The Cobalt Group – Dealer Website Vendor Profile

Cobalt was one of the first auto web site companies in the game; they got into bed early on with some OEM’s. Case in point the new agreement with GM that allows them to strong arm dealers to use Cobalt solutions or there is no hyperlink to the local dealer. If Microsoft did something like this there would be anti trust talk. However GM and Cobalt get away with it.

Customer service has always been a dealer complaint as they, like BZ, ADP and others just do not believe in listening to the client that pays the bill. They continue to use the “cookie cutter” approach. The amazing thing is they are supposed to be a CRM tool, a bit of an oxymoron here.

Like BZ their solutions are not well connected, too much “bling and flash” and expensive compared to better more technologically advanced programs that are more cost efficient.

When you look at the cost breakdown of some of these solutions it is quite astounding what some companies charge.

An inventory solution like IOL or others may run $200.00 dollars a month; a good web site may run $5-600.00 a month, a good CRM tool maybe $400.00 a month. So you look on the outside a total cost of $1500.00 – $2000.00. Some of these companies are charging $5-6,000.00 a month, $60,000.00 a year or more and have 1500-3000 dealers nationally.

HMMMMM that looks somewhere like many millions of dollars a year, with huge margins, there is more profit here than selling cars and the dealers are paying for the pleasure of the experience, heck some are even bragging about it. Compute the numbers.

People like Rajan Krishnamurty recently moved to Washington automotive social networking site CarDomain as its CTO. He was the former CTO at Cobalt. I would look for this company and others like them to slip in the back end of the business with the social network channel model. We do not know the impact of these networks or how they will evolve; they just maybe the next killer opportunity in the ecommerce game in the auto industry.

On the upside Cobalt seems to be in sync with Yahoo's new search marketing system, codenamed "Panama." They have been talking about this for sometime and we still have not seen its power. A key advantage of the new system includes greater local targeting options, mobile applications IE Windows mobile 5.0 and 6.0 which should increase advertising effectiveness for Cobalt's Power Search. This connection may bring even greater value to the dealers. Internet search marketing (ISM) is an important way for dealers to reach in-market buyers.

I received the invitation two months ago for the mobile app and signed up for the application however I have not heard anything since.

With the kind of money there is in this game and the relatively low technology start up costs you know there will be bright, young, intelligent people who will be going for the gold and also it will be open to the International market players.

My Auto Group uses Cobalt for all 5 of our websites, and their lead management tool LMCC. I must say that I have had some issues with the templated website design. My owner wants all of the websites to have a uniform look, however that only leaves us 4 options for templates right now. Cobalt is currently upgrading all of their sites to 3.0, when that happens we will supposedly have more choices. One of my sites has been moved to the 3.0 version, and the others are still on the waiting list. I called ecare to see if we could speed up the process any, and was told that they would all be moved by the end of the year. I didn't understand why they didn't upgrade our whole account at the same time. I have talked to the powers that be about switching to another provider, but it is so darn cheap with the co-op I just don't see a change in our future.

Hi Lao. Your post inspired me. iMagicLab recently launched iLeadTools.com a $56 per month lead management product. This is our attempt to provide a product to the smaller independent dealerships who shouldn't afford these expensive packaged solutions. Truthfully, our software company could not offer this product if it wasn't for development and support dollars earned through our more feature rich (and more expensive) ILM / CRM tools.

I have tried to use dozens of inexpensive Lead Management tools sold to dealers. The tradeoff is always buggy software that is nearly impossible to use. The end result? Dealers spend time wrestling with software, not selling cars. This does not occurring with iLeadTools. It is backed and supported by iMagicLab.

Maybe I was just spoiled by other companies tech support?

My comments on Cobalt websites are simple, but maybe other everyday IM's are feeling the same pain.

Recently returning to the dealership that originally allowed me to be succcessful as an Internet Manager three years ago, I was honored with full admin rights to update our 3 cobalt websites as I see fit.

However, between of the time allowed to learn Cobalts backend through manuals and being not so 'website savvy', I occasionally find the need to call Cobalt tech support which I find to be burdensome to say the least. Emailing will take days, if they ever respond.

Avoiding phone prompts and long wait times, I found it easier to reach the receptionist desk and ask for a tech support manager to answer the usually simple, yet important answers to my question.

