Power, best known for its trademark Customer Satisfaction Index, quietly began signing up car dealers in October for the Power Information Network data collection service. The company said it has 800 franchise points signed up already, nearly 200 in California, the first target for the service.
Employees were out in force promoting the network-called PIN for short-to more than 18,000 dealers attending the National Automobile Dealers Association annual convention in San Francisco last week. The company said four of five dealers contacted there signed up.
Two major computer companies have agreed to become strategic partners and sell PIN. ADP Dealer Services, Hoffman Estates, Ill., and the Reynolds & Reynolds Co., Dayton, Ohio, service about 65% (by volume) of all dealers.
"This is 20 times more important than customer satisfaction," company President J. David Power told Advertising Age.
Just as supermarket scanning helped retailers gain the upper hand over package-goods marketers, dealers could use the PIN data to turn the tables on automakers, giving dealers more power over inventory and marketing.
Power is touting the service as a way for dealers to achieve more effective vehicle ordering, advertising and profit breakdowns.
Dealers joining the system will simply add a so-called gateway from their finance and insurance computers to link to Power's system. PIN will crunch the numbers overnight and return reports to the dealer daily, while keeping a copy of the data to track industry trends. These aggregate data will be offered to dealers, manufacturers and allied industries.
Mr. Power believes there is a lot of room to improve efficiencies at dealerships.
"Half the cars ordered are dogs," he said. "They are just sitting on dealers' lots. They aren't appropriate for the marketplace."
Using the PIN service, he said, dealers can reduce inventories by as much as 50%. Mr. Power contended such a reduction in inventory would save dealers $3 billion a year in carrying costs.
To allay fears, Power contractually agrees to maintain the confidentiality of each dealer's data. Also, it's waiving monthly subscription fees to dealers (charter rates are $49) until a statistically significant sample is achieved.
Mary Harrison, computer system administrator for the Hand Automotive Group, which operates five Los Angeles area dealerships-three of which already subscribe-said the information will be very helpful.
"I look forward to the time when they can give me results for the overall group alongside our results," she said, adding that "they haven't worked all the bugs out yet."
Power's goal is to have 700 to 800 franchise points in California, out of a universe of 3,000 in the state, by July. Power expects to have a nationally significant sample by the end of the year. The company said it plans no advertising.
Dealers aren't the only potential customers. Others include car manufacturers, which already track sales of their own makes but have to rely on third parties for competitive information. And most of that information is dated, relates only to unit sales and ignores profits.