AutoAlert, Inc., is a software-as-a-service company that works with its client base of thousands of U.S. automobile dealers to enhance its gross profits by providing targeted consumer marketing and lead-generation data. Recently acquired by the Bay Area middle-market private equity firm HGGC, LLC, the company realized approximately $700 million in gross receipts in 2013 through hundreds of thousands of transactions. Based in Irvine, California, AutoAlert holds several patents identifying its enhanced marketing services and processes.
AutoAlert’s portfolio software helped Paragon Honda-Acura in Queens, New York, to complete sales of close to 100 additional units a month in 2011. The company’s software product provided targeted information on the dealer’s existing customers that indicated which ones might be most receptive to new purchases.
The software system analyzed data that included the level of current consumer equity in a vehicle, existing mileage, terms of lease, and warranty descriptions. The result: new prospect data on pre-selected customers distributed over several marketing categories that then assisted the dealer in boosting sales while keeping costs low.
After receiving the AutoAlert data, Paragon staff started calling prospects each morning, eventually handling some 7,000 new leads. During the period studied, the dealer estimated that about 1,000 of its sales each year resulted from working with AutoAlert.
Based in Irvine, California, AutoAlert, Inc., offers actionable marketing data to help car dealers in increasing their brand reach and conversion rates. By providing a data analytic and lead-generating software program and targeted direct marketing campaigns, AutoAlert has become a major resource for thousands of dealerships across the country.
By early 2012, two new AutoAlert patents dealing with methods and procedures built into its marketing software had become active. The new patents represented the third and fourth by the company to be registered with the United States Patent and Trademark Office. AutoAlert works closely with its dealer clients to provide training and customer support. The company’s highly trained staff puts a high level of product knowledge and professionalism at the disposal of dealers with the goal of growing long-term and mutually beneficial relationships.
AutoAlert continues to build its set of software-as-a-service products and methodologies designed to increase its customers’ ability to raise profits, generate warranty and other after-market sales, and enhance customer satisfaction and retention. By protecting its intellectual property through diligent, timely registration of patents, the company has taken steps to ensure its own and its clients’ long-range effectiveness and profitability.
Acquired by the mid-market private equity investment firm HGGC, LLC, in early 2014, AutoAlert includes among its family of trademarks MileageAlert, ServiceAlert, and WarrantyAlert.
Serena Software Inc. became a new member of HGGC’s portfolio in the first part of 2014. HGGC, a Bay Area private equity firm focused on the middle market, recently ramped up its acquisition of companies in the high-technology field with significant growth potential. San Mateo, California-based Serena works with its client businesses to deliver development and operations products that streamline and enhance release and deployment and unite the functions of information technology and applications. Established in 1980, Serena provides orchestrated development of applications and management of releases in a way that brings all the relevant systems together smoothly and seamlessly.
In fall 2013, Serena executives announced the innovative Dimensions CM 14 Preview Program. The product allows customers to enjoy early engagement with cutting-edge software features in mobile and parallel development, and those that encompass new product capabilities. By focusing on offering increased ease of operation and transparency, Dimensions CM 14 aims to make its customers’ development and deployment cycles even more efficient. Through Dimensions CM 14, staff charged with release management and development can now improve their understanding of their own production and deployment streams in real time.
Parallel development is a particularly important concept in today’s global business climate. A company’s effectiveness is immediately increased when it has access to the best products and practices for maintaining the visibility of multiple incoming updates and requests.
AutoAlert, Inc., offers a highly effective direct marketing service to its 2,700 automobile dealer clients. Through DirectAlert, which AutoAlert created in collaboration with the interactive marketing company The Ready Group, LLC, dealers can achieve a response rate of 10 in 1,000. This rate doubles or quadruples the commonly accepted response level for direct marketing campaigns in the automotive sector.
Over the course of more than a decade in business, Irvine, California-based AutoAlert has developed a software platform that offers car dealers sophisticated organizational and data mining capabilities. Through its software-as-a-service system, in conjunction with its hardware and on-site staff training programs, the company works to increase clients’ ability to generate leads and close sales while saving money on advertising costs.