Moreso, our dealership has been paying Cobalt for years and regardless of where the money comes from (Co-op or not), I have yet to hear or see a Cobalt rep reach out to any dealership first to help a lending hand in improving website performance.

As a busy Internet Manager graded only on end-of-month sales, a little assistance every once in awhile would be nice in the ability to harness the power of a dealership website.

My experience with the Cobalt group is more based on the technical side of things. My company is http://www.elite-searchenginemarketing.com. We are contracted by many automobile dealers to control their website development and maintain a high ranking in the natural search engines for their respective websites.

Cobalt is obviously a large player in this market. When you take a look at the other vendors offering websites to dealers, from the largest to the smallest, Cobalt allows as much flexibility if not more than almost any other vendor.

There are always going to be restrictions on what you can and cannot do when using admin tools for websites. And there will always be the occasional need to ask for help from the technical support teams. But all in all, Cobalt has been relatively quick to respond to our needs and the admin tool has allowed us to make most of the necessary changes required to satisfy our clients needs for their websites.

It's like any other product out there. Repetition of use creates familiarity. Once you grow more and more comfortable with a product, the quirks become more second natured and away you go.

Hello Jeff,

I’m Melissa McCann the Marketing Director for The Cobalt Group. I’m responding to your thoughts and questions about Cobalt.

We want you to know that we are listening – and we do hear your comments, concerns and feedback. And, we have both good news I want to give you and some explanation about the changes that are taking place that will greatly improve your website experience.

Today, our new platform is in use in over 5000 dealerships and is producing very strong results. We still have a few clients on our legacy platform but they are being migrated quickly. This platform update has been an amazing undertaking and brings Cobalt to the forefront as the new industry standard and I’m not just talking marketing BS. I’ve been in the automotive industry for a long time, and I am speaking as someone who can appreciate what dealers really need.

This platform was built dynamically with the guidance of our deep search partnerships with Google and Yahoo!. Dealers on this platform are experiencing better than ever organic search results because of the new frameless website architecture and many other architectural features that allow search engines to perform a deep crawl into relevant content.

Why should you care? Well, the features of the new platform address concerns and needs that our clients, like you, have shared with us. This new platform does so much for your websites, for example:

• Radically improved content management tools making it easier than ever to update your website and proactive services if you would rather be selling cars than updating your website

• Enhanced vehicle merchandising that allow dealer to better sell what’s on their lot and capture business for vehicles they could easily trade for or acquire

• Social networking features like emailing a friend

• New Specials functionality that allows you to feature vehicles you’re trying to spotlight to move now

We also noticed concerns that were voiced on this blog by some of our dealers and we wanted to address them here:

We’re constantly balancing OEM and dealer needs to provide dealers with the ability to leverage the millions of dollars their OEMs spend on advertising to the dealership’s advantage. We care deeply about dealership success and are always looking for ways to provide more offline advertising leverage online.

I noticed some blogger concerns about their ability to move to the latest platform as a group. Let me explain why that is the case. As we create integrations between the OEM and Dealership we custom code lead routing, brand site integrations and custom tools for each program. These are the back end details that insure each dealer receives all brand lead referrals and that websites meet compliance standards. These are also the customizations that deliver automatically placed advertising allowing dealers to leverage OEM offline advertising dollars.

We must customize each OEM program before moving it to the new platform insuring all of this works for the dealership. This creates a situation where some dealer groups may have some sites on Nitra, our legacy platform and other sites on our new Website 3.0 platform. We are very sensitive to this situation and are working quickly to migrate all sites. Dealer portals may be moved to the new platform now providing portal level search optimization.

There are many new and exciting website designs, features and services available to improve your support options and give you more flexibility than ever. After all we believe you should be selling cars. Let us deal with your online marketing. We do appreciate our clients and we want you to know we are listening and we built this new platform to meet your needs.

I was a rep for Cobalt and they are a powerhouse in our industry, with that said they do have some customer service problems. I had a 4 state territory. I was supposed to see 5 dealers a day, as well as prospecting. I always got the same reception when I went in to a store...where you been? I always had DP's and GM's wanting to train the Im's on the sites. Do the math, 5000 dealerships + 1 rep for 4 states = poor service. They worked me to death, weekends, traveling on Sundays and holidays, it just about ruined a marriage and fried a good rep. Cobalts partyline is the "we are migrating customers as fast as possible", what they need to do is read a book on customer service, quit changing platforms and get out of bed with the OEM's. There are so many better options in the market. They know once they have you....and all the leads and customer information in the LMCC, goes away when LMCC does!

