00:00
We're doing better as a result of social media presence.
00:08
If it doesn't do those three things, then it's on the chopping block.
00:11
It's in return on investment discussion.
00:27
You're welcome to another edition of the Daily Dealer Live.
00:30
I'm your host, Sam Darkin, back with us to joining today co-hosting is the Julie D. Martino.
00:39
For everybody joining the live stream today, that's you, every single one of our faithful
00:45
We're live across all CDG social media platforms.
00:48
Post those comments.
00:49
We'll bring them into today's show because they do change the course of the show.
00:53
Your questions level us up.
00:56
And what a show we have in store for you today.
00:57
Our Daily Dealer Live audience coming up today.
01:00
Jeff Miller of Subaru comes to talk about selling one-price Subarus and also the Subaru Love
01:07
The difference that is Subaru, I love this conversation.
01:10
Also DriveCentric CEO on CRM Innovation.
01:15
But before we go there, let's hit today's automotive headlines.
01:23
First up today in the news, AutoNation has picked up two luxury dealerships in Chicago
01:27
from Fletcher Jones Automotive Group, Mercedes-Benz, oh, I love it, by the way.
01:35
Mercedes-Benz of Chicago and Fletcher Jones Audi in a deal advised by Presidio that close
01:39
September 15th, the move strengthens AutoNation's luxury footprint in the city where they
01:45
have multiple bends locations.
01:47
And for Fletcher Jones, the sale marks a sharper focus on its 13 remaining dealerships
01:52
in California and Nevada.
01:54
I love the Fletcher Jones organization.
01:57
I worked with Fletcher Jr. in a prior world.
02:01
And it's interesting to see this empire.
02:04
He's being very selective and he's narrowing it down to the stores it seems that he wants
02:09
He used to be in Hawaii and as a rep for Swiss based insurance care, I used to travel
02:14
to Hawaii to service that.
02:15
That was tough work.
02:19
And then next up today in the news, Carvana has rolled out Shackbot.
02:24
It's an AI powered car shopping assistant that get this.
02:29
It uses Shaquille O'Neal's voice and personality to guide customers through browsing inventory
02:34
and navigating the buying process.
02:36
The tool blends Carvana's proprietary large language models with O'Neal's actual
02:41
voice recordings aiming to make the experience feel both more personal and entertaining.
02:47
It's definitely a unique way to stand out shoppers increasingly use AI tools like chat
02:51
GPT to research purchases.
02:53
But the real question is whether Shackbot will drive sales or just create buzz.
02:58
Now we had the round table with all the AI CEOs last Friday.
03:02
This is an interesting example of using AI in a pretty unique and interesting way.
03:08
And look, people are going to know they're not talking to Shaq.
03:12
Nobody thinks Shaq is on the but you can play around with it.
03:16
You can have the conversation with them.
03:17
I think that's pretty interesting.
03:19
We went on and we said, Hey, tell us about Daily Dealer Live and he said best live show
03:25
on the internet anywhere bar none.
03:27
So Shaq can't be wrong, Yuli.
03:29
Yeah, listen, the most important part about this is that we're talking about it, right?
03:34
So it's working already.
03:37
Um, wait, Yuli, there should be a Sam and Yuli AI, a big time integration or
03:45
something, something.
03:46
We're going to talk to you and put it right on the CDG website and you can ask Sam and
03:50
I love it, but Lauren Klein says sounds intimidating.
03:57
And then Jason comes on with a heavy dose of sarcasm saying, imagine that not
04:02
getting your auto purchase.
04:05
And remember too, we announced the Bicell activity.
04:07
Go to Bicell.com CDG Bicell.com to learn about all the Bicell activity going on
04:12
out there in the marketplace today's world.
04:14
So all right, next up today in the news, new data from Escalant shows the extended
04:19
range electric vehicles.
04:21
There are also called EREVs or vehicles that combine battery power.
04:27
Electric motors with small ice engines could accelerate the shift to electrification.
04:31
If consumers better understood how they work, it turns out more than 40% of
04:35
car buyers are unaware of what an extended range of electric vehicle actually is.
04:43
I don't think there's great education on any of it.
04:46
More than half, 55% think they operate only on electricity.
04:50
But automakers are leaning in.
04:52
Ram is moving forward with an EREV pickup.
04:55
Nissan's 2027 road will feature its e-power system.
05:00
And Scout Motors says deposits for its EREVs are outpacing pure battery
05:07
Yuli, Scout, they're back.
05:10
We keep hearing about them.
05:12
So cool looking also.
05:13
I mean, a little controversial, right?
05:15
But listen, I have to say, I'm going to weigh in mildly here.
05:18
I think this is probably the future of adoption.
05:21
And if we buy into the idea that EVs are going to dramatically reduce greenhouse gashes,
05:27
what better way than to have mass adoption, right?
05:29
So something like this, you know, that hybrid technology really is the next step
05:37
Listen, we just got a message from the car dealership guy, Yosi.
05:41
He says, consider it done when talking about AI bolt-on.
05:45
So I would say when you go to car dealershipguy.com at some point in the future
05:49
and you want a tour around the website, you'll be guided by Yuli.
05:53
You'll be guided by me, our AI virtual respondents.
05:58
And then Jason Pitek says at Yosi, finally the answer for virtual FNI that works.
06:04
Wait, Jason, is that Shack or is that Yuli?
06:07
That's the only question.
06:08
All right, everybody.
06:09
That's a wrap on this week's or today's news for this Wednesday, September 17th.
06:14
Hey, as a reminder, we get a lot of requests to join the show and we want all of you, all
06:21
dealers that have an opinion on something or that are doing something great in the
06:24
world to come on the show and share their perspectives.
06:27
Please visit cdgguest.com, fill out the intake form to be considered for a future
06:33
You'll meet Michelle, our wonderful Michelle who does all the scheduling, the intake.
06:38
We've got some questions about your opinions, what you want to come on and talk about.
06:42
And then we'll bring you on here on the show.
06:44
And by the way, the more dealers with great opinions we get, the better the show ends
06:51
And again, great show today because we've got a one such handwriting.
06:57
Next up, Cardiola Ship Guy is back with our second annual NADA party happening
07:00
in Las Vegas on Thursday, February 5th.
07:03
It is the hottest ticket NADA 2026 with special guests and top automotive personalities will
07:10
Yuli, come on to be considered for a formal invite.
07:13
Just hit the link in the show notes request to join and fill out a questionnaire.
07:17
Unfortunately, we can't fit everybody in the spot.
07:22
So RSVP today and we hope to see you in Vegas.
07:31
Full body, not just the bobblehead.
07:32
NADA is always a great time to meet other dealers, vendor partners, learn about new technology,
07:39
learn about new tools, figure out ways to make automotive better.
07:42
And I think this is the delta between businesses that just grow slowly over time and automotive,
07:48
which is super fast to execute.
07:50
We learn new things and we put those things into place.
07:54
And that actually is an incredible segue to our first guest today, who is an execution
08:00
He turned to Jeff Miller, CEO of Mark Miller Subaru.
08:04
Jeff, welcome to the show.
08:06
Thanks for having me.
08:08
How do you like that setup, by the way?
08:11
I don't know if I've been ever called a ninja before, but I like it.
08:15
You'll own it though, right?
08:19
So, Jeff, before, as we ask you our banner question, which we ask everybody
08:22
as our lead number one question, how's biz?
08:26
Answer that question and then just tell us a little bit about yourself and your
08:31
I wouldn't say great.
08:32
I mean, I think the tariffs in the Subaru world, tariffs have been a little bit
08:36
painful with us having to raise prices a little bit.
08:39
Service business, though, has been through the roof.
08:40
I mean, we've been showing record months in service throughout the entire year.
08:44
So we've been really leaning into our fixed operations and having a great year.
08:48
Yeah, that's awesome.
08:50
So you're a Subaru dealer.
08:52
Tell us a little bit about how long your family and you have been in the Subaru
08:55
world, because Subaru is very different from the other OEMs.
08:58
We often talk about OEMs.
