“The Great Train Wreck” — Time, Friction, and the Dealership Process Breaking Customer Trust | Matt Lasher, President of Streamline Auto

Look at this guy. Back to the show. Matt Lasher from Streamline Auto. Thanks so much

for joining me. Mr. Cirillo, it's an honor and a pleasure.

You know, I feel like you and I have more in common than the LinkedIn algorithm will

let us discover. Tell me more. Family men. I mean, that could be said

of a lot of people. This idea of not even having packed for NADA yet, but already wanting

to be home. Listen, family first, you know what I mean?

But it's great to see SUBI and all the people. NADA is kind of a second family, right? So

it's the transition that's hard. Can I ask you this? A sincere question.

Going from dealer focused, your dealer operations focused working at the dealer group. What

are you doing now on what we all call the vendor side? How does the lens shift when

you come to an NADA? It's fascinating. So many NADA's attended

with a dealer badge and a lot of respect for dealers and the overwhelming nature that

NADA is. I think the fascinating disconnect is we all get really excited about our solution

and the thing that we do as vendors and the problems that we solve and we care a lot about

those things. But a lot of times it's really disconnected from the dealer. Like the dealer

themselves doesn't even feel it or understand or care, right? And so I think that's the

riddle on the puzzle. But the industry is so great. It's such a relationship business.

People do business with people they know and trust. People buy cars from people they know

and trust. So the industry is no different. If you want to grow and have success as a

vendor or as a dealer partner or whatever, there's no shortcuts. You build relationships

slowly and intentionally over time. And I think that's the great thing about NADA and why we

all have so much fun getting together. It's speed dating. And it's speed dating that smells like

money. Oh my goodness. Okay. I got to talk to you about this because you are sitting on what I

believe is a tremendous amount of data with the work you're doing at Streamline. And I want to get

into the affordability crisis first, but let's talk about this thing that you call the great

train wreck. I need to know what you're seeing. What corner are you looking around right now and

what's your sentiment towards that? Yeah, look, I mean, affordability is a topic. You see it in

the headlines, $1,000 car payments, new cars continue to go up in price, interest rates are

high, affordability is a problem. It's becoming more and more well known. But in 2006, Greg Goble,

give him credit where credit's due, coined the phrase the great train wreck. And it's a problem

that still exists at every dealership, everywhere, every day, today. And it's getting worse. So the

great train wreck is when I spend five hours with Mr. Cerillo, right, Mike, let me show you all these

great cars that you could buy for your family. You need the third row seat, everything's great,

right? Okay, yeah, we test drive a bunch of cars, and you fall in love with the Cadillac Escalade.

Okay, great. Well, let's send this, let's write this deal up. Perfect. Well, we get it back into

finance and I forgot to run your credit. And I don't, I didn't ask you how much money you make

per month. And now all of a sudden, I don't have a deal that's financeable. So we've created

the great train wreck in that the customer's unhappy, the salesperson's unhappy, the sales

manager's unhappy, the finance manager's unhappy, the lender's upset, because nobody has the opportunity

to do any business, right? And so that's the great train wreck. And it happens, not because we want

it to, but because sometimes there's just a lack of information at the point that they need it.

And that then creates a ripple effect into the customer experience, or as I like to call it,

the guest experience, because they should be treated like guests. It is a hospitality business at

some level. Yep. But if you're creating all of, well, I say you're creating, if friction is created

at so many spots that kill the excitement of car shopping, because it can be exciting.

Can be. Then that's another avenue. Like it's almost like watching the train not just hit the

object and train wreck, but also watching the rear end of the train implode on itself as well.

So there's a good car phrase. It's called that car dealers use this phrase a lot. Yeah. It's

called time kills deals. Yeah. If you work at a dealership, you understand time kills deals.

Another sort of simpler way of saying the friction that we all are aware of

time kills deals and all sorts of ways. If I spent five hours with you at the dealership and

now you can't leave with that car, you're coming back to see me. Maybe not. I'm a little bit upset.

