Jay Mason, the Founder and Owner of Dealer Spike, grew his company’s revenue from$7.4m in 2014 to$25.6m in 2017, a 248% increase, and is now on track to hit just under $100m in 2018.
Dealer Spike is a world-wide digital advertising company focused on helping dealers in eight specific verticals increase sales and service profitability through online digital advertising and training. (The eight verticals are Powersports, RV, Marine, Trailer, Ag & Lawn, Truck, Heavy, Equipment and Auto).
In this interview with Eversprint‘s Malcolm Lui, Jay shares how he and his team accelerated their high value sales by:
- Hiring the right people, especially their inside sales force who consistently and regularly cold calls dealers, and who are happy to start them on a small service and grow it over time.
- Selling a portion of Jay’s Dealer Spike stake to a private equity firm, which in turn provided access to deals and lower cost capital.
- Acquiring companies to reduce expenses through economies of scale, and to diversify their product lines.
Malcolm Lui: Welcome to the high value sales show of Eversprint.com. I'm Malcolm Lui, the Managing Member of EverSprint, and today we're speaking with Jay Mason, the Founder and Owner of Dealer Spike, a worldwide digital advertising company focused on helping dealers in eight specific verticals increase sales and service profitability through online digital advertising and training. Welcome to the call Jay
Jay Mason: Thank you.
Malcolm Lui: Jay. Two questions for you to start. One, can you share what your eight specific verticals are in that you're a digital agency specializes in?
Their eight verticals
Jay Mason: Sure we specialize in power sports RV Marine heavy truck heavy equipment agriculture. Printed automotive And new car franchise automotive.
Malcolm Lui: Now. How did you choose the specific niches to help out of all the ones out there.
Jay Mason: Well I started my career in the automotive sector and in the 1990s and was doing sales in that sector and grew. My career there. Became vice president of a company Called busy results. And. In 2006 we. Sold that company to. Siddiqui global. Formerly. ADP. At that time. I knew I wanted to go out and start a new business. And so I formed Giller spike. And. It took me two years to start. Architecting the technology to do that. And then in 2008 we launched the company. And at the time I wasn't able to compete in automotive due to the sale but I grew up riding motorcycles atv boating camping and our being and I said what we did over here and automotive I can do the segment and I'm really passionate about all of these things and so we kicked it off in the power sports segment and started selling our technology to Harley-Davidson dealers and eventually crew that took more than 3000 dealers and today more than 10000 dealers around the globe.
Malcolm Lui: Wow fantastic. Now for dealer spike you grew your company's revenue from seven point four million in 2014 to twenty five point six million in 2017 a two hundred forty eight percent increase and now you're on track to hit just under 100 million in 2018. What were the three biggest drivers. What were the three biggest drivers that allowed you to keep the sales growth over the past four years
Jay Mason: So the past four years we continued to increase our sales organization we had a great. We have a great of sales that leads the charge and we continue to hire a lot of salespeople over that year. Today we have you know almost 100 sales people and that are selling our products and each of the different verticals. And we also in. 2016. We partnered with. A private equity firm. And. To help grow the business to the next level. And help make acquisitions. So they became. A partner in 2016. And that enabled us to Continue to grow and take the business to the next level.
Malcolm Lui: Could you get some details as to how you grew your business and from 26 million in 2017 to just under 100 million in 2018
Jay Mason: Yes we did it through acquisition and merging with our competitors as well as continue to add new product lines to sell to our existing customer base. So it was a variety of you know acquiring new businesses but also layering what we would call layered applications and selling new products to our existing customer base
Malcolm Lui: So to recap. Would you say that the three biggest drivers of your growth from 2014 to today were due to the fantastic V.P. of sales and your sales team the capital that was provided by the private equity firm and then subsequently the acquisitions that you've been able to make since then. Wouldn't it be the three biggest
Jay Mason: Yes.
Malcolm Lui: Drivers right. Can we talk a little bit more about each of the three so four people and sales. What was the biggest challenge in terms of building up that team and having them be effective in an onboarding new dealers
All about creating deep relationships
Jay Mason: So for our business the majority of our sales team is an inside sales force. We operate in a volume capacity so we don't sign big deals. We sign a lot of small deals that turn into big deals. And I think one of the key things for us was you know starting with our core product and building a great relationship and serving our customers and doing everything we can to make sure that there are raving fans of our business. And then later go back and sell them our other applications that might be thousands of dollars more per month. But we're all about creating great deep relationships with our customers and our sales people know that that our first responsibility is to introduce them to the dealers like family build a relationship with them and then eventually they'll love us and we'll be able to sell our other products to them and build a great lot you know long lasting relationship with them.
