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"The Breach Is Coming!" The Vibe Coding Security Bomb Hidden Inside Your Dealership (& What Every Dealer Building AI Tools Needs to Know) | More Than Cars
"The Breach Is Coming!" The Vibe Coding Security Bomb Hidden Inside Your Dealership (& What Every Dealer Building AI Tools Needs to Know) | More Than Cars
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About this episode
Dealership marketing gets called “the most over talked about under resource department,” with hosts arguing that high ad spend and weak conversion are symptoms of deeper funnel and creative problems. They connect brand, website UX, and staffing realities to lead costs and customer experience. Then the conversation pivots to AI tooling: dealers should build a resilient, documented knowledge graph—but “I am also very, very afraid of it,” warning that leaked API keys, weak showroom-floor password hygiene, and cloud AI usage can create breach risk.
Today I'm joined by Paul J Daly and Kyle Mountsier, Co-founders at More Than Cars.
Paul and Kyle break down exactly how a single exposed API key can hand a hacker access to an entire dealer management system, why dealerships are uniquely at risk given the volume of sensitive customer data they store, and what the best operators are doing to build securely before the first major breach hits the industry.
Topics:
00:25 Dealerships' Most Under-Resourced Dept.
02:40 Why Auto Ads Are The Worst.
04:50 The $734 Symptom Dealers Ignore.
09:50 How One Dealer Cut Ad Cost By $200.
18:10 The Widget Killing Your Conversion.
24:25 Lost 50% Of Staff, Sales Soared.
27:45 The Knowledge Graph Every Dealer Needs.
46:10 Rebrand As A Hospitality Business.
This episode is brought to you by:
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Filter:
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Technical
Too Afraid to Ask
Term
CDP
"But the reality is is right now, whether it be a or any company that's trying to do do business on behalf of your business, right? ... trying to figure out segments in your CDP"
CDP stands for “customer data platform.” It’s a software system that gathers customer information from different places so a business can target messages more accurately.
CDP usually means “customer data platform,” a system that collects and organizes customer data from multiple sources (website, ads, CRM, etc.). In a dealership context, it’s used to support marketing segmentation and personalized communication.
Term
titling process
"It needs to understand how you answer questions on the showroom floor, how, how your back office works when the titling process happens."
The titling process is the legal paperwork flow required to transfer vehicle ownership from the seller to the buyer. Dealership AI needs to understand it because questions and next steps vary by state and by the deal structure.
Term
value, evaluate trades
"It needs to understand how, how, how you, uh, you know, value, evaluate trades."
When you trade in your old car, the dealership has to figure out what it’s worth. That “trade evaluation” uses things like the car’s condition and mileage to set the trade-in price.
“Evaluating trades” refers to how a dealership assesses a customer’s current vehicle as part of a new-car deal. It typically involves condition, mileage, options, market pricing, and payoff/loan status to determine the trade-in value.
Concept
hierarchical structure of your dealership
"It needs to understand that your, your, your hierarchical structure of your dealership so that, you know, if it's recommending the best path for escalation, it knows all of that."
Dealerships have an internal chain of command—who answers what, and who takes over when something needs escalation. AI needs to follow that same structure so it routes questions to the right person.
A dealership’s hierarchical structure is how responsibilities and approvals are organized—who handles what and when issues must be escalated. For AI, this matters because “best path for escalation” depends on internal roles, workflows, and escalation rules.
Term CDP
1 mention · 28:15Term titling process
1 mention · 28:37Term value, evaluate trades
1 mention · 28:44Concept hierarchical structure of your dealership
1 mention · 28:49
Dealerships' Most Under-Resourced Dept.
Why Auto Ads Are The Worst.
The $734 Symptom Dealers Ignore.
How One Dealer Cut Ad Cost By $200.
The Widget Killing Your Conversion.
Lost 50% Of Staff, Sales Soared.
The Knowledge Graph Every Dealer Needs.
Rebrand As A Hospitality Business.
Select text to request an explanation
It's going to be massive.
And when it does, it's going to be the wake up call.
What?
We don't have it to be a dealer.
A breach.
Paul J. Daily and Kyle Mounts here on the CDG podcast.
Gentlemen, welcome.
It's so good to be here.
Thanks for having us.
How do we feel about dealership marketing nowadays?
You guys are the marketing guys.
I want to know how do we feel about it nowadays?
What is the state of dealership marketing?
It's the most over talked about under resource department
in the entire operation.
Kyle's going to give you a lot of vague answers like that
throughout this interview.
We're not going to let him off the hook.
We're not going to let him on the hook.
What does that mean to you, Kyle?
So what's so interesting to me in retail auto is that
every conference you go to, every LinkedIn post,
every single thing is targeted around the marketing effort.
We talk about CDPs, marketing automation platforms,
what the marketing tools are available, the communications,
CRM, everything is the communications are all around marketing.
Yet the decision, the hand, the bag is held by someone
that's full-time job most often is not that, right?
And so we put so much energy around customer acquisition
or customer life cycle marketing in the communication
within the industry.
But then we put one person in charge of 13 rooftops
to handle 100% of customer communications,
content creation, managing the internal teams,
the internal communication.
How do I reset my Facebook password?
And they become like de facto IT.
That's what I'm saying.
Yet we've got 10, 13, 15, 20 salespeople sitting on the floor
selling still an average of 10 cars a month.
Now there's some great dealers doing more.
And we're essentially saying, hey, look,
we really actually don't know what's going on in marketing.
We're only going to attribute one person to that
when they ask to hire someone to support them.
We're going to say, no, that's an expense we can or expense,
but we'll go hire two or three more salespeople
to try and hope that they can squeeze more out.
Squeeze more out.
Wait, so you think that it's a marketing issue,
meaning when you say under investing in marketing,
like I would argue we're investing everything in marketing,
all the resources, all the time, all the capital,
and like you said, all this technology.