Yeah. But even speed and throughput of the transaction, efficiency at the dealership is a

big thing. And we're talking about it, you know, NADA AI, all the ways that we can be better,

faster, smarter, right? Right. Same thing throughput in the FNI office matters a great deal.

I don't want to spend two hours, you know, taking a turn and going through this and that and all

these things. So we got to juggle all of these complex things. Sometimes it's a financing issue.

Sometimes it's related to affordability, but it could just be, you know, the finance manager

wants to add extended service, an extended service contract to the deal, right? And they want to

extend the term from 72 months to 84 months. There's little practical things that we can do

to help the throughput at the dealership speed up and address affordability, address protection,

address the consumer experience. So there's a lot there. But yeah, I mean, it's an interesting

problem to be thinking about. And it has a lot of layers that are related to

the haves and the have nots, whether you have money, whether you don't, the different problems

that different lenders are solving within the ecosystem. But observationally, here's what I'm

learning, Mike, is really interesting. Lenders and dealers are like Mars and Venus. There's a

gigantic grand canyon in between and we use different language. And so I go to all these

lender things now with my dealer sort of lens on and I'm like, wow, they don't, they're like

skipping over the dealer, right? And you know, we're all about people, right? So in the power

of people and the value the dealers add in the process, the dealer playbook is my favorite

podcast in auto and you're the OG, my man. You've been doing this forever. Did you, did you just

your favorite podcast in auto? Yeah. Okay. You got to say it right into that camp. My favorite

podcast in auto. All right. I appreciate that. Okay. I'm sorry. I cut you off. All right. I

don't know what I was saying, but you're the best. It's people focused. It's people over

everything. That's my mantra. You know that I say it all the time. They're skipping over the

dealer. Well, people they don't know, don't appreciate the value that people are adding

an automotive, right? People don't understand the FNI role. Often dealership, general managers and

principals don't pay attention to FNI because it produces a lot of profit, right? But you've got

people like Adam Marburger and other people that are like training FNI, trying to grow these leaders

in the business. How do we do a more effective job? How do we sell warranties? How do we improve the

customer experience? How do we provide service to the clients that are buying cars, right? There's

so much opportunity for improvement. And I think that's the exciting thing about what we're up to.

Okay. So now you're talking about is being in the room where the conversation is happening,

is that part of the opportunity that you're seeing? I mean, there's an element here where you're

like, Hey, what I'm sensing is don't waste a good crisis. That's it. Like if it's a train wreck, let's

make it not a train wreck. Bro, I love that. You know, dealers are so resilient, right? 2008,

you know, you got cash for clunker or Lehman Brothers and then cash for clunkers thing. You

got COVID that came out smelling like roses out of the hat. The affordability crisis that's coming,

the tidal wave of people that are running out of cash, negative equity, high interest rates,

all these affordability constraints that exist. Okay. Dealers are resilient. We're going to

figure out this puzzle also, right? There's just no stopping the dealer. And I think that's the

value that the people in auto retail bring. And it's so easy to just like go direct to consumer

or test, you know, whatever. From your vantage point with Streamline, you know, you mentioned

you're in the room now with a lot of lenders in those conversations. I mean, what is the sentiment

and at what points, what types of things are coming up where you're like, man, I wish a dealer was

in the room. 100%. I mean, so a question like, how can a lender help a dealership? Lenders are

required for the liquidity and they got it. Somebody's got to buy these contracts and these

loans, right? So how can a lender be better? Well, a very simple answer is the lender can provide

dealer facing technology that helps them navigate their program. Now that's a biased answer.

Streamline helps do that. There's other providers that do things like that as well.

