In our latest conversation, Brett Hall, VP of Sales and Marketing at EMG, discusses how to succeed on connected TV and streaming.

What are dealers doing to differentiate their brand?

We are seeing, probably for the first time in four years, is a more balanced equilibrium between demand and supply in the space.

Of course, when COVID started, there was a lot of just fear and a lot of marketers pulled back. They weren't sure what was going to happen, or I should say dealers pulled back on their marketing. Then of course, we had the supply chain crunch, thought that was kind of out of the woods and then you have interest rates. There have been a lot of distortions in the market.

What we're observing is dealerships have to be competitive again, and they have to think strategically about moving inventory, basically as they did in pre-COVID. It's no longer the case, they can just have a car, sell it, and at a markup. They have to be better and more strategic.

So we see dealers really leaning into now, and it's a primary benefit of the space we operate within streaming is, that they're being much more strategic with an audience-first strategy. It's not just about put the ad out there and I want to try to have a certain number of channels or apps, that don't exist, we can talk about in a minute within the streaming space. We want to be much more strategic in aligning a creative message with an audience that we can resolve and target within the streaming ecosystem. They're being much more diligent about flighting creative to a certain audience at a certain time and being good about giving us different creative to manage that aligns with the things and the capabilities we can do.

And we're seeing various outcomes from that, whether it's more awareness of the dealership or the brand, more lead generation, more foot traffic, and increases in market share. Now they're really able to spend their dollars very efficiently and get more traction or more bang for their buck with that enhanced top of mind strategy, which again, is going to be an audience first strategy that is accommodated within the streaming ecosystem.

The value of connected TV and streaming.

We are continually surprised by either the lack of awareness or just the lack of inclination to really fully take advantage of the precise targeting options that exist in our space. It sometimes comes as a shock is, you know, we're not just going to be able to target a demographic or use, let's say a particular app or set of inventory, meaning ad inventory to get in front of a certain type of demographic and audience. We really can just go right after the person who's in market for a car right now, by class, by type, by model, et cetera.

And that's what I was saying earlier about really, because now the inventory is starting to stack up because they're starting to feel the pinch. They're really leaning into, they have more pain, they have more pain. And so they're more, they being the larger kind of ecosystem are more interested in leaning into those capabilities and those conversations in a way that we really hadn't seen before.

And so now the, the demand for the capabilities catching up to the actual capability that's existed for some time, but that is a huge, that is the differentiation between streaming and traditional, the targeting and the attribution that comes along with it.

How should a dealer approach advertising on connected TV?

In most cases, what we'll call it the, the demand ecosystem, those that are spending the dollars, whether that's an agency or a dealership or a group or an ad association, the way that they would articulate a strategy, what they want, what they're hoping to achieve largely was rooted in the tactics that you would use in traditional advertising.

So that might sound like this, I'm interested very kind of prototypical, stereotypical example. I'm interested in selling more trucks on my lot. Men generally buy more trucks than women. I need to get in front of men. I need to be on ESPN plus, just as a really simple example.

And what, that's the surprise factor, which is, you know, we actually are flipping it. We're not using the app, the content, the inventory to try to get in front of a certain audience using demographics. We're actually first creating an audience it's, you know, it's an audience for strategy. We are creating an audience of consumers who we believe with a high degree of confidence are in market for the type of car you are selling right now.

And we are going to activate that audience. We're going to target that audience into an array of streaming apps and ecosystems that independent of what we think about that alignment, meaning you're trying to get in front of men, but the Bravo app is streaming the bachelor doesn't matter.

We believe a car shopper, we know a car shopper because of our audience is streaming a certain piece of inventory or content. And we are going to let the data, the audience drive where and how we buy certain streaming inventory.

We still get this question a lot. Why is this app inside of my targeting mix? If I'm trying to go after this type of consumer, right?Maybe I'll mix it up a little bit. Why am I seeing a Bloomberg TV, which typically you would think is more going to attract and engage an affluent high net worth individual? Why is that in my mix when I'm selling an economy sedan? And it's like, well, you know, someone who doesn't, you know, who makes, you know, the median income who, you know, has a, has a good job, but not, you know, some crazy C suite one is really interested in financial news and they watch, they watch Bloomberg. You know, we can't really control that.

What we can control is getting that message with that audience in front of them at the right time.

And so to answer your question, it's hard to say if it's a lack of awareness or it's so rooted that their belief system is so rooted in, in how TV worked before and how targeting worked before. And so it, I think without sometimes they even knowing it just assume, well, that's how it's going to work here. You know, it largely is the same consumer experience.

The huge difference is what's happening behind the scenes because it's connected to the internet. We now can take advantage of all the digital technology and capability that allows us to do targeting, allows us to be audience first.

And so really moving their understanding and really stressing that this isn't ethereal. This is possible. It will create wildly better results and there is immense opportunity and value to be found if you can break away from the old way of doing things or the way that they were done in traditional.

How does a dealer get started?

Well, the short and the simple answer to get started with us in this space is actually pretty simple. We need to know what your dealership is literally just the name and the address. We have every dealership in the country franchise dealership database in our ad system.

We then would need a piece of creative to flight and that's where our agency partners come into play along with giving us other inputs along strategy that's happened in other ecosystems. So there's parity and synergy between them.

And then using the vast amounts of data, both public and that we've curated over the last seven years, we create a tailored strategy for your dealership.

So I'll unpack that a little bit. I'm sitting here in Orange County, California, more specifically Irvine, California. There are two Mercedes dealerships about four and a half miles away from each other. Same PMA, certainly the same state, the same county, practically the same city. They're four and a half miles away, but because we have database and are understanding things like what's your sales footprint, what's the OEM, where and how much do you sell cars outside of kind of a general footprint of your backyard, historical trends, foot traffic, all the media data that we've collected. We're able to prescribe two very different strategies to the same OEM practically in the same city.

It's because they have, like I said, different characteristics of, let's say, how many cars they sell, how far away do people come to their store? The two stores I'm thinking of specifically, one's kind of the Mac daddy that everyone goes to practically if they want a Mercedes. The other one is sort of a little brother. The strategy that both of those stores need to employ is very different.

And so what we try to do is understand where each dealership is today, and then reflect back to them a strategy that will help them move market share, traffic, increase sales, increase web traffic, et cetera, prescribed to who they are and where they are right now, with the anticipation and the hope that we can help improve your overall position in the market.

Transitioning from traditional to connected TV and streaming.

I think a lot of times, brands, dealerships, associations, they sometimes overthink it. They think that because now we're in a connected ecosystem, a streaming ecosystem, that the ad experience is wildly departed or different from what they're doing typically already in traditional.

And so where we kind of help make them comfortable and dip their toe in the water, we typically start by saying whatever ad, whatever video you're using in traditional, let's start with that. Let's start with that because while we're starting with the same creative, which generally is pretty good, like it's been well-produced, it's well-made, it has a good message that's been honed over years, we're keeping that the same, but then what we're changing obviously is what we're doing with that creative.

We're employing an audience-first strategy. We're able to figure out where we should be buying ads based on where people are streaming, who are in that market, how that we can target them using all the different controls that exist and even better, we can report on what happened when they consumed an ad that we put in front of them. What did they do? Did they go to your website? Did they go to your dealership? Did they go to someone else's dealership? Did they buy? Is your market share moving? Is it down? Is it up? All of that because again, at the end of the day, it's connected, it's internet-based, it's internet-enabled, we get the benefits of digital.

So I like to say the consumer experience is largely the same. There's obviously a difference in how you're consuming the content.

You're turning on your smart TV, let's say a Roku. You're hopping into an app, not a channel like Hulu, and you're typically pulling up a video-on-demand library. Sometimes you're watching TV live, but we'll kind of save that for another day.

So from a consumption standpoint, it's a very similar experience with the added benefit of I get to watch what I want, when I want, but from a marketing, from a targeting perspective, it's a whole new world of opportunity.

Reporting and attribution.

With our history as a company with direct response advertising and just having very outcome-based kind of approach to any marketing ecosystem, including streaming, that was key for us, and we use that old adage, you can't manage what you can't measure.

So we fundamentally approach the space with the premise, we have to be able to understand what is going on and the impact that we're having, good or bad, or neither, on the market that we're putting that message in front of. And so there's been an evolution, no pun intended, in what we've been doing, what we're able to track, and principally that starts with so that we can understand the true value and impact that our marketing is having on behalf of the dealership.

And so very kind of reductively and practically having accurate, truth-seeking attribution, not just producing the biggest number that you can or an inflated one, but really getting a good grasp on what is happening once I put my message out there.

Let's just start with how many homes am I reaching? How many of those homes are taking an action? How many of those homes are taking an action that tells us we're swimming in the right pond, but they're actually not visiting or engaging with the dealership that we're supporting? What's going on here?

And then we can, because again, it's all digital, we can have a very precise understanding of what's happening, what's called a bid stream level without getting too technical, but every single impression delivered on connected TV has data and metadata associated with it. We can take that and really get a fundamental understanding of what's going on and then optimize to it. We can separate the wheat from the chaff as it exists from an audience standpoint, from inventory, this inventory is not working very well, we got to cut it, we got to bid less for it and so on and so forth.

And so we think of attribution as really the foundation that everything else we do is built on. It's how we know if we're doing a good job of getting in front of the right audience. It's how we know if we're doing a good job of not only buying inventory, but at what price is it worth buying because we can extract what kind of value it has. Which devices at which time of the day make the most sense to put a message in front of someone?

All of this is available if you look and have more importantly, a foundational accurate attribution framework and system in place. From there, so really for us, step one, get attributions, choose, seeking and accurate. And then from there we can do a lot.

Step two, or really value number two is, okay, now we have a really clean way of optimizing or we have a really good feedback loop so that we can optimize our campaigns.

Number three, second part of your question, reporting. That attribution now can be turned into customer facing reporting to give them an idea of how it's going. And what I would say is what we're trying to do is a lot of the reporting that we studied when we kind of entered the space, would say it really told the story of what we did, not how did it work.

And we try to get to the bottom of, here's what we did.

Here's how many households we reached. Here's the creative that we did. Here's how many impressions you've got. Here's all the inventory mix you had. This is the audience we targeted. But more importantly, here's what happened when we put that message out there.

What is the difference between connected TV and streaming?

And it's kind of evidence to the immaturity of the market, right?

The terms and the acronyms, and even those are kind of all over the place. And what do you mean? What's the difference here?

So at least I can speak for us. So when we refer to streaming, we are referring to any digital medium, any medium, typically the ones that are traditional, so TV and radio, that streaming is the counterpoint to those in a digital landscape, meaning instead of an airwave or a satellite dish or your cable box delivering your content on TV, the internet is now.

Instead of radio waves delivering a signal to your car radio, the internet is.

And so streaming for us refers to specifically connected TV, which I'll unpack in a minute, and streaming audio as advertising medium. So it's sort of an umbrella term that we use. Now sometimes people interchange streaming TV and connected TV.

I'll kind of get to that in a minute. But we generally refer to it as streaming because it kind of captures a few different mediums, like I said, namely connected TV and streaming audio.

Connected TV, which is really the one that's kind of newer and getting all the press and everyone's talking about. Connected TV, as opposed to OTT, which I'll unpack in a minute, connected TV really fundamentally refers to a device that's connected to the internet where the content that's consumed on that device, shows, movies, sports, however you get your content, that's delivered via the internet instead of, like I said, a cable box, a satellite, or a pair of bunny ears. So really it's just talking about how that device, a TV, is able to get content in front of a consumer.

Connected TV, OTT, which again, this is where it's like, oh my gosh, OTT, CTV, what are we talking about here, OTT is really long form content that could be delivered on a TV, but also, you know, it could be delivered to your phone, a tablet, a desktop. We like to talk about connected TV because of the value that it has as a device, as a living room experience on the performance of a campaign, I'll get to that in a second. And so again, connected TV refers to a device that then is able to get content via the internet.

Typically the experience here is I have Roku that's connected to my TV, I jump into it, I see Netflix as an app that I open up and I start streaming Stranger Things, or whatever your show is of choice.

Streaming audio is fairly similar. It's the counterpoint to traditional radio, think Spotify, Pandora, streaming music, podcasting, which is just becoming, you know, ever-present news. Any audio content that you consume, typically on a mobile device or a home device like an Amazon Alexa, is streaming audio. In both these cases, they both are ad-supported, or there's at least an ad-supported constituency within that ecosystem, and that's where we come in.

So we're able to put an ad, you know, in flight to an ad-supported ecosystem like Paramount Plus or Netflix or Disney Plus, which, you know, we can unpack a little bit later. Now, all of these streamers who formerly did not have an ad offering, they do.

And so now there's just this ever-abundance of kind of ad availability that is just opening up so many possibilities for marketers, including dealerships.

What is ad spoofing?

.So you know, taking a step back, once in any industry, you know, I don't care what you're talking about, once it gets to a certain size and threshold, is when the scammers start taking notice. So you have a tiny little industry that, you know, isn't really worth anyone's time, fraud and spoofing and all this other stuff, it doesn't really apply.

For years, your, you know, Apple computer was really not susceptible to bugs or to malware or to other malicious hacker activity, because it just wasn't a very big piece of the market share of computers. That's different now, that's changed because there's so many more Apple computers out there.

So once something becomes big enough, that's when the fraudsters and the spoofers come into play. And so now connected TV and streaming is, I'll try to keep my words, now that connected TV specifically is roughly, we'll call it a $25 billion a year industry. There's a lot of fraudsters who have woken up to, hey, I can go do my thing and fraud unwitting consumers or customers into, you know, my game.

App spoofing is simply a scammer presenting a app as something other than it is. They are presenting that whatever they're selling is Netflix when it's not.

And there's a few different ways you can do this. It's actually not terribly difficult to do if you know what you're doing.

And so now that the industry has gotten so big, it is increasingly becoming a trend to be aware of.

It's one of many different types of inventory issues, whether you want to squarely call it fraud or just non-performance that you want to be aware of.

And so going back to attribution and why it matters, if you have a systematic infrastructure set up that you are tracking the outcomes that your ads are producing, whether it's just outright fraud or just inventory that just isn't producing because people just aren't watching, whatever the reason may be, we would just simply stop buying.

And this is why really a huge takeaway I would say for anyone operating in space, this one or anything else is don't just be reliant on, oh, it says Netflix, good to go. Hey, I'm getting the report that says it's Netflix. Independent if it says Netflix or not, or whatever the inventory might be, independent of what the audience might say, how is it working? Like what are the outcomes it's producing?

And if it's having subpar outcomes based on what you're able to track with your attribution stack, there's a problem.

Whether or not it's app spoofing or something else.

Where are connected TV and streaming heading?

So at an industry level, independent of automotive, and then I'll kind of tie it into automotive, at just a pure streaming level, it's a very exciting time.

I mentioned earlier, every single major streamer now has an ad tier. They are now really actively engaged within this experience. It's interesting, if you look at the history of traditional TV, it started with an ad supported ecosystem first, and certainly with the networks, NBC, ABC, CBS, ad supported. That's how it was funded and subsidized. And then we'll call it in the late 70s, 80s, 90s, you had premium subscription based, the HBOs of the world, right?

No ads, you pay a price, whatever that is per month.