The capital and technology and paid media.
But not the people.
Google and Facebook are getting rich on our industry
and we have pinned them as like not a third party,
but like they love our industry because we're overpaying them.
Our ads run the worst out of any industry
outside of law firms in the world.
What do you think is like that?
So our cost per acquisition is some of the highest in the world.
Our conversion rates are the second lowest
in the world of any industry
that is looking for a conversion on a site.
We like literally pay for Google and Facebook per capita
to be able to exist.
There's a saying by like venture capitalists,
which is that sometimes they just wonder
if they should just take all their capital
and then just invest it into Google or Facebook
because it's like 30 cents of every dollar
that gets invested until start off.
It's the tax.
Bunch of capital allocated into the marketing budget, right?
But it's unstructured capital.
It's not well balanced
and we don't understand what it's doing
because we don't put the people in the places
to be able to manage that capital well.
And so it gets mismanaged not by fault of the person
or one or two people that's involved in it,
but because they're under trained and under resourced
and under capitalized by person
to handle the volume of marketing budget
that we're shoving through all of these third parties.
So we have a couple of questions and technical stuff
and then let's go back to the thematic.
But you mentioned we are spending the most.
We pay the most.
I couldn't make the argument that's because
the customer acquisition costs on a vehicle
or like what does NADA say?
It's like 700.
700 big parts, 734 bucks.
So that's also higher than most other goods in the market.
So it makes sense to spend more.
But then the second thing you said is
we have the lowest conversion rates.
Why is that?
Why does it have to be so expensive?
Right? Why is it because it is?
Well, I think that accepting that number,
that's just what the cost is.
Cost of acquisition is high.
But cost of acquisition is only high
because the investment in retention
and brand building is extremely low.
This ties back to having a well rounded strategy
because you have the funnel and people come in market
and they go on the top of the funnel
and no one really pays much attention
because our funnel, we're thinking like,
oh, well 90 days, right?
The consideration matrix.
And then when they come out the bottom of the funnel,
everyone spends and they're competing
and overspending on one another
to get the little lead that drops out of the funnel.
And that's why it costs so much.
People are under investing in the broad sense
of like what is marketing?
We have to tie that in what is brand building?
What is a retention strategy?
How are we cultivating those relationships before
and after and during the life cycle?
So the fact that we don't invest in those things
because we have enough money as an industry
to throw more at the bottom of the funnel.
And we do.
And it's easy.
I was just telling you guys before this conversation,
I think it's relevant to bring up
about the conversation I had with a dealer
regarding they said, hey, like they're essentially,
if I had to distill the question is they're trying to identify
their ideal customer profile, right?
They're in a new market and like, do I advertise offers?
Do I advertise convenience?
Do I advertise price like all of the above
or whatever it may be?
Or, you know, is it a subprime market?
Do I advertise financing?
How do you guys think about that?
Like how do you think about identifying the real ICP,
ideal customer profile at a dealership
beyond just like, hey, I've been operating here
for five years and like I'm using my gut feel.
You've worked with any dealer.
Is there like a systematic process
or how would you go about doing that process today?
You have to start with who you are.
Like what's the persona of the operator, the owner,
the vision of the operator, the owner and the people inside,
right?
Because an ideal customer profile typically comes from a vision
or a resource that you have internally, right?
So, interesting.
So you're saying like lean into your strengths.
Right, exactly.
Like, what's your trajectory?
Forget the market, but like lean into your strengths.
And I used the example in the past of, you know,
like Rick Case Auto, Rita Case,
where they really lean into the philanthropy
and just again, experience.
And that's, they were always marketers.
So they lean into that.
It was never like, hey,
Fort Lauderdale is a great market
for this specific type of experience.
It was, hey, this is my personality.
I'm going to bring that to the world and, you know,
just be great at it.
Yep.
If you try to start from a different position
than what Kyle just said,
you're constantly going to be fighting the who are we question.
That's right.
Because it's now a variable that depends on who you're trying
to go after at the moment.
So I think that puts any business in a dangerous place
because a brand is, I mean, everyone thinks like,
well, what's our brand?
It's our vision, our mission statement.
It's what we believe.
I actually think that the brand is actually just a mirror
that reflects your values back at you.
I agree.
And so it's, if I know my who I am
and what kind of mirror I want to be,
I'm going to attract or repel the ideal customer,
naturally speaking.
So you have to start.
Yeah.
The cleanest example of this is wanting to go after a people
group that speaks a different language, right?
Whether this be a Hispanic people group or anything, right?
If you try and set up all your marketing around that,
and you're like, we are so good at marketing
to the Hispanic market in Miami, right?
And then 100% of your staff only speaks English.
You're screwed.
Yeah.
It's inauthentic.
Yeah.
And so that that maps across a lot of different mediums.
So look, if you've hired a whole bunch of moms, right?
You think your customers are going to start talking to moms,
right?
If you've hired a whole bunch of white dudes in their 40s
to sell cars, probably going to be great at a bunch of it.
Now, you're going to get edge cases, right?
But how do you set up everything around like how you can
operate as a store?
You know, a great example.
This is Marysville Toyota.
Yeah.
Jim Collins.
Why?
And well, because they, their staff across the dealership,
more than 50% female, they didn't do that intentionally.
They try to have a very diverse workforce because they're
just like, hey, we have to represent the community.
Okay.
And so they do, but because their dealership is 50% female
across all disciplines, because it is their customer base,
strangely enough, is majority women disproportionate to
the other benchmarks, other stores like markets.
That's interesting.
And we're having a conversation about growth.
And my suggestion was like, well, why don't you just position
yourself as the best place for a woman to buy a car?
Because if your sales target is X, you know, there are at least
that many women many times over in this market for a car.
And if you just own that market, you would accomplish your goal.
So you're saying from like actual advertising.
Do you imagine?
And then you lean into that.