Malcolm Lui: So how small the typically start the salespeople aren't working with the dealer and how big can it get
Jay Mason: I mean so for a small dealer maybe they'll only spend you know a few hundred dollars per month with us but you know a large dealer group might spend millions of dollars a year with us. It just depends on each size of the dealership. So dealerships in a major metropolitan area are going to spend more because they're spending more on advertising they're spending more and marketing spending more on technology to tools to make their businesses more effective and efficient in the rural markets. They're spending less but you know because we provide all of these data tools and we build web solutions for them you know just about every dealer in America has to have a Web site and we aggregate this data and populate it. So whether in a rural market or a metro market you need a website and that's kind of our core based product that we we we work with and we have relationships with you know thousands of Oh Williams around the world.
Malcolm Lui: Right. So how do you make money on a small dealer who is only paying you a few hundred a month
Jay Mason: That's a great question. We make money because we build the product once and the people to duplicate it. But with. A dramatic custom look and feel and you know we kind of have the secret sauce that you know enables us to do it. We don't like to give everybody all the details on how that happens. But we've been able to make a very good living. You know we have over 13 hundred employees today. And and you know our tools are built to recreate and build our products very quickly and get them pushed out the dealers. But each dealer has their own custom look and feel for their web solutions.
Malcolm Lui: Right. Imagine the back end might be very similar since each either is carrying very similar parts and vehicles and products
Jay Mason: Yeah.
Malcolm Lui: Right
Jay Mason: Yeah. We have a salmon as you know that is the same across the platform but the front end what the consumer sees in the dealer sees is very customized for them and
Malcolm Lui: Right
Jay Mason: Very different. So
Malcolm Lui: Right.
Jay Mason: Not every site looks the same.
Malcolm Lui: Nice. So. So no one is going to be thinking this the same site for the same dealer just have a different logo
Jay Mason: No.
Malcolm Lui: Boy be on that.
Jay Mason: Yeah yeah
Malcolm Lui: Great.
Jay Mason: Yeah.
Malcolm Lui: Fantastic.
Jay Mason: Tell customers
Malcolm Lui: Now is it does their sales team have a hard time approaching dealers and offering the services or does it other way round the dealers come to you for the most part. Now
Jay Mason: It's a combination of both. You know we have a great reputation in the industry. We have a really high retention rate with our dealers. The dealers that choose to partner with us stay with us for a long long time. You know the average dealer stays with us for more than seven years. And you know we are we really are all about how do we serve our dealers. It's not about all but what we do. But it's all about how how we can help them grow their business. We know if we can make a difference in their business and in their lives then we're going to be taking care of. Q And so everything we do is all about you know giving our dealers the best customer service the best support and the best tools in the industry.
Malcolm Lui: Now in terms of the PR firm back in 2016 they made investment in dealer spike.
Jay Mason: Yeah.
Malcolm Lui: What made you what made you believe that you needed additional capital. And why did you opt to go the route this as opposed to other ways of raising funds.
Why he sold a bit of his equity to the PE firm
Jay Mason: Yeah. So good question. Part of it was just from a liquidity perspective. We sold a portion of the business to private equity and it was primarily liquidity to me to you know just diversify my investment portfolio. And but with that partnership can know access to more deals and more sophisticated financing that we could have done on our own. You know these you know billion dollar funds private equity funds that they raise you know give them access to a lot of cheap capital and great leverage is with the bank. And so we're able to leverage those partnerships to continue to expand and grow our business and and primarily it was for just liquidity and to take as you would say chips off the table
Malcolm Lui: Sure. Now if you had not gone that route if you had not invested in or
Jay Mason: Expect
Malcolm Lui: Have not allowed the firm to buy a piece of the equity from you. How do you think your growth profile would have been different. I mean you you wouldn't get 100
Jay Mason: I wouldn't.
Malcolm Lui: Million today right.
Jay Mason: Yeah. You know the nice thing is as the private equity firm didn't put anything in the business what they taught us was is how we can only leverage successful businesses and their Ebola margins to put debt on and acquire companies. And so the first of the last fund you know invested in our business but it was just to me to take chips off table
Malcolm Lui: E
Jay Mason: And they never actually had to put money into the business we had. We were profitable at the time very profitable and we were able to use our profitability to acquire our first company and then continue to move on and look at other deals. And and then you know strategic partnerships came together were able to merge together and grow the business again to the next level. So today you know we're always looking at a variety of deals but in today's markets if a business is doing well it has enough profit a lot of times you can leverage that profit to put together a great financing deal to do a buyout or acquire another company
Malcolm Lui: He
Jay Mason: In.
