This Zoom video call is a discussion between Todd Smith from 360Converge and Mike McFall COO of 360Converge who previously founded Black Book Online. We discuss how dealership will most likely emerge from this huge push into Digital Retailing and the lingering external issues that are surrounding the automotive industry. In this conversation, we also go downstream and discuss service and parts and the impact COVID-19 will have on these sectors moving forward.
Video Transcript
Captions
00:00
Kord video hey this is Todd Smith with
00:03
360 Virg and I lumped another 360
00:06
converged guy with me today mr. Mike
00:08
McFaul our CEO oh you may know Mike Mike
00:13
was the one of the founders of black
00:15
book online he is the man who created a
00:20
used vehicle trade in valuation lead
00:25
generation how about that is that a big
00:27
way to say that that sounds great
00:31
one possum so I’m Mike and I always have
00:33
great conversations so I wanted to
00:35
include him in our perspectives because
00:38
it’s always good to hear what Mike’s
00:41
thinking and so listen I have lots of
00:45
questions today Mike lots of questions
00:47
the first question knowing where we’re
00:53
at with the world right now and where
00:55
automotive is at what do you think about
00:58
the manufacturers and the role they’re
01:02
playing and it seems that domestics are
01:05
far outpacing the luxuries or imports
01:10
with their incentive programs what do
01:14
you what do you make about what’s going
01:15
on from the OEM level how is that going
01:18
to impact do you think the business
01:21
because I I know in your experience you
01:23
did a ton of work with all the OEMs
01:25
you’ve great relationships with these
01:26
guys so what do you think yeah that’s a
01:30
great question thanks thanks for the
01:32
chance to join you for this this would
01:34
be a lot of fun well you know I work for
01:35
General Motors for 10 years in their
01:38
Finance Group so I watched him go
01:40
through a number of different financial
01:42
cycles bottom line
01:44
everybody approaches this thing a little
01:46
bit differently I think the first thing
01:47
that all of these companies need to
01:49
think about is their workers and how to
01:51
protect them and and I’m sure there’s a
01:53
lot of good thought going into that and
01:55
then the next thing is how do you
01:57
restart your business from you know from
01:59
essentially nothing the thing they got
02:02
to think about is a lot of these OEMs
02:04
got into some really interesting
02:07
forward-thinking somewhat exotic things
02:10
maybe in alternative
02:13
tation and mobility and electrification
02:15
I think those things probably are not
02:18
going to be on the front burner right
02:20
away because you got to think about just
02:22
getting back into the business and
02:24
obviously as you said incentives are
02:27
going to be in play the other thing that
02:29
I’m sure they’re gonna want to think
02:31
about is you come back into the
02:33
situation with a paradigm how you look
02:37
at customers and how you evaluate
02:39
customers credit and you say to yourself
02:42
can I still apply those same standards
02:45
and practices to underwriting you know
02:49
retail finance agreements and loans and
02:52
leases in this new environment
02:55
you got good people who frankly just
02:59
missed a couple of payments on their
03:01
rent
03:01
it shouldn’t blow up their credit score
03:04
but normally they’d be something where
03:05
you’d say gee you know I got a problem
03:06
with these customers
03:07
I think the ohi’s need to look at the
03:10
environment just as you said from an
03:12
incentive perspective and also and how
03:15
they look at underwriting you know paper
03:18
going forward that’s an interesting side
03:21
I I just read jamie diamonds transcript
03:24
with investors meaning hey he had no
03:27
idea what was going to happen but is
03:30
leading movement even though his mouth
03:35
is saying I have no idea what’s going to
03:36
happen they are now tightening up the
03:40
reins on mortgage lending so they’re
03:44
going to make those barriers harder so
03:47
the question will we see that impacting
03:50
auto and Guice I hope I hope not because
03:55
it’s going to lock a lot of people out
03:57
of the market you know look look at the
03:59
economics of this thing before we came
04:01
into this with situation half of US
04:04
households didn’t have financial reserve
04:07
to cover a 500 dollar emergency and what
04:10
we’re talking about is thousands of