You have like, you know, you have quarterly events where
women come in and, and, you know, all the things.
How to keep your car.
How to keep your car.
How to be safe on the road.
How to install.
Has anyone graphed like, has anyone ever graphed, you know,
50 positionings that I think we're about to that a dealership
could take?
No, because here.
So let me take the other side of this, which is I'm listening
right and I just expanded a new market.
I just purchased stores underperforming.
I want to grow the store.
Maybe it's a, it's a, I'm dealing with a brand that is just,
you know, heavy, heavy concentration.
It's a dime a dozen.
We're not talking up to you at a store talking a more mainstream
brand where there's many competitors.
So maybe I want to go heavier used.
The question is my skill set is me, my value.
I'm great at logistics.
I'm not good at marketing.
Hypothetically, right?
We're like, what do I lean into?
Right.
You just gave an example of leaning into a demographic
or like a person, the people, which I think that's a great
authentic way to do it.
But it is a question I have.
Who needs logistics, right?
Who out there needs logistics?
Well, I need logistics.
I'm a, I'm a at home business owner that works night and day
all day, every day convenience.
I like that.
So I need convenience.
So I'm going to go after all buyers that need convenience
because I'm great at all of the logistics that it takes to
make them feel like I'm the most convenient option in their
life, right?
Okay.
So here's another.
So the dealership group that I came from when I left the
last three years was dedicated to single, single point of
contact, one price.
And there were multiple people, especially the people that
were like marketing agencies that are around us.
They were like, well, aren't you going to cut out all the
people that want to negotiate?
We're like, yeah.
And that's totally fine, right?
Because we need to go from selling 140 cars a month to 200
cars a month.
So all I needed to go with fine was 60 more people a month.
Did it work?
That didn't want to do for you?
Absolutely.
Cause I know a lot of dealers.
I've tried and I sold by 200.
200 bucks from like what market was that in 20s?
Just outside of Nashville.
What brand?
Mazda.
Mazda.
Interesting.
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I know, yeah, it's very, you know, many dealers have tried
over the years.
Some have, you know, gone back some have stayed.
I know Subaru is really pushing hard for their dealers, but
it's a point of contention.
But that's a good example of at least one way of positioning
that could work.
I mean, I like the logistic like if I'm good at logistics,
again, positioning convenience.
That's a pretty broad stroke.
Yeah, because you know, you and I were just talking about all
the work that our wives do to manage the logistics of a
household and a lot of kids.
So a logistics person could very easily appeal to a busy mom
who is just, you know, holding the kid and like making the
thing and try because what do they want convenience?
I don't want to have to think about it.
I want it to just be done.
That'd be nice.
If one thing in my life was just done for me.
Yeah, yeah, but like imagine also you've got a car like
let's say the dealer loves to be in commercials, right?
And it's just that's not we've never seen it.
Hypothetically, imagine there was a dealer that like big
commercials or GM.
Let's just imagine that like like it might happen one day.
But imagine you've got that and and like is just overly
excitable, right?
Like just you got to come in.
This story is further and further from the truth, right?
I mean, we've never seen this before, but then like you hire
a whole bunch of people that are just like, you want to buy a
car today?
Yeah.
You know, like that's the ethical marketing persona.
Do you feel like there's like a disconnect between what you
see in advertising and experience, right?
It's it feels like it's in many times is very cookie cutter.
Some of the dealerships that I'll perform are much more creative.
By the way, we haven't even spoken about interest graphs
versus social media, which I'm sure this is like we'll talk
about what that I'm just talking about like organic.
You go on Instagram today.
You can have zero followers and get a million views because
it's an interest graph, right?
But it may drive business.
It may not drive business, but but the point I'm trying to make
is that we are in a world that has shifted like almost entirely
to interest graph.
The only social media remaining is actually our like phones
and group chats.
Think about it.
You know, personal.
Yeah.
It's very personal.
Everything else is you see anything is served to you.
That's like it's like a television.
I don't know that person.
I don't even follow that person and I didn't after I saw the
thing either.
Yeah.
I'm just often to the exact so let's start with talking about
the disconnect that you see from actual advertising to experience
like bridging that gap.
I just think that's you see so much cookie cutter advertising
out there still to this day.
Just go on 10 websites right now and look some dealers.
I've heard a lot of just complaints on you know, all we
have restrictions and I have to use this website which only
lets me, you know, use this type of graphic and there's
obviously some friction with the OEMs and mandates.
But how do you think about there's still some flexibility
though?
There's a little plenty of flexibility and there's dumb
decisions that we make all the time because we bought something new
or we didn't understand that that that thing doesn't look like
the rest of the things on the website, which is not the way
that you experience the rest of the world.
Reality is the 734 dollars cost per car sold on new cars that
NADA talks about is it's awesome.
That's a symptom.
That's a symptom of things like producing bad content, right?
Because when I look across the rest of the world, when they
look at cost per acquisition, they are constantly balancing
content versus acquisition mode, right?
Landing page, efficiency, conversion flows.
Like you even think of like the whole business of click funnels
that we don't even consider in our industry, right?
But it is simplistic landing page with clear calls to action,
clear value propositions without a lot of noise so that I
can get someone all the way into my funnel very quick, right?
That's the whole business proposition of click funnels and we
don't think about that.
So and then and then you think about the creative, right?
We overspend on marketing because our creative isn't relevant
and personalized for the audience that we're talking to, right?
So, you know, you think about these big brands and I get that
they're big brands, but their commercials that they run on
ESPN are totally different than the commercials that they run
on CBS, right?
Most of the time or the commercial that they're running in,
in, you know, OTT because they know that the cost of acquisition
is highly dependent on the content model that they're driving.
Yeah, the worst the content is the higher the ad will call
it an ad tax.
Yeah, it's an ad tax and more money.
If I want, that's a great way to frame it.
Yeah, you look, but you think about it from a platform standpoint,
right?