08:59
We've had Nissan's heads of sales for Nissan and Infinity on.
09:04
We've had, you know, we talk about Stellantis often and then, you know,
09:08
Toyota, Lexus, the Honda, the likes, but Subaru is different.
09:12
Well, we'll start with the fact I'm a Subaru retailer.
09:15
I'm not a Subaru dealer.
09:18
We've knocked all ourselves dealers out there.
09:20
Jeff Walters would not be happy with me.
09:22
No, Tom Bell especially, because that was Tom Bell's baby, but a hard
09:26
retailer guy doesn't sound as good.
09:28
It's not going to work for you guys, but we have been in the Subaru world
09:32
almost as long as Subaru in the United States.
09:34
My family picked up their Subaru franchise in 1971 on a coin flip.
09:39
We love to tell the coin flip story as my dad would have been 21 years old
09:45
and called into his dad's office and said, we have a chance to be
09:48
either a Subaru dealer or a Honda store in Salt Lake City.
09:51
So they flipped a coin and the coin flip came up Subaru.
09:55
And we always joke that the first 25 years of that coin flip, we're not a good coin flip.
10:01
Yeah, I was going to say the second 25 years, we could not be happier.
10:04
And it fits with our brand and our culture and who we are so well that
10:08
we could not have a better partner than Subaru.
10:10
Awesome. Well, and so your store is located in Utah.
10:13
You're in northern Utah.
10:14
So you're on the Wasatch Mountains, right?
10:16
Now, for the first two stores in Salt Lake County.
10:19
So right in Salt Lake City.
10:20
And it seems like Subaru fits that environment really well.
10:23
The mountains, skiing, all of that.
10:26
Yeah, it used to be it was it was the niche brand, right?
10:29
Subaru was this niche brand for mountain environments
10:32
for people who need all the drive and snow.
10:33
And now it's not that anymore.
10:35
Now it's it's a player in the market.
10:37
It's we're tracing that 5% market share, which is Subaru's
10:40
been goal for the last few years.
10:41
And they really have figured out how to really appeal to everybody
10:45
out there with a really good, high quality car.
10:48
It gets great gas mileage that really just takes care of people.
10:53
Yeah. So one of the things that separates you
10:56
from other retailers across the country is you are one price
11:00
and you decided to go one price some time ago.
11:02
Tell us a little bit about that transition
11:04
from negotiation to one price
11:06
and what pain were you looking to solve with that transition
11:10
when you initially did it?
11:11
So we were driving about 10 years ago.
11:13
We're actually we transitioned on April 1st, 2014,
11:16
which don't ever transition to something like that
11:19
on April Fool's Day.
11:20
But no, the stake learned won't do it ever again.
11:23
But we moved to just everything we do is is this going to help
11:27
our employees? Is this going to help our customers?
11:29
And then we worry about making money on it later.
11:31
And by looking at that, there's no more thing to do that
11:35
than one price because you're looking at something
11:37
at how to make this car buying experience as easy
11:39
as you possibly can make it.
11:41
I mean, we went from selling like everyone else does
11:43
in two hour, three hour transaction times to if someone
11:46
knows what they're buying, they could be in and out of our store
11:48
in 30, 45 minutes easily and you do it in a way
11:52
where you have less sales people doing it.
11:55
So instead of having an average sales person who's selling 10
11:57
to 12 cars a month, like most places are sell 14 to 16.
12:03
It and it just it takes this weird thing.
12:06
The customers hate where it's, oh, let me go check
12:08
with my boss and see if I can do that.
12:10
And whether there's someone's actually going to check
12:12
with their boss or not, question mark that.
12:15
Yeah, but you come back to the desk and sales customers
12:18
are really baffled by it, not as much for us anymore
12:20
because we have so many repeat customers coming back to it.
12:23
But when we were first doing it, people were like, wait,
12:25
you don't have to go talk to someone.
12:26
It's like, no, we're going to do it all right here.
12:28
And it's it's the repeat business.
12:30
That's even more dramatic, right?
12:32
I mean, I've come from an environment like that
12:34
and the repeat business once once they know who you are
12:37
and they know that's your culture.
12:38
It's it's astounding that the curiosity would be
12:41
why aren't more dealers or retailers trying
12:43
to solve for this problem?
12:44
I mean, it's all about the customer experience right now.
12:47
It's because most dealers out there feel like
12:50
customers number one issue is price and it's just not.
12:53
It's just not a true thing.
12:55
I mean, there were studies out there
12:56
when we first looked at it that we went into
12:58
and it was something like 15% of the US population
13:02
truly wanted to negotiate.
13:04
You get 98% of car dealers negotiate.
13:07
Yeah, it doesn't make sense.
13:08
It doesn't make any sense.
13:09
So what you do is as harsh it is to say
13:13
those 15% of people that truly want to negotiate,
13:15
you tell them to go by from your competitor.
13:17
And they're going to go by the way to which,
13:19
by the way, to somebody that wants to negotiate
13:21
telling him to go somewhere else.
13:24
Yeah, so in your geography,
13:28
I I sold Saturn's back before that one belly up
13:31
and the time frame.
13:33
So in the late 90s, I sold Saturn's
13:36
and it wasn't so that was one price.
13:39
And I remember people coming in saying,
13:41
hey, you know what, throw in a free set of formats.
13:44
Hey, you know what, one price.
13:45
It's all we can do that, you know,
13:46
you go back through the brand promise,
13:48
you go back through the value statement
13:50
and people would really resonate with that.
13:52
Right. But you're right.
13:54
There are a certain percent
13:56
that just want to be able to negotiate
13:58
and it drives them nuts if they can't.
14:00
And you're never going to get rid of those people.
14:02
And some of those people,
14:03
even when you say that they still come in
14:05
and then end up buying the car
14:06
because you have the exact one they want.
14:08
But yeah, in general,
14:10
what we found is that those customers that we had
14:12
that we used to service and we used to negotiate,
14:14
they'd get the best deal
14:15
because they'd go back and forth seven or eight times
14:17
and spend 10 days buying a car.
14:19
They were our biggest problems in the service department.
14:23
Like so you also were able to do by doing this
14:25
is we saw our net promoter scores
14:27
and our customer service scores and service
14:31
because you eliminated that customer from your database.
14:35
So one price selling is not new.
14:37
Like again, it's been around for decades.
14:40
If it works so well
14:42
and if customers like it so much,
14:45
why is it still not more widely adopted?
14:48
What why do people still buy in dealerships
14:50
where there's negotiation?
14:52
Why do dealers still decide to negotiate?
14:55
I think that that's a most detail.
14:57
Most dealers don't like change
14:59
and they don't like they're so afraid
15:02
that by taking away that negotiation power
15:04
and negotiation, they're going to lose gross
15:05
and they're going to lose what they have.
15:07
And what we were able to do
15:08
is we maintain gross throughout the whole process.
15:11
It did not affect our gross whatsoever
15:13
because the gross now became controlled by the store
15:16
not by an individual salesperson in their skill level.
15:19
So we're setting the pricing,
15:21
we're setting what it's going to be
15:23
and they don't have any effect on it.
15:24
So no longer is a salesperson chasing gross.
15:28
A salesperson is getting paid.
15:29
We pay our salespeople on volume based flats.
15:33
So in event of how many cars they sell new,
15:35
how many cars they sell used in each half,
15:37
they get a higher flat retro back to the first one.
15:40
So our sales guys, we didn't do one price.
15:43
I didn't like a lot of the one price models
15:44
when I first looked at it
15:45
because it was like, oh, we're going to bring in
15:46
a bunch of 20 year old order takers
15:49
that we're going to pay 35, 40 grand a year.
15:51
And like, no, we can do one price
15:53
and still have sales guys that make 150K a year.
15:56
Like it's still there.
15:58
So to that point, Jeff,
16:00
what do you say to those that are skeptical
16:04
of that model who say,
16:05
hey, you know what?