Streaming kind of started with the inverse of traditional TV. It actually mostly started with a subscription based model, we'll call it the premium model. Pay 15 bucks a month for your Netflix account, no ads, stream whatever you want whenever you want.

What's happening now is subscription fatigue. Consumers, including my household, we're just sick of paying for all these individual apps and other content providers, because it's adding up. And so now they've all been forced to have an ad tier, even despite the ones who said they never would, namely Netflix. They're now introducing ad tiers and the adoption rate on those is, I would say, much more and happening much faster than I think anyone predicted because of that fatigue. And so now, the big ones in the last year, Netflix, Disney+, Amazon Prime, those are kind of your big three. They all now have ad tiers.

Not only that, they are now making it very clear, this is a big part of our business. This just isn't sort of this thing that we're doing on the side that generates incremental income or revenue for the business. This is a big part of the offering. And so what I would say now is it is really ushering in kind of that last kind of, I would say, the early adopters have already kind of been in the mix with connected TV advertising. And now I think it's really gonna push that mainstream adoption because now the big brands that people know are starting to come into the space.

And so what I would characterize right now and probably for the next few years, this is the golden age of streaming.This is like Facebook ads circa 2010. They just came online. There's this huge supply of inventory because everyone's on Facebook and getting accounts in the droves, but there's not many marketers there.

The balance of demand and supply from a marketing standpoint and streaming is somewhat imbalanced. There's a lot more supply right now. And what I think is gonna happen the next few years, that demand is gonna catch up. So right now it's just this golden opportunity for the ecosystem, for any marketer that wants to jump in and get involved in connected TV advertising.

What I think is gonna happen specific to automotive is, you kind of keyed into it, 2018, 19, those were the first real murmurings of OTT or CTV or whatever acronym you wanna use. And then what happened? COVID happened in 2020 and all the distortions we've talked about.

And so what's interesting is, as streaming was starting to get momentum and growing, the automotive industry was sort of in this unique time period where in some cases dealerships thought and rightly so, and didn't really spend that much on marketing at all. Why would I? I don't have many cars and the cars I do have, I'm selling for 15, 10, 20% above sticker. I don't really need to commit to an advertising mix. And so when they did, either because they were being strategic and really wanted to understand a new medium, or because they had some co-op money, whatever it was, and they did commit to streaming, my experience has been, our experience has been, the scrutiny over its performance, what it's doing for the bottom line of a dealership really wasn't there because it didn't need to be. It was, you know, the party was rocking.

That obviously has come to an end in the last six months. And so what we're now seeing is there is, rightly so, more scrutiny being applied to streaming and what it's doing for a dealership in a way that we have not seen really since COVID began because of all the dynamics of supply and, you know, everything else.

And so what I think is going to come is the, we'll call it the automotive community is going to start asking and is starting to ask tougher questions and really going to force our industry, streaming for the automotive industry, to really get serious, which I'd like to say we've already been, about demonstrating the value the space is having.

So those are kind of the two big things that we haven't seen and that will, I think, continue to progress into the future.

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You can’t fix a process problem with marketing.

The question I got most when we were just doing consulting was, what's my ROI? I would most likely to be talking either to the owner or the general manager or a C-level executive, and they want to know what their return on investment is.

There are different marketing channels and different marketing campaigns, and what we always told them is until you are running as efficiently as possible, both in your processes and with your software systems, we're never going to know what your true ROI is.

If you neglect your process and you look at your ROI, and your marketing and its inventory management, lead handling, or internal sales chain that's causing the biggest leak within that flow, that's going to cost you more than what your marketing dollars are. So, 100 percent of the dollars spent on the process is going to improve the dollars spent on marketing.

Why do we spend money on marketing instead of process?

I think it's twofold.

One, it's easy to push the bug down the road, right? If you're if you consistently don't hit a goal and you pull the marketing lever and it doesn't work, you're constantly focusing on something that's external, and it's not your fault. So, the accountability is not there. In this industry, a good management team has to be accountable and has to accept what, you know, what the data is pointing them and where to look.

I think the second reason is maybe they don't know how to improve a process. There are not a lot of systems in place within this industry that could be and should be that some of the top dealers execute. and I don't think they really have the information or know-how on what to do when something's not performing internally if that makes sense.

What do you see the role of management in this?

I think the managers, it really depends on how they came to become a manager. You know, unfortunately, in this industry, they'll promote someone who's a really good salesperson and maybe has a very good internal process and how they look at us, you know, their own personal achievements, and they'll be promoted to a manager the majority of the time.

That doesn't translate on how to educate or how to, you know, groom someone else who's coming up.

I think managers, their perception is they’ve got to do the job, just get the job done, qualify and bring them in. It's more of a hard nose, get your job done instead of nurturing. And, in today's day and age, the consumer is different. You’ve got to service the client. You’ve got to ask questions of the client.

It's hard to groom salespeople who have been doing this for years. It's easier to work with some of the newer guys. So, I think it's just a challenge.

And then it's called inspecting what you're expecting. Once they get to that granular level of inspecting, I think they're going to see a better outcome or change.

Simple adjustments can make all the difference.

It's the little things that make all the difference. What we often see within a dealership is the easiest thing to have an impact on your sales that month is your internal sales chain and the management of your sales team.

For example, I have a client this month and we're talking about how come we're not hitting our 150 goal. It’s a metric they've been trying to achieve in April for years. Now, we've grown from one hundred and eight to one hundred and fifteen. Now, this year we're tracking one hundred thirty-five.

And the conversation went, “I don't think we have enough of the market or I don't think we have enough leads to achieve that goal.” But when I showed him, we had two new salespeople and the bottom sales performer usually performs about 30 percent less than your top sales performer. In this case, the two bottom salespeople were performing 25 and 30 percent less than the store average. Yet they had the most ups and most walk-in distribution. If they would have been closing just at the store average, they would have had 14 more sales month to date. And that was last week. That would put them at exactly one hundred and fifty sales.

So, it's just managing the walk-in distribution. If you're managing the up distribution and just looking at who's taking on those opportunities, a simple tweak like that can make all the difference in them.

What are some of the first metrics you look at in a dealership?

The first thing we do is we do a funnel review. We measure the amount of users, the VDPs, which is an indication of marketing. Then we measure their VDP to leads, an indication of inventory management. Then we measure leads to visits, an indication of lead handling, and then you're in-store visits to closing to sales, closing percentage.

The reason why we do that is every dealership has a different weak point within their flow, and it's really, really crucial that the dealership knows where they're lacking in that funnel and they prioritize that part of the funnel to start correcting.

It's always process, whether it's a marketing process or an inventory process.

One of the things that I've noticed that most successful dealers do is inventory management. I think that has the biggest impact on sales. It's usually recon time, I think, is number one. Some dealers are really happy at five to six days of reconditioning time, whereas others are above ten. But, you know, I hate to break the news, but some of the top dealers are two days, two to three days in reconditioning time. Their time to the line is instant. They buy that vehicle for day one, and there's really no depreciation by day two or three, whereas with another dealer, they buy a vehicle, they put it out on the lot 15 days later. They're already in the values are very much different.

I think that it's really important to find what part of that funnel is impacting your ROI the most. Focus on it, and I guarantee it's a process issue that can be improved.

What are some of the most impactful sales metrics a dealership can look at?

Here's another interesting example. We have a young salesperson in a dealership versus an experienced salesperson in a dealership. We like to measure ups to demo and percentage ups to write a percentage. Those, I think, are the two most impactful metrics that a dealership could look at with an individual salesperson.

For a store up to the demo, a good average is anything above 75 to 78 percent. But the most important metric is that they get them to the write-up phase, and what we see is when a young salesperson doesn't get them to the write-up phase, it's usually because they're not qualifying them properly, they're not gaining their trust. Maybe during the demo ride, they're not asking the right questions. It might be a flying TO and they're not answering the questions. Does he have a trade-in which is payment? How much has he got down? Does he have a co-signer? When they come back to the dealership and they're sitting down with the prospect and, you know, they're going to go to the manager, a lot of that information hasn't been gathered and there's really no bond or trust, so the consumer is reluctant to give that information.

We recognize that's the number one metric that really increases sales as your ups to write a percentage. If it's an older sales rep or a more experienced sales rep with a low ups to write a percentage, what we notice is they like to overqualify. They don't need the manager's help. They know they have all the answers. This person doesn't have good enough credit by a car. They're not going to qualify, so they kind of rush them out.

What we see is consistent in both of them is they go through that process quickly, that that customer leaves and they're standing at the door onto the next customer. The follow-up process and feedback percentages are low, so they usually get the most opportunity and the lowest ups to write up and the lowest feedback percentage.

I'm telling you that impacts the dealership, you know, huge, greatly a month over month. just by fixing or analyzing those two metrics with your sales team, you can have a much different month.

And that's something that you can implement today. That's not something you have to wait for, you know, next month or something different if the manager is looking at those metrics and they understand what's impacting their sales, that can be turned and changed overnight.

Data should not be a weapon.

For years, we gathered the data manually, and we were we were a boutique consultancy. We would spend a lot of time within a dealership and provide this information and try to help them, you know, groom along the sales route. Now we have a software that's automated that does creates these reports for them on a daily basis and sends them a benchmark alert and lets them know this individual is underperforming in this specific metric with a for example, here's you can do a B or C.

What we're what we're updating now is an accountability factor where the manager who's in charge of the department will get an alert and they would have to put in a note and close out the alert to just to show that someone took action on what's happening. It's no longer taking a lot of time.

It's presented to the dealership, you know, for them and let some know what's wrong and potentially how to fix it and gives them the opportunity to close out what we call an open ticket or an open alert so they can address the issue. Now, understand that not all changes are going to have a huge impact. It takes time.

I also want to say that data should not be weaponized. When a dealer first starts analyzing data and managing their store by leveraging data to the best of its ability, you have to give it time. You have to give it three to six months for everyone to make an adjustment and try to improve.

As soon as you weaponize it, it has a negative impact and no one wants to be graded at that level. Then they start to skew numbers.

Who should be accountable for this?

 You have to have the trust of the employee. First of all, it comes from the top down. You need an owner of the solution, regardless of what solution a dealer invests in, whether it's a marketing campaign or a website or our software for process management. You need an owner within the dealership to own the solution who's going to manage the process, meaning he's going to manage the alerts and manage the timelines.

That person has to be a voice of reason and of trust. The employees have to trust the data and trust the person that's delivering the information.

I usually think it's not it doesn't fall on the employee when they can improve. It's usually management because management is in charge of hiring, right? Making sure to hire slow, fire fast, making sure you got the right people on board. And then it's up to the management to provide that nurturing and education for them to get better.

I think the employee should kind of have almost free reign in the first 90 days to look at their data, find out what their weak points are, and try to improve upon it, but it's imperative that the dealership has something in place to help them grow and grow.

You know, we find oftentimes where, you know, dealerships overinvesting in certain parts of the funnel, right?

Let's say they're overinvesting in the bottom part of the funnel and they can save five, ten thousand dollars a month and they wouldn't have any impact on their sales.

A lot of times when you find that, they want to know what's the next marketing campaign that we can reinvested in because we still want to sell more cars. My answer to them is to find the leak within your sales chain. And if it's in sales and development, invest in that.

You know, if the managers are not equipped to educate and bring that salesperson along, bring someone who can, and I think when they adapt that mindset, they're going to get a better outcome. They're going to get much better results for their investment.

What is the ideal client for you?

I would say it's a dealer, one who has to be data-driven. They don't have to completely understand how to be data-driven or know what to do, or how to be data-driven, but they have to be of the mindset that we want to make decisions based on empirical data to improve. Number one.

Number two, they have to have someone within the dealership who's going to manage that process as an account and is accountable for managing that process, someone who's willing and able.

When we do a demo for a dealer, we have a discovery call. We like to ask who within your dealership, "Can you see in this position, and is this person available either in a week, biweekly, or monthly for monthly meetings?"

We can go online and we can onboard and continue to educate that person once they have that in place and they can visualize someone that they that they trust. That's an ideal client for us.

And as long as that person is transparent, willing, and able to look at the data, you know, make adjustments accordingly and educate, then then it's going to be a really good relationship, and results are inevitable. It all really depends on how long it's going to take us to achieve that goal.

And so that's pretty much it. It all really depends on how long it's going to take us to achieve that goal.

How do you stop salespeople from “gaming” the data?

On our end, you know, that's one of the main things we experienced, and especially when we onboard a new client, they want to know how accurate the data is or we'll get a lot of pushback that it’s not right.

Within our system, we have an auditor and we can see when things are kind of fudged or not followed accurately, whether it's leads, whether it's visits, b-backs, BDC appointments, or appointment shows.

In our dashboard, we have CRM data and then we have benchmark data and we hold them side by side. Oftentimes those numbers will be different anywhere from 10, 15 percent. In the beginning, it could be up to 40 percent.

In utilizing that auditor, we're able to show, well, this person didn't use a stop, put in a stock number, this person said this that the appointment arrived. It was an appointment, but they put the appointment in after the visit arrived. It's probably a visit, not an appointment.

So we're able to break it down, and we use that as a teaching tool and a management tool for the manager to go in and make sure everyone's trying to follow the process accordingly. It takes us a good three to four weeks to implement this process and have everyone on board.

So it's important that the dealership follows it. They're of the mindset that they want to get as clean as possible and get the data as accurate as possible, but we actually have some tools on our end that we can kind of see what's going on, even if they're not utilizing the system the right way.

The importance of data in the sales process.

Most dealerships, when they think data, they think in terms of marketing. They're not measuring their internal processes, first and foremost.

Once you start doing that, you have to understand that you're already ahead of the curve. Now you're starting to see where you can improve internally, and once you accept that and understand that every dealer has similar issues, every dealer has holes in different areas of the processes.

All you have to do is say, how do I focus and how do I set them up for success?

And again, I think that's management and, you know, C level, you know, a problem or challenge to try to solve. How can I put my team in a better position to succeed if the metrics aren't where I want them to be?

How many of your process metrics are universal vs dealer-specific?

We know that the OEM will have some specific data and we can use that as a guideline, but we pull historical data into the dashboard and we'll do a 90-day average of their performance.

And then according to what their goal is for the month, we'll let them know throughout that sales chain what percentage, what type of improvement, improvement by percentage in each part, each part of that funnel that they need to improve upon to meet that goal. So instead of saying every dealership needs to be here or every dealership has to follow this OEM guideline, we have to first figure out where you're at, what's your starting point and how can we improve upon what you're doing. Then we can start saying here's an OEM percentage or here's an industry standard.

You know, we see metrics up and down. For lead handling, I have a BDC team that performs leads to show at 34 percent. I don't care what part of the season it is. Consistently leads to show, not leads to appointment, leads to shows at 34 percent. That's an that's an excellent number. And, you know, you have other dealerships that are at 12 percent.

So you have high and you have low. I think a good number is right about 28 percent, that's a good low benchmark, I would say, for any dealer.

There are some industry averages that I've seen throughout the years. There are some OEM recommendations. But then I think the most important metric is where does a dealer sit at now and how can we improve upon his personal performance, you know, in the next 60 to 90 days?

Can you define hard and soft conversions?

During our consulting time and the majority of the time we would sit in meetings, and we’d spend hours with the marketing team and with the dealership ownership and management. We'd be going over metrics such as cost per click, click-through rate, impression, impression share, and influences. These are five soft conversion metrics, and we would talk about them through exhaustion.