But that's an answer. But a really interesting subtle answer Rob Cochran gave an ADA chairman

yesterday or two days ago to AFSA talking about it's about the relationship. So do you care or

are you thinking about how do I grow the relationship with my dealer? Right. In this

increasingly digital world, right? Can we have practical productive conversations

that help dealers do more business? I feel like, okay, this is a working thought process. And I'm

not sure if I've fully figured it out yet, but I feel like you're the right guy to help me figure

this out. Our human nature, it's interesting. On the front side, it's like technology will

figure this out for us. On the backside of it, it's like no humans desire to have other humans

help figure the things out. So how do we reconcile that? Because I feel like, you know, you walk the

halls here, everybody's talking about how, you know, whatever the AI, and I know that sounds

somewhat cynical. I mean, we do, you know, everybody's leveraging the bias that we share

with the people bias that we share. That's a great way of saying it. So how do you reconcile

that to say, uh, technology leveraged human first, listen, so right. And so it's not taking

for granted the skills that you may not understand. So a really talented F and I manager, if you've

never sat in that seat, you may not understand the art of the selling and what they're doing in

that role. Right. So if you've never understood it, it is easy and or tempting to just jump over

that person. No different than dealers maybe are being jumped over as a lender thinks about, okay,

well, how do I capture the contract? Right. I want the loan. Right. Well, it's an indirect

automotive lending model. You're not going to change that model. Right. So you got to embrace

the model and be empathetic and appreciate the skills. Same thing on the lender side.

Do we appreciate as a dealer, the underwriter or the person that's very responsive to us

when I send in a tough application, but they text me right back. Right. And I appreciating that

person. Am I bringing a relationship to it? Do I know the name of that underwriter at bank XYZ?

Right. We can just be human about it. Right. And it's like very simple stuff of like, but now I

think we can leverage technology to grow those relationships in productive ways. So, you know,

I like Mike Cerillo is great. I love the dealer, but that's great. We have a relationship,

but if there's a way to enhance it and allow our businesses to grow together,

well, that's even better. Right. And that's where I think technology can play in some of these

benefits of AI and efficiency and all the things that we're talking about in this conference.

Yeah. That seems to be a theme that I've picked up on today, which is, you know,

four months ago, it was like, Hey, I was killing everybody's jobs. You got the CEO of Sales Force

saying we're looking at it. It's already replacing 53% or whatever the numbers are. Yeah.

Fast forward four months and we're like, no, it's going to speed up human connection if

we do this properly. If we do it right. Yeah. Words like empathy. We've used trust words like

empathy discernment. These are words that are all coming to my mind now when you're thinking about

a people first approach. Can we talk about empathy related to customers that have less money? Yes,

please. The world has a bias to people that have money or don't have money. So sometimes in the car

business, we can think, Oh, the person with challenged credit or affordability issue or

don't make a lot of money is almost less than or perceived to be like a headache.

Right. It's going to be hard for me to sell you this car. It's going to take a lot of work. I

might have to discount the thing, have a bank fee, $5,000 bank fee. I'm not going to make any money.

It's like not worth my time. Right. So there's a bias or a stigma that exists. But I come at it

from a point of view is we're all equals regardless of how much money you have in your bank account.

Right. And one of the underlying premises with Streamline is can we help align the dealer with

information that allows that person that maybe they have a bias and a stigma to serve? Let's

make it easier to serve that person. Let's make that 580 score that comes in today that just had

a discharged bankruptcy, your best opportunity for the day, and you can serve them quickly,

efficiently, transparently, just like you do the 800 customer that can buy whatever that they want.

This is so interesting. I have a friend of mine who was, while he still is the,

oh gosh, I'm going to screw up the title. He's the head orthopedic surgeon in the hospital. This

guy's making well over a million a year. He said to me that one of his colleagues, another well

paid, well salaried doctor, was going through a divorce. And he said a divorce is enough to

break even the wealthiest person's finances. And all of a sudden that guy couldn't afford things

or get approved for things that he would have to put before. And so it's like, to your point, it's

like, you don't even know people's situations. No, we hear the reverse of that. We hear the grubby

kid with dreadlocks that comes in and wants to buy a Lambo and they don't know the rich debt,

you know, we've all heard that story. Or like, or we put people in like credit criminal buckets,

or we use phrases like that's a good term, but the safety net that maybe didn't exist for them,

right? The divorce or the health issue or the job loss or if you own a restaurant during COVID,

or a serrillo, or a serrillo, a serrillo that comes to the country and doesn't realize he's

got to start over with no credit, but still needs a vehicle. Like, but that's what I'm picking up.

That's what I'm saying. Those life things don't mitigate the fact that I still need a vehicle.