04:11
dollars of emergency that that the
04:14
stimulus package won’t cover you know
04:16
they’re going to get back to work but
04:17
you know you hear these analysts talk
04:19
about a V response and even if the
04:22
economy recovers as a V for a lot of
04:25
folks who want to go out and
04:27
car it’s gonna be more like a you
04:28
they’re gonna need to find a way to get
04:31
their feet underneath them and they need
04:32
transportation and I I hope
04:35
money’s cheap and gas is cheap those are
04:39
two fundamental parts of this equation
04:42
that if you can balance the rest of the
04:44
equation we get the underwriting right
04:46
and the product right you’d be in good
04:48
shape now that makes a lot of sense yeah
04:50
that’s interesting just how you know
04:53
obviously we have no idea what’s going
04:55
to happen you know it’s just more you’ll
04:58
know when you know I guess I mean it’s
05:00
hard predicting you know what we’ll move
05:02
forward so with that being said though
05:06
there’s been obviously a lot of
05:08
grumbling in our space with vendors huge
05:11
cuts you know what it what do you think
05:15
the mix is going to be obviously guys
05:17
like Andy and Rudy a roaster loving this
05:20
I mean it’s like windfall I’m sure for
05:23
those guys in fact I’m speaking with
05:25
Andy I think later today or tomorrow so
05:28
great actually good to us to Andy’s
05:30
Andy’s terrific he’ll have a great
05:32
perspective on this those guys are in a
05:34
great position here you know again back
05:36
to your earlier question the ohi’s could
05:38
take a more thought leadership position
05:41
more formative position on digital
05:43
retailing and you know we may not be as
05:47
far away from that as we think but I
05:49
bought a card not long ago and it was
05:52
from a dealer who didn’t really have a
05:54
digital retailing platform yet all the
05:56
regular tools everything you’d expect
05:58
but basically I said what let’s just do
06:01
this remotely I did the test drive I did
06:03
the trade appraisal first because that’s
06:05
the way I like to buy cars and of course
06:07
they’re not going to steal my trade and
06:10
I I went and I did the test drive and
06:12
and then everything between that and
06:14
picking up the car was negotiated but
06:16
this guy despite text messages I sent
06:19
him all the documents he needed and I
06:21
was in and out I mean that’s not truly
06:24
digital retailing but it’s a digital
06:26
experience that’s a lot more advanced
06:29
that a lot of people you know are
06:31
accustomed to and I think you’ve talked
06:32
to dealers who were exploring some of
06:34
that stuff yeah you know what I think it
06:37
comes down to leadership mindset it’s
06:39
either get a minute
06:41
or you’re just focused on doing deals
06:44
right like you have one of those two
06:47
leadership mindsets like you come from
06:50
old school or just the philosophy that
06:53
hey I want two men in front of me I want
06:56
a belly-to-belly relationship or you’re
06:58
comfortable enough to support a more
07:02
intrinsic type of experience that’s done
07:05
via as he said taxed email phone calls
07:08
we’re customers not physically in front
07:12
of you yet you’re still able to
07:14
accomplish the same things yeah you know
07:16
it’s interesting to I you think about
07:19
the sort of a spin off of your question
07:22
I’d be interested in your reaction with
07:23
this too but you think about the the
07:25
vendor community and you know you and
07:28
I’ve been doing this for a long long
07:29
time and we we were around when you know
07:33
if you use sort of a an agricultural
07:36
analogy that the vendor community looked
07:38
like a lot of seedlings in the field
07:40
right and then a lot some of those
07:42
seedlings sort of withered and died and
07:44
they needed to other seedlings kind of
07:47
grew up into plants and then big animals
07:51
came and ate them all right so now
07:53
you’ve got let’s take this way too far
07:55
but you got these sort of big animals
07:58
running around and and that’s kind of a
08:00
good thing in my view because the
08:02
consolidation and the vendor community
08:04
in in core functionality is is probably
08:08
good at the moment because that means
08:11
they’re financially able to help their
08:14
dealers through a tough time maybe give
08:17
them some relief on payments etc but you
08:20
go back to the field and there’s still a
08:22
lot of seedlings growing out there and
08:24
what’s interesting to me is I’ve been
08:27