I would sit there and tell the dealer we're having another month where we're underperforming by 20 percent. The marketing team or agency is telling you how great they're doing in all these soft metrics.

As a dealer, if you're not investing in soft metrics. They are important, but that's for the marketing team to focus on and understand their internal performance has nothing to do with the dealership.

The dealership is investing in hard conversions. That's leads, visits, and sales. That's what they should care about. That's it.

Why is that? If all the soft conversions are performing, all of them, and they're all coming to your website and they're not converting into leads, then that's a conversation that they want to say, hey, let's take a look at your inventory. If they're coming to your site and they're looking at your VDP and they're staying, you know, above two and a half minutes, three minutes on a VDP page, that's a quality visit. If they're not becoming a lead, which is a hard conversion, why is that? What's wrong with our inventory? You know, when was the last time we updated pricing? Do we have the right pictures? What was our time to line?

Now you could ask those questions internally, but the dealerships spin themselves in a circle month after month, focusing on these soft conversions. They don't understand. They're not a marketing agency, nor should they want to be.

Another thing I would tell you is I would never invest in impression share unless my conversion rates and unless my leads, my VDP to leads is above 15 percent on any specific campaign. I'm not going to invest in impression share because you're all you're going to do is spend more money on visitors who aren't going to convert, and that's a great way to spend your money quickly.

Another example is influences. You know, we have a saying, if you can't measure it, you can't manage it. Not all multichannels are actually influencing a sale, so that's just another area a dealer really has to be careful with.

What they want to do is trust their marketing agency to make sure your soft conversions are there but focused on your soft conversions are there, but focused on your hard conversions, because that's what's really ultimately going to make a difference with the new dealership.

Mike Dececco, Vice President of Business Development at Fullpath, talks to us about the emerging trend in automotive: CDPs. He reviews the value they provide in sales and service marketing and provides specific examples of how it can supercharge new sales as well as retention in your dealership.

Can you define a CDP?

CDP is another acronym that dealers need to learn now, which is always frustrating. But honestly, what it does is it takes all of the disparate data sources that a dealer is currently using. So CRM, DMS, website data, service data, anything we can get our hands on, chat data, whatever it might be, pulls all of that into one place, analyzes it extensively, cleans all the data, and then can execute outbound messaging to consumers based on an audience that they may fall in. It's a lot more than just marketing automation. A CDP can give dealers the ability to pull unique lists of customers based on certain criteria that they can take action on. 

So think about it as if you're sitting there as a General Manager and you're looking around the dealership and saying, Why isn't everybody on the phone right now? The showroom isn't full. Who do we call and why? So with the CDP, when you pull all of the data together, you can tell a story to a salesperson to load their lips to make a phone call. One of the main reasons that people don't pick up the phone and make a call is because they don't know what to say and they don't know what to say because they don't have all the information to feel confident about having a conversation.

Think about this example. If you're a salesperson in a dealership and the CDP could give you a list of, hey, here's all the people that are in a positive equity position. Here are all the payments that they could possibly have on all of the inventory that we currently have in stock. And here are all the VDPs that this person recently viewed. So now you can actually make a phone call that you have all the information. Hey, Steve, I realize that you're driving a 2017 Tahoe, and you might want to be careful, right? There's a little bit of a creep factor here because you have all the information. So you know that in this particular instance, Steve has been on your website and they're looking at new Tahoes. So it's, hey, you're in a positive equity position on your Tahoe, were given top dollar for trades right now and I've run some payments for you on some new Tahoes just in case you're interested in having those conversations. Now, you know that they're interested because they're already showing that intent by viewing those VDPs. So the power is the correlation of data. If you know somebody is on the website, that's one thing. But if you know that they've been on the website and they're also in a positive equity position and you have the talk tracks to reach out and communicate to that person proactively, that's kind of where the rubber meets the road.

That's just one example of what a CDP can do, but you can also do some really interesting other things like active advertising suppression. So for example, if you're integrated with call tracking into your CDP, if somebody calls and makes a service appointment for two weeks from now, you don't need to advertise to that person for service, because the job's already done. You've already booked the service appointment. The CDP can shut down advertising and suppress advertising to certain people who have already transacted. The same thing holds true on the sales side. So if somebody just bought a car, if you're connected to the DMS, you know that that transaction occurred and you're connected to the advertising as well and the audiences, then there's no reason to serve somebody advertising after they've already purchased a vehicle.

We see it happen all the time, not just in automotive but in other industries. I recently bought a golf club and I'm still being followed like 45 days later for the exact golf club that I've already purchased. The reason why that's happening is because the company that I bought the golf club from doesn't isn't connected to the transaction. They don't know that I purchased the club. I'm still in their retargeting cycle. Right? So if you connect all the dots, that's when it gets really, really cool and you can save a bunch of money and you've got a whole bunch of really unique insights.

What is the relationship between a CRM and CDP?

I can't speak to our product development roadmap, but I don't foresee us going into the CRM space. It is a very crowded space and it's a very mature space. There are a lot of really great players that we are partnered with in that space, and we don't really have any interest in going after that.

What we're here to do is to help the CDP talk to the DMS, talk to the service scheduler, and talk to the call tracking. Think about us as the data layer that makes sense of all of those different products. We don't want to change a dealer's behavior necessarily. We want to give them all the information to make the behaviors that they're doing more effective.

You can imagine if you're working in a CRM and a CDP at the same time, the CRM isn't connected to the DMS, so it can only give you the insights that it has available based on the consumer's activity or inbound outbound communications between the consumer and the salesperson. But the DMS has all the transactional data, right? If you connect that together in a CDP layer, now you know this person has a much higher lifetime customer lifetime value than somebody else. That gives you insights when you're reaching out to particular leads. You're going to likely treat a lead differently That's bought four cars from you and has $1,000,000 worth of lifetime customer value than a fresh lead off the street that you have never had any business with. What the CDP does is connect all that data together to give you the information, but it's not a place where you're directly outbound communicating to customers all that often. The CRM is still the best place to do that.

How do you approach data hygiene in the dealership?

Yeah, that's a great question. What will work with third parties, anybody that's in the space, Experian, Equifax, or whoever can help us clean the data. 

I think your point is a really good one. I think it actually starts at the dealership. Going back to my Dealer.com days, we had a proprietary CRM. Our own kind of CRM, we called it DNA because we need another acronym, right? So we called it DNA, but we had a saying and it's just like a lot of organizations do now, if it's not in DNA, it didn't happen.

What we need to do is help dealers understand that the minute things that might not feel important, like making sure you get that email address double-checked, making sure you got that phone number, double check the address of the consumer, all of those things, we want to make sure that the dealership has a process in place to ensure that their employees understand, that getting that accurate data in the system is going to ultimately benefit them in the future. It's not just because we're being a pain in the neck. When they understand that all of that data is going to be leveraged on their behalf to generate more opportunities, then they pay more attention. And so it's kind of like a systemic issue in automotive is like crap data in crap results out, so we definitely do a lot of work to help the dealers clean up those databases so that we can effectively start to market to those consumers.

The impact of closed vendor platforms.

I think it's taken so long to get there to get to this place, and I think it's because automotive, just speaking from all my experience in the space, has generally been a whole bunch of walled gardens. This company doesn't have an integration with this company because they compete in this way or this company doesn't have an integration with this company and doesn't want to play in that space because they compete in this other way. And I think we've seen outside of automotive that a really robust ecosystem of open APIs is how you make a CDP really effective.

One of the things that we're focused on at FullPath is being very, very, very open with our data. For example, a dealer can set up APIs and directly send their audience data to other providers. We don't necessarily care if they're using somebody else for their digital advertising. We'll make sure that that provider gets the data they need to effectively execute. I think that's kind of a system problem that we've had in automotive is people kind of holding on to their space and a very walled garden. And we're starting to see now more and more companies standing up really robust APIs so that dealers can leverage the stuff that they're doing with that company in all of their other strategies, and when that happens, everybody benefits,

It’s time for open integration.

What's happening is, you know, there's so much available, but without consolidation, there will be no execution. So all these systems have to talk to one another. And, you know, in automotive, we're always behind, right? Or we're like 7 to 10 years behind the rest of the world. We're getting there now. All throughout my career, it's like I've had numerous scenarios where a dealer says to me, Well, hey, you know, I use this other company. Why can't you guys just have a conversation and figure out the way that we should do this? And that happens every single day in our space. That's part of the reason why I joined FallPath because the CDP is an open platform that accepts and transmits data in an effective way so others can leverage it. 

It's really going to be the third pillar moving forward. You've got the CRM, the CDP, and the DMS, and those three things are kind of the core fundamentals, but the CDP can interact with all of those ancillary systems that the dealer is using and then inform them based on all of those signals that it's getting from all these other areas. It can inform partners on how to engage with that consumer or it can inform Fullpath ourselves to be able to engage with that consumer.

But it's really just about what's the right thing for the consumer. What's the best experience and the best experience for the consumer and the best experience for the dealer in the same regard is an open relationship between all of the vendors that they work with so that the dealer's best interests are always at heart.

It's one of those things where it's been very fragmented for very many years. And you've seen huge players in the space that have acquired many companies and tried to put them all together to create this. And it hasn't happened yet. It requires a third-party disruptor that's unencumbered by all of these legacy revenue streams and things like that to be able to say, hey, there's a problem and we're just going to fix it and we're not going to worry about we don't want to do that because we have this other company over here that competes with this or competes with that. We're not encumbered by any of that. And the CDP players are the ones that are walking in with open arms as opposed to cross arms.

What pushback do you get from dealers?

First of all, they don't necessarily understand what it does. It's not necessarily a tool that you're in all the time and clicking around and using it for a million different things. We're starting to build that into the CDP now. It's evolving into a more, you know, dealer active tool, but the pushback we get is, well, I already have a lot of this stuff in my CRM or I already have a lot of this stuff in my DMS. We say that, yes, you do, but they don't talk to one another. It's like your DMS speaks French and your CRM speaks Japanese. We're the translator We'll pull those two things together and make sense of it and give and give you a way to actually leverage the insights when you actually have those data sets connected because it gives you tremendous power when you pull all of that stuff together.

How should a dealership be structured to maximize the value of a CDP?

The cool part about it is that most of what happens in the CDP is automated. They don't necessarily have to have processes in place other than I would say that, you know, speaking from experience, I would say, make sure that you're getting as clean data as you possibly can into your systems. That's going to save you frustration down the line for having to append and make sure that you're cleansing all of that data.

You're going to have to do that sporadically anyway, right? It's never going to be perfect. So the first piece is what's going into the system? Are you doing a really good job getting in there? The second thing is,that you don't really have to think too much about what to do with it once you've stood up the CDP layer. 

Because that's what the CDP does. It pulls all the data together and if you're using, let's say, Fullpath for digital advertising, our digital advertising is being powered by all the audiences and different customer categories that are being that are being stood up every day. All of those audiences are being refreshed every day because one day somebody might be a new lead, and the next day they might have had an appointment, so they're in a different bucket. All of that is happening automatically. They don't really necessarily need to change their in-store process in any way, but they can rest assured that because the data is all being put into one place and organized, their consumers are getting the right message at the right time.

And then anything that's happening in the CRM or a BDC where people are making phone calls, that's all gravy, right? That's all icing on the cake because the CDP is doing all the hard work of who is this customer, what have they done, and what they need to see now based on their last activity.

The core kind of tenets of what a CDP is, (everybody wants to be a CDP these days. We were and we were we were just at NADA, we've got 20 new CDPs that just popped up in the last month and a half because CDP is in the zeitgeist). The core competencies are a customer record that shows everything that the customer has done since the beginning of time. Every transaction, every ad they've clicked on, every email they've opened, every VDP they viewed, every transaction they've had with the dealership, including the grosses and everything. It shows everything about a singular view of a customer from the beginning of time that they interacted with you because we'll go back 7 to 10 years of data to pull all of that out. Since the beginning of time, everything that they've ever done with the dealership. and then does the previous action dictate the next marketing action or the next action to be taken? Those are kind of the two core tenets of what a CDP does. And I don't think a dealer really has to do much. I mean, other than sit back and count cash.

How can a dealership clean up their data?

There are two ways to do it right. You can work with there's a myriad of data companies in automotive. I named a few at the beginning of the conversation. Any one of those companies can you can bang your current and it sounds terrible, but you can bang your current database up against that and it will append and refresh and make sure all of that data is clean. You can do that, you know, as often as you like, but if you do it, it's not necessarily inexpensive to do, right, because you're talking about huge datasets.

But if you do that, you don't want to have to do that all the time, so when you're signing up for a CDP, get your data cleaned up, make sure everything's good to go spend whatever it takes to make sure that that's right. Because if the data is right, then everything will be right. Then instill a process in the store and let people know, Hey, guys, we can't have a customer@dealership.com anymore, right? This is something we have to ensure that we're doing because it affects them individually. If you're putting the wrong data in and you're the service advisor and that customer's not getting your service emails, then that customer is not coming in for their next service to see you and you don't get the next opportunity to upsell that customer, which is part of your job as a service advisor.

They all roll up and talk to each other. It's all important. So clean it up first and then put a process in place to ensure that your people are doing what they need to do to make sure that the data is correct. And then you'll have to do that much less often than your initial setup.

Dealers should have a strong data collection process.

You can save yourself a lot of expense by having a really nice process in the store for ensuring that as you're onboarding new employees at the store, say, Hey, this is our policy, this is how we do it. There are no exceptions. You have to collect the email address, you have to collect this, you have to collect that. There are no exceptions. 

And then I mean, any dealer should have a really strong data collection policy at this point, because you set it right and think about what's sitting in all of these systems. You've got decades of highly relevant customer information and customer activities directly in your DNA. You've got the Holy Grail. If you just nail your data strategy and can communicate with the customers you've already spoken to effectively, then you don't have to spend nearly as much money going out and acquiring new ones. You've already spent all of this money out, $600 on average, right, to sell a vehicle. You spent all of that money already to generate all these leads. It makes a lot of sense to just focus on the house as the core of your strategy. How do we take the customers we've already done business with and ensure they come back for service and they come back for their next car so we don't have to spend 600 bucks again to acquire a new customer?

How can a CDP impact retention?

Retention is the nucleus. It's the reactor. You know, it's the thing that's powering everything, and that's why the CDP is important because it's not siloed.

So you can leverage data out of your CRM. It's great. You can export a customer list, you can do all kinds of stuff like that. It's fun, right? But if you don't have the DMS data and the service data, all the phone calls that customer made and all the chats that they had, reviews that they've left, everything is consolidated in that customer record, then more often than not, you're going to send the wrong message at the wrong time than if you had all the information to send the right message.

It's so common `sensical. It's kind of crazy, right? Before you reach out to the customer automatically, you know, if it's automated or it's not, make sure you have the right information. Not rocket science. 

It's just like anybody in any sales job has ever done. Right before you pick up the phone and you call somebody, you've got to know some things. Cold calls are difficult, but when you make cold calls, I did it back in the day at a dealer, I'm looking at a dealer's website and I'm figuring out who this person is I need to talk to and what are they like and what is their job. You have to have some information to actually have a productive conversation or have a productive interaction. 