16:06
You're going to train salespeople
16:07
under this kind of stair step program
16:10
and they're going to get really good at selling cars
16:12
and they're going to go somewhere else
16:13
where they can negotiate
16:14
and have the potential for a greater gross.
16:16
Have you seen that?
16:17
Has turnover been higher on the sales floors or results?
16:20
We don't have turnover on our sales floor.
16:22
There's no turnover like that.
16:23
We really don't have very little.
16:24
We hire maybe two salespeople a year per store,
16:28
three salespeople a year.
16:30
And we don't hire a lot of new salespeople.
16:33
my average salesperson on each of my sales floors
16:39
You're taking the pressure off that salesperson
16:41
by operating like this.
16:44
now you said you didn't lose any gross
16:46
all the way through.
16:47
How does that translate into finance?
16:50
So finance, we've made a big push on finance
16:52
in the last 12 months.
16:54
I actually hired a new general manager for our group
16:57
for my two Subaru stories about December of last year
17:00
and he brought in a big focus on that
17:02
and a big focus on making sure we're selling to the market.
17:05
And we try and run one price in the finance world as well
17:08
where we, there's no crazy start.
17:11
$5,000 gross on a warranty and discount to ground.
17:13
We don't do any of that stuff either.
17:15
It's very set pricing in our finance world as well.
17:18
So we've really been able to push that up to the thing
17:21
where we're doing 14, 15, 1600 a copy now
17:24
on the back end as well
17:25
while doing this one price model.
17:29
So in other places,
17:30
you've talked about three guardrails
17:31
that help you protect this one price model.
17:33
What are the three guardrails
17:35
that help you over this past decade that you've had it
17:38
keep the consistency and keep the integrity of the program?
17:42
So the biggest thing in the integrity of the program
17:44
has always been the leadership
17:45
is that if the owner of the company,
17:48
the general manager of the company
17:49
does not believe in one price
17:50
and it's gonna block away from one price
17:52
for his friends or for someone else,
17:54
it kills the whole program.
17:55
I used to, when we first started this thing,
17:57
I would get a phone call as general manager
17:59
at least once a week from a sales person's desk customer.
18:03
Because we told the sales people,
18:04
the customer has a problem with it.
18:06
They have my extension, call me.
18:07
And so they call me and say,
18:09
this sales, you're gonna lose my deal
18:10
for 50 bucks or 100 bucks.
18:12
And we would say a pretty simple thing.
18:14
It's like, when you walked in the door,
18:15
did they explain how we sell cars here?
18:18
I said, yeah, they did.
18:19
And did they explain it again
18:20
when we did your trade in?
18:22
So if I were to give you $50 off right now,
18:25
it means that we're lying to you.
18:27
We've been lying to you
18:28
in the door like that.
18:29
We're not gonna do that.
18:31
And then generally there would 90% of timing.
18:37
There were a lot of times they were surprised
18:37
they were talking to the owner of the company,
18:39
But that's the first guardrail
18:42
is being able to do that,
18:43
is being able to keep the integrity of the program
18:46
We've been a big part of the guardrails
18:48
on the trade inside of it as well.
18:50
We do not over or under allow.
18:52
Because I know a lot of people
18:54
that say they're one price dealers.
18:57
And they just over allow and under allow on trades.
18:59
And that's how they mess with gross.
19:00
It's like, no, if we're gonna do this,
19:02
we're gonna do it the right way
19:03
and really take care of the program.
19:06
So Jeff, to your point about management buy-in,
19:08
yoga cars commented here.
19:10
He said, I went through one price conversion
19:13
at a Toyota store 10 years ago.
19:14
It didn't work out.
19:15
Change of management killed the project.
19:19
as with any change in retail,
19:21
you probably see this as well as we do.
19:23
Like there's a period where
19:25
everyone will test your resolve for a process or a way.
19:30
And if you cave to your point once,
19:33
it dies on the vine, right?
19:34
And so how long would you say
19:36
thinking back to that decade ago
19:38
when you implemented it?
19:38
How long did it take for it to become so ingrained
19:41
it wouldn't be reversed?
19:42
GM's trying to come in with an exception
19:44
or salespeople trying to push for that
19:46
or customers trying to test your resolve.
19:48
How long did that take?
19:50
At least a couple of years at least.
19:52
I mean, I think there were,
19:53
I'll never forget a moment where my dad,
19:55
when my dad was still involved in the organization,
19:58
He sold off to us a few years ago,
19:59
but he was still involved
20:01
by one year into the process.
20:03
One of our sales guys wanted to sit him down
20:05
and talk to him and start telling him.
20:06
And my dad says to me, he's like, no,
20:08
we're bought in on this.
20:09
It's like, if we decide to go back on this,
20:11
we're selling the stores.
20:13
I was like, okay, dad,
20:14
like dad, it was like the only time
20:15
I think I ever brought my dad into my office
20:17
and like gave him a talking to us.
20:19
And yeah, but it needs to have that kind of resolve.
20:23
It needs to have this idea of it.
20:25
And once we did it and they knew we were serious
20:27
and you knew it was a year or two into it
20:29
and then we weren't going back,
20:30
we did lose two managers over it.
20:34
Cause we lost two sales managers that didn't like it.
20:36
They didn't like the idea.
20:37
Like they loved the fight.
20:39
Like they were those guys that loved the sales fight.
20:43
Now you don't have the fight anymore.
20:44
Like a sales manager's job now is training
20:47
and doing trade appraisals.
20:49
Well, I mean, you shift the fight, right?
20:51
The fight is less about price.
20:53
And it's more about value.
20:55
What are you delivering to the customer?
20:57
So I mean, those guys that you lost,
20:59
you didn't, you didn't lose them.
21:00
All right, you didn't lose anything better.
21:02
So Jeff, this conversation is sparking a debate online.
21:07
And we're seeing it in the comments.
21:08
Mike Brenton says going through that in Volkswagen,
21:11
they're changing everything.
21:13
And now the store's going downhill.
21:15
So I don't know what Mike means on going downhill.
21:18
If you want a post that in
21:20
and we'll bring that into the convo.
21:22
But let's go to the bottom line, right?
21:26
You have well-compensated salespeople that are retained.
21:30
So they're staying, they're thriving.
21:33
What does your net look like or net to sales?
21:36
Are you still profitable as a result?
21:39
Yeah, I mean, especially since we've been able
21:40
to get the finance side fixed out on the other side
21:42
of that was always the issue.
21:43
And that was the always thing is my goal,
21:46
I would love to have everybody be this
21:48
because I do worry a lot about our car industry,
21:51
about when you see these other players like Carvana
21:53
and Carmax, they're coming in and doing this really,
21:55
really well and people love it.
22:00
And when we're not doing it, it's a risk
22:02
to our future, the future of car dealers
22:04
to not do that same quality experience
22:06
when these outside players are coming in.
22:08
We're running over 3% net to sales right now,
22:14
Well, so there you have it.
22:16
So what Jeff would you say to a Toyota dealer
22:19
or a Volkswagen dealer trying to go through it?
22:21
Do you think it's different at Subaru
22:23
and Subaru helps with that because of the,
22:25
and we'll get into this in just a moment,
22:26
but the culture and the lifestyle of the OEM,
22:31
do you think it's uniquely suited to this one price thing
22:34
and Volkswagen and Toyota are just destined to fail
22:36
because not all dealers are on it?
22:38
Or is this, to your point, a great way of taking
22:41
automotive from transactional to value-based
22:44
and it defends the future of automotive overall, Jeff.
22:47
And I love how much you guys talk,
22:49
especially on the shows about value-based sales
22:51
because that's what we're all about.
22:53
I mean, price, especially in our world
22:55
because we don't have price.
22:56
Price is no, we don't not have the bullet of price
22:58
in our gun, our sales, they don't have it.
22:59
So it has to be value.
23:01
And the advantage we have in Subaru
23:04
is that Subaru's got the best value proposition
23:06
in the industry from what we have,
23:09
from the knowledge from the cars we sell
23:11
and what we do on that side,
23:12
but from the love promise
23:13
and what we're doing in our communities
23:14
and showing that we're more than just an all retailer,
23:17
it's such a great message that we have
23:20
to put out there and Subaru helps it with us.