Like Instagram's job is keeping on the platform.
So it has to show you things that you're interested in, right?
Even the ads, if it shows you better ads, you have a better
experience, period.
But from there, they're like, hey, if we're going to, if we're
going to run this garbage and waste your time on it, like it's
going to cost you more before you convert because you're just
swipe, swipe, swipe, swipe, swipe.
So it's in there.
They want you to spend more because if your ad is bad, if
your ad is good, it's good for them.
It's good for you.
It's good for the consumer because it's like an entertainment
experience too.
You're talking about website uniformity.
It's like, but let me do a little, let me do a little weave
here for a second, right?
So we talk about this focus and I think about this a lot because
you know, people all time come to me with like, propose, hey,
let's launch like a consumer website together and this and
that.
And I'm like, not interested.
Not interested.
Like have my lane, don't want to deviate from a lane, have had
prior experiences in prior businesses where I deviate it from
a lane, did not go well staying in my lane.
Yeah.
All right.
So that's my little anecdote on staying focused on one specific
target, you know, know our core audience, yada, yada, yada.
Okay.
Which is interesting because you started kind of CDG was like
consumer facing the most mainstream thing in the world.
It was.
And then you like the most mainstream.
You couldn't be more mainstream than in the beginning.
Right.
I know we really changed, but you found your, you found the
target and the area which felt authentic to me and interesting
to me because if it's not interesting, I can't do it for
many decades.
Yes, I'm going to burn out and I was to be bored, right?
Website uniformity.
So now let's go to this.
I think it's still, it still plagues websites where you see
all these like you mentioned, like at the end of the day, a
widget from another vendor is going to compete with another
widget, right?
They all want the real estate on your website.
They all want usage.
I'm going to want it to be bigger, bolder colors and you
know, I'm going to want my widget ultimately delivering value
to you in some way.
Right.
Didn't keep it.
It's going to hurt the aesthetic of your website eventually,
right?
When there's enough of these things.
So how do you think about uniformity?
Where's the balance of, Hey, let me add another widget.
This will add this, this will add that, but it's not fully
tailored to me.
It's not going to be perfectly my color necessarily.
Like it's going to break some of that uniformity.
Like how much does that really impact conversion?
What do you think about that?
Oh, it massively impacts conversion at its simplest.
I go always back up, bring up and you can pull it up and it's
a brain games episode.
Wow.
So back in, I don't know if you ever watch brain games like
early 2000s, 2010 ish and they did an episode where basically
they, they hooked up a bunch of people to like an anxiety
monitor, heart monitor and gave them two options.
Like you can pick the store with like 22 different ice creams
or you can pick this ice cream shop with chocolate, vanilla
and strawberry.
That's, that's your first option.
Everybody was able to choose very, very quickly.
It was like either there were people that went with the many
options or because there's two options, right?
Immediately they then zoom you in and go, all right, now pick
which ice cream you want, right?
And the anxiety and stress level of the users that were given
the 22 options was significantly higher than the ones
with three, right?
So when you start like creating anxiety out of popups or,
or color variants or button variants or, you know, the
inability to understand the context at which you're making
a decision with, right?
I see, I see SRPs on dealer websites all the time, we're
like, you scroll and you have like a block of call to action
buttons and you can't even see the car anymore, right?
So like, what's the context by which you're making a decision
to say I want to take an action on that right now?
All of those types of things, the speed at which the website
loads, the cleanliness, the on brand, we talk about a tax on
brand, a tax on brand is, is I don't even know where I'm at
anymore, which is the reality of so many of these deal of these
websites is which am I on a Mazda website?
Am I on a Nissan website?
Where am I even at?
Because I can't focus as, as a user.
So why, so what have you seen like the best dealers?
What have they, what are they doing?
Because obviously there's dealers out there, 50% of dealers
are outperforming the other 50%.
So they might say, I think I'm pretty good shape, right?
It's working inevitably.
Well, like, what do they do?
Do you call your website company and hey, remove that?
Like got a test or?
It's not a simple answer, right?
Yeah, because it is multifaceted.
You've got to look all the way through the ad channels all
the way down to the, the, where the cheese is, right?
Where the mousetrap is, but at its simplest, right?
Everybody, I'll never forget the Carvana website came out.
Everybody called their web vendor.
It was like, I want to carve on a like website.
Everybody did it.
I was just thinking about Carvana, right?
But you go on Carvana.
You got any buttons on the search results page?
Nope.
How many buttons are on the VDP to how easy it is to
understand what's going on, how clean the layout is.
It's all flat on the page.
There's not like chat popping up at you every, every two seconds on
the, actually, this is the most crazy part.
If you go to Carvana homepage and you can get to new cars
now, right?
Even on their new car sites, which are have you are complaint.
Yep.
It's a logo and three single click buttons in the header, not
like drop downs to the 18 different things that you could
possibly try and figure out whether it's like shop service
finance or trade.
I think is the third one.
I just looked at it two days ago.
And if, so if you want that level of conversion,
convenience, that level of market adoption increase.
So you're saying just give me the Carvana UI and I'm good.
Very similar.
I bet if you tested that, right?
You said, should you be testing?
If you tested that, I think it'd be very quickly clear.
Which one was how many times have website vendors heard that line?
Give me the Carvana UI all of all and do they have already
like and then like three months later, three months
later, can you put this widget on my site?
Bingo.
But arguably that widget is going to help my conversion, right?
In the short term, in the end, well, you have a conflict of opinions.
Usually what should be on there?
Do you have different people fighting for different interests?
So it ends up like, let's put them all on there.
But I also think the industry is usually driven by a 30 day cycle.
What are, how do we, how do we feel this week?
Right.
So true.
Right.
And that you can never execute a broad plan or even execute broad testing.
If it's how do we feel this week?
Leads are down.
Foot traffic's down.
Let's some salesman was just in here saying like, here you go.