Website progress (see previous comments)

Since, my Cobalt rep Lydia Edwards and tech support 'Andy' have been in constant contact assisting me in my quest for better functionality of our websites which were in dire need of repair.

Tech support at Cobalt is still a challenge to contact in a timely manner, but when reached are intuitive and helpful.

It seems Cobalt's contracts are also attempting to conform to the industry with shorter, more flexible terms.

In this same time frame, I have heard from a few fellow internet managers time strapped like myself, how their premier and cutting edge automotive website company has let them down. One as simple as the geographic region of the website marketing as they were consistently receiving all their leads from over 60 miles away. Oops. Im assuming it's probably from the recent buyout and marketing blitz without beefing up the tech support/developer staff first.

I don't forsee Cobalt selling out any time soon.

More updates to follow... thanks Jeff!

I Run e-commerce for a large group of stores in Cleveland, OH.

GM Dealers are being forced to take a Cobalt site (for free allegedly) to be able to receive our leads from GM.com and chevy.com through OneSource.

Apparently, our CRM providers (AutoBase in our case), weren't giving GM the type of data they were looking for to show how they are driving internet business to our stores. The data on their reports never matched the data on our system.

The concerns I have are:
How is GM and Cobalt going to geographically protect our franchise territories?

Will Cobalt be able to push data to our CRM application? I shudder at the thought of manually adding data to our CRM that is currently pushed in.

Will we have to invest double in sem/seo to put our "new" website up in the listings?

We have a terrific website currently and are positioned very well. This positioning required a tremendous investment for which we have high equity.

Are we going to fall victim to the larger purchasing power of Cobalt to supplant us in seo/sem listings and positioning? In effect is this Cobalt initiative going to take all of our market leading efforts and nullify them?

I really need a clearer vision of the push and pull of marketing and data for this Cobalt initiative so that I can get my head around it.

One of the things NOT mentioned in the enrollment website for this GM initiative is the promotion and link out to our well established dealer website. Is this going to be available and if so will we be forced to pay for the redirect?

What motivation will Cobalt have to seamlessly upgrade us on an ongoing basis if they will already have been generously handed a huge portion of this highly competitive market? This internet market lives and breathes and moves very quickly. Will Cobalt be able to respond in a timely fashion with a minimum of down time?

Finally, we have seen in many previous posts that the level of service (or CSI if you will) is not very good at their present volume of business. What type of customer service can we expect to receive when several thousand more dealers will be added to the mix almost instantly?

I am sure we will have many more concerns until we see more information.

Once I find out more I will post again good, bad, or indifferent.

Jim Setele

love to see your home site (non-cobalt).

I have worked with Cobalt and other companies in the past, and until I was able to run my own internet department I never knew how much I wanted to be involved and how many ideas I had to add to my web site and ILM CRM tools. Well I learned real fast how much of a process that was if it even could be done at all as far as making changes.

Just a quick note regarding our Cobalt website and LMCC. I have had a great experience with both. The website is easy to maintain,and change. I have found LMCC to be a easy way to keep in touch with our customer base. The tech side for me has been great as well. Even if I call when tech support is closed, I will get a call from the on-call tech. The cost of all of this is very minimul as well. I am not a tech savy IM, but have always had patient answers to all of my questions.

The designs are outdated. If you want to edit something you run the risk of messing up the templates. When I used their site I had to use technical support to update the site for me with specials and changes simply for that reason. While, the tech support works great. They need change. Look at the styles that dealerskins or dealer.com have. One company I just found out about today is dealereprocess. They have a nice grasp on things. TK carsites are amazing as well.

We are looking for software like Cobalt; yet after reading the comments are there any recommendation for our company?

Mark, we have a solution that I believe would work very well for you. You do have other options. It's a very flexible system called Backstage that is designed for non-technical people who want to be in control of their own web sites and be able to reach out to their customers and prospects instantly. We brand each company uniquely so that you stand out in the crowded arena of dealers. Feel free to contact us: yourcreativepeople.com

Justin Murphy, Creative Director