watching I got I try to be on
08:30
everybody’s email list because I think
08:31
it’s a great way to learn about what’s
08:33
going on right who’s selling what and
08:36
and I know you’re on LinkedIn quite a
08:38
bit and you see some of these seedling
08:40
companies and I’m not sure I would call
08:42
roadster one of those it’s more of a
08:44
bigger plant but they’re out there
08:46
saying look we’ve got a technology that
08:49
we knew the time would come for that
08:52
technology and suddenly
08:54
this is the time for that technology so
08:57
what’s interesting is they’re out there
08:59
saying look if you’ve been thinking
09:00
about this we’ll make it easy for you we
09:02
can set you up remotely we’ll give you
09:04
some free time to experience this thing
09:05
and I think you pointed out in one of
09:08
your LinkedIn posts and I want to walk
09:10
back to this it’s not just a question of
09:12
buying the technology it comes down to
09:14
that basic store process as it always
09:17
does right
09:18
yeah if to me it was like I keep I fin a
09:25
Ferrari and you could put him in it and
09:30
if you hit the gas he’d hit the gas and
09:32
he instantly crash it right just it’s
09:36
just too much
09:37
tech and power right for right your old
09:41
son so and I’m not saying that digital
09:44
retailing the tech is too much power for
09:45
dealers but you’re installing tech that
09:49
has a whole slew of unseen ramifications
09:54
that most people aren’t thinking about
09:57
or address that’s leadership commitment
10:00
to it are you gonna run parallel past
10:03
the guy who walks in verse the guy who’s
10:06
doing it online how do you manage these
10:09
different scenarios effectively because
10:12
you’re almost like Sybil you have to
10:13
have different personalities based on
10:15
channel it all these things become very
10:18
difficult and and I only speak from the
10:21
experience of all my conversations with
10:22
Caputo and other groups that have just
10:26
all chips in fully committed to digital
10:30
retailing as the core part of their
10:33
business verse the people that have
10:35
dabbled and in my conversations the
10:39
people that have dabbled with it have
10:42
they struggle with it and it’s not as
10:44
effective and my thoughts where now you
10:48
went from a third of dealers that had a
10:51
tool to half or more what percentage of
10:56
them are dabbling and how’s that going
10:59
to impact not only the dealership the
11:02
salespeople the customers all of it and
11:07
that’s a that’s a big question it’s a
11:10
loaded question you know so yeah it is
11:12
III think not all that I mean there are
11:15
dabblers look we’re blessed to be in an
11:18
industry where there’s so much creative
11:21
energy and so much entrepreneurial
11:23
vision and that’s just the truth I mean
11:26
yeah there’s some things that they
11:27
weren’t great about what we’re doing as
11:29
a whole but but the great thing about it
11:32
is you’ve got dabblers who were there
11:33
because they want to figure it out they
11:36
know it’s not going to be a one-night
11:38
kind of thing or one week or one month
11:40
kind of thing they’re gonna have to go
11:42
into it and then there are other
11:43
dabblers who just want a good story for
11:45
the 20 group meeting because they want
11:47
to they want to not be left out right
11:48
and those guys they’re never going to
11:51
get it yeah there’s no I found something
11:56
ok how are you buddy fine your ferrari
12:02
by the way
12:03
yeah he’s scratching that right so yeah
12:05
I agree like you know look my good mind
12:08
I guess my concern is dealers who go hey
12:10
I now I need this tool because I want to
12:14
open up for business I want to continue
12:16
so I want to start selling cars because
12:18
my state’s on the lock down or you know
12:21
not essential and I need to be able to
12:23
do stuff remotely how am I going to do
12:26
that and everyone’s like oh digital
12:29
retailing will fix that I don’t think
12:31
that’s the actual case I think digital
12:33
retailing the technology is a component
12:35
but it’ll take the dealerships
12:37
leadership the people processes you know
12:42
appraising trays moving people how do
12:44
you deal with remote workforce today we
12:46
have no tools to manage a sales team
12:50
effectively from their homes that’s
12:53
that’s really a problem you know it’s
12:55
it’s difficult enough to manage
12:57
salespeople when you’re there with them
12:59
and you can coach them and and help them
13:02
along and you know maybe this will be