This widget actually did this for that dealer.
So you're like, let's try it.
Hey, remember that Carvana thing?
Yeah.
Put this widget there too.
And now this widget and that's where we get.
I've talked to all the website providers.
They've run the tests.
Mm hmm.
They know that if you use on board fewer options, they like have
the data studies on it.
I mean, like long-term thinking with conviction.
Yeah.
Not like it has to, everyone has to know there's follow-through going,
going to happen as well.
It has to come from the top.
And you said the 50 and the 50 percent, everyone has to decide
what level they want to be on.
And if they want to be in the top 10 percent, that's a vastly different
level of commitment.
Then I can, I'm happy with the top 50 percentile because that's
when you start talking about, are we willing to make very hard
decisions that are going to disrupt the norm that, that are going
to make people upset may even mean I have to replace some people on
the team who can't get on board with it.
So I think that's, it's a measured conversation and I think
comes out of the, to the leadership, to the people and their ability
to cast the vision for it and see it through to results.
They have to get the people to the promised land enough so people
are like, I see this.
I mean, I watched this happen.
You and I mutual friend Todd Caputo.
I was a part front row seat.
A hand in switching him from a legacy, you know, negotiation heavy model
to a one price model.
What happened there?
I lost 50 percent of his staff.
And what happened to sales?
Um, they went up a lot and his cost of marketing went over what time
period to go up.
I'm going to say it was very obvious within 90 days.
What happened to his margins?
I went through the roof.
His cost of marketing per car went down from like 500 to like 200.
So why did his margins go up?
Cause CPM went down or because because gross profit went up or one
of his GM said this to me.
He's like, I've never seen what happened on Saturday happened
before because their leads actually went down, but their conversion
went up floor traffic was through the roof.
He goes, I've never seen people just show up like this when it was
one price for his one price and they focused on brand marketing.
It was son auto group simple upfront.
Nice.
And so the brand, the whole brand messaging was around.
How do we make this simple?
You come in, right?
We have a process.
We follow is all upfront.
It's all in front of you.
It's upfront.
Here's the price of the car.
There's no negotiation.
Here's what we did the car.
Here's the reconditioning here.
The guarantees and nice.
He focused on his facilities training his people to be hospitality
mind on that value proposition.
They weren't, they come by all these cards cause Todd, Todd is the
excited dealer and I, I like watch 10 years worth of Todd Caputo
infomercials him and Kaylee marching cars by every morning.
Can't be like, oh, we have, and his strategy was like, you know,
we have a hundred, the other dealers in the area would call
him the, the rental car king, not the used car king because he
would just, we have 120 in Palace.
Remember those 120 in Palace.
They have between 28,000 miles and 45,000 miles on it.
You can pick anyone you want, 1499 and that was Todd.
He decided to stop and then they would negotiate.
They would upsell, they do all that stuff and he said, we're
going to sell one price.
That's what people want.
They want to know what they're getting and he was ahead of
the current big time.
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Yeah, and it doesn't have to be one price.
You're giving one example.
It does not.
It does not have to be one.
Yeah.
It's in the Syracuse New York.
That's it worked for his market.
But negotiation can work too.
Because maybe you look at Patrick A.
Bad and Beaver Toyota of coming.
Yeah, they negotiate and you've never seen people happier to
do business with a business.
I mean, drinking a beer on the showroom floor sign and paperwork.
It's unbelievable.
Really?
Yeah.
Oh, yeah.
Not even a joke.
Wow.
I believe it.
I wrote this other phrase down that you said this was before
record, but you're talking about like knowledge graphs for
the dealership.
I was dying to ask you what that means.
But I ask you now like, what does that mean?
Okay.
So like, and you understand this because I know some of the
stuff that you're doing with AI internally.
But the reality is is right now, whether it be a or any company
that's trying to do do business on behalf of your business,
right?
So anyone that's communicating with your customers needs
context as to how you communicate and the greater the use of
AI, the faster we can consume context.
The problem is, is I don't care if you're like doing AI chat
phone calls, uh, trying to figure out segments in your CDP
communicating via marketing and building content with any of it.
You have to understand the entirety of the dealership and
that's not just like, what hours are you open and what vehicles
are available because that's very easy.
The AI does or?
Yeah, the AI needs to, right?
It needs to understand how you answer questions on the showroom
floor, how, how your back office works when the titling process
happens.
It needs to understand how, how, how you, uh, you know, value,
evaluate trades.
It needs to understand that your, your, your hierarchical structure
of your dealership so that, you know, if it's recommending the
best path for escalation, it knows all of that.
And so my contention right now is that every single dealership
should be building a very resilient documented knowledge
graph of their entire dealership.
That means standard operating procedures, job descriptions,
uh, you know, roll hierarchies across the entire pipeline of
the dealership and putting into the database.
That's easily accessible.
Deership thesis.
So.
Mission, vision values.
Yes.
First of all, uh, we, you mentioned, ooh, so what we've done and
I'll, I'll, I'll show how this can kind of port over to the dealership.
But what we've been doing now is we have been, we started by doing
this initially, right?
Well, okay.
Let's like document.
But then we said, wait, if we're already documenting, why don't
we just throw a little user interface on this?
And before we knew it, certain things that we do on a daily
basis, we had actual dashboards for them all done using AI,
like, you know, cloud code and all these things.
I am, you know, one engineer, like this isn't like a crazy big
investment or anything.
And now what we're doing, um, is we're essentially what we're
building, what's called like CDG hub, which is where we've said,
wait, so if the editorial team has this tool, the sales team has
that tool, the content team has this tool, why don't we just put
it all together in one place so that it has staying power.
It lives beyond, you know, there's one person using it.
And by the way, we can now share the information across departments
so that if, you know, if, uh, the content knows this outperformed,
it talks with editorial and editorial knows, Hey, we need to
do a follow up piece on it.