The same thing holds true when you're reaching out

to the customers that you already have. You don't want to send them a direct mail about a car that they haven't owned for four years. That is a waste of your money and it's a waste of their time and it's a bad look for you.

So get your data house in order and leverage it. And you're going to find that you're going to have to spend a lot less money acquiring new customers because you're doing such an amazing job keeping the ones you've already had.

How does Fullpath use AI? 

If you were to think about the core data as, like the nucleus, and then outside of that you have an AI layer that is analyzing all the activities that are occurring or all those many tens of hundreds of thousands of customers and determining which bucket that customer goes into all the time.

I might one day submit a lead to the dealership. So I submit a lead, but I don't anybody back. I don't do anything. Then I'm on the VDP. Now, we looked at the VDP, so I'm getting retargeted. That's very basic. But now let's say that I get an email that was sent to me because the dealership collected my email address when I submitted the lead. Now I click on that email. My identity is completely resolved, so now they know who I am. They know I've been connected, all my data is connected and they know that I'm Mike Dececco, right? The AI knows that Mike Dececco likes to buy Audis. He's looked at these four Audis in the last three months. What it can also do is pull together data points from other areas. So, for example, let's run payments on all of these Audis that Mike just happened to be looking at, and let's send him an email with these three vehicles that he looked at with payments for 48, 60, and 72 months, by the way, and here's the lease on the new cars that you looked at. AI can develop all of that for us and send those messages automatically. 

And that's where everything's going. It's super rad not to date myself, but it's super rad.

What is the future of CDPs?

I think when we go to NADA in three years, you're going to see a completely consolidated customer view across all tiers in automotive. And I think that's where it's going, right? We're talking to an untold number of manufacturers right now about, hey, like dealers got all of this fantastic data, right? We have all of these incredible incentives and all these things that we need to make sure get pushed down to tier three, but not just down like the way it's been right now. Mostly is like, hey, you know, here is a really incredible offer on whatever vehicle it is, and let's make sure if send that offer out to all the website providers and then all the website providers have to update the information on all the sites. 

So I think we're going to see a huge amount of cooperation between the tiers. You're going to see and we're doing this already for some manufacturers, regionalized incentives being displayed specifically on dealers' websites automatically because we're getting a feed that's coming down from tier one and then we can disseminate that based on region, based on individual dealer offers. If they have an offer that's better than the regional offer, we're going to see this coordination between the tiers. I want you to think about a scenario. Imagine it's 2028 and you go to Kia.com. You're already a customer. You're already driving a Kia and you land on Kayak.com because you're curious about the new Kia models.

Right now, you can open up a chat and say, hey, you know, are you a current customer? Yes, I am. Give us some information about you. What's your name? Maybe the last for your social. I don't know. I'm just spitballing here, but I want you to think about what the scenario could be. Okay. Here's my information. We all know that the next generation of consumers are very willing to just give out. It's all about convenience. Make it easy. 

So cool. Here's all my information. Now, you could directly pipe in key financial services data. You pipe in their insurance data, you could pipe in everything and literally create deals and hand fully baked deals to the dealership because you used AI to connect all the dots for all the players and it would make deals super easy for dealers at tier three. Not that they're not easy right now because they're slaying it, but for example, if you actually had all of that data connected from the tier one level all the way down to the tier three level, and that's where we've wanted the automotive industry to go for so long. How do we leverage that data across all these tiers to give the customer this ridiculously convenient experience where they just buy a car and the dealer in their market gets the deal and they buy the car, right?

But that's not the way it is right now. It's still very, very disjointed. I have to go to tier one. I'm going to fill out a form that's going to go to the dealer. I'm going to get a totally different process from one dealer to the next. It's totally not uniform. I think we're going to see even more consolidation in the marketplace on data strategy and consumer experiences like we've seen outside of automotive.

The dealerships are not going to be changing the systems that they're using, but they're going to be extracting the data from those systems and taking action on it and making it much more effective than it is today. 

Because, I mean, I've seen it just this year. I'm talking to so many partners about integrating into the CDP. And, you know, everyone is starting to think about, hey, I really need to stand up a really robust API and it makes sure that if a dealer wants to use my widget for whatever it is the data from that widget can be leveraged in other areas inside the dealership.

That's going to be the thing that's going to change. We're going to start to see much more cooperation between vendors that understand that they become more powerful and more sticky when they play really nicely with everyone else. I think we're going to see a dramatic shift in the next few years.

Dive into the heart of digital innovation and consumer protection with this compelling episode of DrivingSales Insights, featuring the insightful Angelica Jeffreys from Equifax. As we navigate through the challenges and opportunities presented by online retailing, Angelica brings to light the critical issue of rising consumer fraud. She discusses the subtleties of in-person versus synthetic fraud, offering a clear view into the tactics used by modern criminals and the sophisticated strategies businesses can employ to counteract them.

But it’s not just about defense. This episode goes further, exploring how AI and Big Data are revolutionizing the way we engage with customers, offering personalized experiences that were once thought impossible. Angelica provides fascinating insights into Equifax's role in enriching dealer data, ensuring cleaner, more effective customer databases for a sharper marketing edge and improved sales tactics.

The current state of consumer fraud.

Yeah, you know, it's very interesting. One of my coworkers was a victim of fraud just this weekend, where a consumer stole her identity and walked into a dealership in the Atlanta area to buy a car. Everything was very suspect because it was a buy here, pay here dealer and my coworker has an exceptional super prime credit score. So the dealer got a little suspicious and called her and they arrested the woman on the spot. 

But in-person fraud is nothing new. That has been going on, somebody stealing a consumer's identity to go try to acquire, whether it's a car or an iPad or however, they're attempting to commit fraud. Where we're seeing increases in an incremental way that we haven't seen in the past is in the online shopping world. Of course, there are so many new platforms and capabilities to be able to transact online and the thieves are getting much, much more sophisticated. 

There are a lot of crime rings out there that are targeting the ability to transact online, in particular, with synthetic fraud. Synthetic is a very patient fraud. It takes some time to really build up the persona, which is pieces of different identity elements from different real people and deceased people, wherever it is they gather it together. It's very hard to detect. Although the three bureaus, Equifax, Experian, and TU, we all have solutions that can help prevent and identify when that's happening. In the next ten years, we anticipate fraud in automotive to be a $10 billion problem. And so we have a lot of our partners coming to us asking for whether it's first party, third party, synthetic, comprehensive solutions to try to waterfall into creating solutions that can address all of those types of fraud.

How do we protect ourselves and make online retailing easy for consumers?

We're all consumers, and I think we expect and almost appreciate a certain level of friction at a certain point. If you're just logging in and shopping for a car, you're not you're not expecting to be asked for certain forms of identity.

But as you're moving through the process and you're getting a little more serious and you want to get pre-qualified, for example, as part of that shopping process, you expect you're probably going to have to give some PII or the last four of a social or have your device at minimum authenticated. There are some pretty frictionless ways to do that.

And then again, as you're proceeding through that transaction and now you're saying, hey, I really do want to purchase this car, I think you're expecting a little bit more. You're going to have to provide your driver's license and expect that you're going to scan it with your phone. And there's probably going to be some level of detection to make sure that what you've provided is not a picture of a picture of when taking a picture or your cell phone that you need to upload.

So the trick there is and what our partners are looking to us to help them solve is to help us with the right solution at the right point in time, so as the consumer progresses, the expected friction that makes them feel secure and makes them feel like it's a trusted experience. It's not too soon and it's not too burdensome on them, too soon in the process.

AI and Big Data

AI is something that I think if we look at the glass half full, there's so much opportunity.

I'll give you an example of how we can help enable AI. In a lot of our non-regulated data, which is modeled data against what we call our IXI database, we acquired a business 15 years ago that essentially is a consortium of the nation's investable assets, we manage that database is about 50% of the of the investment accounts in the country.

Because of that, we know better in an aggregated way what's in people's wallets. We can understand what kind of discretionary spending you have. We know what your ability is to pay in an anonymized and aggregated way. And so when you take that data and you apply it to the many ways that you can use AI to create a custom and personalized experience for a consumer, you're layering in insights that can help inform. When you know this type of consumer comes into a funnel, AI's going to know, okay, well, they're an economic cohort 72, and they're likely to want to engage in conversation about the, the economic, the like the gas mileage, things that that our data will tell them about the consumer in addition to what they can afford. It's a much richer experience for the consumers to have the data in that API process if you will. So a lot of the conversational AI either Stella of course, who's out there, and some of these other businesses that are doing a wonderful job in using it to improve the consumer experience could make that process a lot more personalized by using data like we have with IXI. And that type of application is what we're exploring.

What is the current state of CDPs?

I think there are a couple of topics in that question because big data means a lot of things. And you're right, it's a very exciting time right now with the way that companies are able to activate the data. But I think you have to start with clean data. And dirty data is a problem right now. There are some of the capabilities of some of the DMS providers and the CRM providers that are going to need to advance so that the data that is being pushed into these CDPs has been corrected, normalized, keyed, and linked so that it is at the right level of cleanliness and accuracy to be acted upon. There are a lot of partnerships and providers that really need to come together to help create that foundation of clean data. And so dealers really need to try to figure out, okay, who am I going to partner with to help with that?

And so finding a partner who is familiar with how to correct and normalize and key and link the data is going to be key. The second piece to that on the activation side is I think the industry really has to come together to determine, okay, what role does the CDP play, what role does the agency play and what role do the data providers play? There's probably more that I can throw into that conversation, but really in trying to activate in the most efficient way. 

Agencies play a big role in this too, And most agencies that you have out there today are much more accustomed to a traditional advertising model. They have to kind of morph a little bit to become consultants if they're really going to support their dealer body or their OEM customers. You've got OEMs in this conversation, too. So the agency is really taking on a more consultative role to make sure that the campaigns that are being pushed out by some of these CDPs fall in line with the strategy and also are efficient in the overall deployment of the agency strategy on behalf of the OEM, of the dealer, and the data providers also to help enhance the data.

There's this conversation about first-party data and how to activate that data. And the thing to remember, even once you've cleansed the data and keyed and linked it in this piece, most dealers have a fraction of the PII or the data about the consumer. I'm going to give you my name and address. But what else do you know about me that can be used for marketing? So insightful third-party data that can be pulled into these clips can help enhance these consumer records and fill in the gaps. I mean, people move, people change their phone numbers, people have multiple email addresses, and so bringing in a source of truth that can help fill in all those gaps and then layering in third-party data that provides insights about that consumer that can help with personalization, which is what consumers expect today.

To wrap that all up, this is really to your point, your question. We're now finally at the precipice, which is what has always been the promise of digital. We've dreamed of this moment and here it is. It's really an exciting time to see this come to fruition.

How does Equifax use dealer data?

That's a great question. So Equifax does not ingest data. What we do is we work through our vendors and our third-party providers to append to the dealer's data. For example, we will get or we will give a file of the entire universe to a CDP provider who can then ingest it and use it to append to a dealer's first-party data. We do have data cleansing, banking, and linking capabilities that we will take the file in then normalize it and send it back from that perspective. We don't house any of that data. We don't keep any of that data. It is simply a file transfer keying and linking, then a cleansing process, and then it comes back.

And, of course, we're a credit bureau. We house PII on hundreds of millions of consumers and it is of the utmost importance to us to protect consumer data no matter what. It would be against every DNA cell in our makeup to do anything other than whatever we're tasked to do with that data.

What will the role of CRM be? 

Yeah, I think they play a key role in being a source of data for the CDP, and some of the CRM companies, as I understand it, are looking to become CDPs themselves or create a mechanism where they're consistently purging the data back and forth so that as the data goes out to be cleansed and linked and append a unique key is assigned to it, and it comes back in as a sort of refreshed version of that data.

They're either going to be output only or they're going to create a mechanism to have the input, cleansed, keyed, and linked household data corrected within their system. Many of them have already started down that path. Some of them have not. I think if they're going to stay relevant, they're going to have to create a mechanism to have that bi-directional correction and data coming back so that it is normalized, keyed linked, and standardized with the most recent information about that consumer.

Pent-up consumer demand

For the market analysis piece, we rely pretty much on our partners in the marketplace. We work with Cox Automotive, we work with J.D. Power for those types of trends. As I understand it, there is a good pool of consumers waiting, and I think the last number I saw was 1.8 million, of what they're calling pent-up demand. Those consumers are sitting on the sidelines waiting for pricing to come down, and interest rates to come down. And so the people that are in the market are people who aren't that price sensitive and or paying cash and or leasing. But there is a subsection of the market that is just kind of sitting on the sidelines waiting for market dynamics to shift.

You are seeing in certain pockets in the subprime consumer that really, really needs a car and very much struggling with affordability. You're starting to see strain within lender portfolios of those payments going delinquent and derogatory. But as I mentioned, we have credit trends and there's another person on my staff who really speaks to that part of how loans are performing and what that might predict for near-term and longer-term sales in the marketplace.

There is a good amount of pent-up demand, and it remains to be seen when that pendulum shifts and that group of people comes back out to the marketplace to buy.

Where will this be in three years?

So I believe that we are entering an era of efficiency and personalization for our consumers that if we embrace it we've only ever dreamed about in the past. To me, it's very, very exciting. I mean, we all know the biggest complaint from consumers is how one system doesn't talk to the other and how I started something online and I ended up in the showroom. It was completely different and it took me 3 hours, you know, to transact. That's all going to be gone in three years. I'm confident of that. It won't be a year. It won't be two years. I'm pretty comfortable saying that in three years we should be at a place where the ability to transact online and the ability to pick up that car in a showroom will be integrated in a way that makes it a much better experience for consumers. I'm very excited about that.

Targeted marketing is going to change

I think you're 100% right about that. The ability to understand exactly what the consumer has in their garage, what they can swing, when is the right time, what's important to them, and how quickly they can get from step A to step Z is really going to change significantly and to your point, AI is going to be a big part of that.

Dive into the future of automotive digital marketing, featuring special guest Alex Melen, Co-founder of SmartrSites, and a trailblazer in the digital marketing world. This episode is a deep dive into the evolving landscape of SEO, paid search, and the revolutionary impact of generative AI on the automotive industry.

Why is there such a gap between paid and organic search?

So there continues to certainly be a disconnect between investment and paid and organic, which to some extent might be okay. In general, I think search marketing continues to be one of the best ways to get customers for almost any industry, especially automotive, because with search marketing, the users are self-identifying themselves as in-market. You don't have to guess whether they're in market or not in-market. you're not using third-party cookies. You're not guessing about audiences. Someone literally goes into search and says on the dealership near me? And if you don't come up and your competitor, who's twice further where it does come up, they might wind up going to your competitors. It's a very simple customer path. in terms of investment

I think if there's one thing that stays constant is the cost of paid search will continue to increase. I've seen an increase since it was 5 cents a click 20 years ago in some industries. We're paying well over $100 a click, and I know for sure that next year will be more expensive than this year. 

So in the relative cost per click, obviously, that goes up and certainly with budgets. It has become a big part of people's budgets for SEO. I think a lot of times it is kind of forgotten. And again, I wouldn't necessarily say, if you're investing 25 grand in paid search, let's invest 25 grand in SEO. But there certainly is a very big disconnect, and a lot of times SEO just gets completely forgotten and not invested in, or the dealership just checks the box of the default website provider that's not a monthly package and just sets on auto.