13:04
the catalyst for that it we all know it
13:06
kind of comes down to the people and
13:08
what’s let’s just hope that we come out
13:10
of this and you know there’ll be a
13:12
period where we just sort of the engines
13:14
starting to turn and it’s sputtering a
13:16
little bit let’s let’s hope that happens
13:18
more quickly but I agree with you I
13:20
think the
13:21
that you you need it you need it in for
13:24
digital retailing there really for the
13:26
gears to really turn you need oh is to
13:29
figure out this is important to them and
13:31
to take some thought leadership you need
13:34
the vendor community to say we’ve got a
13:37
bunch of legacy things that are in our
13:39
way that are preventing us from doing
13:42
what is right for the consumer we need
13:45
to get past that most importantly their
13:48
cultural issues their visionary issues
13:51
you know it takes time but I’m I’m
13:55
really really proud of how far in the
13:57
industries come and I know you are too
13:59
and there’s a number of companies out
14:00
there who are you know making this work
14:02
I think roadsters up to maybe a thousand
14:05
dealerships now that’s great progress
14:07
yeah so look I mean I’m excited for what
14:10
comes next because you know but I think
14:12
both of us love technology and the
14:14
impact it can have on our industry
14:15
knowing that when you have the right
14:17
leadership mindset the processes and the
14:20
right people in place you can really
14:22
make some impact so that being said as
14:26
you see the industry evolving in that we
14:29
will come back online hopefully sooner
14:32
rather than later you know what do you
14:35
think for these dealers that you know
14:39
let’s say that and I think there’s a
14:41
different mindset between the guys are
14:43
in the big cities verse the rural
14:46
dealers right yeah exactly
14:49
they’re those mid market dealers so
14:51
wonder how that that will impact speed
14:54
to getting up to be able to sell cars
14:57
and be efficient again you know I don’t
15:00
know I don’t either I mean you know this
15:02
is they say you know at the moment you
15:04
know we’re in mid April they’re talking
15:06
about sort of a progressive kind of a
15:08
saying some areas that are kind of ahead
15:10
on a lot of there isn’t and you know
15:13
transportation is it is a critical piece
15:17
of what we do if you can’t get to work
15:19
you’re not going to work so yeah I I
15:21
know that this is going to be important
15:24
I also you know in addition to the black
15:29
book work I’ve done in the work we may
15:31
work we’ve done together at 360 converge
15:33
I I had some
15:35
you know work in the parts area and it’s
15:36
interesting parts less glamorous people
15:39
don’t really think about parts but parts
15:40
is a very delicate thing and from a
15:44
supply chain kind of perspective and you
15:47
know one of the outcomes of this
15:49
experience is also potential disruption
15:53
in parts availability and that’s
15:56
interesting because a lot of those parts
15:58
are coming from China those factors have
16:00
been lost line someone we’re coming back
16:02
online and what you may find is that you
16:06
know the fixed ops part dealerships back
16:09
to your question about you know how do
16:11
you get going again well first thing you
16:13
do is fix the stuff that’s worth fixing
16:15
yeah and there’s pretty good money in
16:17
that so I know I think I’m sure dealers
16:20
are thinking about how to get fixed
16:23
stops running well as long with other
16:25
aspects of their business and I’d be
16:27
sure if I were in that space to make
16:30
sure that that I had access to the kind
16:33
of parts that I needed because if you
16:34
don’t have the you know if a job has
16:36
2530 parts and you don’t have two or
16:39
three of them you don’t get the job done
16:40
and yeah I I think I think what you’ll
16:44
find is because the you know only parts
16:50
haven’t there’s a supply chain for that
16:51
too we know they’re in inventory the you
16:54
know the the manufacturing parts
16:57
aftermarket parts there may be
16:59
disruptions in that space and of course
17:01
the other thing that’s interesting is
17:03
you know you’ve got Salvage component is
17:07
the third component of parts and a lot
17:08
of those salvaged parts you use in
17:10
collision and because people haven’t
17:12
been driving they have been back in
17:14
their cars and because they have been
17:15
wrecking their cars there’s not a lot of
17:17
total losses so you know nobody talks