Like you get the point.
So when I think about a dealership doing this and starting to work
with the different, uh, people in different departments, I wonder
like if isn't wooden creating, like creating that knowledge
graph that you talk about, how does that actually work?
Is that, does that, is that a companion to my DMS or like, what
actually happens here?
Are we talking, so am I building another tool?
Am I replacing a vendor?
Like where, where does the world go from here?
Cause listen, every, you know, there's every cutting edge dealer
we know, every, the smartest ones in the industry are doing stuff
that the average dealers will do in three to five years, if not
less, and you know what they're doing today?
They're all building their own stuff in house, not in replacement
of the vendors.
I'm saying in addition right now, at least right now, they're building
their own stuff because it's tailored to them.
Yes.
It's tailored to them.
Yeah.
So to that point, for sure, the DMS, the CRM, your marketing
automation platform, your CDP, if you've gotten that farm built
that already has structured data that there might be arguments
like, oh, the DMS is messy.
The CRM is messy.
Yeah, it's messy, but like there's already great structured data in
there, your service drive, all of your transaction data.
It can be structured, de-structured, put piece back together.
What we don't have is everything that's offline, right?
Everything that you can't consume just by the structured data that
we already have, right?
This person reports to this person and this is their daily activity.
These are their daily activities that happen offline, right?
And or that happen in the interpersonal relationship of working in a
retail environment, right?
The beauty of what you do, what we do even is like 90% of our activity
online is online, right?
90% of a dealer's activity is offline because it's-
How do you capture that in combat?
That's what you have to document.
You have to, you need to put someone in place that is like rabid about
documenting every aspect of your business in the structured document
format.
Okay.
Let's see you did that.
Let's see you did that.
Yeah.
Then what?
I have it all, all documented.
Now what?
So hire a developer to wrap all of that knowledge graph.
If, well, you could very simply put it in like a server, like a notion
or a, or a slight, or there's a few others that are like that and a lot
of SaaS companies use them, right?
And they wrap them in what's called MCPN points out of the box.
So then you could tell your 10 billion communication platforms that are
all doing AI communication for your service, sales department, all of
that to go hit those MCPN points.
Oh, you want to know about my, we're doing service communication.
Here's the five service endpoints that tell you exactly what, what my, my
standard operating procedures and my, and my user hierarchies are in, in
my dealerships so that you can clearly communicate that when you're on
the phone with these people.
So that the communications are crafted, not just around like the way
that they built their little AI thing to understand generally dealership
service, but it's unique to you, right?
So wrap that in MCPN points and, and give authorization to those MCPN
points based on the type of provider that's coming because I love the
dealers that are building their own stuff.
I think it's really cool.
I am also very, very afraid of it.
Extremely afraid of what?
Like technical debt?
Uh, security.
Security.
Say more.
Uh, I said this to you earlier.
I didn't, no, I didn't, you did say PII, but I didn't expect you, I didn't
expect that you would say security risk.
I'm curious like what, what specifically like comes to mind.
Yeah.
It seems like both of you guys were aligned on that too.
Did something like happen in the industry or like why is that top of
mine?
I think everybody who is like paying attention to this level is waiting
for the first thing to happen.
It's going to be massive.
And when it does, it's going to be the wake up call.
What we don't have to be a dealer.
A breach.
Somebody into like a vibe coded tool that a dealer is using.
Absolutely.
Which could be a gateway into everything.
If you expose the API keys or the service accounts that you're logging
into your Reynolds data with, right?
Like I know dealers that are creating like service accounts to log
into their DMS is or CRMs so that they can go scrape the data and pull
it into their vibe coded thing.
Well, if they don't understand how exposure leaks when unauthenticated
users get at that system, all they have to go do is look at the browser.
And if they're doing that in an unauthenticated or in a like client
side code, all of a sudden, all of Reynolds is open.
Wow.
Just like that.
Wow.
And Reynolds isn't responsible for it.
I didn't even think about that.
Yeah.
Oh, it's, it is like I've thought about security like I'm almost like hate
saying it on such a big podcast because I'm like some.
Somebody's like, that's a great deal.
Dealers are vibe coding stuff.
Great next.
Yeah.
Yeah.
Because like it's all ever, everyone's on super base.
Everyone's using VO lovable or, uh, or Claude code.
They're all building on Vercel or, or in lovable.
They're exactly the stack.
Yeah.
And, and everyone's on super base because it's the only thing that
has auth built in, but you, but you know, you know, those memes
where like something is like holding up everything.
It's like super bass is like here.
It's like, it's like super bass is like this and then like the world is
like standing.
It's insane.
Yeah.
And, and a dealer is uniquely at risk because of the, the, the level of
fidelity at which they have PII.
Okay.
So let's talk picks and shovels here then.
Where's the, like, what's the gangster play here?
Like, is it to launch like a security vibe coding firm for dealers?
Like, is that the, is that the billion dollar opportunity here?
I think, I mean, think about it.
It's either that or like some like McKinsey for like dealers for vibe
coding because either you need to help dealers do this or you need
to help them do it securely.
Yeah.
Is there something unique about the dealer's data or processes traditional
cyber security firm could not serve or whereas like a vertically specific
back to under resource marketing department under, under resource
engineering department should be hiring real engineers that understand
this engineering department.
Yeah.
That's not, but like, I don't see it on anybody.
The PM is, is, is most of these vibe coded solutions that are coming out
of like, especially smaller mid size dealers.
Like a savvy, a sally dealer person person.
Yeah.
Not even a dealer principal.
Could be a marketing person, could be a service person.
Right.
This is one of those.
They're just in their lone ranger in this thing.
Absolutely.
And like, it's so tempting when you see the result right there, like
the carrot is like, oh my gosh.
Yes, we want, you can do that.
It's like, I just don't want to think about the other risk because it's
right there.
It's my data.
Right.
If you don't know about tech, you're like, okay, it's mine.