Through DirectAlert, which was unveiled in 2012, an automobile dealer can produce customized and focused direct mail collateral that uses a pattern-interrupt methodology to maximize customer responsiveness to a dealer’s message. Pattern-interrupt techniques work to cut through customer resistance to sales messages by introducing the element of surprise to generate curiosity about the content of an ad.
Pattern-interrupt, used in both sales and interpersonal communication strategies, relies on the fact that humans tend to pay attention when familiar, expected patterns are thrown off. DirectAlert offers dealers the ability to send personalized and targeted messages to those existing customers most likely to make a purchase. Additionally, it provides the capacity to offer consumers information about both the dealer and the original equipment manufacturer that can trigger a purchase sooner than expected.
A provider of business outsourcing services, iQor announced on April 1, 2014, that it had finalized the acquisition of the Aftermarket Services of Jabil Circuit, Inc. Through the acquisition, iQor seeks to position itself as a leading global firm in a $40 billion market focused on customer relationships and product support.
Jabil Aftermarket Services provides clients across a range of industries such as retailers and electronics makers with customized aftermarket solutions. The deal integrates Jabil Aftermarket Services’ experience in product support with iQor’s emphasis on customer support to form a distinctive organization that meets the needs and expectations of customers.
Jabil Aftermarket Services will become a separate business division of iQor, operating as iQor Aftermarket Services. The merged company will have over 32,000 employees and approximately $1.5 billion in revenue. In addition, the firm will operate in 17 countries.
iQor CEO Hartmut Liebel, who was formerly served as the CEO of Jabil Aftermarket Services, said, “We are excited to welcome the more than 13,000 Aftermarket Services employees to iQor.”
In February 2014, middle-market private equity company HGGC, LLC (formerly Huntsman Gay Global Capital, LLC), announced yet another addition to its holdings in the digital marketing sector. HGGC purchased Buy4Now Technology Group, based in Ireland, and will operate that company as a subsidiary of its existing portfolio company MyWebGrocer, Inc. The strategy takes MyWebGrocer, headquartered in Vermont, into the global marketplace in e-commerce services. MyWebGrocer had acquired a Buy4Now subsidiary in 2008.
MyWebGrocer began serving small retail grocery stores in 1999, when it offered an online platform that enabled them to compete in a digital environment. Its growth over the past decade and a half has driven MyWebGrocer to a leading position among providers of e-commerce solutions that assist grocers in connecting with their customers. Through MyWebGrocer, clients can access high-quality Web-design, hosting, and consulting services.
Buy4Now, operating out of Dublin, offers MyWebGrocer a full-service Internet platform and the existing staff and clientele to expand into the European market. Buy4Now has more than 10 years of experience serving its market through its variety of e-commerce offerings. Buy4Now’s long-term relationship with major Irish grocery store company Musgrave Group, along with its general merchandise functionalities, offers MyWebGrocer an accessible means of transitioning into a major role in global e-business.
Conversion rates tend to be a hot topic among e-commerce and marketing professionals, and with good reason. Simply put, a website’s conversion rate is the metric showing the percentage of visitors to that site who took a desired action, whether that happens to be making a purchase, registering as a user, filling out a survey, or writing a product review. For example, if a site records 100,000 visitors over a one-month period, and 3,000 of them complete a purchase, the site’s conversion rate comes out to 3 percent.
The digital marketing community immediately becomes interested when a company claims a high conversion rate or a boost in its conversion rate. However, to talk about conversion rates as a positive requires consideration of the context for the figures. What constitutes a good conversion rate, and how much did it cost a company to achieve this rate? Who exactly are the customers doing the “converting,” and what was their status before they “converted”? In addition, how does a company decide how much to pay for any particular conversion rate? Will it base its budget strategies on the cost for each action or the cost for every customer acquisition?
While a company’s conversion rate can be a powerful tool in determining its performance, there is no agreed-upon way to measure it. Data involving the number of minutes spent at a site or the number of unique visits tend to be far more standardized.
