April 2007 Presentation

The Designerly Approach to Business

Quinn Chow Masters of Science Candidate in Industrial Design Art Center College of Design email: qchow@yahoo.com May 2009

First a little background... Theres no doubt we love cars. We spent $700 billion on them last year in the US.

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Theres also no question we hate the act of buying them a Ford survey found that buying a car was one of the most unpleasant retail experiences in life.

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This was confirmed every time we spoke to car buyers In our first survey, they brought up issues like feeling not well-informed having to sit in a showroom all day and going through long sales pitches.

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And when we spoke to car sellers, they expressed the same frustration talking to dealers and salespeople, they hated having to compete by negotiating and lowering prices and the most valuable customers to them are the happy ones, because they become lifelong customers.

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Its happening slowly, but sellers are changing their attitudes: The top 10 dealers in sales all point to their commitment to customer service as leading to their success. So the question we had to ask was: What has been stopping it from getting better?

Well we found many reasons, but the one were tackling is confusion.

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Right now, there are 19 dealers to go to within 15 miles of here most representing different makes, let alone models this creates an overload of choices.

Or when shopping online, these are a fraction of the choices the internets been great, but its created an overload of information.

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So for car buyers, we offer Alfred, an online shopping assistant that streamlines the entire process into a single interface. Its a website from which buyers access beginner-friendly advice on how to navigate all the choices and then keep track of subsequent research by storing it on their Alfred account. And from which buyers can add car information OFFline on the showroom floor, by using their cell phones. This way, bridging the

gap between physical cars, and the virtual information that represents them. And it turns buyers into a networked community that offers trusted ratings on everything to do with buying cars: the cars, dealers, salespeople.

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And we do the same thing for car sellers they suffer from confusion too. These are the major departments, processes, decisions, and variables involved in selling a car.. There is a definite overload here previously, sellers deliberately used this to their advantage when

negotiating a car deal but now, this confusion is seen as a roadblock to giving the buyer good service.

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So for them we have FastSell, a sales management toolthat, again, organizes it all into the same workflow, and streamlines it into a single interface

and puts it into a handheld terminal, so the seller can manage the system from anywhere again, bringing virtual information out onto the physical car lot.

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And then, when we integrate the streamlined buyer information with the streamlined seller information and share it with the appropriate checks and authorizations of course Alfred and FastSell combine to build a transparent, trusted, and lasting relationship.

So what does this relationship look like?

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To show it, I introduce to you Ronnie Ronnie just learned she's going to be a new mom! Which means a time of big, exciting change, not the least of which is their car.

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She and her husband have been meaning to talk about it but they never seem to get the time.

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And her friend, pictured here, made her wary of buying a car.. For her, all the excitement was lost when she had to listen to loooong sales pitches wait a loooong time for a salesperson to run around

getting answers and deal with the confusion of having to talk to different people from different departments.

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But not Ronnie. She finds Alfred when shopping for other things related to her new baby, in this case, baby seats.

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She clicks through to AlfredCarShopping.com, and is impressed that instead of asking which car she wants, it asks about her: where she'll be driving, how many people, any pets, etc only after getting to

know her, does Alfred offer beginner-friendly advice and recommend some cars to her.

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And then it helps her keep track of further research onlineShe really loves this because she only has a few minutes a day to look at this stuff, so whenever she gets back to it, she only needs to log into her Alfred account and pick up where she left off!

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It helps her offline too! At one particular dealership, Cerritos Infiniti, she can take a picture of the circular barcode to upload that cars information to her Alfred account!... Cool! Thinks Ronnie Way better than writing things down and carrying all those pamphlets!

"Way better than having ME carry your pamphlets, her friend quips.

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It's at the dealer where Ronnie first encounters FastSell, a tool used by the salesperson with it, he can add anything else they talk about to her Alfred account.

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Out of all the dealers and all the cars she looked at that day, one of them stands out: Cerritos Infiniti. Instead of mucking around with sales pamphlets, information about that specific G35 Sedan Ronnie

looked at was all in her Alfred account waiting for her when she returns home.

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There's also info about the dealer and about Justin, the salesperson!... Key to that info are trusted, buyer-generated ratings Ronnie and her husband are assured when the car, Justin, and

Cerritos Infiniti all check out with high ratings!... It also points out the dealer offering fast and friendly service through their FastSell system.

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What this means is that when Ronnie goes back to the dealer, she can allow FastSell to access to her Alfred information - no need for wasted time on anotheor sales pitch. Her only remaining question was to see one in Laser Red with alloy wheels, that's what her husband preferred.

Justin checks and they don't have it. But they DO at Glendale Infiniti, and they can start a dealer trade, on the spot, and it can be delivered within an hour oh, and hey, this is what the car looks like.

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Ronnie and her friend decide, NAAAHHH

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The rest of the sales process goes just as smoothly. When it comes to trade-in, it's as easy as scanning the VIN number, using his FastSell terminal.

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And Justin has make, model, history... All the information he needs to help Ronnie decide on the value of her car".