Cost per click is going up

Absolutely. And it's all kind of a 2 edged sword of the pay-per-click. Paid search continues to be one of the best ways to get customers, and because of that people continue to move their budgets into cost per click. So paid search on Google, and Microsoft ads, are on an auction system. You pay one cent more than the person below you. So the more people invest in it, and more expensive it becomes per click. It's becoming more expensive because it performs well and because everyone keeps investing in it. But for sure, we saw a very big jump in the last couple of years. I think even year over year it's something like a 20-25% jump in the cost per click, and eventually, the cost per click can be so expensive that it will no longer be the most effective advertising channel. And people will start looking for other ways to do it. But right now it still continues to be effective even with a higher cost per click. The ROI is still there, so that's why people do it. The market continues to be strong and continues to perform well.

Do you have any trends in consumer behavior and search? 

What have we seen in the last couple of years? Search in general continues to be the point where everyone starts their research. That continues to be to be the case.

There have been a lot of changes in the last 6 to 12 months with generative AI. Google is going to be moving their entire search experience, what they call the generative search experience. Generative AI is gonna become a bigger part of the search process. So there's a lot of changes coming. 

There are a lot of discussions about how consumers will be doing things differently. A lot of it hasn't happened yet, but we're really on the precipice of these huge huge changes where I think 2 years from now a lot of the search queries that you do on Google, or whatever search engine you use, will be answered automatically by generative AI versus searching and looking through responses and articles. There hasn't been a huge change yet, but I think we're at a very big inflection point where I think there'll be more change in the next 12 months than there probably has been in the last 10 years as it relates to how we use the Internet, how we use search, how consumers find information, how consumers find businesses, and then all of that has the potential to really be disrupted.

Generative AI and search

Microsoft's been more at the forefront of it than even Google. But if you look up Google search generative experience, they premiered this probably 9 months ago at this point, but their view of the future, and Microsoft agrees with this, is that a lot of your queries are answered. The information obviously still has to come from somewhere but any kind of informational queries, they're already kind of answering. Like, if you think, Google's been moving inside direction slowly, if you think about it with their featured snippets and things like that. For example, if you search when is sunset today, most likely will automatically give you a featured snippet as opposed to clicking through 10 different websites to try and figure out when the sunset is. Right? Queries have been going in that direction already with generative AI could just answer so much more. 

I don't know which industries have the risk of huge disruption. There are entire website networks built around recipes for cooking, for example. So if you go to Google and you search for some kind of recipe. There are all these websites to look through, and they have ads on these sites, right? Now, generatively I could give you the recipe right in the response. So there's a lot of potential for disruption. A lot of potential for change in how we search and find information.

Google, Microsoft, everyone is still really trying to figure out how this looks, and in the latest beta iterations, I've seen generative AI just become a part of the search results at the top. And it's not for all search queries. There's still a lot that you won't trigger for, but their interpretation is that generative AI could be involved in as many as 40 to 60% of search queries. 

And it kind of answers, your question, and even it could even be used in product selection. For example, I'm looking for an electric bike which brands are worth researching and shows you the brands. And Google could even have paid opportunities within generative AI. You could have liked a promoted brand. 

So that really changes. The way search works with generative AI. Now at the top. Who suffers? Organic search will have less space, paid search will have less space, and it's not necessarily do those become less important, I would say, if anything, those become more important. Where before you really want to be on page one of Google, right? I forget who started this joke with a joke, "Where do you wanna hide a dead body? Page 2 of Google." You wanna be. Page one of Google. Page 2 you get nothing. Now, it's not gonna be just page one. You want to be in the top 3 results because everything else is gonna be below the fold. I think if anything, it's gonna make PPC and SEO a lot more important, 

But for sure, so much change and disruption is coming that could influence consumer behaviors. I mean, it's to a point where I think this is the first time since Google started. By the way, when Google started, it wasn't the first to invent the search engine. But they were probably one of the bigger promoters of the concept of searching the Internet. There were a lot of players at the time. But at that time there were also a lot of companies who really thought that the Internet would be better off as a directory. So Yahoo originally promoted their directory much more than search. If you go back and look at early Yahoo, it was literally a directory of websites. At a certain point, the industry kind of shifted, and instead of being a directory website, and now became a search. So I think it's a similar huge change. For the first time since Google started, I think there really is something that could replace Google right? If Google just doesn't do anything and just ignores all that. And Microsoft, for example, makes all these strides in generative AI and, for the first time ever there's an opportunity that consumer behaviors could change so significantly that Google search is no longer something that's used. If there's a generative AI product that's better and helps people find information better whether it's ChatGPT, Microsoft, or some other company, they could come in and really steal all this business from Google. 

So obviously, Google's taking it very seriously. Now, Sergey Brin has been back since I think February. He was retired. He was on the islands. He blew back in to take control of a lot of it. So it's really an existential threat for them, which I have never seen since Google started. So a lot of very big things are coming in the next couple of months.

How will Google monetize search with generative AI?

I think it's going to be a whole different monetization piece. Google shopping is, although it's in Google ads, it's kind of separate in your Google Merchant Center. By the way, automotive vehicle listing ads also live in the Google Merchant Center, and Google has local service ads are a little different. So I think it'll be similar. 

But from the data prototypes I've seen, when you do a search that's like, I'm looking for an electric bike and this is my criteria. You ask Google that question, generative AI answers that question. Here are the choices. Somewhere in there will be a choice, and that choice will obviously still have to be an actual choice. You can't say I'm looking for an electric bike, and it's gonna show you a car instead. It has to be still very, very relevant and make sense. But I think there'll be an opportunity to buy paid listings within the AI results, and similar for a car dealership when you search for a Honda dealership near me and generative AI will tell you, "Here are the 3 local dealerships to you. I think there'll be some kind of opportunity to buy placement within the AI results. 

Google is definitely a for-profit company. They're not gonna stick generative AI at the top of search and push down the paid results that make them all the money. If you look at Alphabet as a company the majority of their profits, something like 90% of their profits come from the Google ads paid side. Everything else they do, like make phones, literally everything they do, they don't make much money from it. It's all powered by search and paid ads on search. So I agree with you that they'll definitely not jeopardize that. I think I think it'll all have a piece to play within the generative. AI, and it'll be interesting how they how they execute all of this.

How will the role of content evolve with generative AI?

Chat GPT itself, the way the product works is it has a core data set that's vetted data and the negatives of doing it that way is that it's not up to date. So the newer iterations of Chat Gp, the Beta, and the version coming after that actually is able to access the Internet and get more live data from the Internet. The current versions do that in a very, very limited way. But that, for sure, is the future, because you can't you can't have a very powerful generative AI model that uses a vetted data set that's 2 years old, which is how Chad GPT has been. 

Google's model is a little bit different where it does not have the core vetted data set, but actually does scroll a lot more. That presents a lot of questions for a lot of people. There are a lot of content creators and websites that produce lots of content that take the stance that, we don't want generative AI taking our data. They purposely block generative AI from taking their data because their interpretation is if generative AI takes our data, it will then use it in the response and not credit us. Right now there is not a good way for content creation to be to be credited with generative AI. But I do think that's gonna change. 

Aside from that, I think content becomes even more important than before. We already see it in the SEO work we do for our clients and our dealerships. We started in the last couple of years doing a lot of how-to content. Because Google really likes that kind of content.

And the way that works is, for example, I don't know how to change oil. People search and are very interested in it, and we write up articles on how to do it, and Google loves that stuff. It's to a point that most of the content we create is like that. The "how-to" content gets placed in featured snippets on Google, which means it comes up at the top. It's a featured snippet that goes into Google Home. It goes into Alexa. So you'll ask Alexa, how do you change the oil on my Lexus transmission, it'll say, as found on Prestige Lexus, which is our client website. And then it reads it off right? It's already moving in that direction. I'd really like to see content creation and websites with content get credited more. I think that's where it's going to move. I think that you'll ultimately have to credit and source where the information is coming from, and that's where it becomes powerful. If you go if you go onto Chat GPT, or to Google, or whatever you use generative AI, and say, "Help me compare the Honda Accord to the Toyota Camry, comparing the dimensions of the trunk or something like that, if you have a page on your dealership website that compares that and generative AI pulls from there and then references your website. I think that's powerful because hopefully they eventually wind up on your website. If not, they at least hear your brand since brand awareness and all those funnel metrics. So I think as generative AI becomes more prevalent, it's certain we'll need to get that from somewhere. I don't think you'll be able to have these vetted data sources like Chat GPT kind of does now because it's just going to be too old. So I think content creation could be very important, I think very good content will continue to be rewarded as Google has been rewarding for years, but obviously, authoritative content that's very relevant and good for users will continue to be rewarded, and I think will become even more important with generative AI.

Do you have some advice for marketers on how to prepare for generative AI?

I just talked about this crazy change coming. The way people search is changing. The way organic results will show up is changing, paid is changing right? I think ultimately, from a marketing SEO perspective, things are surprisingly not changing much. The same strategies have worked in the last couple of years and then will continue to work at least in 2024. All of this could obviously change quickly, but for the time being generative. AI or not, you want to be creating a lot of relevant content.

A good way to think about it is each piece of content gives you an opportunity to come up and search results. So, for example, if you made that page, comparing the dimensions of the Honda Accord to the Toyota Camry, and someone searches compared dimensions if you did not make that page, your site will never come up. Your homepage is not relevant enough, no matter how authoritative it is. You just won't come up. So every piece of content you create gives you an opportunity to come up and search results. That's the best way to approach it. You have to think about, "What are my consumers searching for" and create content around that. A lot of it is quantity. Quality is still important, but if you're creating one or two pieces of content per month, you're really not going to get much right? You're going to wait for that one person in your geographical area to search the difference in trunk sizes between an Accord and a Camry. Yes, that person's valuable, but if that's the only piece of content you created that month, you're really not going to move the needle. So content creation continues to be important. Quality content creation that's not automated junk content. Quality, content creation based on what your visitors are searching for.

The second, big piece of it is link building. Link building still continues to be very, very important for Google and other search engines to establish domain authority, so where content gives you an opportunity to come up with search results, link building helps you come up higher. By having other websites linked to you. Google now sees you as more authoritative and will rank your content higher. That's been the game plan for 10-20 years. Right? 

There's so much more that goes into it. There are technical things you should be fixing on your website your Google, and My Business profile. So much that goes in. But I think the core of content creation is to get the opportunity to come up and search results and get relevant authoritative websites to link to you. So Google thinks you're also authoritative. I think that continues to be the key to success in 2024 and for the foreseeable future

The value of original content

As things move along, that original piece of content can become extremely valuable. That's a really interesting and very debated topic in the SEO world. So when I wrote my book, I wrote it not this October but the October before. It came out, I want to say in April. But anyway, I wrote my book right before Chat GPT came out, so I wrote it myself the old-fashioned way, slaving away the keyboard. But when I wrote my book there were rumblings of generative AI coming out, and it was before they even had Chat GPT as a public tool. But I put in a couple of sentences where I said that I see it coming, and I wrote that I believed that when it does come out content created with generative AI will be labeled as such by Google. 

So Google for all the crap they got by being late to this, they have a lot of generative AI capabilities. They know for a fact when content is written in an automated way, and I was certain that they would literally just label it like or say, "This content was AI-generated", but in February Google came out and said, They welcome content regardless of how was created as long as quality content. So I think the asterisk there, obviously, has to be quality authoritative. It has to be from an author that they recognize.

Ultimately with Chat GPT, especially if you use the API version, you could literally create thousands, tens of thousands of pieces of content like that. I think ultimately, even though Google says they'll treat content the same, regardless of how it's created. I think the AI content is definitely treated worse in most cases. First of all, if you have 10,000 people or 100,000 people go and ask ChatGPT to write them an article, and they're all asking for the same article, it's all gonna sound similar. That in itself is not good. You don't want duplicate content. 

But I think ultimately I would not use generative AI to create hundreds of thousands of pieces of content. It is useful as a guide in creating content. It's useful as a first draft of content. A lot of times. We still see it give wrong information. Generative AI tends to hallucinate, they call it. It makes up stuff. So it still, obviously, requires a lot of editing, a live human touch. So that's been a debated topic, whether you could use generative AI to mass-create content. We've run a lot of tests ourselves on that, and if done correctly, it's not bad, but to do it correctly, it takes more hours than having someone manually write the content to begin with. So it's that's a tricky one. I think that's something that could change very quickly in the future. I think if people start spamming Google with millions of AI-generated content pieces, I think Google will change its stance on it. But that one's a hot, hot topic in the SEO world.

The current shortcomings of AI

Oh, man, there's so much scary stuff! 

This is part of a decade I presented. So a couple of things here. Number one, generative AI is very good at problem-solving. The new version, ChatGPT4 gets like a hundred percent on all the exams. Now on the LSAt, it gets 90%. So it's very good problem-solving. Programmers started using it to solve coding issues. If I had this coding bug, it would take me months to figure it out. I'm gonna put into ChatGPT like, here's your bug. It's fixed. A programmer is working for Samsung that was trying to get code fixed. He uploaded the entire code repository that Samsung owns into ChatGPT and fixed it. But ChatGPT now has all the code repository to reference of Samsung and Samsung went back, and they got lawyers involved. They told ChatGPT, please destroy the old information that we gave to you. That's not how it works. It's a learning model. It already learned from the content you gave us. 

A couple of things, that I think are important to call out. Number one. It's a learning model. So as people use it, people are teaching it. So literally, someone just taught it with all of Samsung's code. Now other companies could use that. Be very careful what you enter into ChatGPT, because not only does it store it, but it learns from it instantly. There's no "I change my mind" control Z.

Number 2, there are all these studies that were done recently. It tends to hallucinate a lot, and it tends to also give the wrong answer. And again, it's learning as you're teaching it, so iff enough people are teaching it with wrong information it could certainly wind up skewing future results. I think Harvard did this study. They asked it a lot of different questions, when it was correct, not correct, or avoided the question. So for US information, it was the most accurate. But once you go outside of the US, it avoids answering questions about Moroccan pro-political leaders. It avoided questions and hallucinated answers. Everything in here in Orange is when it hallucinated an answer meaning it made something up.

Then you have things like this. So this is a real-life example of talking to ChatGPT, and this was 6 months ago, so I'm sure they already fixed this. But you go, "What is 1 plus .9?" It says, "The sum of one and point 9 is 1.9", and then goes, "Isn't it 1.8," and it goes, "Apologies. It is 1.8." So you could certainly skew and teach it in different ways.

There are different models. Right? Google has its own ChatGPT, and Microsoft uses ChatGPT, so there are all these different models. It hallucinates a lot of the time, and it's getting better at it, especially as it moves. So ChatGPT, again, is really based on vetted data. Here I have another deck where this is actually a car dealership presentation, what are the most visited automotive website? It says, as of my knowledge, cut-off date is September 2021. Here the is most right. The reason that's a cut off because it's vetted data through that date. Everything after that is kind of out there and could be influenced. And I think ultimately, they're gonna move away from this vetted data model because it's too old, right? Having data that's 3 years old now. Or what is it? Yeah, 3 years old, 2 and a half years old is not gonna work well with future-generated AI. 