17:19
about parts because it’s not glamorous
17:21
but it’s an interesting component that
17:23
you’re probably going to hear some more
17:24
about pretty soon yeah I’ve heard a
17:27
little twinge of that from like the New
17:30
York marketplace you know the number of
17:32
collisions fell off the map right and
17:35
positions fall off that means repair
17:37
shops work falls off in the future
17:40
because usually that stuff’s kind of
17:42
booked out so that’s obviously going to
17:44
impact things as you just pointed out
17:47
just acts
17:48
just apart you know when you have to
17:51
start a car can’t get that part I got to
17:53
pull the car off a lift I got to put it
17:55
somewhere else to wait for that part
17:58
start a different job that will also
18:01
impact turning my used car inventory
18:05
that I’ve gotten that needed repairs to
18:08
make it front line ready that could be a
18:11
potential you know whammy coming in our
18:14
future and then just in general I think
18:17
I talked with Caputo just pricing these
18:20
cars right now there’s no market so it’s
18:24
hard to know what things are worth are
18:26
things worth 25 less than the day before
18:29
coronavirus hit I don’t know but you
18:32
know as Todd said like what
18:35
man I’m runs usually like seventy
18:38
thousand cars or something on Tuesday
18:40
here they’re running some five thousand
18:43
you know what they ran and they were all
18:46
weird mostly so there was no marketplace
18:50
that with the amount of lease turn ins
18:52
that’ll be grounded in the next couple
18:54
months
18:55
coupled with rental car fleets I mean we
18:59
never even considered some of the
19:01
impacts of what this means because this
19:05
has never happened like this right yeah
19:08
absolutely and you know I was around
19:11
black book I was more on the marketing
19:13
side but I will tell you that the the
19:16
pricing services black book included
19:19
have interesting proxies so if they
19:21
don’t see enough of one particular unit
19:23
but they know that another particular
19:26
unit travels in parallel there’s a high
19:28
correlation and pricing they can
19:30
triangulate as well as long as there’s a
19:32
baseline of activity you know they can
19:35
kind of get there you know you know it’s
19:37
interesting too because we’re gonna come
19:40
out of this thing and things are gonna
19:42
get better but it’s it’s not gonna be
19:44
that fast and I kind of have a question
19:47
for you because it kind of runs to your
19:49
area of expertise as well you think
19:51
about you know let’s say we’re in the
19:56
future now and the restrictions have
19:59
been lifted and hypothetically we’re
20:01
ready to
20:02
the doors we’ve Purell depth all place
20:05
we went down the whole place everybody’s
20:08
you know walking around with the
20:10
distance between them but things will
20:14
not come back to the same right away and
20:17
maybe not for a long time my question
20:21
for you is I’d be interested in your
20:24
thoughts on the kinds of services that
20:28
dealers have available that they might
20:32
want to dial up and among them you know
20:35
things like well obviously chat but
20:39
speak to that because I think that’d be
20:42
an interesting thing to talk about is
20:44
you know the things that you kind of
20:46
might have set aside become important in
20:49
a way because upgrading that’s distant
20:51
what kind of tools do you think dealers
20:52
need to amp up and dial up in a time
20:55
when we really can’t connect as well
20:57
with people yeah so okay there’s a few
20:59
things right I think coming out of this
21:03
sanitary vehicles will be like at a very
21:09
high level you do like a little sticker
21:11
on there that’s got a little little
21:13
flowers flower right and it ties you
21:16
know auto nation’s been using the Clorox
21:19
360 machine good luck getting those
21:22
right now there’s like new veneer that’s
21:26
not really a true sanitizer it’s more of
21:28
a I think smell remover product but it
21:31
might do some sanitizing and a hundred
21:33
percent sure so don’t quote me on that
21:34
yeah but I feel like there will be a new
21:39
service that’s just gonna get ingrained
21:42
in dealers and that will be one to
21:46
protect get the cars sanitized right
21:48
because you know as you said earlier if
21:52
we see a natural movement away from
21:55
group travel and public transportation
21:58
to individual travel that’s a
22:01
psychological thing to me people are
22:04
gonna be like well who’s been in this