A company must first decide what it wants to achieve, and that will determine what to measure. If a marketing professional wants 5 percent of visitors to a site to watch a two-minute video all the way through, he or she will need to track more than just the number of visitors clicking on that video.
When thinking about another firm’s conversion rate statistics, managers will need to remember that they can make no valid inferences about one company’s performance over another’s without first understanding the context surrounding the metrics.
In recent years, the aftermarket services industry has seen enormous growth. As far back as 2006, after-sales services and the sale of spare parts in industries like information technology, automobiles, and industrial machinery were already estimated at roughly $1 trillion, or 8 percent of the annual gross domestic product of the United States. That figure has increased dramatically as companies across these industries have refined their strategies and business practices in order to tap into the full potential of this sector.
Having recently acquired the Aftermarket Services unit of global electronics maker Jabil, the customer service outsourcing firm iQor Holdings Inc. is poised to enter this rewarding new territory. In doing so, iQor will also be taking on some exciting challenges that have been identified by the business platform association Aftermarket as trends to watch in the near future. These include:
Knowledge. Identifying, analyzing, and sharing the experiences and insights of customer service personnel and other field operatives is a key step in helping product developers and R&D teams optimize design. How best to capture and transmit this knowledge is a hot question in today’s aftermarket business.
Data. Management of data in an environment of constant technological advances is at once a significant challenge and a major growth opportunity. Businesses must strike a balance between no lost data and no efforts wasted on data that is ultimately not useful.
Service Dominant Logic. Service is rapidly taking the place of goods as the cornerstone of economic exchange. Companies must therefore evolve and grow their business mentality in order to make the transition from a product-focused operation to a customer-centric one.
A portfolio company of middle market private equity firm HGGC, LLC, MyWebGrocer (MWG) has been providing sophisticated digital solutions to the online grocery industry for nearly 15 years.
A central element of MWG’s platform has always involved helping its retailers and brands better understand their customers. In pursuit of this goal, MWG recently conducted a comprehensive segmentation study, called Exploring the World of Digital Grocery Shoppers, to identify and explore the opinions, motivations, and preferences of individuals who plan and shop for groceries online. Out of a consumer panel of 30,000 digitally active shoppers, the research revealed five distinct types.
The reluctant shopper reviews weekly specials online a few days before shopping, but otherwise does very little planning.
The traditional grocery enthusiast makes use of online resources primarily for research, especially regarding weekly specials, but is more comfortable with the in-store shopping experience.
New digital shoppers are typically young, ethnically diverse individuals with busy schedules, who plan and look for specials online and streamline the shopping process by using mobile and e-commerce technologies.
The passionate planner enjoys and makes extensive use of online resources in searching for recipes, planning meals, building shopping lists, and reading product reviews.
The affluent online shopper belongs to a high-income, high-activity group with very little time for meal planning or shopping, and therefore appreciates the ease and convenience of online groceries.
Identifying these five groups is the first step for retailers and brands seeking to improve digital engagement. Retailers can then begin to build better customer relationships through more specifically targeted marketing efforts.
In late 2013, the private equity firm HGGC bought a unit of Jabil Circuit, Inc., a contract electronics manufacturer, for $725 million. The transaction marked the biggest add-on deal in HGGC’s history. In addition, the acquisition of Jabil’s warranty repair unit was the fourth transaction in HGGC’s quest to build up iQor Holdings, an outsourcing specialist. When combined with iQor Holdings’ projected growth, the purchase of Jabil’s Aftermarket Services business unit will more than quadruple iQor’s revenue and bring its total number of employees to 31,000.
The deal was quarterbacked by Gary Crittenden, the chairman and managing partner of HGGC, who also serves as the chairman of the board of iQor. HGGC appears to be a logical buyer for Jabil’s Aftermarket Services unit (warranty and repair) because iQor concentrates on customer service, and the Jabil unit focuses on the replacement and repair of consumer products. In addition, both companies serve many of the same clients.
In mid-2013, HGGC hired Hartmut Liebel, the former CEO of Jabil Aftermarket Services, to oversee iQor. Crittenden said that HGGC plans for a long-term investment in iQor.