Yes.
Do that.
Oh, I can now have this.
I have control of this thing.
The biggest thing with it is like social security numbers.
Yeah.
That's like data birth.
Yeah.
Data birth.
There's a lot of driver's license number.
Yeah.
On a physical copy.
They got scanned into your tier.
By the way, there's records.
By the way, there's a signature.
Yeah.
And non-rotated passwords on, on company and computers sitting on
the showroom floor.
Yeah.
That are like password 123 because five people have to
log into it.
Everybody's like, change our password immediately.
It's like that's baseball.
Password 123
Yeah.
Like, I mean, like this guy just came out with an article about like
Claude Enterprise and everybody's going, oh, if we get Claude
Enterprise, we're fine because it's secured, right?
Well, if it's not running locally and in your environment and it's
hitting Claude servers, like all of that stuff is still going to
Claude.
Now it's hashed and secured, but like so much risk.
It's wild.
You, you're both wearing shirts that say, or you're wearing shirts
that love people more than cars.
We're like, we can't match.
Well, I want to ask you.
So we spoke a little bit about people.
I know that's a really important theme for you in your business.
Um, in automotive media as well.
And you do, you, you do, if you have an agency, you do several things.
Um, but I, I'm curious.
I, I mentioned you guys my prior podcast.
I spoke about just this belief of like barbell where either dealership
of the, frankly, the present, but definitely the future is you have
to either be great at the human, the people aside or like concierge style
almost, or you have to be like, don't talk to me.
Don't nothing, just Carvana style more or less where it's like fully remote.
You know, I don't have to deal with anyone.
Do you, do you subscribe to that?
Do you think that is the world we're going to?
Like, will there still be the middle ground where I give you like both options
or look, I can tell you, I bought, I mentioned this on a prior podcast,
but I recently purchased my car.
I went for like the very like human concierge style because that was
what I wanted and it worked great for me.
Like I had, you know, my local guy, um, you know, I, I, I already, I
shouted them out, but I'll do it again.
Lehigh Valley Lexus.
Like they were great.
And he told me, and yeah, and he told me like this isn't like, this wasn't
like a super bespoke, you'll see a lot of experience.
It was a great experience, but it was kind of like, Hey, like we, this is
how we operate.
He's been focused on that for years.
He has been.
So my question to you is, uh, is that the barbells or like, is this,
you know, hogwash and, you know, it's just, we're going to stay in this
middle lane and slowly with our way and the industry will continue consolidating.
What do you think?
All right.
I think, I think you have to be both unless you have a very specific plan
to just be one.
Um, I take, and the larger groups get and the more consolidation happens,
the more you have to be both because it's still the concept of a local car
dealership.
And if you want to be a local car dealership, you have to be involved
in local things, which means you have to be involved in the lives of the
people.
It's one of the things we talk about.
How do you be involved in the lives of people in a way that inspires
them, motivates them, makes them trust you, makes them want to do business
with you.
And like, I have to actually take that a step further back.
One of your last, uh, one of your previous guests, Vic Keller, in the
last five minutes of your episode with him, he talked about, you asked him
something about like, what's the biggest opportunity in business in general?
And he said, it's in the retail automotive and it's understanding that
it being the ability to communicate the fact that in the retail auto industry,
you can build a career that can do anything you want.
We have the money to attract better, great people to attract great people.
And by the way, the guy has sold like three companies to Berkshire,
multi-billionaire.
And I think he went even further safe.
I was a publicly traded company when I would invest my time, energy,
money, and how do I do that?
Because I think whatever, whichever way you go, I do think you have to be
both, but giving people a reason to believe in care about what they do,
whether that is a carbon experience, carbon is full of people who believe
in care a lot about what they do and how they do it.
But so is the dealership who takes, you know, so is Lexus and Lehigh Valley.
And I bet if you ask Carvana customers, if they felt like the
Carvana experience was personal and human, I bet they would say yes.
All right, real quick, before we get back to the episode, I want to share
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Yeah, that's a good take.
And I bet that they enjoyed it also.
They liked that experience.
Most of the people that I talked to that have bought a car from Carvana or sold
a car to Carvana have followed that up with, that's the only way I'm
doing it from now on.
And this is just anecdotally, right, in a poll of my friends.
But I will tell you that Kyle and I travel all over the country and we have
so much opportunity to just like walk up to someone, man on the street style.
And every single time we asked them about their last car buying experience,
what they liked, what they didn't like.
We always ask them, what was your favorite part?
Every single person said my salesperson.
They had a good person.
No one was like, they had an awesome tech stack.
Yeah.
Not a person mentioned the website.
Well, I think that the industry's moat is the retail industry's
moat is actually being great at both.
The reason why the OEM can be and the customer needs us to be great at both
is because that's the only way we stay in business.
Well, right?
Because if it needs to just be like only remote, there's a little pickup
and delivery shop somewhere, right?
Where all you do is you pick up your car and maybe you test drive it
at the mall like the OEM has tried to handle that, right?
But then on the flip side is if the only thing that we do is like hope
that people come in and don't hate our online experience and companies
like Carvana or really anyone else that can be some level of tech savvy
just comes into sales market share right off the right away, right?
And so the moat is have an incredibly hospitable concierge style
experience that's met with a beautiful digital experience, which with the
tech and the tools that are available today, it's so it's very hospitality.
Actually, like your Marriott, Marriott guy.
Yeah.
Like everybody.
Okay.
But I think this is a great example.
I never thought about this before, but one of the reasons I like staying
at Marriott's is because the tech is good.
Oh, really?
And the booking is good and I don't have to talk to somebody
when I walk in most times.
I just go right to it's convenience quick.
However, when I do have to deal with a person, I like Marriott
because like they're good at it.
Hmm.
So it is both.
And sometimes I don't talk to anybody.
And sometimes I want to talk to somebody.