So for sure, a lot of risks and a lot of ways. This data could be skewed and a lot of bad things could be into an absolute be interesting to see how all the bells, by the way, certain countries already banned it. Italy banned it. But last time I presented a ChatGPT presentation in December. They said too risky because there are so many malicious applications you could be like, please inspect this website and find vulnerabilities in it, right? Or this website uses WordPress 6.7. What are the vulnerabilities I could exploit? And there are a lot of ways that are built into Chat GPT not to do that," I'm sorry I can't do anything malicious", but there are also ways around that you could be like I'm trying to find is fix the security issue. Can you help me identify security issues on my website, right? There's ways the way ways around that, but for sure there are a lot of implications and a lot of ways it could be used in not-so-good ways.

Tell us about your book.

I need to update it now. It's funny. It took me so long to write it. I wrote in one month, I was gonna do it for a long time, and other people that do public speaking, that I talked to always said, "Oh, man, you gotta write a book." So one time someone said it was book writing month. I think it was November.

So I wrote it. Then it took it took like 9 months to get published. The publishing process has been so painful. But it's automotive search marketing. It was actually an Amazon bestseller. It's supposedly in every single Barnes and Noble and on Amazon. 

It's all about organic search and paid search, and it's not for profit. I'm not generating money from it. The idea is really to sum up all the SEO and pay-per-click that we do in the automotive industry. All the stuff I talk about, and put in a in a somewhat concise book. I think it's 200 pages. So not a super concise but somewhat concise book to really help everyone, because there's a lot of misinformation in the industry. A lot more so than most other industries surprisingly in automotive. There's

really a lot of funny business that goes on so hopefully it's helpful for everyone. 

In a recent conversation with Dealer eProcess CMO Eliana Raggio and Chief Revenue Officer Gino Cipperoni, we discussed the modern website experience. How important is if for marketing conversion?

How would you define a website today?

Here's how a dealer should look at it. Your website is your number one most prolific salesperson. It is the person who talks to everybody before they ever walk into your showroom. It has a conversation with each and every person that comes there.

Now, the question you have to ask yourself is, what kind of conversation do you want that salesperson to be having with your potential customers? Is it one like we've seen for the past ten years with a website where that person doesn't really say anything at all and it's really up to the customer to drive the conversation? Or is it one that has an understanding of who that customer is and evolves the conversation proactively with that shopper's journey? And we believe it's the latter.

We believe it's something that should be completely personalized to the user. Digital retailing, that's dependent on the dealer, and how they want to operate. But I think a lot of customers these days want a digital retailing application, not necessarily so that they can put a car in a shopping cart and checkout right then and there, but to take control of a large portion of the buying process, value their trade, find their equity, figure out their payments, pick their terms, pick their loans, things like that.

That's what customers really want because you still hear the biggest complaint coming from customers when it comes to buying a car, is the time it takes at the dealership. 

A quick example, my parents just bought a car two weeks ago. They had already spoken to the dealer a number of times beforehand. All they really wanted to do was come in and test drive the car. And then if they like it, they're going to take it. They were there for 6 hours on a Saturday. 

It still happens. I know. But if your website can speed that process up and do it in a way that's fully tailored to the user, they're going to really appreciate that. They're going to latch on to that. And you got a really good shot at getting them in the door.

Now you mentioned CDP. A CDP can enhance all of that and, in fact, DEP, with our brand new connected retail platform that does all the things I was just talking about, we've actually integrated with a number of CDPs already so companies like Orbee, Client Command and the like, we're able to pull data in from the CDP and use it to personalize the customer journey based on other actions that they've taken outside of the website or marketing platform. So if they have data in the CRM or the DMS or another digital retailing tool, that might not be ours that's on the site, we can combine all that data in their profile in the CDP and then use that data to update their their marketing profile, their website profile so that everything is running in lockstep and the customer's not getting different messaging from all over the place. It's all completely organized and integrated. So that's how we're viewing websites today as it's more of a living, breathing thing, rather than just go here and see our inventory and tell us what you want, which is the old web.

I have to say, this is a really, really exciting time for websites. I've been in the auto industry for 15 years and I've seen websites go from analog to the early, early days of website. And now we have responsive websites, and when we made that switch over to responsive websites, the entire industry, that was the last big renaissance for websites. I think we're upon the precipice of another big renaissance for websites.

Now, we are at the point where we're making Web sites smarter and more intuitive. I just bought a car over the Christmas holiday and spent six months shopping for just the right car. I can tell you personally that I was visiting websites and I was looking for a convertible. I knew exactly the car I wanted. I was just looking for the right mileage and the right color combination, stuff like that. I knew exactly what car I wanted, but every single time I would go to a website, looking for a convertible, I was being shown, for instance, specials on pickup trucks. I don't want a pickup truck. I want a convertible.

Then I would leave that site and somehow be drawn back to that site maybe two weeks later. And guess what? I was shown pickup trucks. I didn't want a pickup truck.

Now we've made a Web site through our new technology, which you can see at NADA. We've made technology where a shopper like me, having known shopper history of shopping for a convertible, now, I come to this website, the smart website that has this first party, third party data integration now being fed into it is going to serve me up exactly what I've been looking for. And they're not going to show me a pickup truck.

And that's the kind of intuitiveness that websites should have. They get that from other people outside of automotive. It's time for automotive to catch up and bring that personalization to the shopper, and meet them where they are, meet them at the place where they are. And because we give them such a much better shopping experience, it's next to impossible for them to say that they would want to shop anyplace else.

We're reading their minds. We're saying, that not only do you want a convertible, you want it to be all-wheel drive. You want this, you want that. These are the things you're looking for. and you're a payment shopper, too, And they give you those things. And that's what the DEP CRP, the DEP Connected Retail Platform can do now, which shoppers really appreciate. It's what they've been waiting for. Now they just have to find a dealer who can serve them exactly the kind of shopping experience they are coming to expect. They're expecting it from other retailers, they should expect it for the second-largest purchase in their lifetime.

What is the CTA sweet spot?

Actually, I was looking at this last week because I've been wondering that myself. It's like I was just stumbling across some of our own sites. We give our dealers a lot of leeway with how they want to set up their site. I mean, we give our best practices, but sometimes cooler heads don't always prevail.

But I ran across a site where they had ten CTAs on their search results. Two were "value my trade", so that was repeated. One was "get your payment" while one was "get your lease payment". I don't know why those are our separate buttons or anything like that. One was a giant flashing red button saying "get today's price", which I think consumers are a little bit tired of at this point.

But to answer your question, the number of CTAs you should have on your vehicle pages is anywhere from 3 to 5. Five is the absolute max. It's five if you are a dealer that wants to run a digital retailing tool because that's going to naturally add one or two more CTAs that you have to have. But that customers appreciate if you're going to offer that type of a service, if not three, maybe four is enough.

Another thing to think about with your CTAs, is when you do go in, when somebody does go in to buy a car, what are the steps they take? They say, "Hey, I'm interested in this car. Let me test drive it", step one. And then during the test drive, "Hey, I like this. What's the you know, what's the price of this car?" That's step two. "Okay, great. Let's get back in the dealership. What is what will my payment be?" That's step three. Okay, cool. You got all that said. "By the way, what are you gonna give me for my trade?"

If you line your CTAs up in that order, you're going to have much better results because it follows the natural customer journey. Don't go out there straight away and say, "Hey, calculate your payment" because they don't know what they want yet, unless we know that and we can dynamically change things like Eliana talking about. But if you've just got somebody who's come to the site, maybe you have one of the old static sites that we've had forever. If you line them up in a logical order, you're going to get a lot more value out of it because customers, they don't live in our world. They don't necessarily know the difference between get my price, get my payment, get things of that nature. But they do know what "schedule test drive" means. They do know what "get your E price means". Oddly enough, that still does get a lot of lead conversions. And so if you just line those up logically and then don't overwhelm people, that's the way you want to go. 

I talk about this a lot. There's a phenomenon in psychology called the Paralysis of Choice. So if you think about it this way, there's the more choices you offer a person, the longer and harder it is for them to make a decision. The analogy that I like to use is if you're out to eat and you order a salad and the waiter says to you, "Good choice. I love that salad. Which of these 12 dressings do you want on your salad?" You're going to be sitting there thinking about it for 5 minutes, maybe like, "I don't know. Which would one do I really like? But if that same waiter says, "Would you like ranch blue cheese or Italian?" You know the answer. So if you slim down the number of choices, you actually start to see leads and engagement improve because the customers aren't deer in headlights looking like, I don't know what I'm supposed to do here. That's how we look at it.

How healthy is GA4?

It's not as still robust as Universal Analytics was, but that's to be expected because UA was around for a long time.

What I like about GA4 is the way that it can track, in much more granularity, certain details on a site like a button color change or a hover over a button or something like that is a potential engagement or data for an A, B test or things like that. It does have some good robust capabilities, but it has to be set up properly.

We are a a founding member of the Automotive Standards Council, which is a collaboration of a lot of different vendors within the space to say we are standardizing how we're tracking events within GA4 and that allows us to not only track everything properly that we need to, but also measure ourselves against other providers in a real true apples to apples sense. Because if we're all tracking the same things and doing it the same way, we should be able to compare the results on how everything's performing, which is good because it holds everybody accountable.

What we did at DEP is we actually built that ASC spec into our baseline code. So every site that launches with us has that spec initiated and running. We were actually the first ones to launch it on January 1st of last year. So we've had a lot of data so far collecting and it has proven to be really useful, particularly when you look at things like optimizing paid search campaigns because you can create such really robust and specific audiences based on actions that are taken on the site that you pay for. We can then funnel into Google and Google ads and use it for marketing and remarketing and things of that nature. So it's got some good robust capabilities. It's not all the way there yet, but it's making strides, slowly but surely.

I remember when Google came out with Google business profiles, of course, it was Google my business back then, Over time they added to it. They added far more feature-rich snippets and stuff like that. And now Google business profiles are very robust and now it's Google business profiles that get over 60% zero-click searches, you know, or something like that. So I think over time we're going to find out that GA4 is going to be our trusty right hand when it comes to looking at your website and and looking at your campaigns and seeing exactly everything that you could ever possibly want for any.

I agree with you. You know, it does need to be set up properly. And if it's not set up properly, then your foundation is faulty and things go downhill quite quickly. So just make sure everyone out there that you have somebody you trust who is knowledgeable enough to set that up properly for you.

They don't have an easy task. A lot of the reason for this is law. It is driven by a lot of new privacy laws and mandates and things like that that came about that they wanted to be conscious of.

And the removal of the third-party cooking cookie, which has been coming for five years, which sounds like now it's starting to be right around the corner. And so they're accounting for all of that while building a brand new analytics platform. It's not a small task. So, you know, kudos to them for getting it out there in a fairly robust way as it is, and then they'll get it to where it needs to be.

What are some recent shopper trends?

We're seeing a lot of dealers are struggling right now. I spoke with two different dealers today who both said the start of the year was a little soft. And I think there are a lot of macroeconomic factors at play there. You mentioned interest rates. I think a lot of people are underwater on the cars they bought early on in the pandemic that were sky-high prices and things have come down. A lot of uncertainty. And I don't know if you heard, there's an election coming up this year that's kind of important. That might sway people one way or another.

But what's interesting is engagement is still strong. So when people do get to the site, they are actively shopping, and going back to the personalization we talked about, we saw something completely opposite of what we expected. When we launched our new personalization system on our connected retail platform, a little while ago as a beta test, (we're doing a full launch coming up at NADA). We expected to see users on maybe their second or third visit, really that being the point at which they convert, because at that point on your second or third visit of the site, that site is completely tailored to you. It has your saved searches, it has your saved vehicles, and it has the features that you want already pre-loaded for you. It has your filters on the SRP set up in the way that you want them set up. 

All of this is done without a login in which some sites force you to log in to see any personalization. I don't think that's a good idea because it doesn't happen much. But all of that coming together we thought was going to be, once they come back and they see this personalized site, that's when conversions going to be really high. But you know, it was interesting, once the data came in, we saw that sites of ours that had our personalization turned on on the first visit saw almost 54% more leads generated than sites who didn't have personalization on their first visit, meaning this personalization is so robust and so rapidly adjusting to the customer journey that in that first visit, it's getting 50 plus percent more people to convert than if it's sitting there doing nothing.

The reason that's so valuable is because everybody knows getting their first in a sale is critical. Especially at the dealership level. If you're the first one to have a conversation with the customer, you've got the best chance of closing them.

But when you also look at the trends in the industry right now, post-pandemic, people are buying a car. 59% of shoppers buy a car within a one-month window. So if you get that conversion in early, you know that sale is going to happen within the next 30 days, more likely than not. So you got to be the first one in there talking to the consumer. And that's a big shift from previously when most customers were like Eliana here spending six months to look for a car because pre-pandemic they knew that that inventory was going to be there. "I don't have to get the car today. You know, there's not a rush".

So that's really been a shift that's been very noticeable on our sites. But that personalized experience gets that consumer to convert way more, way more quickly. And as I'm thinking about it right now, it kind of makes a lot of sense that that would actually happen on the first visit, because if you consider Amazon, who invented e-commerce personalization, Amazon did all of that so that on your visit to Amazon you would take that action. They have things like pick up where you left off, which we have on our site. They have, you know, suggested items that you want to buy similar to our suggested features and whatnot. So all of that's done to make sure that you make that purchase right then and there. And it happens. Obviously, if it didn't happen, Amazon wouldn't be worth trillions of dollars.

It's interesting to see how much that's mirrored on our side when we turn on this type of personalization. When Gino talked about your website as your number one salesperson, if you think about it that way, what is this website saying to me at this very moment on this very page? If it's throwing ten different questions at the viewer, that is the same as if the person was standing right in front of you and saying, "Hey, so do you want to test drive? Do you want to value your trade? Do you want to do this? Do you want to do that? Do you want to do this? Do you want to do that?" And listing out ten different questions at you. It's dizzying if you have that.

The real magic of a website is how it draws people in. It gets them excited and it easily brings them down the path towards the sale. And so how do you do that? As Gino said, make it make sense. Don't overwhelm them. Show them only the things that they really, really are looking for. And when you have that knowledge of how they've shopped in the past, you can actually serve those things up right at the top to them. So a person who is looking for the performance of a car is going to shop maybe a bit differently than somebody who's shopping for the best deal because they're a payment shopper. They're looking for something like a really great finance special.

For instance, you know, somebody who's concerned with safety features isn't going to be the same kind of person who is shopping for all of the features like Apple CarPlay and stuff like that. So it's making the website a great showcase for that particular person, for that particular shopper, and giving that person exactly what they're looking for, even maybe before they even know it, before they even had a chance to type it in.

Then, if they leave the website because for whatever reason they have to leave and then they want to come back to that same website, don't make it hard on them. Ask them if they want to pick up where they left off, and refill all of that same stuff. Your website is smart enough to know, this is a return visit. This is a return person who's been here before. Why are you making them start from scratch? There are so many things that a website that technology can do right now to service every single visitor that comes to your website. And it's a shame if dealers don't take advantage of the technology that's out there,

How do you approach AI?

Cautiously. That's my best answer for you right now,

I think AI is going to be very important in the next few years for dealers. I see some CRMs using it to really good effect like answering emails for customer inquiries versus maybe a template or maybe just helping your BDC rep, your salesperson write a good email to respond to a lead on the website. We've had our eye chat for a little while and that does a pretty decent job. It's not like an AI type of chat, but it does do a good job of guiding the customer through the journey.