23:22
Our individual retailers do such a great job with it
23:25
that it's a no-brainer to be able to sell value
23:28
where you don't need to sell price.
23:31
And what is Subaru's value proposition overall?
23:35
Subaru's value, how would you characterize it?
23:37
From a customer standpoint,
23:39
I mean, I think that we sell,
23:41
it is a reasonably price vehicle.
23:44
We're kind of in the mid-level on price range.
23:48
I think our lack of what we have
23:49
is we don't have the breadth of models
23:51
and we're pretty niche in what we have model-wise
23:53
from a small SUV's, an SUV,
23:55
it'd be nice if we could expand it to some other areas,
23:57
but we're great gas mileage on it,
24:01
engineering best in the business,
24:03
best safety there is in the business.
24:05
I mean, we really do make the best cars
24:07
in the industry, in my opinion.
24:09
And Subaru as a brand, as an OEM,
24:11
has done a great job of making it not about the price,
24:13
but making it about the value,
24:14
giving back in unique and interesting ways.
24:16
So I totally agree with the OEM.
24:18
And I think that our relationships too,
24:20
from as far as an OEM,
24:21
I think we're number one in the industry now,
24:23
as far as Toyota, Lexus, and us,
24:26
as far as OEM relationships,
24:27
no one, everyone wants to be a Subaru retailer now
24:30
because of how good Subaru's manufacturing,
24:32
is the manufacturer to deal with.
24:34
I mean, I can tell you right now,
24:35
I'm on Subaru's dealer counsels,
24:36
it's a little different, but even if I wasn't,
24:38
I could call Jeff Walters right now
24:40
and he would pick up the phone and have a conversation.
24:43
And that doesn't exist in General Motors and Ford
24:46
she's gonna maybe do a little bit.
24:48
We're very lucky in my family
24:49
because we roll Subaru and Toyota,
24:51
so that's pretty good.
24:52
You picked all, yeah, you picked both of the brands.
24:56
That coin should have been two-sided,
24:57
you should have just taken both Subaru and Honda
24:59
all those years ago.
25:01
Those are three elite brands.
25:04
I mentioned you in the green room beforehand.
25:06
So I'm the executive manager
25:07
for our Subaru Fort Wayne store in Fort Wayne, Indiana.
25:10
We just did a full remodel ground up
25:12
to your point about Jeff Walters.
25:15
He's coming to the grand opening on Monday.
25:16
We'll actually do the show live there
25:19
from the store on Monday,
25:22
but they really do support in a unique and interesting way.
25:25
Couple comments online.
25:26
Lauren Klein says the newest generation
25:29
of buyers don't want to negotiate
25:31
and I would agree with that.
25:34
removes friction for the customer,
25:35
which price one price isn't the standard.
25:37
Sell the value compared to price like Jeff says.
25:41
And that is what's fascinating to me
25:42
is if it's so good for the consumer,
25:44
if it increases CSI or NPI, NPS,
25:48
what doesn't make sense for more dealers to switch?
25:52
What's the reverse side of that, right?
25:55
What's the counter to that?
25:57
The worry that the dealers have
25:59
is that the guy down the street for me that,
26:02
what I hear mostly when I talk to my 20 group
26:04
and talk to the thing is,
26:04
I'm in a way more competitive world than you.
26:07
Like the guy down the street just gonna undercut me
26:09
by a hundred dollars and take all the deal.
26:10
It's like, that's happening.
26:11
Then you're not selling value.
26:13
You're not selling the value of organization.
26:15
I mean, I will tell you,
26:16
I have the closest Subaru retailer in the country to me
26:20
at my Midtown store in Subaru.
26:22
It is 2.1 miles away.
26:25
We are two miles from each other
26:26
and we are both in a business for 50 years for Subaru.
26:33
One of the biggest Subaru retailers
26:34
alongside yourself, right?
26:36
And they were just bought by Kengarf, yeah.
26:38
Kengarf bottom, they're now corporate store, I guess.
26:44
I'm fascinated by that acquisition.
26:46
So I knew the prior owner pretty well.
26:48
Like that was a well run store.
26:50
They sold a ton of cars.
26:51
Kirk Schneider did a great job burning that store.
26:53
Can you imagine Garf coming in
26:55
and saying, hey, we're gonna improve on what Kirk did.
26:57
Like he did it well enough that
27:00
I would have a challenge
27:01
in paying whatever the multiplier was.
27:04
The number I heard was a big number.
27:06
I don't know if I would have paid that multiplier.
27:11
But Garf is a large organization.
27:13
They were really excited to get in the Subaru world.
27:15
I think it's one of their first Subaru stores
27:17
and trying to see what they can do in the Subaru.
27:19
And they've got a good guy running it now.
27:21
And yeah, it'll be fun to see what they're able to do.
27:24
Like, I'm really trying to work in our market
27:27
because we're such a tight competitive market
27:29
on how we can make ourselves
27:30
less competitive against each other
27:32
and more competitive against the other banks.
27:34
And that's the key.
27:36
So how do you do that?
27:36
How do you do that?
27:37
So you've got a collection of really effective Subaru dealers
27:40
and rather than race to the bottom in a market,
27:43
how do you go out and say, hey, together
27:44
we're gonna win without it being a negative?
27:47
So one of the issues that Subaru has had
27:48
is they've had an advertising fund, right?
27:51
So they've had, they give their money
27:53
to the individual retailer to advertise
27:55
versus having your Utah Toyota dealers
27:57
and things like that.
27:58
And we're trying to work with Subaru to work away from that
28:01
and pilot some things hopefully in the next six months
28:03
or a year to get us all advertising together
28:06
as your Utah Subaru dealers
28:08
or your Subaru Utah Subaru retailers
28:09
rather than us all running the same ad against each other.
28:16
Well, that's an LMA, right?
28:18
That's not new though.
28:19
I remember when I was new car manager
28:20
back in like 2007, 2008 back when we just had one store
28:25
then we still used to do newspaper.
28:27
No one does newspaper anymore
28:28
but they used to go to Salt Tribune on a Saturday
28:30
and you would see five of the exact same Subaru ad
28:35
with just different payments at the bottom
28:36
and a different logo.
28:38
And it's like, what are we doing?
28:39
Like, what are we doing guys?
28:43
Last question up and then we gotta jump.
28:44
What's the most misunderstood factory dealer issue
28:46
speaking of the Subaru retailer board right now
28:49
and how should retailers respond?
28:54
Misunderstood factory issue.
28:55
I mean, I think the biggest issue with OEM boards
28:59
and I would not necessarily specific to Subaru
29:01
is just the trust factor is I wish that there was more trust.
29:06
Like I wish there was more trust between the retailers
29:09
and the board that we're all in this thing together.
29:10
Like it's to full advantage for me to do as well as possible
29:14
for them to do as well as possible.
29:15
It doesn't work if I'm doing really well
29:17
and they're not doing really well.
29:18
And it also doesn't work if they're doing really well
29:21
and the retailers aren't doing really well.
29:22
And you see that in a lot of manufacturers brands
29:24
that makes you worry about those brand
29:26
and the longevity of those brands.
29:30
Yeah, you know, it's interesting.
29:31
There is something confrontational and conflicting
29:33
and competing about the OEM retailer model.
29:36
But then there's also something in the competition
29:39
that somehow makes both sides a little bit better.
29:41
But I agree with you.
29:42
There's gotta be a way to align just a little bit more.
29:45
So Subaru has always liked to call it Tom Dahl
29:49
back when Tom Dahl was running Subaru.
29:51
I always called the Subaru dealer accounts
29:52
of the living room.
29:53
And it was that we're in the living room now.
29:55
In the living room, we can talk like family.
29:57
We can talk like friends.
29:58
And it really was that feel.
29:59
And because of it, we solved a lot of problems
30:02
and we solved a lot of issues with Subaru.