Note that there's still the same questions being asked before, and Justin still needs to access the same databases, it's just that he stays at Ronnies side throughout it all.

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It's the same when it comes to negotiating the price and the financing. The transparency makes it a cooperative process. Ronnie's done her homework and it shows.

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When everything's agreed upon, it's just a matter of hitting "print" and paperwork is already filled out both Justin and Ronnie benefit equallyNo muss, no fuss, just a signature.

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So Alfred's streamlined flow of buying information made Ronnie feel confident she was making the right purchase on the right terms FastSell's streamlined workflow made Justin's sale quick and trustworhy The end result? A lasting relationship

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The nice little surprise for Ronnie when she gets home is a free car care kit she gets when she describes and rates her buying experience thus helping future buyers through Alfred and adding to the community!

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And FastSell has gone already gone through Alfred to start Ronnie on her next phase: owning and maintaining her new car she can schedule her first service right there It seems Ronnie will get to see Justin, and the crew at Cerritos Infiniti, in a few months.

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Alfred and FastSell are my recommendations for Risoria's entry into this market What market is that? First FastSell competes for small-and-medium dealership spending on Dealer Management Systems and Customer Relationship Management systems...

And assuming small and medium makes up two-thirds of all the dealers in the US, multiplied by their average spending yearly on these systems, we get a market potential of $320 a year Our plan is to capture that market $22,000 at a time but why would a car seller pay this?...

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Simple FastSell offers bottom-line savings. When presented with early prototypes, Justin Soto, Used Car Sales Manager at Pacific Honda said the integration and real-time communication between departments saves time and the

structured working process saves them errors so he sees being able to cut 1 or 2 support staff, which equals $67,000, or 3% of their personnel costs.

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And it means top-line growth. Paul Conant, General Manager at Cerritos Infiniti, says his happiest customers are the ones that get their car quickly, and that happier

customers lead to referred and repeat business A lifelong customer to at Cerritos Infiniti is worth easily more than $300,000.

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FastSell is the best way for sellers to seamlessly tap into a projected 47,000 car buyers a year Where do these buyers come from? Alfred's buyer community. Our primary target are the 1.6 million new families a year in the US. In an initial survey, "good service" ranked just as important as "low price" in the purchase decision however when narrowed to a new

family demographic, "good service" ranks higher so these are the people most interested in the friendly service Alfred and FastSell offer. And this demographic is also 40% more likely to buy a car online than any other demographic Why is that? Because life's changes demand it.

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This is the type of marketing that will address that putting Alfred in places new families will most likely be.

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But we won't ignore secondary markets. We want to hit other likely car purchasers: college grads starting their first jobs, and teenage new-drivers marketing to them can take on some unique forms,

such as producing an Alfred widget, so young users can rate and review cars, just as they would music or movies, on MySpace.

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So whats it take to launch FastSell and Alfred?... Here are the major activities Risoria must take on in the next 7 years.

We focus on design and development of FastSell, needing half a million dollars to get FastSell to soft launch into alpha installations by Year 1.

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After testing and refinement, we officially launch FastSell locally after Year 2 this lets us continue to refine the product, while gaining some sales to fund the development of Alfred.

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The goal is to time the national expansion of FastSell to start when Alfred goes live in Year 4.

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And so Year 5 is where we see the biggest outlay of investment A cumulative $2.8 million through 5 years to fund the marketing of Alfred. We need to build a critical mass of users to a) make the buyer-

generated ratings meaningful and b) protect us from competitors who try to build a similar community.

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As Alfred gets a foothold, that downstream buyer demand I talked about will kickstart sales of FastSell reversing the flow of cash and breaking even in Year 6.

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For our business model, we are assuming 2.2% market share by Year 7. This means $8.4 million in revenue, with $3.7 million in ebit, and positive cash of $1.7million. This represents 100% year-on-year growth, which we are confident we can achieve for two reasons the first is the growth in internet-

assisted sales: it grew from zero in 2000 to 30% by 2006 and its showing no sign of slowing down the second is other innovators in this area like CarMax and MSN Auto experienced 2 to 300% growth in their first years of inception.

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In conclusion did we make the car buying experience a joy?

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I presented prototypes to sellers and this is what they had to say Paul Conant, general manager said this system is very useable Rocco Calundruccio, a student here but some of you dont know is a former Jeep salesman wishes he had this when he was selling cars and Justin Soto, sales manager said theyd for sure consider running FastSell

And I did an online survey asking car buyers opinions on Alfred and FastSell a Honda Accord owner said it seems to have all the info I need in one spot a recent purchaser of an Acura RSX said this could build a healthier relationship between the salesperson and him or her and a Mercedes owner simply said this idea is fantastic.

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So the answer is YES, we are making a joyful car buying experience but I think a more worthwhile question to ask now is, and this is very particular to what we do here in Grad ID is the solution worth

implementing for Risoria?... Ill let Johann and Larry answer that but first I want to say one more thing...

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...Thank you!

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