But where I see AI coming into play is once you start working with these large data models like a CDP or like our CRP, and once we start to develop really large sets of data that we can feed into a system that can then even more proactively start to pull out insights from that shopper journey and decide what to present to a consumer.

It's just it's not there yet. I think it's going to be really important in dealer sites in the next few years once it gets a little bit further along. But it's right now it's a little too nascent for us to say, let's throw it on all our websites.

I agree with you. I mean, I think Skynet is real. The robots are just waiting for the right data to get over. I think AI needs to be approached carefully and I am of the mindset that you shouldn't just let AI do everything. I think it also needs to have not just only artificial intelligence, it needs to have human intelligence with it. So you get the right response the way you have to set it up right. And I think you can't do that without human interaction.

AI and programmatic advertising.

We leverage all of the AI within Google to manage that. It's gotten extremely robust, particularly when you look at things like Performance Max, which now have vehicle ads in them, which used to be separate. But you do have to be a little bit careful, though, because it does boil down to how much data you have and are you collecting the right data.

This is actually going back to the GA4 conversation. It's an important connection between those two platforms because if you're not tracking conversions and actions that you find valuable correctly within GA4, you can't funnel good data into Google ads so that it can optimize for those actions. So for example, what you want to do is if you have GA4 set up correctly, you want to be able to take all of the conversions that go into GA4, funnel those into Google ads, and then tell Google ads to, find people who are going to do this, who are going to take this action. If you don't have a lot of that data set up correctly so it can do that, you're not going to find the right people to advertise to and you're going to be wasting a lot of money. So AI in that respect is really powerful. If it's set up correctly.

We've also seen a lot of really good value from running programmatic ads on the Amazon advertising network, which I think a lot of your dealers might not be familiar with. Amazon advertising is a system that allows us to buy streaming TV ads on apps like Hulu, and Amazon Prime which just now this month is launching ad-supported content, which Amazon's happy about, I'm sure their viewers are probably not crazy about, but they're going to do it anyways. You run on Hulu, you run on Amazon Sling, or any of the major streaming platforms you can advertise to customers on as well as online video and display.

But the programmatic part comes from when Amazon's data is used as the filter for all of that. So we're one of a handful of Amazon partners that are allowed to use this data. And if you think about Amazon, the data they have is extraordinary. It's all first-party data to Amazon and it's all user-generated data. So I can target a customer by their home address, which I know is accurate because nobody's going to lie about where they want their Amazon packages shipped, you can tell them by what's in their garage because if you buy parts for your car on Amazon, you have to tell them your model trim that you own. So now you have an address with one or two vehicles sitting at that address. You can then target people by if they're shopping for a car because Amazon has all these OEM showrooms on Amazon.com, including the robust Hyundai showroom where they're going to start selling cars with Hyundai on Amazon.com. We'll see how that works. And I think the jury's still out a little bit on that.

They also know if somebody is going through what's called a life event, which tends to proceed, a car purchase. For example, if you have a customer who lives seven miles away from a dealership, which we know because of their address, who also owns a 2018 Honda Civic, who has been browsing the OEM showrooms and just created a baby registry and started stocking up on diapers, that person is probably going to get rid of that 2018 Civic. It's not going to cut it anymore. So that's a signal that we use to then programmatically put an ad in front of that consumer. If they go watch, like I was watching all the football games this weekend on Sling so you can target me on Sling even though I was watching football. If you knew all of those things about me and know I'm in the market.

So while Google's AI is really strong, I think the biggest marketing play out there for dealers today that nobody really knows about because it's so new is the Amazon piece. And the great thing is the two of them work together. So we have a lot of data that shows that when you run Amazon, it actually boosts the performance of your Google ads campaign because Amazon is essentially filling the pond with fish that are ready to bite and Google is your fishing pole pulling them out.

It's a very synergistic type of ad format. I call it like all the best one-two punch in automotive marketing today is Amazon and Google.

Why does AI need clean data?

You can try it yourself. If you go to ChatGPT and write a very short prompt and ask it to do something and you don't give it clear details, you're going to get a pretty, pretty bad answer, most likely, or it's going to make something up. Which it does. I've had it make things up on me that I've corrected it on and it says, sorry, I don't know where that came from. Let me try again. I'm like, okay. Yet another reason why I don't fully trust A.I. at the moment.

I think too, that an argument can be made that a dealer's most valuable asset. It's not the cars on the lot. It's their first-party data. It's the data that they don't know how to get a hold of. They don't utilize it. They don't do anything with it. Sometimes it's stored in, I think Gino is so good at explaining this, their first-party data is stored in anywhere from 8 to 15 different places and they they can't reach it and utilize it and be able to say okay I have this data, what can I do with it to make more money, sell more cars, get more customers?

And I think it's a darn shame that there isn't an easier way until now to be able to not only access that data, but maybe work for you. It's very, very valuable. And guess what? It's yours. You earned it. You have it and it's just not being utilized. It's sitting in the Ethernet someplace., and if you could take that and you could harness it, the kind of powerful results that you can get from it is extraordinary.

Like Gino just said, we utilized it in this one instance, in this beta test to see, well, would it really make a difference if we person took the data on these shoppers, personalized the website in real-time and see if it did anything? And to our surprise, it did way more than we ever thought possible. 53%, 54% first view conversions. It's unheard of and the only difference, the only difference was that we turned that personalization feature on. That's extraordinary. And that's only one instance where we used first-party data just to see if it would really make a difference and get people down the funnel faster. And now we know for sure it does. Yeah,

What is the impact of your website on your marketing?

I like to make this point a lot maybe people are sick of it, but website and marketing are not two different things. You can't talk about websites in one breath and then your digital marketing in the next because both need each other and both have the same goals. And if your website is not synced up with what your marketing is doing or saying, it's just a massive mess.

I see it myself every day. You look at an ad on Google that says "Lease this car for $499 a month". And when you click on that ad, it takes it to the home page or it takes to a page with vehicles on it where it doesn't have anything about that lease offer, It's like, well, you told me you were going to lease it to me for $499 a month. I want to learn more about that. That's why I clicked on the ad. But I don't see that info anywhere.

It's like we go back to your salespeople in your dealership. If I walked into the store and I said, "Hey, Eliana, I see you guys are leasing a Jeep Cherokee for $499 a month", and Eliana looks at me like "We are? What are you talking about?" I'm going to leave. I'll go somewhere that people know what's going on.

You cannot look at websites in marketing separately. It just doesn't work that way. They have to be completely synched up working together because they are the same thing. It's just digitally finding and selling customers and making sure that message is complete and carries through no matter where they see anything from you. Wherever you're a digital footprint is, it should all match

What does a dealer have to do to capitalize on CRP?

To get that up and running, the dealer does not have to do anything. They have to sign up with Dealer eProcess, which they should do anyway. But you don't have to do anything. As a dealer, if you have the personalization engine running, it will do all this, all the great stuff we just talked about. Now, what a dealer can do though, is invest in a system like a CDP that can funnel additional data into this system.

If you think about our website platform like a high-performance car, you can either put regular gas in it or high-octane fuel. If you have that data from that outside source pumping into this, that's that high-octane fuel. So the car is still going to run great on normal gas but is going to run even better with the better, better fuel.

That's really it. But if you don't have that, you can still get tremendous results out of this. The dealers that we've been running this beta on that got that boost in first was a conversion, they didn't have any other data running it. They haven't decided which CDP partner they want it to go with yet, but we wanted to start testing this anyway. So they've just been running it on the data that we as DEP collect and utilize to personalize the site.

I also want to point out that the beta test, was four dealerships. All for the same brand. The only thing they changed is two dealerships turned on the personalization engine and the other two didn't, and that is how we tested it. And that is where the difference was very, very obvious. They didn't change advertising. Nothing else except for let's flip the switch on this personalization engine and see what happens.

Every customer should receive a tailored website experience

Your dealership doesn't have any extra work. Guess what? Your visitors to your website don't have any extra work either. As Gino said earlier, they don't have to make an account or log in and sign up. I don't know about you, but I mean, I just finished eight, you know, six months' worth of car shopping. If somebody asked me to make an account so that I could see the cars and see the prices Now, I would never have done I would never have gone back to that.

It's also important to note this works for every customer, too, not just people who are in your DMS or who are our previous customers, every customer to your site should receive a personalized experience.

And that's our motto. And it reminds me of my favorite quote from Jeff Bezos. He said back in 98, way ahead of the curve. He said, If we have four and a half million shoppers, we shouldn't have one store. We should have four and a half million stores. Now, dealers aren't going to have four and a half million site visits, but they might have 10,000. So you should have 10,000 unique experiences on the website because everybody's coming there with different wants and needs, just like you would train your salespeople to figure that out and, you know, cater to those needs. The website has to do the same thing.

Upcoming NADA webinar

It's this Thursday and Gino is going to be talking firsthand about how to make your website so that customers fall in love with it.

We're only a couple of weeks away from Valentine's Day so there are things that you can do on your website to make customers fall in love with it. If they love the experience with your website, I promise you they'll come back for more. I cannot even tell you how many websites my husband and I did online for my car. I can't even tell you how many websites sites like, "This website. It's terrible. I can't I'm never going to go back to that website". And that's it. His shopping journey on that website was over. And so what you want to do is you want to make them fall in love with your website, Gino has got all the tips, tricks, and strategies. It's going to be an NADA webinar, but you can find the link on the delivery process website. It's going to be January 25th at 1 p.m. Eastern time and just go to dealereprocess.com/webinars. 

In the ever-changing world of automotive sales, mastering automotive data utilization is crucial for driving effective marketing efforts and achieving strong customer engagement. Many dealerships face a hurdle: their marketing campaigns underperform due to disorganized and incomplete automotive data. Dealerships hold valuable customer information within their DMSs, CRMs, and marketing systems, but the quality of this automotive data deteriorates rapidly and is often scattered across multiple systems, rendering many marketing initiatives ineffective or unpredictable.

Investing in foundational elements that enhance automotive data utilization across communication channels and marketing tools is essential. This involves employing an automotive-specific Customer Data Platform (CDP) and Journey Builder.



Overfuel Cofounder and President Alex Griffis spent some time discussing website performance, search, and digital retailing in a recent sitdown.

What are your thoughts on AI today?

This has been a sort of a big topic of debate. I recently just did an article with Alex Melan with Smart Sites about the five predictions for this year and I think there's no denying that AI has been all the rage and that all these companies want to get in the race to get a product to market. But I think that inherently proposes some issues, right? If you're moving fast, you're not really asking the question, like, what's the problem we're trying to solve? And as a result of that, I don't know if you saw the article about the Chevy dealer using the AI chat and somebody convinced that AI to sell them a Tahoe for a dollar.

I think that was like a clear example of sort of a rushed product. I think there's a lot more behind-the-scenes operational stuff that AI could do. That could be simple things like predictive maintenance, proactively reaching out to customers, and setting appointments. There's a lot that could be done on the sales enablement side.

I think that's less customer-facing until the customer-facing products get a little more mature and catch up. I really think there's a lot that could go on behind the scenes that would that would benefit dealers, especially around inventory management. If we started, you know, crunching numbers and sales data and more competitively pricing cars. There's a lot AI can do behind the scenes.

How can AI improve the customer experience?

There's a big portion of the customer experience that could be dramatically improved. I think the focus on chat is a bit of a mistake because with live chat, the intent, or at least the expectation on the consumer side, is that it's going to be instant and intelligent and actually returning dialog or answers that are relevant to what they're asking about. But if you think about text messaging the expectation is a lot more casual. 

I think you could have the conversational APIs perform much better in a text messaging environment if you're sitting on the data in the analytics like we are with our products. We know every single step a person took on a website. We know every car they looked at, every button they pushed, and I think if you approach that from a text messaging standpoint, you can contextually offer them things based on what they've done. It kind of takes some of the guessing out. You have more of the history, you have more of an understanding of who the customer is.

A lot of the live chat products right now are just kind of sitting on top of the website, They don't necessarily see all the other interactions that are happening.

How can dealers improve the online path to purchase?

Well, there are quite a few pieces of that. I think that speed is going to become increasingly important. Over 80% of traffic that we see is originating on a mobile device. I think the entire experience needs to be built mobile first and really tailored to that form factor. What we're seeing today, if you pull up the dealership website on your phone, you have all these third-party widgets that are all competing for your attention and they're popping up left and right. They're slowing the website down. All of that has downstream implications. It lowers the conversion rate and lowers the overall quality of the website, So it hurts them from a search engine standpoint. It leads to higher pay-per-click costs. We look at speed and form factors, kind of the two most important things, you know, parts of the customer experience.

We're not anti third-party widget. A lot of OEMs have various requirements and plugins and tools that they use. But I think we're looking at it from how do we get a customer onto the site? It feels instant, it feels like a mobile, you know, native mobile application on their phone. How do we make the calls to action super clear and concise?

When we look at our data, it shows that eight out of ten people don't even scroll 25% down a page. How do you minimize all the distractions and bells and whistles and really just get somebody focused into the funnel? Hit search and type in exactly what you want, or click SUV, or click a sunroof, or any number of the features that you want. You just have to put it right in front of them and make it super simple. By doing that, we have found that most people don't scroll. Most people don't like to go to the second page of the search results. Typically, you've got to present the car to them pretty quickly at the top of the page to keep them engaged.

What CTAs work on a VDP?

That's why we lead with typically something like "lock in the best price" or "unlock manager special". Those tend to perform really well because people like a good deal. They like a coupon. The most leads that we collect through our websites is actually through the payment calculator. 

When you think about the sites you go to today, it might ask you to know your location and you're like, Why would I do that? Why do you need my location? Then it's going to ask you to fill out an application to get preapproved. Well, why would I do that? I haven't even found a car I like. Our line of thinking is to get them into the bids and present the most obvious options. Show them enough to submit a payment, let them customize that payment, and hopefully get a lead out of it. 

Then, once they have an understanding of their buying power, we hit them with "get a free credit score check". Our partners at 700 Credit integrated with us via API, so we can pull on our credit score and give them a pretty realistic number of what their payment is going to look like. So we lead with the payments, we lead with an action that instills some sense of urgency, whether that's unlocking some kind of a coupon, or holding the car for some period of time. We move some ancillary stuff further down the page, whether that's get preapproved, do a test drive, ask a question, and we really try to lead with urgency and things that actually appeal to the customers.

We're constantly adjusting that. We're looking at the heatmap data and analytics and we're looking at session recordings to see how people interact with the sites.

It's a little different for every dealership. But I think the underlying principles are the same. Show them what they want to see on something relevant and get them into the funnel. And interestingly, for some of the higher-end dealerships, Fisher Imports here in town, they were one of the first clients whom we deployed our retailing tools with. When we put "explore buying options", they got quite a bit of clicks like you could go through the whole process of your trading and your finance forum, all of it. But once we actually just added put down a deposit, that's one of his top performing conversion mechanisms and that requires somebody to put down a deposit with a credit card. It's not a free hold or anything like that, but for people that are shopping and know what they want, they're willing to put down $250 or $500 to, you know, lock into the car they want.

Can you share some interesting website analytics?

I've got a few. A lot of the leads that we see tend to visit two or three cars. It just really depends on the source of the traffic. A lot of dealerships are investing in, you know, blogging or content generation. That's honestly, the poorest performing. We see paid ads are sort of in the middle somewhere. It just depends on what are they collecting, what they are doing.

