Dealerships, Free Access Articles, Technology

A ‘DATING’ website or ‘introduction agency’ designed to bring together car buyers and car dealers that is free for the customer and a mere $7 for the dealer has begun operating out of Adelaide.

Called Mogo, the agency was introduced nationally in the past couple of weeks by Adelaide businessmen Vanya Andropov and Greg Harris.

It is said to be unique in the way it bonds buyers and sellers and has media giants including News Corp, Nova Entertainment and Foxtel as major investors.

Speaking exclusively to GoAutoNews Premium, Mr Andropov said Mogo had already registered more than 1500 dealerships and was building its customer base through social media, including Facebook.

But the investment by capital equity media company Scaleup Mediafund (SUMF) last month has put Mogo onto a higher plane, allowing it immediate access to publicise itself through the News Corp print and online platforms, on radio through Nova, and through target media groups such as Foxtel and real estate site REA Group.

SUMF, which started in 2017 as an equity company dealing in media services, gives Mogo the avenue to put together a marketing and advertising campaign through News for television, followed by other initiatives to publicise and promote Mogo, Mr Andropov said.

Mogo works by introducing people, who are ready to buy a car, to a dealer and, said Mr Andropov, is “much like a dating site”.

The buyer nominates the type of vehicle make and model and his or her location. This is sent to dealers in the buyer’s area who have registered with Mogo but the details of the potential buyer are kept anonymous.

If a dealer has the car the buyer wants, it responds and pays $7 for the lead. The buyer pays nothing. The buyer and the seller then connect with the aim of a successful sale.

Mogo founders Vanya Andropov (left) and Greg Harris

“The opportunity to talk to News Corp came up after that so we pitched our business and News, through SUMF, decided to invest,” Mr Andropov said.

However, behind the investment was a lot of planning, with Mr Andropov saying that he and Mr Harris had been working on the program since coming up with the idea “about three or four years ago”.

“To ensure we had everything right, we have spent three months trialling the system,” he said. “This included a large social media accent where we pushed 3000 leads to the dealer network.

“We trialled what resonated with customers and dealers. Our customers showed they were very favourable to our service with one of the best features being Mogo’s pledge not to hassle prospective car buyers.

“One of our beliefs is that, ‘We’re not interested until you are interested.’ We welcome people who are at the end of their journey for a new vehicle. We aim to get the customer and the dealer together, either in person or online.

“During the trial we found that about 60 per cent of people who used Mogo ended up buying a car through the platform within two weeks,” he said.

“We now have more than 1500 dealers which is about one third of the Australian market.”

He said the development of Mogo was done with the aid of Deloitte Auto to ensure the system worked with the dealer networks.

“Mogo is designed to be as simple as possible for dealer use, including 24/7 access,” he said.

“It means a dealer can sit at home on the weekend and get a mobile phone message about a lead.

“The dealer can immediately get a price and all the details to the prospective owner – all while at home on the weekend.”

According to Mr Andropov, Mogo is less expensive than other buyer-connect offerings but does not really have any direct competitors.

“It is designed for people who are ready to buy a car and who have done their homework,” he said.

“It doesn’t compete with other sales organisations such as Carsales.”

Mr Harris said that for Mogo to work as efficiently as possible, customers need to know what they want.

“Then it’s up to the dealer to find a vehicle in their chosen type, model, specification, colour and price and, in particular, if it’s in stock,” he said.

“We’re not taking anything away from the dealer. That was the main point. It’s about creating rapport between the dealer and the customer and not creating a situation where the customer doesn’t want to go to a showroom for fear of being harassed into buying a car.

“The aim of Mogo is to remove this anxiety about visiting a dealership and doing business with a car dealer. Most of that is because the deal – that is the financial part of the transaction – has already been done online by the dealer and the customer.

“They will meet without having to negotiate and that makes for a far better relationship and one that both parties can build on for the future.”

Mr Andropov said customers were generally happy to provide their details so the dealer can build a relationship and find a car for them.

“The majority of people we surveyed – in fact, 86 per cent of the thousands of people we spoke to –  wanted a relationship,’ he said.

“We are delivering qualified leads. We get the customer to go through 10 steps – name, postcode, preferred vehicle and so on – then we send an SMS to dealers and those that can meet the customer’s needs will respond.

“The dealer pays a flat $7 to talk to a lead. They don’t pay to use the portal and they don’t pay on the sale – they get the leads for $7.

“They can do this with new or used vehicles and discuss trade-ins.”

Mr Andropov said that Mogo does not cater for private parties.

“The relationship is built with the customer and the dealer,” he said.

“If the customer wants to trade in a car, it can be placed on Mogo but it is only seen by dealers – no private buyer can view or buy that car.

“We have to make sure the dealer using Mogo is not competing with private buyers or auctions.

“We only deal with licenced motor vehicle dealers. There are too many scams in the private market and we didn’t want any part of that pain. Only dealers registered with us can view the cars being requested.”

Mr Andropov and Mr Harris come from a background in leasing and are aware that dealers want support. They said they are now looking at working in the same way with OEMs.

Mogo works by taking a request for a car – for example, a Toyota Corolla – and passing the lead on to the Toyota new-car dealerships registered with Mogo.

“It could go to 50 Toyota dealerships in the buyer’s area, for example, and eight could have the car the customer is after,” Mr Andropov said.

“Those eight would pay $7 to get the lead. The revenue depends on the number of leads picked up by dealers.”

Mr Andropov said the program was trademarked and patented in Australia and the US and was trademarked in Europe through patent attorneys. The emphasis on other countries is important.

He said that international expansion was one of the aims of the business and that the US was a possible next step.

By Neil Dowling

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