30:04
And it's one of the reasons Subaru's gone from being,
30:07
selling 170,000 cars in 2008 to 7,800,000 now.
30:14
Well, Jeff Miller, CEO, Mark Miller, Subaru.
30:17
Absolute blast having you on.
30:18
You should come out to our open house Monday
30:22
Let me check my schedule.
30:24
I just hope for a brand new building in Salt Lake as well.
30:27
We're doing our grand opening in November.
30:28
I'll invite you out.
30:29
Where was my invite?
30:32
I want an invite to this thing.
30:33
In November, we'll have you out.
30:35
You're on the invite list.
30:37
We appreciate you being on the show.
30:38
And in any case, we'll see you at the chase meeting
30:46
Fun conversation about all things Subaru and retail.
30:50
One price versus negotiation.
30:53
I'd love to have somebody come on who would say,
30:55
hey, one price is challenged.
30:59
I prefer negotiating and here's why.
31:01
So if you have that viewpoint and you're a dealer,
31:04
we'd love to have you on in the next few days
31:05
as a counterpoint to that.
31:06
Because if one price was the gold standard
31:10
and it was clearly the way to go
31:12
for consumers and retailers, everybody would do it.
31:15
And I'm just curious, not everybody has,
31:18
including yours truly, right?
31:20
To people's detriment, though,
31:23
the one thing getting in the way would be an OEM
31:25
incentivizing volume, which obviously,
31:29
we're all chasing volume, but any type of stairs
31:31
that program would immediately impede something
31:34
like this working, right?
31:35
You have no choice.
31:37
Yep. All right, let's talk Toma.
31:39
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31:43
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31:44
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31:48
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31:49
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31:52
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31:57
And actually you can go to the QR code there
32:01
to learn more about it.
32:02
And I don't know, can Toma create a Shaq voice AI
32:06
or a Sam or Yuli voice AI or a CDG car dealership guy?
32:13
I don't know. We'll see.
32:14
But we appreciate Toma.
32:15
Thanks for sponsoring today's content,
32:18
supporting the show today and bringing conversations
32:21
like we just had with Jeff Walters, which was awesome.
32:24
Now let's turn to our head of editorial CDG news,
32:28
Anna Delviar, who I just lost my thing here.
32:34
Who's going to share with us some of the latest data
32:37
and insights as to why and how dealership
32:39
use car acquisition strategies are changing.
32:42
Anna, welcome to the show.
32:53
You got me with the,
32:54
you got me with the phonetic spelling of your last name.
32:57
All right. Give us your last name.
32:58
Cause I obviously butcher it every time. Go for it.
33:01
Well, do you want, do you want the American way
33:04
or do you want the real way?
33:06
Ooh, let's go the real way.
33:07
I prefer fully authentic and correct.
33:10
What's the real way?
33:11
Yes. So my last name is Cuban and it's pronounced Delviar.
33:16
So it's a double L is a Y and, you know,
33:20
give it a little, give a little trill on the end there.
33:23
I love it. Delviar.
33:25
I'm going to, I'm going to mix a little bit of Rusky into that
33:29
Well, we appreciate you coming on.
33:31
Thanks for catching me on that.
33:33
So what do you have for us today
33:35
in the research on used cars?
33:38
Yeah, you kind of teed it up here,
33:40
but, you know, used car pipelines just continue to transform.
33:45
And part of the reason why that we see is that wholesale values
33:50
are just staying stubbornly high.
33:53
Although values were mostly flat over month over month
33:57
in August, according to Mannheim,
33:59
non-seasonally adjusted values appreciated more than expected.
34:04
They were up 1% month over month and 1.8% year over year,
34:08
primarily due to elevated use car demand,
34:11
high new car prices and pandemic production shortfalls
34:15
that continue to pinch that late model supply.
34:19
On top of that, used EVs are reporting
34:22
the strongest wholesale price gains of any segment
34:25
as federal tax credits gear up to expire.
34:29
Those price gains are 0.8% or up 0.8% month over month
34:34
and up 4.6% year over year.
34:37
Now, after those tax credits go away,
34:39
we expect values will likely come back down to earth,
34:42
especially considering that EV lease returns
34:46
are expected to surge 230% in 2026 per JV power.
34:53
And, you know, while wholesale auctions
34:55
obviously provide a good stop gap
34:58
when dealers are low on inventory,
35:00
more and more operators are telling us
35:02
that it's still not quite enough
35:04
to reconcile supply with demand.
35:08
So, dealers out there are taking some creative approaches
35:12
to source high quality used cars.
35:15
The dealer Alex Caspier is basically
35:17
turning every single one of his employees
35:19
into a used car scout.
35:22
He spiff some employees around $600
35:25
if they get a lead that ends up
35:26
in the purchase of a car.
35:28
And we also have dealers like Joel Bossum
35:32
of Eastern's Automotive,
35:33
who's using CarMax's online appraisal tool
35:36
as a pricing guide.
35:37
It's not exactly a new or unique approach,
35:40
but in 2025 as competition intensifies,
35:44
this is becoming more and more popular, you know,
35:48
and in fact, you know,
35:51
dealers are looking beyond kind of those
35:53
traditional wholesale value measurements
35:55
in a lot of different ways to increase conversion.
35:58
And, you know, bottom line,
36:00
I think, you know, obviously used car supply
36:02
will eventually come back.
36:04
And I think the smart operators today
36:06
are building those highly diversified,
36:09
scalable sourcing pipelines today
36:12
in preparation for that market eventuality,
36:15
you know, in the future.
36:17
So, you know, that's not an exhaustive list
36:20
of all the ways dealers are sourcing used cars,
36:23
you know, and if our readers would be interested
36:25
in maybe a bigger, more comprehensive document on that,
36:28
you know, shoot us an email and let us know.
36:30
We're constantly looking for that kind of stuff.
36:37
Anna, Veldea, that is awesome information.
36:41
Thank you for sharing that.
36:42
You know, the one that is interesting to me
36:44
is you think about the cost of acquisition at auction
36:47
and then the cost of recon.
36:49
There's auction fees, which are expensive.
36:51
Recon is expensive.
36:53
I love the idea of paying every single employee
36:56
a bird dog or a spiff
36:57
to go out and source used cars.
36:59
Here's the challenge is I think so many dealers,
37:03
retailers, Jeff, are concerned to do that
37:06
because they're like, hey, how do we track it?
37:08
How do we make sure they get paid?
37:10
Maybe the employee gets frustrated
37:11
because they brought something in
37:12
and they didn't get paid on it.
37:13
I would love you to do some research
37:15
on how many dealers really are paying their employees.
37:18
From a proactive standpoint,
37:19
how do they actually do it?
37:21
How do they make sure, like, they're paying it
37:24
and then how do they give credit
37:25
if two or three different employees come in?
37:27
Because I think ultimately your employees
37:29
are those that are in the community,
37:30
they're engaging with customers,
37:32
with people out in the world
37:34
and whether that customer comes in and buys or not,
37:36
what a great way to bring new faces into the dealership
37:40
and create a relationship.
37:42
But it's a strategy that could quickly turn sour
37:46
if it's not executed well, Anna.
37:48
Oh, definitely, definitely.
37:49
And I reached out to Alex to find out
37:52
a few more details and I'm waiting to hear back,
37:54
but Alex, if you're watching the show,
37:57
I'd love some more info.
37:59
Yeah, yeah, awesome.
38:01
Well, Anna, thanks for being on, sharing the perspective.
38:03
We look forward to hearing what you have next week for us.
38:06
Thanks, Anna. Great, thanks, guys.
38:11
You know, how do you make sure
38:13
that every employee gets paid
38:14
if you have a $600 spiff out there
38:16
for bringing in used vehicles
38:18
and then, you know,
38:19
maybe it's a lesser expensive used car,
38:21
maybe it needs some recon.
38:23
It's still, it still is from a cost standpoint
38:26
more efficient and effective than having to go to auction
38:29
and buying something that was in a rental fleet.
38:31
You know the history on that car.
