenter wants to own the top-right quadrant
Pitch Talking Points:
Highlight that there is direct and indirect competition but really focus on what we do well and how we compete
Better Design
Better Execution
More Robust Offering
Ability to create new modules (Development team)
Etc…
Pitch Talking Points:
Model: Saas
Model has specific metrics to focus on for example Churn
Make sure to explain what the metric is and how we plan maintain low churn
LTV – focus on driving value over long term
Build a solid support team and account management team over time
Pitch Talking Points:
Beginning with one module – EpiCenter’s Reconditioning platform
We will create a tiered rate card, which will not come into play until we have exhausted our target market ($500 price point)
Each new module opens up bundling opportunities to increase penetration
Each existing customer will be pitched new module if applicable
3-5 years
We will have a full product suite that can be sold ala carte but first product will be priced at $500 for midsized dealers
Pitch Talking Points:
Make a strong pitch that EpiCenter is only the beginning. More models will be needed and created to create a really sticky product.
Pitch Talking Points:
Business wide focus on product development
3-6 month development cycles
New products will be vetted by existing and future customers and trialed
Products will be sold immediately
Need to round this Slide out
Cars.com
Adesa
autocheck
Pitch Talking Points:
Focus on importance of Monthly Recurring Revenues and maintaining low churn
Focus on Milestones
ARR = Annual Recurring Revenues
Round this Slide out more
Pitch Talking Points:
Validate Sales multiple (7x)
Average of 2 recent deals done by Autotrader
Sales are known as is deal value
Highlight potential Suitors to make investing in our venture more attractive
Pitch Talking Points
Old inventory is bad
Depreciation costs are only one piece of the puzzle
Opportunity cost of capital can also erode value
Cuts into Gross PUVR
Keeps money tied up which can’t be used for additional purposes
Profitable dealerships control levers to maximize their gross PUVR and/or increase their inventory turn
Unless you are simply a showroom, holding old inventory is not a good business practice
Segway Question: Dealers obviously understand this so what’s the problem?
https://canvanizer.com/canvas/vJUJ5KUY984
Pitch Talking Points
Old inventory is bad
Depreciation costs are only one piece of the puzzle
Opportunity cost of capital can also erode value
Cuts into Gross PUVR
Keeps money tied up which can’t be used for additional purposes
Profitable dealerships control levers to maximize their gross PUVR and/or increase their inventory turn
Unless you are simply a showroom, holding old inventory is not a good business practice
Segway Question: Dealers obviously understand this so what’s the problem?
Pitch Talking Points
Old inventory is bad
Depreciation costs are only one piece of the puzzle
Opportunity cost of capital can also erode value
Cuts into Gross PUVR
Keeps money tied up which can’t be used for additional purposes
Profitable dealerships control levers to maximize their gross PUVR and/or increase their inventory turn
Unless you are simply a showroom, holding old inventory is not a good business practice
Segway Question: Dealers obviously understand this so what’s the problem?
Pitch Talking Points:
Dealers, like any retail business, hold inventory. This inventory is expensive and depreciates
Depreciation is a real cost and it can’t be recouped despite a dealer’s perspective*
NADA’s latest estimate puts monthly depreciation at 1.5% which in isolation isn’t much, but is amplified over time and over 10s of thousand dollars of inventory
A dealer that has held 50 used vehicles at an average of 15000 for 30 days would see a depreciation expense of nearly $7000
*(http://www.firstinnovations.com/news-events/news/why-dont-dealer-owned-vehicles-depreciate)
Pitch Talking Points
Reconditioning is a necessary part the a dealers operations.
According to NADA 66% of all used vehicles are sourced from trade-ins. These vehicles need to be inspected, serviced and detailed to ensure they are ready for resale.
Problem: Most dealers don’t have a good way to account for these vehicles as they go through the multi-step reconditioning process. Customer Service ROs often get prioritized ahead of recon inventory which leads to more delays. Parts may not be available, body shop work needs to be ordered or outsourced.
Communication is also a problem as the car goes through many touch points in the process. UCMs need to approve several steps but may not be informed or may not be at the office.
Overall it is a logistical problem
All, this leads to an average days in reconditioning time of 10+ days (need source)
Imagine the time and cost savings if a UCM could manage this process online from his office or mobile device