22:05
car you know I don’t want to get in that
22:08
uber I don’t know who just was in there
22:10
where they coughing there’s a lot of
22:13
just mental things I think we’re gonna
22:15
go through
22:16
from this trauma of being quarantined so
22:19
from a dealer’s perspective the number
22:22
one thing to me is moving your brand to
22:27
be very centered around hygiene and
22:31
sanitization of facility vehicles and
22:35
people protection right so frankly I
22:38
think that becomes the nucleus for
22:42
everybody so I don’t think there’s a
22:44
competitive advantage inside that I
22:47
think that becomes a new normal for us
22:51
moving forward that being said I think
22:56
that dealers will have to leverage tools
23:01
whether it’s you know text chat online
23:06
communication facebook Messenger they’re
23:09
going to need to use these communication
23:12
communication tools more effectively you
23:16
know where they’ve always been the to me
23:20
that the second string to the phone or
23:23
the in person visit we’re going to see
23:26
this I think switch where these tools
23:30
and communication methods will become
23:33
primary not the secondary secondary will
23:36
become in-person you know phone will
23:40
always be valuable because yeah you’re
23:42
not and you’re never getting sick
23:43
through a phone call right exactly but a
23:46
lot of people we already a migration
23:48
they don’t like the phone as much as
23:51
they like the convenience of being in
23:53
control on a messenger or on text that I
23:57
can respond at will right I like those
24:01
types of real type tools far better than
24:04
email because emails get lost really
24:08
fast like you or me you know we have
24:10
hundreds and hundreds of emails a day I
24:12
may see it and then I’ll get back to it
24:15
and then I just forget about it and now
24:17
two days go by and it’s it’s four clicks
24:20
over in my Google Mail that I’m not
24:23
going back to that thing so and I look
24:27
at as we’ve talked so much about CR
24:30
and the mail even getting through the
24:34
emails coming out is tough because of
24:37
the spam filter traps because of some
24:41
CRN’s being blacklisted because you know
24:45
a host of reasons
24:48
how emails don’t format correctly
24:50
because no one’s using a rendering
24:53
engine inside their tool unless you’re
24:56
like a MailChimp or Constant Contact so
24:59
I’ve you email is not the great tool as
25:03
much as can we apply the really cool
25:07
functionalities we would have to be able
25:10
to deliver in an email in a text asked
25:12
in a messengering service right so I
25:16
think that’s that I hope we’ll see come
25:20
out of this that they become the new
25:23
norm look a good BDC uses all these
25:26
channels every single day right to level
25:29
degree of effectiveness
25:31
I think dealers will have to onboard
25:34
these tools more then use outsourced
25:38
services only because you know you have
25:41
humans you better trained them to use
25:44
these tools if they’re the primary if
25:46
it’s the secondary way it’s fine to have
25:50
the outsourced but if it becomes the
25:52
primary you better want you want your
25:54
people at the front line to make faster
25:58
decisions to change outcomes and for
26:02
manager intervention to be able to jump
26:05
into a conversation to to continue its
26:09
movement so that’s kind of I like that
26:12
you know what I’m listening to your
26:14
answer it’s interesting to me because
26:16
the the theme in your answer is using
26:21
the the tools to their full potential
26:24
and we know it’s difficult for
26:26
salespeople who are on the floor and
26:28
we’re multitasking just you know we’re
26:31
all human and we try to focus on the
26:33
thing in front of us do you think to
26:35
sort of follow questions you think as a
26:37
result of that that that dealerships
26:39
become more if they empower their BDCs
26:42
with more respond
26:43
ability and more activity in other words
26:46
it’s not just a question of the BDC
26:48
qualifying and setting appointments but
26:51
they’re actually going to set up sales
26:53
follow up on documents handle scheduling
26:57
maybe even concierge work on service you
27:01
see the BDC role expanding as a result
27:03
of this or do you think the salespeople
27:04
just have to step up and use these tools
27:06
more effectively you know this is the
27:09
greatest question in 2008 when we had
27:12
the financial crisis David Cain and I
27:15
joked about this and I think we’ve
27:17