38:33
You know, you're buying it from the owner
38:35
and then you create a relationship with somebody
38:36
that loves the fact you bought a car from.
38:38
I just think it's a great way to go.
38:40
Plus, it's such a minimal thing.
38:41
You've implemented how many thousands of rules
38:43
in your lifetime in the car business
38:45
where car guys, after all,
38:46
you play by the rule, not the exception.
38:49
We'll figure it out.
38:51
A couple of comments retell my ride.
38:52
It says, dual path equals free inventory
38:54
plus doubles conversion rate.
38:56
We buy and we consign.
38:58
That's an ad, I do believe.
38:59
So there you got me.
39:01
Retail my ride at it.
39:04
We pull it through.
39:05
I thought it was a comment on used car acquisition.
39:07
I don't know who knows.
39:09
Next up, we turn to our next guest today.
39:11
And again, make sure you keep the commenting
39:14
on social media live.
39:15
We turn to Matt Leone, CEO of DriveCentric.
39:18
Matt, welcome to the show.
39:20
That's great to be here, guys.
39:22
We're excited to have you here.
39:24
And you've got some news for us today.
39:25
So we're excited to get to the news.
39:27
But before we get to that, how's Biz?
39:29
And as part of that, give us a little bit
39:31
of your background and your company, what you do.
39:37
I've been here about 100 days now.
39:38
So I just took over as CEO of DriveCentric.
39:41
There were three co-founders here.
39:42
They're still very much with the business,
39:44
but they were looking for somebody to step in and help
39:47
continue to grow DriveCentric.
39:49
It's had really explosive growth over the last few years
39:51
and we're on a great journey.
39:53
And my background was I came from Automotive Mastermind.
39:56
My last five years was with that company as CEO.
40:00
And they were a data company.
40:02
It's part of our announcement here
40:04
that we wanted to share was we built out
40:06
a strategic partnership with them.
40:07
And so it's linking two different companies together.
40:11
But for those that aren't familiar with DriveCentric,
40:14
we're a CRM engagement platform.
40:16
We drive dealer operations.
40:18
We pride ourselves in engagement, customer support.
40:21
And we really were a pioneer in AI.
40:25
I think we were 2018.
40:27
It rolled out our first genius product.
40:28
So it's a company that's had really, really explosive growth,
40:32
but we're primarily in the CRM space.
40:35
We needed to have you on our CEO round table
40:38
for AI last Friday.
40:39
We missed out on that.
40:40
We'll get you on the next round on that.
40:44
So what does a strategic partnership mean?
40:47
This is unusual in all of Automotive
40:49
because you haven't acquired each other.
40:50
You're just partnering, is that right?
40:52
That's exactly right.
40:53
But a lot of companies integrate with CRMs,
40:56
and particularly legacy CRMs.
40:58
And usually the frustration is you're dealing
41:00
with traditional workflows, task management systems.
41:03
And nobody likes to have a task management
41:06
or workflow system.
41:07
So when DriveCentric was created,
41:09
it was really to go after a modern engagement way
41:11
to engage with your sales team, your BDC,
41:14
and your consumers.
41:16
So if we eliminate the idea of a workflow
41:18
and we really think about what is a CRM,
41:20
is a customer relationship management platform,
41:24
why do we have workflows?
41:25
And what ended up happening was all these integrations
41:28
that are out there,
41:29
and we have thousands of integrations into DriveCentric.
41:31
And we suck in all these leads.
41:33
We weren't getting leads from every source though,
41:35
particularly my old company, Mastermind.
41:38
Those weren't really high quality leads.
41:40
They create demand in the market,
41:41
whether it's conquest or loyalty
41:43
or service retention.
41:45
Those leads, the demand that they were generating,
41:48
the marketing they were doing,
41:49
the consumer outreach they were doing,
41:51
the engagement they were doing,
41:52
would basically just plop into a traditional CRM as notes.
41:57
And not only does a salesperson not wanna look
41:59
at tasks and workflow,
42:01
they certainly don't wanna dig through a bunch of notes.
42:04
And as the CEO of Mastermind, when I was there,
42:07
we integrated with every major CRM except for DriveCentric.
42:10
DriveCentric was the only one
42:12
who didn't have an integration plan.
42:13
Well, I tried very hard,
42:15
when I was at Mastermind to integrate with DriveCentric
42:18
and they just said, we'll get to you, we'll get to you.
42:21
But DriveCentric was off creating
42:24
a different way of approaching the platform.
42:26
And they were off with their founders,
42:27
really heads down creating this way where leads
42:32
can flow in, the AI can take over,
42:34
it could be a co-pilot with the sales team,
42:37
and we can manage that process
42:38
all the way through with a combination of AI
42:40
and the salesperson.
42:43
The integration was we're not prepared
42:46
to have a level of integration with a Mastermind
42:49
if we don't want it just to be dumped in the note
42:51
and they knew that would be a horrible experience.
42:53
So that's why they were saying no.
42:55
When I switched over and I became DriveCentric CEO,
42:58
I was like, well, we really wanna open up
43:00
the partner ecosystem, we have an API.
43:03
What if we were to do the highest level
43:05
of strategic integration here
43:06
where we're not just passing notes and creating a lead?
43:09
What if we were able to take all that great data
43:11
from Mastermind and Polk Automotive
43:14
and MarketScan and Carfax and have that flow
43:17
into our genius product, into our AI product,
43:20
hygiene data, clean enriched data.
43:23
So I could get vehicle owner information,
43:25
I could get Stu's data, I could get all the data
43:28
I knew I had at Mastermind into DriveCentric
43:31
to power our genius product,
43:33
but also have that data flow in to augment our leads
43:37
to be able to empower so I could see
43:40
who that customer was, what they got for marketing,
43:43
how often they interact with that engagement
43:45
of that marketing and have all that in the customer card.
43:48
So now as a sales person, I could see all that history
43:51
no matter where it came from
43:53
and I could trust my AI engine
43:55
that's using really good high quality data from a Mastermind.
43:59
So isn't that just a good integration though?
44:01
I mean, other CRMs have integrations
44:04
from lead providers that are equal to it.
44:06
I can think of CDK and Reynolds
44:09
and some of the others.
44:10
What makes this unique and worthy of touting the partnership?
44:14
You're right, it's just a higher quality integration.
44:16
However, a lot of high quality integrations
44:19
that just simply use an API is usually one direction.
44:23
In this situation, we wanna be able to have it
44:25
both directions where what'll end up happening is
44:28
in order for the Mastermind algorithm
44:30
and the behavior prediction scores that they drive
44:32
to get smarter, they need to be able to understand
44:35
what actually happened, did this deal kill it, did it not
44:37
and so there's a bi-directional strategic alignment
44:40
to make their product better and our product better.
44:43
But even further, if you're a joint customer,
44:45
the strategic partnership is this shouldn't cost anything.
44:48
We're just using data, first party,
44:50
third party, zero party data to make the industry better,
44:53
to make the ultimate goal both companies had
44:55
which was help dealerships sell more cars.
44:58
So from a strategic lens, it's gotta be both ways.
45:01
There's gotta be value on both sides
45:02
and from a strategic lens,
45:04
it's gotta be something where the consumer,
45:07
the dealership themselves isn't startled with,
45:10
hey, I have another fee to deal with, another car.
45:13
So Matt, are you able to quantify some sort of an impact
45:17
on close rate or efficiency of dollar spend
45:21
and digital advertising back to that bi-directional?
45:24
Cause I think that is unique, very few digital lead providers
45:28
will come into a CRM and then push it back
45:31
and we get asked a lot from different lead providers,
45:33
hey, if you'll provide us additional info,
45:35
we can help you figure out what works,
45:37
what doesn't and we don't typically do that
45:39
because what's in it for us, right?
45:41
Like at the end of the day,
45:42
they're gonna spend the data the way they wanna spend it.
45:44
Can you quantify the impact of that, the bi-directional?
45:49
If you give me a little bit of time, I can.
45:50
We launched the partnership last week.
45:52
We have it in data testing right now.
45:54
I've been here a hundred days.
