Businessmodel of Cars.com

Customer Segments

Cars.com has a multi-sided business model, with two interdependent customer segments that are both needed in order to operate: vehicle buyers and vehicle sellers.

It also has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at anyone who wants to buy, sell, or repair a vehicle.

Value Proposition

Cars.com offers four primary value propositions: accessibility, convenience, risk reduction, and brand/status.

The company creates accessibility by providing a wide variety of options. Its website gives consumers the choice of searching for new cars by make, price, and body style. Besides the website Cars.com, it also owns DealerRater.com, which enables consumers to see reviews of car dealers and service centers; and PickupTrucks.com, which allows consumers to find new and used trucks.

The company offers convenience by making life simpler for customers. Its website enables them to create an account where they can save a list of their favorite vehicles and past search criteria. The site’s feature “Online Quick Offer” allows sellers to receive cash offers online, with the ability to compare up to four offers at a time and the average sale taking 1-2 days. Lastly, Cars.com maintains iOS and Android apps so consumers can buy, sell, and browse repair services on the go.

The company reduces risk by maintaining high quality standards. It provides consumer reviews of used cars, and has a team of industry experts that provides reviews of all the vehicles on its website so consumers can know what to trust.

The company has established a powerful brand due to its success. It is the second-largest automotive classified website, behind only AutoTrader.com. It is one of the largest digital automotive platforms in general , with millions of used and new vehicle listings and the largest database of consumer reviews in the industry. It has 1,300 employees serving every local market in the U.S., and its marketplace enables commerce activities with over 20,000 retailers and every vehicle manufacturer.

Its website attracts 30 million monthly visits, and in 2015 it influenced 36% of total vehicle sales in the U.S. It is the first and only third-party website in the automotive sector to go mobile-responsive, creating a seamless site experience across different devices. Lastly, it has won a number of honors, including the following:

• The “Highest-Rated” Used Car Advertising Award in the eighth annual DrivingSales Dealer Satisfaction Awards
• AUTO Connected CAR News’ award for “Best Car Buying or Selling App Experience or Mobile Web“
• Selection as the the top review site by car buyers and service customers four years in a row in Digital Air Strike’s Sixth Annual Automotive Social Media Trends Study
• Top ranking in overall satisfaction among third-parties in J.D. Power’s 2016 Automotive Mobile Site Study ### Channels

Cars.com’s main channels are its website and mobile app. The company promotes its offerings through its website, app, social media pages, advertising, and participation in conferences.

Customer Relationships

Cars.com’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. Beyond enabling customers to buy and sell vehicles, the company’s website helps them do the following:

• Estimate car values
• Estimate payments
• Review cars
• Review dealers
• Obtain service estimates
• Find service centers The site also provides a variety of useful resources, including general how-to articles, car repair advice and tips, recent car news, multi-car comparisons, trend reviews, and videos. Despite this orientation, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

Cars.com’s business model entails maintaining a common platform between two parties:  vehicle buyers and vehicle sellers.

Key Partners

Cars.com maintains partnerships with other websites through which they promote each others’ services. Its key partners are as follows:

• Auto.com – Like Cars.com, enables consumers to research and buy cars
• NewCars.com – Provides new car reviews and photos, comparison and inventory search tools, rebate information, car-buying tips, and a car price quote service
• RepairPal.com – Provides fair-price estimates based on service centers in customers’ areas ### Key Resources

Cars.com’s main resource is its online platform, which attracts 30 million monthly visits. It depends on human resources, who include the technology employees that maintain and update its website, the sales personnel that recruit dealers to promote their new vehicles on the site, and the customer service personnel that provide support.

Cost Structure

Cars.com has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely transaction expenses, a fixed cost. Other major drivers are in the areas of sales/marketing and customer support/operations, both fixed costs.

Revenue Streams

Cars.com has two revenue streams:

• Listing Revenues – Revenues it generates from fees charged to customers for listing their vehicles for sale on the website (general listings and added premium features such as photos)
• Advertising Revenues – Revenues it generates from fees charged to dealers for advertising their products on the website