Malcolm Lui: Took
Jay Mason: In addition with your profits
Malcolm Lui: Right.
Jay Mason: You know.
Malcolm Lui: He took a little bit about the acquisitions he did that took you from twenty six million and last year to just under 100 million this year
Jay Mason: I can't get into all of them because they're not all the ones that we want to disclose
Malcolm Lui: Okay.
Jay Mason: But we've. But we've been able to you know acquire you know companies and put them together. We've been able to reduce some of the expenses that find some economies of scale through bringing these companies together and then you know divesting in certain product lines that maybe weren't as efficient to take on these new products that were built more efficiently and more profitable for us to to have
Malcolm Lui: Right. Okay. So I go looking into the future. Do you see acquisitions is to be your primary growth engine
Jay Mason: I think it's a combination of both. It's a combination of you know making strategic acquisitions that fit our verticals and fit what we're trying to do from each of the verticals we work within. But also growing organically we are on a combined basis selling just over 200 dealers a month on our product. And we see that there's a lot of runway to continue to grow our business not only in North America but globally Europe Asia and and continue to expand and so we're doing that and we continue to look at companies to acquire abroad and as well as just sell our existing tools into those foreign markets.
Malcolm Lui: So you said just now that you're set you're adding 200 new dealers a month to your platform.
Jay Mason: Yeah.
Malcolm Lui: And how many dealers out there in the world that can use your platform.
Jay Mason: Yeah. So there's over 100000 dealers throughout North America and so barely. There's a lot of runway today we only have about 10000 dealers on our system. And so you know there's a lot of runway and just preowned to give you an example just in preowned automotive there's about 50000 dealers. That's just one vertical. And if you look at new car franchises I think there's about 17000. So you got seventy seven thousand just to our verticals and then you get into boat dealers and our sports dealers and green and so there is a lot of runway we haven't even scratched the surface so our business has a lot a lot of runway. You know we will grow to be valued at more than a billion dollars with no problem
Malcolm Lui: Wow fantastic. So when you say value add a billion dollars is that on a term I like on a private. Most private earnings multiple when you can't come when you came up with that
Jay Mason: Yeah
Malcolm Lui: Number.
Jay Mason: Yeah.
Malcolm Lui: Okay
Jay Mason: Yeah. Course
Malcolm Lui: Okay. A nice round number.
Jay Mason: Yeah.
Malcolm Lui: So what you think will be
Jay Mason: And
Malcolm Lui: The
Jay Mason: It can grow beyond. I mean there's there's a lot more you know different acquisitions. We don't have to stay and just you know digital marketing there's all these different profit centers within dealerships that we can play and you know their service their sales. There's parts and accessories you know financing and so as you look at that there's a variety of different tools and products and companies that we can acquire and all of these different profit centers for dealerships. So
Malcolm Lui: Can you just give an example of what you mean by that. Because I know you're in the digital marketing space now. How would you potentially
Jay Mason: Yeah
Malcolm Lui: As hypothetically
Jay Mason: I'm
Malcolm Lui: Go into a real world profit center
Jay Mason: You could look at you know accounting and finance and providing that yeah the software and technology for accounting and software service and parts software parts and accessories software all of these different verticals all these different profit centers within the dealerships. I think there's a lot of ways to go about it. And if you look at you know like the Cox family who owns you know Auto Trader and and you know the auction houses and all of these different platforms you know they're a multibillion dollar business. I think they're valued at more than. 13 or 14 billion you know. So there's a lot of different areas that we can attack in our markets
Malcolm Lui: Right. And it'll
Jay Mason: And
Malcolm Lui: Be
Jay Mason: That's just domestically. You know.
Malcolm Lui: Right. So you'll be leveraging essentially that relationship you already have with the dealer and just expanding your service offerings with them beyond marketing
Jay Mason: Yes.
Malcolm Lui: And advertising.
Jay Mason: Yes. Of course.
Malcolm Lui: That's fantastic. What do you what do you see as your biggest challenge to to get from where you are today to that billion dollar valuation level.