continued to joke about this we’ve been
27:18
to more BDC deaths funerals than births
27:22
that’s funny
27:24
right so we’ve seen that because when
27:27
things get tight it’s usually the first
27:29
thing guys cut because mentally they go
27:31
no I’m just gonna make my sales people
27:33
do it but sales teams a lot of times are
27:37
getting pulled in many directions so
27:38
they don’t have the strength and power
27:42
of focus in one little area that’s very
27:46
controlled and because of that things
27:49
kind of unravel right yes the whole
27:51
concept to me at BDCs was to allow us to
27:55
focus on very specific outcomes that is
28:00
a I have a lead that’s come into the CRM
28:02
I’m now going to turn that into an
28:04
appointment right that’s a it’s a it’s a
28:06
finite outcome of the process now right
28:10
you’re forcing more and more of the
28:12
process online
28:14
then the bdci playing one part that
28:17
might be a confusing handoff to the
28:19
sales person would be better to train
28:21
the salesperson to handle more of the
28:24
customer experience can you do it with
28:28
less people but better trained if you
28:31
have the right technology that supports
28:33
that there’s a lot of unanswered
28:36
questions in my mind in how that will be
28:40
done and frankly look it’s gonna be done
28:42
in 10,000 unique ways for every
28:47
dealership right every dealership will
28:49
they just get [ __ ] done man I mean
28:53
that’s the only way you can say it to me
28:55
is like
28:57
everybody figures it figures out their
28:59
way the question I think the deeper
29:03
question is will there be a vein of
29:06
highly efficient systems and processes
29:10
that are more effective that come out of
29:13
this and more profitable that people
29:16
will get ahold of and be more successful
29:19
in implementation and you know outcomes
29:22
for customer sales right I don’t know
29:25
that’s a there’s a lot this is like a
29:29
incredible time for discovery of these
29:32
things and you know I feel like I want
29:35
to keep a really close eye on
29:37
dealerships what they’re doing how
29:39
they’re doing it what works what doesn’t
29:40
work
29:42
I think the detours that will be
29:43
successful or they can figure things out
29:46
quickly though they need a little bit
29:49
more time you know a lot of times even
29:53
me back in retail days you know if it
29:55
didn’t work I just threw it out and
29:57
tried something else I didn’t let things
29:59
bake long enough yeah I think that’s a
30:03
prevalent issue amongst dealers that you
30:07
know they’ll commit to will commit to
30:09
something for a period of time and if I
30:11
can’t get it right or what I think is
30:14
right I just abandon it so my fear is
30:17
will that happen to digital retail yeah
30:21
well you know it’s interesting do you
30:24
think that the so exactly right this
30:27
this adversity that we’re suffering will
30:32
stimulate some creative thinking does
30:34
does that favor the small smart nimble
30:40
multi store operator over the big public
30:44
companies or do you think the big public
30:46
in the long term is it is there a
30:48
tortoise and the hare thing is it like
30:50
who wins and who wins first and who wins
30:53
the race and the long term what in your
30:56
view in terms of coming out of this
30:57
thing look this is pretty easy
30:59
the innovative smaller groups walls are
31:03
is the Easterns that all these guys
31:06
Caputo these guys are the true
31:10
marketplace innovators right yeah bang
31:14
though bang the metal out then it looks
31:17
good and then the big consolidators go
31:20
visit those guys and go uh what are they
31:23
doing or hey let me grab this one guy
31:27
who would work on that project and I’m
31:29
going if they take the people exactly
31:31
right look the big guys they’re not
31:34
going they’re not going to run into
31:37
innovation you know they’re not going to
31:40
just leapfrog the entire industry and be
31:43
the best most competitive guys that’s
31:46
going to come out of what I call the
31:48
smaller to middle sized groups that
31:51
still have they have the size money
31:56
people capabilities to implement things
32:00
and work through the processes to make
32:04
them successful then that will that
32:06
knowledge will drift to me to the big
32:09
guys right and then the small stores who
32:13
technically you would say are the most
32:15
nimble that’s it’s hard to be nimble
32:19
when you’re really small because you
32:20
can’t take many chances every right yeah
32:23
