Second of a two-part series
SEATTLE (Feb. 11, 2000) — When you profess to "driving the revolution in car care," you´d better have enough horses underhood to pull that off.
After a year of tinkering with their concept in that big cyberspace garage, the execs at iCARumba Inc., a new Internet enterprise, drove it out onto the Web on Feb. 1 for a zero-to-60 mph cruise.
The premise behind the firm lies in its contention that the link between auto service shops and car owners is weak—sometimes even broken, resulting "in many distrustful car owners and service providers that are not adequately rewarded for good work."
The Seattle-based firm also maintains that the linkage between shops and suppliers is inefficient, causing high prices for service providers and distribution problems for suppliers.
iCARumba.com wants to strengthen those connections, thus providing motorists with a one-stop source for automotive information and services and, theoretically, greater profitability for shops and suppliers.
Officials stress that theirs is not just another "dot com" venture but rather an automotive services company. And they´ve invested millions in marketing and Internet technology to try to make iCARumba a "household word."
The Jan. 31 issue of Tire Business explored what iCARumba plans to offer to consumers, repair shops and suppliers. This article will take a look at its cost structures, system for rating repair shops and goals.
The company´s initial marketing strategy is aimed at car dealerships, independent repair chains and tire dealerships and eventually will involve the collision repair industry.
There is currently no sign-up fee for service shops to enroll with iCARumba, nor are there any charges for a consumer, who enters a zip code on the Web site to produce a list of iCARumba member—and non-member—shops in the area. But members will have links to their Web sites.
Each time an online transaction is made and completed—for instance, a motorist uses the site to locate and arrange a repair job at an iCARumba member shop—that shop is assessed a fee of $2 for repair orders under $100 and $5 for orders over $100.
Shops will be billed every month on the "honor system, since we won´t actually know what the repair order amount was," explained John Hamminga, a consultant with K2 Consulting Group, which is handling iCARumba´s marketing, public relations and advertising.
A secondary income source will be links to advertisers and "banner" ads they´ll run on the Web site.
Before iCARumba´s Feb. 1 launch, it was test marketed in Seattle and in the San Francisco Bay area. "The response was overwhelmingly positive," he said. "Over half the shops we contacted have signed on," though many others are waiting to see how it takes off before committing.
If a participating shop needs iCARumba to develop and maintain a Web site for it, Mr. Hamminga said the company might someday have to charge a fee for those services, but there are no plans now to do that.
However, there will be a cost for suppliers to participate, though he said terms and charges will be determined in private negotiations.
Mr. Hamminga is unsure how much face-to-face interaction, if any, will be needed with member shops, but said iCARumba is looking at hiring regional account executives. The thinking is a higher percentage of shops might be likely to sign on if they receive a personal visit from a company rep to demonstrate the Web site on a laptop computer.
In terms of targeted advertising, Mr. Hamminga said the company appreciates "the difference between good and bad customers," and believes it has the ability to link good customers with good shops to produce better results than a shop that simply runs "blanket" ads in the Yellow Pages or in newspapers.
Although one auction-like facet of iCARumba´s site will allow a customer to post a needed repair job or service, such as an oil change, and have shops bid on the work, the company doesn´t see the site creating price wars between shops.
"If customers take the time to visit the site, they must want a deeper level of vehicle knowledge and the best value for the work they want done," Mr. Hamminga stated.
One component of the Web site could prove to be its most useful—and perhaps controversial.
If a consumer uses iCARumba for a shop referral, then returns to the site to set up another appointment, a shop rating questionnaire must first be filled out.
Mr. Hamminga said iCARumba is "not in the rating business—we´ll let the market do that from the standpoint of pricing, service, how well a shop does the work, etc."
Service providers will be rated on a curve, so the worst feedback on a shop won´t be indicated to consumers, who will only see generalized rating information. But member shops will have a password and access to specific customer comments. Ratings will be refreshed often, he added, so if a shop gets a bad mark but is working to improve, its grade will reflect that.
Still, a "horrible" member shop with bad ratings won´t be eliminated unless it´s found doing something illegal. "We think it´s a matter of free enterprise, and the market will act accordingly. If a consumer still chooses to do business with a shop with low ratings, they can but probably won´t," Mr. Hamminga noted.
In a philosophical sense, the real reason for providing ratings is because "shops don´t get rewarded, proportionally, for what they do well," said Ken Brookings, iCARumba CEO. With iCARumba, they won´t only be graded on whether they´re good or bad, but also on criteria such as convenience, pricing, services and even customer friendliness.
"Sometimes bad shops set the image for the industry," he said. "I think a thoughtfully applied ratings system can change that and good shops can be rewarded. There´s no vehicle to do that now, and we intend to change that, slowly, over time."
Mr. Brookings said iCARumba is negotiating with about 30 suppliers and pursuing arrangements with vehicle makers, online car sellers and Internet "portal companies" that cater to specific groups, such as women and senior citizens.
The firm is a member of the Motorist Assurance Program (MAP) and is seeking alliances with other professional groups and trade associations. But he said it is yet to meet with groups such as the Tire Association of North America or the International Tire and Rubber Association because "we´re a bit overwhelmed right now."
iCARumba already has a "few thousand" shop members, Mr. Brookings said. One strategy is to use a parent firm "to help educate and bring in their franchisees or dealer base, and that includes a number of large tire and general repair chains—most of the recognizable names and biggest chains in the business."
While a year from now the firm would love to have 50,000 member shops, he said, "our true goals are less measured in numbers, more measured in the dynamic of what kind of shops we need for consumers to have a good experience. And how many consumers are needed in order to be a value for participating shops."
It´s an ambitious goal, he acknowledged, "not something we´ll do overnight. But over the years to come, I think we can make quite a contribution to making the whole automotive service industry a healthier and more robust one."