Jay Mason: Well I think you know there's gonna be several challenges in the future you know as the economy going to slow down. Are we going to be able to hire and recruit the right continue to hire and free trade sales team to continue to grow those things. Are we going to be able to make acquisitions that make sense to get there. Because it all can't come from organic growth as the combination comes from a combination. But I think we have a lot of good opportunity ahead of us to do that and accomplish it and grow well past the billion dollars
Malcolm Lui: Now when you talked earlier about growing your sales organically do you see that despite hiring more salespeople to drive that growth or are there other ways of increasing
Jay Mason: Yeah. It's both it's continuing to grow our sales force because we still have a lot of runway to grow not only domestically but growing our sales force internationally selling our products there as well as layered applications additional products that we will either build or buy. And I think you know depending on how fast you get there we have to make a determination is something that we can build internally in a quick timeframe or do we need to buy it and then integrate it. And so you always ask the question is this a builder by scenario. Sometimes it's built and sometimes it's by and you have to take those you know one off at a time and make a decision on each of them.
Malcolm Lui: Right. So when it comes to building your sales team is it easy or difficult.
Jay Mason: Well I come from a sales background and so I think it's easy. You know the main thing that companies do is they make a lot of mistakes by messing with their sales people's compensation. I think it's one of the fundamental issues they always try and change it every year or change the quarters change the sales compensation change all of these things and what we've found is the most strategic companies don't try and change their sales strategies. They don't try and mess with their sales people's head. They don't try and you know come up with a new compensation program and they don't try and take advantage of their salespeople. I think those are the fundamental mistakes most companies make and you know coming from sales I I I always want to treat our salespeople right. I want to I want to put a compensation program in front of them that they can make a great living for them and their families. And and they can acquire and find their dreams and then stuff that makes sense that we can be profitable as a business as well. It's not always about the business it's it's mostly about the people and how do we support ourselves people. So we're really diligent in doing that and making sure that our salespeople are involved in the products that we're building and we're acquiring because they have the voice the dealer and they're the ones speaking to the dealers day in and day out. So we want to build products that they know are in demand and we want to buy products that we know that are going to be in demand to continue to grow and help them enable them to grow our business.
Malcolm Lui: Right. So what do you do Mark. Marketing wise the generate the leads and prospects for your sales team
Jay Mason: You know we spent we spent a lot of money on trade shows. We do know 50 to 60 trade shows a year in all the various verticals. But mostly you know when we do a little bit of advertising we do a lot of press releases. But I would say every time we look at where we could spend in marketing we say how many more salespeople can we spend calling these dealers and building relationships with them. So we're a big proponent of putting more salespeople on the phones putting them out on the street versus spending a lot of money on marketing and advertising. We believe our people can sell it better than waiting for someone to turn to a magazine or looking for an e-mail or waiting to see an ad on whatever trade are. Not that we don't do that we do all of them but not as much as we value what our sales people can do for us.
Malcolm Lui: Right. So are your sales people just cold calling the dealers out there and say you're relationship
Jay Mason: Yeah there's a lot of cold calling that takes place but a lot of inbound traffic through marketing efforts and through a trade show as well.
Malcolm Lui: So when you say inbound. Like you're not doing you're not doing advertising right. The U.S. trade shows. But then the trade shows are kind of limited by the number of people you
Jay Mason: We
Malcolm Lui: See at the trade show. Right.
Jay Mason: We do have a tasing. So we do advertise in all the trade journals and we do remarketing and digital marketing. But but I would say that's not where we're putting you know that might be 10 percent of what we're doing not where the other 90 percent is in salespeople.
Malcolm Lui: Ok. Yes. Interesting.
Jay Mason: This
Malcolm Lui: Uh
Jay Mason: Is a smile and this is a this is a smile and Albert
Malcolm Lui: Ok. Thank you. And you're the first company I've interviewed so far where it's where so much emphasis is on the sales and not as much so on the marketing to bring elite to the salespeople. Have you experimented.
Jay Mason: Different strategies.
Malcolm Lui: Yeah. Different strategies. Every business is different. Have you experimented with means of generating leads for your salespeople so they can convert more sales more rapidly as opposed to. You know smiling dialing
Jay Mason: Yeah I mean we definitely have we've definitely leveraged and we've just never seen the results. We have a great brand in the market. We have a great reputation you know we have very little churn in our business and so we think our strategy is working well. Obviously the numbers speak for themselves. And we're very pleased with the direction that the business is heading.
Malcolm Lui: What do you see are the trends that are unfolding in the market at the ones that one you can capitalize on and two that you would want to get out of the way so that they don't hurt you.
