IronPlanet Motors seeks ‘breakthrough’ with SEC deal
October 3, 2011
Filed under Features
Auction site’s deal could lead to increased dealer traffic
By Nadia Higgins
In January, IronPlanet was an online auction site known for dump trucks, backhoes and other heavy construction equipment. But also in that month, with the launch of a spinoff auction site, the company’s executives were in new territory. This new sister site, called IronPlanet Motors, sells pre-owned motorcycles as well as ATVs, PWC and other powersports units.
IronPlanet Motors works on a consignment basis, providing an avenue for dealers to remarket their pre-owned or outdated inventory. But, over the months, as IronPlanet Motors grew, the company reached a tipping point. It needed more buyers to drive up prices.
“We needed a breakthrough,” said Steve Kendrick, managing director of IronPlanet Motors. “Word of mouth only works so fast and only goes so far. We recognized that we needed to do something big to get our brand out there.”
A corporate sponsorship of the Southeastern Conference (SEC) of collegiate athletics that represents “well over a million dollars,” or about one-third of IronPlanet Motors’ yearly marketing and advertising budget.
IronPlanet Motors will remain the official powersports auction site for the SEC through 2014. As such, the company is the only site among its competitors allowed to use the SEC to reach the league’s 172 million college sports fans. IronPlanet Motors’ plans include advertising in all forms of SEC media as well as participating in fan events and running a marketing blitz for the football championship game in December.
Kendrick says the reaction to the sponsorship from powersports dealers has been quite positive.
“They are very excited about the level of investment that IronPlanet Motors is making to get buyers aware and interested about the products we remarket through our site,” he said.
The other major response from dealers has been a question — why the SEC? Kendrick says there are several reasons, including timing. The opportunity was brought to the small company at a time when it was ready for its next big move. Another factor was that the SEC doesn’t have a huge bevy of sponsors competing for fans’ attention.
But even more important was the reach of the SEC — 172 million fans in an area stretching from Virginia to Florida and all the way west to Arkansas, in addition to being a national draw in football. The SEC fan base is also growing in Texas.
And finally, the SEC fan demographics clinched the deal. “Not that we’re all sports fans or college fans but that was the primary driver,” Kendrick says, referring to the high level of crossover between college sports fans and powersports enthusiasts.
According to Kendrick, the sponsorship deal provides three main benefits to local dealers within the SEC reach. The first is more traffic to their place of business. IronPlanet Motors does not have a showroom, and items are not moved to an auction site. Instead, the vehicles stay at the local dealership, where they are inspected and photographed to create a posting on the site. That means a local buyer could end up at the dealership to pick up merchandise purchased online at IronPlanet Motors, giving dealers the opportunity to “engage the consumer, to do upsell or do a basic sell of accessories and things like that. Their assets are getting that many more eyes,” Kendrick said.
Also, Kendrick noted, this type of customer — with the purchase already made — is more committed than the average browser, as he or she has already researched a product and decided to buy it.
A second benefit to dealers is raised interest in powersports in general. If the SEC deal translates to more eyes on IronPlanet Motors’ site, more people are looking at powersports units. “It gets people thinking about the products,” Kendrick said.
The third benefit relates especially to smaller dealers. Growth for IronPlanet Motors may give them “more confidence that they can actually remarket that trade-in that doesn’t fit into their inventory scheme or brand alignment.” Dealers may be able to accommodate trade-ins they wouldn’t otherwise accept because they believe they have a better opportunity to get the products off their hands.
When asked about potential pitfalls, Kendrick did not seem worried. “We’re not concerned about the outreach. I believe we’re going to get the views,” he explained. He does, however, “want to make sure we maximize our return investment.”
And to do that, IronPlanet Motors faces the classic challenge faced by all dealerships.
“The main concern, if any, is making sure to convert people from lookers to buyers, that we drive our registrations to the site,” he said.
One way the company is addressing that concern is by holding a sweepstakes for playoff tickets, where fans enter the contest by simply registering at IronPlanet Motors.
“Our dealers who sell through us expect us to make sure we have the best consumers engaged to drive price performance — enough demand to balance supply. We expect to drive participation to the next level through the SEC sponsorship.”