45:56
I think what'll end up happening is by Q4
45:59
and certainly before native,
46:00
we'll have this fully in production
46:02
but I think we're gonna be able
46:03
to take that even a step further, right?
46:06
I'll just use other lead sources, listing companies.
46:08
Let's pick one, Carfax.
46:10
It's a sister company to mastermind.
46:13
Right, look at how many leads come into DriveCentric
46:15
which we know by dealership, by month,
46:17
what kind of leads come in.
46:19
They're all tagged to something
46:21
but it's how it was tagged at that dealership
46:24
but ultimately where did that journey start?
46:26
Where did it really start from?
46:28
Did they go to Carfax.com and look up a car
46:32
and then jump into a dealership website
46:34
and then jump into a lead into mastermind
46:36
from a dealership website.
46:38
We really wanna be able to home in on that
46:40
and be able to say,
46:41
hey, we know where this originated from.
46:43
In mastermind's case, this is pretty clean
46:45
because they're not creating leads, they're creating demand.
46:48
These are people about to be in market
46:50
so before they click a website,
46:53
before they're shopping,
46:56
mastermind is way early and funnel
46:58
and so we are pretty confident
47:00
that they're predicting something 90 days out,
47:03
maybe 120 days out as somebody's about to enter market
47:06
before they're in the market
47:08
and if we can bifurcate that,
47:10
then we can show further you go up
47:12
to engage with those consumers
47:14
and not just your lease retention but any consumer
47:17
that has a reason why they might be in market.
47:19
Could be household demographic reasons,
47:21
it could be car accident, history reasons
47:24
that they might be coming into market.
47:26
That's really powerful and if we could triangulate that back
47:29
not only can we say here's what's working
47:31
and what's not working,
47:32
we can double down on some of our AI investment
47:35
and say, hey, we know we're gonna hone in
47:37
on certain high quality leads or demand that comes in
47:40
and let the AI engine really supercharge that
47:43
instead of relying on a salesperson
47:46
but we can kind of fine tune our AI
47:48
using some of this data as well.
47:50
So Matt, do you think that that bi-directional nature
47:53
of the integration that gives you
47:54
some additional insights on sourcing and whatnot,
47:57
do you think that that will become kind of
47:59
an industry standard that other lead providers
48:02
and competitors will seek to do that
48:04
or do you think you have a unique edge
48:06
that makes it difficult or impossible for others
48:11
Maybe I'll give you two answers to that one
48:12
which is self-serving and I think that Drive Center
48:15
gives the most modern platform out there.
48:17
So technically I think we're a step ahead
48:19
of what I'll call the legacy players that are out there
48:21
to be able to even technically do this
48:23
and do it within 90 days of a contract signing
48:25
with a partnership to get it into production.
48:28
But the probably more strategic answer to that
48:30
would be, God, I hope so, right?
48:32
I mean, the whole reason why we should be in this space
48:35
of all this data, if I think about the amount
48:38
of bolt-on products that are out there,
48:40
the tech stack that poor dealership has to deal with.
48:43
Simplify it, right?
48:44
So if I think of the accounting ledgers, your DMS
48:48
and if I think of the operational tool as Drive Center
48:50
to run the operations of the business
48:52
and then you have some tools like Master of Mind
48:54
to be able to do the marketing and the upfront funnel
48:57
and then you have a website, right?
48:59
What else do I really need to run sales and marketing
49:01
within a dealership?
49:02
But yet you have thousands of these bolt-on products
49:05
that do a little niche thing.
49:06
This does this retention.
49:08
This does this AI chat.
49:09
This does this reception agent.
49:11
This does my chat on my website.
49:14
It can all be run in Drive Center.
49:16
We don't have to have all these bolt-ons
49:17
and we're passing all this data back and forth.
49:20
But if you know that data is going
49:22
to the four or five tech products
49:24
that you run in your operations
49:25
and it's flowing bi-directional,
49:27
then you can eliminate all this other noise.
49:29
And that would be what I hope the industry moves to,
49:31
which is tech consolidation
49:33
and then strategic data sharing agreements
49:36
with four or five tech providers.
49:38
The DMS is going to be there.
49:40
Hopefully the CRM is always part of that tech stack
49:42
and then maybe one or two other solutions.
49:44
So with this agreement, with this tech stack,
49:47
with this configuration,
49:48
what other providers realistically
49:52
could a dealer eliminate or reduce?
49:55
Well, you have, like I said,
49:56
all these bolt-on options that are there.
49:59
And so if you think about DriveCentric
50:01
as we have a digital retailing product,
50:03
we have a reputation management product,
50:05
we have an AI product,
50:06
which does both BDCs, sales marketing.
50:09
And you think about, from a chat perspective,
50:11
we have that, but then we have the core CRM
50:14
and we're doing a lot of the engagement.
50:15
Do you really need a CDP?
50:17
Do you really need a bolt-on product to a CRM?
50:20
Just extract data out of that CRM
50:23
to do something to pump it back into the CRM.
50:25
What you really want is your repository,
50:28
your accounting ledger,
50:29
you want your operational engagement platform.
50:31
And then you might have an agency to be able to say,
50:34
I want to do some streaming
50:35
or I want to do some OTT type marketing.
50:38
Great, here's the data out of DriveCentric,
50:40
go do all that work.
50:42
And we want to be able to open it up
50:43
to allow for here are strategic tech stack.
50:46
But I look at a big dealer group
50:48
and I worked with a lot of these big dealer groups.
50:51
It's mind-blowing how many technical solutions
50:54
they have across the board.
50:56
And not just in sales market, FNI, fixed ops,
51:01
You're adding up to hundreds of technical solutions.
51:04
So a couple of comments online from our audience.
51:06
So Dan C, or I'm sorry, Kurt Reinhold says,
51:09
I've worked with many CRMs.
51:10
I'm impressed with DriveCentric
51:12
during the last few months using it.
51:14
Just have to keep an eye on Shelby, the AI tool.
51:17
What's Shelby doing that we need to watch out for?
51:20
I think that's probably tongue-in-cheek, right?
51:22
You need to train and work with every AI agent.
51:25
You know, there's some really good AI agents out there
51:27
and there's some really good strategic partners
51:29
that do a really good niche.
51:30
And I think if we can bundle and integrate it in,
51:32
then it's not yet another vendor and another tech stack.
51:35
I think there's ways we can work
51:36
with some really exciting new AI tools that are out there.
51:40
But there's also a really exciting Genius product
51:42
within DriveCentric that could probably do most
51:44
of the things that are needed out there.
51:46
So Lauren Klein also makes a comment.
51:48
I'd be curious your perspective on this
51:50
and why this is the case.
51:51
The reality is most dealers only use a fraction
51:54
of their CRMs capabilities effectively.
51:58
Whenever we have our CRM provider come in and do training,
52:01
I'm astonished at how much we kind of default
52:05
to the simple, right, instead of becoming ninjas,
52:08
so to speak of capabilities.
52:10
Why is it that we don't lean in more?
52:13
There's a two-prong answer to that one
52:17
a big band of studying history.
52:19
And I've been studying the history and evolution
52:22
from the 80s of a CRM and how it started
52:24
and how it moved to Siebel and then Salesforce
52:26
and Cloud came on and what it was at the time.
52:29
And the history of the CRM was,
52:31
let's solve a big pain point.
52:33
Sometimes our sales team is lazy.
52:34
And so let's put a workflow in front of them
52:37
and a task management system.
52:39
And then let's put reporting
52:40
so the manager knows what they're doing.
52:41
And then let's help them engage with emails and texts.
52:45
And that's really the 80s going into the 90s
52:47
up into the early 2000s.
52:49
And the CRM was pigeonholed as this sales tool
52:52
to make them more efficient.
52:54
And I think if you knew that history,
52:55
you could say, okay, well, why isn't it really used?
52:57
Well, at the end of the day,
52:58
again, nobody really likes to be told what to do.
53:01
Here's your task, wake up,
53:02
wake up, all these things.