Jay Mason: Well I mean I think there's always the worry that you know we've had a strong economy for the last several years and you know we may be at the end of a bull run. And so we have to be cautious that but at the end of the day you know we're really bullish that you know all dealers are going to need a website. They're all going to need digital marketing tools. And so we grew through 2008 2009 2010 and we really believe that we'll be able to grow through next downturn. Not that it's going to be perfect. I think the other thing that can hurt us is you know increased interest rates. So you know we see what the Fed does. All of those things can have an impact on our dealers. And so as interest rates go the cost to buy a new motorcycle or used boater and RV or heavy truck heavy Columbian agriculture you know tractor or whatever it is. Those may slow sales which may have an impact on dealers but ultimately you know we go through the last downturn we saw a lot of yours go out of business and I think we have the strong ones that are here to stay. And so we feel real comfortable about the future. And and and and again we are also you know moving to become a more global companies or not. So stuck in what's happening directly in the US you know
Malcolm Lui: Yep.
Jay Mason: And for us for us as we look at our business you know we have customers in Mexico and Canada. When you look at the dollar the strength of the dollar against the peso is strong it's 20 20 to 1. When you look at what's happening in Canada you know it's weak the Canadian dollar is 30 percent weaker than the US dollar. And as we continue expanding you look at the pound and the euro. Our business is more global. So what's happening in other countries you know whether good or bad is offsetting problems for us in other countries and vice versa. And so our business isn't so stuck in what's happening in just the US. And so I think that's a good thing for our business long term
Malcolm Lui: Yeah definitely. So in terms of marketing what marketing channels other than trade shows you know what. Which of the advertising channels do you like that you're happy. I know you said did you trade your nose. He doesn't be marketing our paper
Jay Mason: Yeah
Malcolm Lui: Click ads. Have
Jay Mason: I think.
Malcolm Lui: You ever mucked around a
Jay Mason: Yeah.
Malcolm Lui: Best
They don't wait for a dealer to find them.
Jay Mason: We're deep. Yeah. I mean yeah of course we're heavy and pay per click. And Facebook and Instagram and all of the major social media platforms. But but again you know waiting for someone. We're a proactive company and we never want to sit back and wait for someone to call us. We want to get out there. We want to be on the offensive and getting out there and getting our name in front of dealers. You know I could wait and have you know a thousand clicks but today you know we're making probably I don't know. We're making about 30 200 calls a day at least. So thirty two to six thousand calls a day. So. That to me is more powerful than waiting for someone to click. You know. And maybe submit a form or maybe. Or maybe. Or pick up the phone and call us. I'd rather be on the offensive I would rather be. Having our people talk about our brand. Than why we're helping dealers become. The most successful. Dealers in the nation and. Why we're helping them accelerate results. And. Why We're helping them find a 30 percent increase over their competition. So
Malcolm Lui: Right when you say thirty two hundred six thousand calls a day. How many people are doing
Jay Mason: Yeah
Malcolm Lui: That
Jay Mason: Well I think you know we have just under one hundred sales reps and so you know they're there on the phones all day. Some are doing more. Some are doing less
Malcolm Lui: Ok
Jay Mason: Pens on how many demo demos they have. But you know I would say on the worst case we're doing thirty two hundred calls a day in the best case we're doing six sixty five hundred calls with a good place to be.
Malcolm Lui: Ok.
Jay Mason: You know we're
Malcolm Lui: Ok
Jay Mason: Talking to pretty much every dealer in America and abroad. You know every month
Malcolm Lui: Right. When you say call you to my conversations and I'll time my dials that end up in voicemail or don't get through
Jay Mason: Yeah. I mean I would say it's a it's a it's a no. I would say it's it's it's dials it's voice mails it's emails it's conversations it's combination of all yeah I'm happy you leave a voicemail I prefer voicemail over a year know. Over a waiting for some to find my ad
Malcolm Lui: Yeah. I get you myself You're saying she misses something fantastic voicemail scripts then
Jay Mason: Now I think they're good
Malcolm Lui: Yeah. All right. To last question two final questions for you Jay. Who are your ideal dealers and what's the best way for them to reach you
Their ideal dealers
Jay Mason: Know our ideal our ideal dealers are dealers that are progressive that they're thinking about you know knowing that they have to be online to be relevant today to be in front of their customers and our ideal dealers or dealers that are progressive they're looking at new ways to market and and the best way for them to reach us is pick up phone call us or get online and submit a virtual presentation request on our website. Do you expect that come.
Malcolm Lui: All right. Fantastic. Thanks for sharing how you grew your company's sales so fast
Jay Mason: No problem. Anytime.
Malcolm Lui: We've been speaking with Jay Mason, the Founder and Owner of Dealer Spike about his company's rapid growth. For interviews with other fast growing high value sales companies, or to learn how we can accelerate your firm's high value sales through automation, visit Eversprint.com.
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