Do you know Todd Blue?
So Todd Blue is a, he's a dealer from the West Coast.
And when I first met him and I saw his company name, it's Lapis, like LAPIS.
I actually forget exactly what I think it's like a prize.
But you're interested.
I think it was like a diamond or something.
I don't even remember it, but it got me thinking that Vic Keller, you just
mentioned, we're talking about all about like attracting the best talent.
So then my brain goes to say, okay, how do I attract the best talent?
And then I was thinking, I said, well, you attract the best talent by rebranding
from what a traditional dealership used to be.
Like I think that if you just put two ads right now online for a salesperson
and one of them says, you know, Yossi's used car lot or Yossi's auto sales.
Fair.
I might have great ratings, but Yossi's also uses cars as a better ring.
But then the other one says YJL hospitality, which operates three
different revenue streams and one of those revenue streams happens to be
automobile.
Well, the second one sounds like a career.
Yeah.
That to me is the winning ticket.
Right.
If we're going to lean into hospitality, but you have to back it up.
You have to back it up because you show up at the YJL enterprise.
You're not going to do that a lot, but you're like, no, no, no, hundreds.
They just car guys me, right?
You're right.
It needs to actually live up to the experience because you're not going to
convert.
No one's going to sign over, but think about that.
It feels like a career.
So when Vicks said that, I'm like thinking I'm like, okay, okay.
And I mentioned Lapis because again, it felt like a very prestigious brand.
Yeah.
Felt like a career.
Just saying Lapis is like Lapis.
I might want to work there.
Yeah.
It doesn't look like a dealership.
I hear that.
And by the way, he runs a really, you know, tight shop, you know, high end, you
know, luxury brands, you know, Ferrari, Mercedes, it fits.
So the point I'm trying to make is like, you're going to lean into
hospitality, like go all the way, like rebrand the dealership.
The best rebrand for a dealership is as a hospitality business.
Yes.
Which happens to sell cars as one of those revenue streams.
That's the best rebrand in my opinion.
I like that.
Yeah.
Well, there's no OEM regulation.
We were talking about that earlier.
There's that stops you from doing that.
Yeah.
There's no parent company name.
I also think that there's a major opportunity and a dealership
understanding how media works, right?
Like we're in the media business.
So we understand it.
I don't know why a dealership shouldn't be the center point of a
community with a newsletter and with organic social content and with content
that just highlights and features the community around them.
I think almost like a community hub, which happens to sell cars.
Because everyone's already in there.
Yeah.
And like you can name it whatever you want.
You can stand up the site.
The tech exists to stand the site up and generate and talk
about attracting talent.
Well, I mean, that's kind of the read a case model though.
Like again, the free car washes for the community, the DMV, you know,
Longo Toyota, the DMV on site, Starbucks.
Again, that's we're going to get into Geltner at Mohawk Chevrolet
ran this playbook to for the last several years and standing up taking
all this paid advertising out of the equation and standing up an organic
content development that focused on the community.
And he's the incurable entrepreneur, right?
There's all those in the room right now.
So he used it to actually help stand up other businesses and what kind
all types of cake shop, cupcake shop, a wrap company.
Oh, like completely unrelated business.
Yeah.
So he just leveraged his marketing and organic
department to like create content around the co-branding of those.
Wow, you know, Ziggler Automotive also has they have like a restaurant
that is like renowned in their town.
They have a restaurant.
It's like I ate there with Bozard, which is just up the coast from here.
They have a Ford garage.
I don't know how renowned that is, but it was really good.
Yeah.
But I like the idea of a restaurant.
I mean, I think we could all look back and like Michelin stars.
Where did they start Michelin Tire Company?
They wanted people to drive more money, drive more miles.
So we're like, hey, let's give him a map of all the restaurants, rate the
restaurants so they'll have to drive around and buy more tires.
But I think that that same principle is like a dealership has
Vic said this in that episode.
We have a differentiator than all these other industries that he's in.
He's like, we have the money.
We have the revenue that we can pay people better than anybody else.
And we can stand up brands and we have the entrepreneurial
mentality dealers are just and we're just in it.
All the Google and Facebook.
No, come on.
To bring you to Facebook.
I'm sure the big fans love you guys.
Yeah.
Big big show.
I know.
Metta.
Sorry.
Jen says, wow, it's such a good conversation as we're wrapping up.
What's what's in your mind here for this, you know, next 369
months?
I mean, what's what's exciting to you?
Like, what are you thinking about nowadays?
I think the narrative in automotive is because of AI and because of the
moment we're in technologically for a split second.
It felt like we were going full robot and everyone was afraid and there's
all this panic.
And I think maybe maybe it's not clear to everybody yet.
It's clear to me is that we are going to flip so hard back to focusing on
this and so like that is right at the heart of why would love people
morning love cars.
It's like if we can get everyone to believe that what we do is not why
we do it and it can be about so much more than cars.
And I think that we're about to hit the Renaissance for why people matter
so much and AI is just proving it.
So I'm pumped about that.
Amazing.
Kyle and closing thoughts.
The compression of the capability to do anything that you want.
And I'll go back on like that.
The vibe coding thing is super exciting, right?
But but also like the compression of just being able to execute quickly is
going to allow us to do things that we maybe never even dream possible in
the experiential side of the business four or five years ago.
And that's going to open up doors to allow our people to really just be
people and humans carrying inside of the dealership instead of having to
figure out like, did I text that guy yesterday?
Yeah, the tedious stuff.
Yeah, really focused on the experience.
Amazingly said, fellas.
This was really incredible conversation.
Kyle months here.
Paul J. Daily.
Thanks so much for coming on the pod.
Thank you.
All right.
Hope you enjoyed that episode.
Please give the podcast a rating.
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the sponsors of today's episode.
Uber for business, Reynolds and Reynolds and CDG platform.
Thanks for tuning in and I'll see you guys next time.
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