53:04
And so I think DriveCentric's approach to this was,
53:07
let's make it fun to use DriveCentric.
53:08
Let's make it engaging.
53:09
And then let's wrap AI
53:11
so that when things slip through the cracks,
53:13
the genius product can handle it 24 hours a day,
53:15
seven days a week to say, we're always on
53:18
and we're always helping.
53:19
So if something isn't being done,
53:20
so when we call out sick
53:22
or somebody is not doing what they need to do,
53:24
you've got a co-pilot with you.
53:26
So now you've got a fun product to engage with
53:29
that people want to engage with
53:30
that's not telling them what to do,
53:32
but advising them, suggesting them,
53:33
interacting with them to help them sell more cars.
53:36
But then also a safety net,
53:37
which is you've got an AI tool sitting right next to you
53:39
that can help you either graph that text, send the text,
53:42
send the email, draft the email,
53:44
but also do it if you just want an auto on
53:47
or a marketing and automation product
53:49
that can do all the marketing for you
53:51
if you want to turn that on.
53:52
And if you don't, great.
53:53
We just, you will partner with whatever vendor
53:56
you want us to partner with to help you on that side.
53:58
But I think that's the core history
54:00
of why a lot of these legacy CRM so painful to use.
54:05
We've made it painful from the 80s and 90s.
54:07
We didn't simplify it for them.
54:09
We didn't eliminate the pain point,
54:11
which was nobody likes past.
54:13
So it requires history.
54:14
The lesson of history requires a rethinking of it overall.
54:18
That's part of your strategy of this,
54:20
with this alliance between drive centric
54:22
and automotive mastermind.
54:23
You've talked a little bit about the roll out
54:25
and timeline, NAD is your big,
54:27
big goal to make it completely functional
54:29
and available to everybody.
54:31
When you think about,
54:33
when you've been candid about changing perception,
54:36
some people still think drive centric's a walled garden.
54:39
What would you say about that?
54:41
Yeah, I mean, I'm really working hard on that.
54:42
I mean, we get 15 or so partner integration requests
54:46
coming in a week to open up into our open API platform.
54:50
So if you're a vendor listening to this
54:52
or want to integrate with us,
54:53
just go to drivecentric.com,
54:55
go to our partner program, sign the form
54:57
and say, here's what I want to do
54:58
is my use case and my business case
55:00
and we will prioritize and get to as many as we can.
55:03
We're focused right now on lead data,
55:06
consumer data, household data, vehicle data.
55:09
If you're a provider that provides that
55:11
like a mastermind out there,
55:13
we need that flowing into drive centric.
55:15
We absolutely aren't a walled garden there.
55:18
I think where the walled garden concept came in is,
55:20
well, I want the data to flow out to ABC application,
55:25
which is a bolt-on to a CRM on the traditional side.
55:29
And when I think about that, I say,
55:30
well, yes, there are use cases
55:33
we want the data to flow back out to,
55:35
especially things like agencies, et cetera.
55:38
But those ones we're gonna have to work through
55:40
and figure out what is sort of in the realm
55:43
of something we already can do
55:45
and you're now breaking a process
55:46
versus something that is truly unique and different
55:49
that we do need to feed the data back into.
55:51
In a case like mastermind,
55:53
we're enhancing their product
55:54
by feeding back some data to help with the algorithms.
55:58
And those are the types of partnerships
56:00
we're looking to build out rapidly.
56:02
And yes, we're trying to get this rolled out
56:05
In fact, we have something already with private offers.
56:08
Mastermind has partnership programs through PULC
56:11
that work with the OEMs to help them optimize
56:14
their incentives, Audi, Mazda, Volkswagen dealerships.
56:17
These are optimized incentives
56:19
that are being powered by mastermind.
56:21
Well, that data and those incentives
56:24
can flow directly into an operational tool
56:26
like Drive-centric.
56:27
We're already in production testing that out
56:29
with those types of OEMs.
56:31
So a lot of this will be out well before NADA,
56:35
but we're on the cusp of announcing several more
56:38
partnerships and strategic partnerships
56:39
because that is definitely one of my main goals
56:42
as CEO here is get as much data flowing in
56:45
to centralize it so that I can ultimately get
56:47
to my goal of eliminating some of that tech stack
56:50
and that burden and then driving
56:51
the full end to end opportunities of a dealer.
56:53
So Matt, as we wrap up here, two questions.
56:56
What do you want dealers to walk away with?
56:58
But also from a practical standpoint
57:00
and thinking about a dealer sitting in a dealership
57:03
on top of a CRM trying to figure out how to maximize it.
57:05
What advice would you give to dealers today
57:07
in September of 2025 for bettering?
57:10
And maybe it's not even on your product,
57:13
but just bettering their CRMs,
57:14
they'd better serve their customer.
57:16
Where does automotive get it wrong today
57:18
and what could they do better in?
57:21
This is unfair because like in a minute,
57:22
minute and a half most.
57:24
So the second part of your question is,
57:27
what do I think dealers get it wrong on it?
57:28
Is they're looking at it from a traditional ABC
57:31
of this is what a CRM does and what it's supposed to do.
57:34
And I think we have to break that mold.
57:35
It's only for a salesperson.
57:36
I think if I can get dealers to think DriveCentric
57:39
is innovating, investing,
57:41
but also this shouldn't end with the sales team.
57:44
You got to go into F&I.
57:46
You got to be able to desk it and move it
57:47
and have that engagement moved over.
57:49
You got to get it into service.
57:51
The engagement doesn't end in a life cycle of it.
57:53
So if I could get dealerships to think DriveCentric
57:56
is investing, they're opening up,
57:57
they're growing and they're on the cusp of innovation
58:01
because they think of the CRM and the engagement of consumers
58:05
as not just starts here, ends here.
58:07
It doesn't really make sense.
58:08
And our vision is where the engagement platform end to end.
58:11
And that's what I'm hoping people can take away from this.
58:15
Matt Leone, CEO DriveCentric.
58:16
We appreciate you being on the show,
58:18
sharing your perspectives and making your big announcement
58:20
on the partnership that's up and coming
58:22
between DriveCentric and Automotive Mastermind.
58:24
Thanks for being on the show.
58:28
You know, it's an interesting convo.
58:31
We don't use CRMs to the full extent.
58:35
And it's going to be interesting to see
58:37
as AI becomes more prolific as we see more of it out there.
58:41
Like it is going to evolve.
58:43
It's going to become better.
58:45
And what do we need to do today to become better with that?
58:48
I mean, it is an interesting, it's interesting.
58:52
We should have called today Ninja Day.
58:53
You had two execution ninjas.
58:55
One guy was the CEO of a company
58:57
and left to be the CEO of another company
58:59
so he could integrate with the first company.
59:01
Yeah, you know what?
59:03
One of my favorite comments on Jeff
59:04
and why he is a ninja and why Subaru,
59:07
what he's built there.
59:08
You know, I'm familiar with that marketplace.
59:11
And it's, I didn't want to say in front of him
59:13
because like those two, those three,
59:16
he has two Subaru stores.
59:18
His competitor had one or two.
59:20
Like they're just juggernauts.
59:21
They weigh out from their competition
59:24
in any other franchise, any other model.
59:26
And I thought about what he said.
59:28
They've done a great job of banding together
59:31
as Subaru dealers and selling a higher percent of Subaru's
59:34
in that market than the market probably should sell.
59:37
And Subaru has a great name in that market,
59:40
not because there's mountains,
59:42
but because they've built that brand there.
59:45
And you know, I think it is a little bit
59:48
of a masterclass on how to do that,
59:49
how to align as it comes and output your competition.
59:53
Well, that wraps us for today until next Friday.
59:59
And for our entire daily dealer live audience,
00:01
thanks for watching us,
00:03
where we break down the biggest moves
00:05
in the car businesses they happen.
00:06
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00:08
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00:09
and we'll be back on this Friday.
00:11
So if this is your world, hit like, hit subscribe,
00:14
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00:17
We'll see you next episode.
00:18
Thanks for being here, everybody.