That's right. And then I know I personally, I see this is hitting me, you're struggling for it,

because I've now sat in the seat of we can't help you. Yeah. And I'm like,

like, what do you mean? Have money, we'll spend. I have money, we'll spend wood,

buy in cash, but that's not smart business. Right. Right. But I felt that feeling, that empathy

of, whoa, why is this so difficult? Look, dude, this is a big financial purchase for people. And

it's an important decision that people are making and finance managers, sales managers and general

managers and dealership employees, salespeople, we have this opportunity to guide people and

navigate through this very stressful thing. We take it for granted, you know, when you're at

the dealership all day long, whatever, yeah, it doesn't matter if your payment's $1,000 a month.

Sign here. Right. Right. But for some people, they're choking on that. Right.

It, well, you know what it is. I mean, think of how many people you know that have ever who,

oh gosh, and this is not a, guys, you know us, we're not razzling on it. We're talking about,

we're attacking a problem and you're not the problem. Okay. Not the problem. Maybe some

be sensitive. But you, how many dealers have never bought a car before? Oh,

so, so do you know what I mean? Like I've never gone through the process of buying a car.

They don't need to go through their process. They go through a different process.

And that, but it's the same thing, like how we can speak so freely about things,

because we're in it, which sometimes I think removes a level of understanding that if

otherwise was there would change the whole way that we

desired an interesting thing like bias. And we don't see, we have these hidden blind spots

in our life. Right. I could probably talk to any luxury dealer in the country and say,

well, we don't do subprime business. Right. Okay. Then I could go look at their credit

applications inside a route one or dealer track and show them that the more applications they put

into the system, the closer they are to the national average 40% of consumers have a credit

score of 680 or less. So the more applications you put in statistically significant applications

you put into the system, you will highlight the fact that, oh, by the way, yes, you do have

customers with affordability challenges. Yes. You do have customers that have just gone through

a bankruptcy or a divorce or a health scare or whatever else. Right. And so if you're not

thinking about the affordability problem, then you're not servicing them. You're just servicing

the people that have buckets of cash. Wow. And that's, you know, K shaped economy stuff,

halves, halves, knots, but whatever. Was it you that just wrote? Did you just write a LinkedIn

post not too long ago about the K shaped economy? I don't know. I may have. It's fine. It's very

possible. Blackout, you know, stream of consciousness stuff. I love this conversation. I think it's

one of, you know, every now and again, especially when you're at an ADA, I just got to say this,

the conversations tend to start bleeding into one another. I feel like you truly come from a

different angle. We need to be thinking about this and considering this as we wind down Matt,

how can those listening or watching connect with you and learn more? Listen, LinkedIn's the place.

I'll probably get at you. You know, if you send me a message, I'll probably, I'll probably find you.

Or you just tag me on one of your wonderful pieces of content. I'll see it. You know,

we're gluttons for attention. All of us. This man knows how to make me blush. Okay. Thank you.

All right. So connect with you on LinkedIn. That's it. LinkedIn, Matt Lacher. I should,

I should plug the company, streamline.auto, like check that website out. I would love the

feedback. If you think we're nuts, what we're doing over here, like we'd love that.

We're here at the Auto Media Marketplace booth. Let's go. The dealer playbook hosted by Auto

Media Marketplace and iHeart Media Automotive. Matt Lacher, thanks so much for joining me on

the dealer playbook brother. So good to see you. Thanks so much. Hey, thanks for listening to the

dealer playbook podcast. If you enjoyed tuning in, please subscribe, share and hit that like button.

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Check back next week for a new dealer playbook episode. Thanks so much for joining.

“The Great Train Wreck” — Time, Friction, and the Dealership Process Breaking Customer Trust | Matt Lasher, President of Streamline Auto

About this episode

NADA

vendor side

affordability

interest rates

The Great Train Wreck

third row seat

Cadillac Escalade

friction

time kills deals

dealership process

throughput

F&I office

extended service contract

extended term

FNI

extended warranty

cash for clunkers

negative equity

direct to consumer

dealer facing technology

cash purchase

financial stress in car buying

dealership finance process

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