Two years ago, Stephen Cottrell, a 35-year industry veteran, set out to disrupt the automotive retail market. But by blazing this new trail, he also disrupted a business he’d spent a decade building.
Cottrell founded Crosse, Wis.-based Authenticom in 2002. It’s one of a handful of firms specializing in dealer management system (DMS) data extraction and syndication. But his newly launched solution, DealerVault, could eliminate the need for the role Authenticom plays in the industry.
Cottrell, however, believes his latest venture is exactly what the National Automotive Dealers Association (NADA) prescribed when it issued guidance to members last fall on managing customer data. But not every entity views DealerVault as the answer.
F&I: So how do the major DMS providers view DealerVault?
Cottrell: While they are neither coming out and openly endorsing the product, nor certifying it, I believe Reynolds & Reynolds is somewhat relieved that we’ve given the dealer a way to move data that is in concert with their guidelines.
See, Reynolds has talked about dealer-directed downloads for eight years. They characterize them as both difficult to manage and risky. For the first time ever, DealerVault gives dealers a simple tool that provides safety, security, compliance, and indemnification around the data movement, which meets the Reynolds objective. But the product will have a negative effect on RCI (Reynolds Certified Interface) revenues, so they aren’t about to endorse it.
F&I: So how do you secure the data?
Cottrell: We brought in two partners; Rackspace Hosting was one of them. It’s a multibillion dollar company focused on providing data centers designed for safety, security, and compliance. And the data centers are housed and controlled by Rackspace according to its security protocols and guidelines.
Our second partner is Travelers Insurance. It has underwritten DealerVault for up to $20 million in liability protection against loss, theft, corruption, and misuse of data in a cyber-liability policy, which took more than a year to secure.
F&I: So how are you connecting to the DMS?
Cottrell: In the Reynolds environment, we connect via a secure FTP connection off of a dealership PC. We do this because Reynolds wants the dealer harvesting the data off of the Reynolds’ site. In the case of most other DMS solutions, we either have a direct relationship with the provider, or harvest data through traditional polling processes perfected by Authenticom.
The advantage to dealers is they only have one, very manageable connection into the box. From there, they get granular visibility into what data is actually being pushed to each vendor.
F&I: How does the dealer cut a vendor connection?
Cottrell: Using our web-based platform, the dealer can see all the data feeds going to vendors — the feed type, when data was last pulled, and when it was delivered. Now let’s say they want to cancel ABC Direct Mail’s feed. Well, they need only hit the “Deactivate” button. If they want to restart it, all they have to do is hit “Reactivate.” Every time a feed is started, stopped or edited, an email is sent to the master administrator at the dealership or group, the person who logged in and the vendor, which creates an audit trail.
Now let’s say we’re adding a feed; they need only to select the vendor and hit “Submit.” At this point, all the plumbing between Rackspace and the vendor is already complete. So when “Submit” is selected, the feed automatically goes into a pending status. The vendor then reviews the data. If it’s OK, the vendor accepts it and the feed starts immediately. If the dealer wants to see what data is included, he needs only to click on the “Fields” button to see what is being sent. If there is a certain item that a dealer doesn’t want to send, he deselects it and the vendor won’t receive that data element.
F&I: How long is the setup?
Cottrell: It’s a 20-minute process to install the software and about a half hour of training. Typically, we’re doing a lot of support on the initial setup.
F&I: So how does DealerVault change the data-management game for dealers?
Cottrell: In a traditional environment, vendors are paying companies like Authenticom, DMI, and Integralink per feed type, per month. Dealers have been fairly unconscious of this because those fees have been built into the services they are buying, but with cost increases being promoted by DMS companies through their certification programs and certified interfaces, dealers are becoming aware of the true cost behind data movement. So for dealers to have a fixed fee of $299 a month — which is what our solution costs — to push that data to their vendors, tremendous economies will be realized.
F&I: So how much do these certifications cost?
Cottrell: Because of restrictive nondisclosure agreements, confirmation of pricing has been extremely difficult to get. That being said, the over-the-fence chatter is that these interfaces are six to 12 times more expensive than the traditional models. And the only people who are really paying for the certification at this point are companies who have extremely high-priced monthly service models — folks like CRM companies that are dependent on bidirectional communication. The unfortunate byproduct of certification is that it completely eliminates the entrepreneur and emerging technologies, because they are being smothered by these costs.
F&I: How does your solution play with the NADA’s dealer data guidance?
Cottrell: Our chief counsel wrote the data usage agreement we issue to vendors with the guidance of Bradley Miller, the NADA’s associate director of legal and regulatory affairs. So he’s very familiar with our solution. Obviously, he can’t endorse our product, but we believe he’s a big fan.
As for the memo, Bradley talks about data management as being a tremendous potential liability; that’s point one. The second point is dealers spend a lifetime building a customer base and building a relationship with consumers in their community, so they should treat their information as a priority by controlling its movement and ensuring its security. And as mentioned previously, DealerVault is a simple tool that provides safety, security, compliance and indemnification around the data movement, so it meets and exceeds the guidelines set forth by the NADA.
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