that’s a mistake you make impact right
32:26
so I think you have to be super cautious
32:29
on the small side you have to be super
32:32
cautious on the big side if there’s
32:34
middle guys that’s where that’s where
32:37
you’re gonna see the five to twenty five
32:39
store groups that’s where I think the
32:42
gut of innovation will come from yeah
32:45
that that’s that’s a I think that’s a
32:46
great answer and it matches my personal
32:49
experience with rolling out products to
32:52
the dealer community you have you know
32:54
the early adopters are always guys who
32:57
are just out there hungry to try
32:58
something new but you what you really
33:01
want to do is find those multi-store
33:03
operators in fairly big markets who
33:07
typically they’re gonna try it with
33:09
their best GM he’s gonna come back he or
33:11
she’s gonna come back and say hey you
33:13
know what this thing is killing it
33:15
everybody jumps on it before you know it
33:17
the the group’s got it and everybody’s
33:19
benchmarking each other and that’s how
33:21
ideas roll out and I think that’s what
33:23
we’re going to
33:24
see coming out of this situation we’re
33:26
gonna find people building good
33:28
practices finding techniques to
33:32
facilitate engagement with customers
33:34
with distance which is sort of a theme
33:36
we need to think about whether it’s on
33:38
the fix top side or or sales and if we
33:41
can do that as an industry and we are
33:43
taking care of our employees and we are
33:45
taking care of the customer and we’re
33:47
doing what we need to do we’re building
33:48
value in the community and that’s that’s
33:50
really the the vision that the dealers I
33:53
talked to you know want to pursue yeah I
33:56
agree I feel like there’s the that’s the
33:59
crust of this or any that’s the best
34:01
part of this is to me hitting the pause
34:04
button it’s it’s a little overwhelming
34:07
but in that same breath I believe this
34:11
is probably a once-in-a-lifetime
34:13
opportunity for dealers groups to
34:17
rethink their business for the next five
34:22
and ten years yeah I mean I agree need
34:25
to go okay
34:27
we’ve been able to pause I’m not you
34:30
know fire I’m not fighting the fire
34:33
right now I can step back be a fire
34:35
chief work on the business instead of in
34:37
it and really map out what’s going to
34:42
happen like I said it’s now is the time
34:45
to go through your technology everything
34:48
you’re spending dollars on are people
34:50
using it who’s using it how are they
34:52
using it have you got the the flow of
34:56
using services throughout your store is
34:59
there duplication of services you know
35:01
is there in efficiencies that wow you
35:05
spend X on this tech and 10% of the
35:08
people in your organization use it and
35:09
it’s really has an added value and I
35:13
think that’s that’s a great thing and I
35:16
think it’s a once in a lifetime
35:17
opportunity for the smart dealers that
35:20
they’ll they’ll take advantage of that
35:22
so let’s hope they jump on it can’t wait
35:25
to see what happens I know I love it as
35:27
iid tell and I can’t wait to see what
35:30
happens next
35:31
um I think there’s more pain to go
35:34
through frankly I think we’re gonna
35:37
more challenges not less but inside of
35:40
those challenges I believe are heat
35:43
there are more opportunities and I think
35:45
that’s a mindset thing I think in that’s
35:48
how you have to look at this is hey
35:50
every obstacle in your path is an
35:52
opportunity for growth and to move the
35:56
needle so couldn’t agree more cool man
35:59
well I appreciate you taking the time
36:01
and you know I know you’re over Naples
36:04
doing the Naples thing but you know I
36:07
mean social distancing and Naples must
36:09
be a real struggle for everybody because
36:11
it’s a very social spot it’s a it is a
36:14
lot of Midwesterners they’re like to
36:17
hang out with each other but you know I
36:18
try to get out and exercise and you know
36:21
we all run at our own pace so we’re not
36:23
running do we end up each other which is
36:25
just fine good man yeah cool I
36:28
appreciate you taking the time today
36:30
Mike it’s always good to talk so same
36:32
here Todd thanks talk soon
Join 55,000 of your automotive peers. Subscribe to the automotive technology newsletter.
Every Sunday evening we’ll send you a roundup of the best content and events from 360Converge and around the automotive industry. Make sure you’re ready for the week! Subscribe now.
Subscribe here