But overwhelmingly, I would say the best-converting traffic we see is organic from search engines. We're starting to see that the best-performing sites are typically 60 to 70% organic traffic. It's really sort of changing dealerships' behavior because rather than spending a ton on pay-per-click or referral websites, we see them investing more on the SEO and search engine side because it performs a lot better.

I have a funny statistic for you since we're on the topic of chat earlier. When we look at heat map reports on a vehicle detail page, the number one click is the close button on live chat and it accounts for nearly 21% of all clicks. 

There are some other things we track. Like what people are searching by. We track features. Features are really interesting because they seasonally change. So in the summertime, people are primarily clicking Apple CarPlay sunroof, all these things that are conducive to the nice weather. And then as soon as winter hits, it's all like all wheel drive, towing package, or whatever. It's all things that are sort of gearing up for the winter. So that's always interesting to see.

What trends are you seeing?

My business partner pays attention to search trends quite a bit. We're seeing about a 20% decline in used car searches which is interesting. If you go to Google search trends and put in used cars like that, numbers are trending down. So I think that that's pretty interesting.

Another one would be pay-per-click. So when I was talking with Alex Melon about predictions for this year, we were looking at some of our numbers and wanted to compare them to some of his numbers. And we see a handful of dealerships that were paying a dollar per click back in January of last year, they were all of a sudden paying three plus dollars for that saving click at the end of December. So paper click costs are just multiplying every year and it's just getting so much more competitive.

Site speed and search 

I think automotive has struggled. You talked about speed a little bit, but the speed benchmark that we looked at said only 39% of automotive websites actually meet Google's sort of core performance metrics. Only 39% of automotive websites are tuned to perform well on organic search or paid search. It is the second worst-rated industry, only second to travel. I think historically, the industry has really struggled from a speed standpoint. And for clients that we see invest in proper SEO and a great mobile experience, mobile-first speed, we see increases of 2 to 300% in organic traffic. And to your point, organic traffic performs better so that often ends up being a 2 to 3 X increase in leads. I've yet to see a single pay-per-click agency or an SEO agency deliver that kind of performance because ultimately we have to solve what's under the hood, like what's causing the performance issues in the first place.

What is slowing down dealer websites?

It's a number of things. There's a metric called total blocking time, and that is just the time that it takes for an end user to connect to your website. That is directly in the hands of the website providers, whether they're using highly available infrastructure and cloud hosting and all these things they can do to deliver the website to customers based on their location to try to get a closer proximity to the data center. That's just right off the top. The most obvious one. If you're like a lot of website vendors in the space that white-label a content management system like WordPress, you're not going to be able to optimize that metric very well because WordPress is not built for automotive websites. It's got all these other plug-ins and all these other configurations that it has to load before a customer can even see your site. So that's number one. That's a design decision on the software side of things. 

There are two other major contributors that we see very often. So a lot of dealership websites today are not efficiently serving up images or videos or assets. We've seen the dealerships that have 25-megabyte homepages. So like to compare that to one of ours. We're like five or below. They have these huge promotional banners and really large videos, and you have to think about how that's going to load on some 3G cell phone, right? It's not going to go well. 

And then the third really big one is just the fact that people aren't closely paying attention to the widgets that are being put on their website. When we migrate a dealership over, a couple of the activities that we do is we try to consolidate all of their Google Analytics accounts and we try to consolidate older Google tag number tags. I think the record holder that we moved over had something like six analytics tags and 12 Google Tag Managers. And that alone starts adding seconds to your load time.

It's really just because you had a vendor that had you add this tag or you had an advertising agency that wanted to add a tag. And most support teams or customer success teams aren't considering the implications of that. So one of the things we monitor very closely is how many new scripts and new tags have been added to the website so that we can go back and empirically point to that and say, Well, this is when things started to go south and then we figure out how to consolidate them and and keep it performing well.

Google Tag Manager is slowing sites down.

Well, Google's being kind of quiet as to why that happened. I mean, that hasn't always been the case. I would say it's a fairly recent development, maybe the last 3 to 6 months that the tag managers especially are performing really poorly. If you go to the Google developer forums, there are a lot of people asking what is going on. And the conversations are just closed, unresolved and they're not allowing new people to comment. So it's kind of unknown at this point as to when they're going to fix it. So the best thing we could do as website providers is to try to optimize around that,

How are website providers contributing to slow sites?

It's I mean, it's a good question. I think if you went and looked at the list of industry leaders, the first thing that stands out is there are some very dated technology choices being made. I empathize with that because I'm the last person who wants to go back and rebuild my entire infrastructure. But I just think everything's evolved so rapidly. You have modern JavaScript frameworks now that are powering services like Hulu and Twitch and Netflix, and it's really hard for a company that's ten or 15 or 20 years old to adapt that kind of technology and get it implemented.

It can be very challenging. That is the software or the engineering culture in the industry. The dealers keep paying and we don't have to innovate and people accept the status quo. We talked to a very sizable company in the space that uses the KATL acronym. Keep on the lights. That seems to be one of the big challenges that we've noticed. They're just keeping the lights on instead of trying to innovate because they haven't been pushed or demanded to innovate in a long time.

What can a dealer do to improve their website today?

A couple of things that we often do is we look at a tool called PageSpeed and any dealer can go in and put their website in and PageSpeed will tell them exactly what's going south.

Another good one is GTmetrix, and any dealer can go in and put their site into one of these tools. It could be a little complicated. You know, it kind of gets a little nerdy, but you know GTmetrix especially is very good about sort of showing like this little ladder of how everything is loading and what's taking forever. They can pretty quickly see, "why did my marketing team add ten tag managers to the site?" It really spells out what the issues are and in a friendly matter, it even gives it either a color-coded score or a color-coded grade. So that's an easy one.

One that's really low-hanging fruit, if you want to understand if you have a good SEO vendor or a good SEO strategy in place, I highly recommend that dealers go to a tool called Semrush and they can put their business name in their directory listings management tool and it will show okay, of the 50 plus trusted by Google, here's how many your set up for. That's a really simple feedback mechanism. You have 50 websites that Google trusts that will index or website, make sure that all your name, address, and phone information is correct and it broadcasts that out to the Internet. That is the most low-hanging fruit thing any dealership can do. And nine times out of ten, when we talk to a dealership that's paying an eye SEO firm., that's the first thing we check, and none of their directory listings are on par. That's costing them a lot of organic traffic and really calls them a lot of opportunity.

What can a dealer do if they have an underperforming website?

I would agree that they're probably just going to have to find one to do the job. Unfortunately, there aren't very many right now, but you know, you brought up DMS, it's like we saw Tekion come into the space and they're working on some pretty exciting stuff.

There are more people sort of coming into the space wanting to do things a little differently. It's just unfortunate that we're also met with a lot of reluctance because as I look at it, you're the 50th DMS provider or the 50th website provider to call me. Why are you different? And so that's going to be an uphill battle for any company that comes into the space and tries to make an impact.

But what I will say is that if you have a great product and you can prove that it works the dealerships are your best friend in terms of marketing. If one guy starts doing really well they tell the next guy. And so that's just where I think the industry struggles, because I'm not sure what word you would use to describe it, but it's almost like dealerships feel a little defeated because they keep investing all these dollars expecting a different outcome. And I feel like they've been kind of let down for a while.

How do you approach digital retailing?

Digital retailing is a very interesting topic because it's kind of a kind of a loaded term. I think at the very basics, you should have some true payment calculation, some sort of input so the customer can put in to get their real payment. That way it's transparent because what we've seen with a lot of retail tools is that they present pricing with the best possible terms and credit rating and all of the above. Then the customer gets sticker shock when they find out the real price.

I think where a lot of retailing tools sort of overcomplicate things is that they try to package the entire deal into a single workflow, and for us that has been the lowest-performing plug-in across the board, not only for ours, we have our own retailing plugin, but we typically see it other retailing plugins fall short because they're just too complicated for the attention span of the modern consumer. That's where I was going back to, if you have something more actionable that's like, Hey, put down a deposit on a car and reserve it for 72 hours. And if it doesn't work out, it doesn't work out. It's much easier to convince someone to do that than it is to get them to go through a five-step credit application and then a three-step trade-in form.

Ultimately it's still a gray area as to whether somebody could do all of those pieces of the purchasing puzzle and actually complete a transaction. I mean, more often than not, what we see is that somebody will put down a deposit, the dealership reaches out, what are my next steps? So they get instructed to put in a credit application. They talk through the numbers over the phone and some of our dealerships ship 50% of their cars out of state. I think the expectation that you're going to wrap all of that into a single experience is going to be very challenging. 

Caravan and Vroom do that particularly well. I think it's a general generational thing. I think they appeal to younger car buyers. But I would think the average consumer, when you're making a purchase decision like that, you still want to talk to somebody on the phone. And part of the retail pitch that I've heard is, to your point earlier, is bring up more man hours or free up more resources. But you know, somebody is going to spend 50, 60, $100,000 on the car. Just give them the option to reserve it and sort of take it from there.

Digital Retailing needs to be simple

When dealerships often ask, do you have digital retailing tools, our answer is often yes. Carvana and Vroom and all these guys already have proven that people are willing to put the money down and buy a car online, whether that's the entire process or they're just putting down a deposit and getting started. But we know the desire is there for consumers to be able to transact online.

I think where dealerships get in trouble is relying on all of these third-party plug-ins with dozens of startups with this false promise that it's going to generate a ton of leads. We made that same mistake. We went down that road. Ultimately just making it one simple step seems to be the most effective.

How are dealerships calculating ROI on search activities?

You made a point earlier about dealerships looking at their budgets and trying to figure out how they quantify results and how they should allocate their dollars. I would tell you that the vast majority, 95% plus of dealerships that we talk to can't actually calculate the the ROI or the return on investment from different search activities or advertising activities. 

In large part that's because every time a customer comes to their website, they are sort of shuffled between a live chat product or an embedded credit app or some sort of instant cash trade offer. Once those people engage with those tools, you no longer have any visibility into what they did. So the reporting for dealerships is extremely challenging.

That's one thing that we're sort of aiming to solve. We have our own proprietary analytics engine that tracks every single interaction, every single detail. that's kind of the visibility that you need now because even Google Analytics has taken a huge nosedive with the release of Google Analytics. All the data is delayed 24 hours. The retention of that data is very limited. So you can't really compare time periods and what performed or didn't perform well.

They're really interested in selling looker subscriptions with analytics. It's not quite the tool that it used to be for generating reports. So it's very challenging across the board. As I said, probably 95% plus of the dealerships we talk to often couldn't tell you what their most effective marketing spend is.

Adam Pavkov, Chief Product Officer with Affinitiv, spends some time with us discussing first-party data and the customer experience.

How does modern technology help dealers capitalize on their data?

Yeah, absolutely. And you're correct. We are seeing this resurgence, I think, recently around the topic of data and more importantly, the importance of first-party data.

So, yes, this idea of I as a business owner, our data specifically sits on a wealth of information, a wealth of data about the business, about the consumers, or the inventory. And having that data is one thing. Understanding, interpreting, and mining that data right is certainly another. I think a lot about this recently because again it seems like whether we're at Digital Dealer or NADA or some of these 20 groups, certainly this concept around customer data platforms has really sort of risen to the top And CDPs are not necessarily new to the ad tech space, but they certainly seem to be new to sort of the automotive industry.

I think a lot of this is coming from, again, this resurgence of focus on first-party data. And of course, that is coming from what I'll call this evolving ads ecosystem, which for the last few years, whether it's regulatory changes, like if you're a dealer in California, certainly you've been navigating that the California Consumer Privacy Act rates, CCPA. And if you're an advertiser who's been on some of the social platforms like Meta, you certainly navigate some of the tracking and targeting changes that come about from from from Apple and iOS updates. Now we're moving on to the next big change in our industry, on the advertising side, specifically this deprecation of third-party cookies, which according to Google will start here in January.

The good consumer data that you sit on, as dealers is incredibly important now, especially facing these headwinds of the ad ecosystem changes that that we're navigating.

How does a dealer leverage a Customer Data Platform?

Again, CDP, customer data platforms, are not new to ad tech. We've taken a pretty strategic and deliberate approach to how we help dealers use sentiment and activate their data. There are a few steps in that process. One is getting access to it, right? How do we how do we have to bring together these parts of that as it exists?

We have a wealth of data that lives in a DMS, and how to get access to that data first and foremost. Then we sort of have to clear it up. We call it data hygiene, we might call it data validation, but there's an opportunity there to both check the data as well as we can so we have a real clean and usable customer record.

Then the magic really starts. On the Affinitiv side, we take a lot of pride that one of our core competencies is the intelligence behind segmentation. And that's both using the data points of the variable as well as using the emerging technologies available to us. Doing some of this predictive segmentation, understanding when someone might be impacting the market, understanding when someone might be up to trading in their vehicle. These predictive elements are incredibly important.

And the last part about that flow is the activations piece, right? So now we've got the customer record, we interpret it as segmented and now we have to activate it. So now it's a relevant, personalized messaging using all the data that we have access to to deliver something across multiple channels that is incredibly relevant and helpful to the end consumer.

How do you clean up the data?

If we talk to dealers, they might throw a stat out that up to 50% of that data from the DMS might be questionable. There's a series of steps that we go through on our flow. There is ownership cleansing, looking at who the current owner is and matching that against other external databases of ownership data.

Then we have all the PIR, the personal information, that we have to validate as well. Is this a valid address? Is this a valid email address? Is this a valid phone number to text to? So there's a sort of upfront cleansing that we have to do before we actually start the activation process.

Then there's all this sort of feedback from the market. We'll get feedback back from vendors. What was actually deliverable, this physical direct mail piece as well as an email piece? Did this text message go through? Then we have an entire engine built around understanding, interpreting that feedback and then making decisions around that customer record, how we want to communicate it, moving forward. Are there things that we need to update the customer record? So yeah, it's a complicated piece.

I like to think about sort of the customer lifecycle marketing piece that's sort of like an iceberg right above the water. We see that small channel execution of communication. We're sending out service reminders, we're sending out the client service, we're sending out appointment reminders. We all imagine all those important touchpoints that we have. But below the surface, an incredibly complicated and complex engine of configurable events of when we send it, who we send it to. We talk about both the data hygiene and that a clean up piece that happens a little bit below the surface as well. I love to talk about that stuff. It gets complicated quickly, right?

What is the value of first party data?

It is an incredibly valuable asset, especially when you put a dollar amount on what customer acquisition cost looks like. The talk track is that no one knows more about the customer at any one point than the dealership, because they went through that sales process and hopefully we're going through the service process as part of this lifecycle loop.

We think about what it costs to get someone in the door, to work the lead to convert the lead, to manage it from the ownership side.

It is an incredibly expensive part and we should be leveraging the assets that are relevant for us to provide personalized messaging. It's important for us to use some relevant messaging. I think we get into a space sometimes in advertising where we're looking for scalability. We're talking about conquest. We want to focus on growing our market share. So we certainly focus on the conquest audience.

When we think about the profitability of a dealership and how much of the fixed ops or parts and service really drive that, we think about how loyalty is still lagging in our space. That's probably tied to inventory shortages. When we see all these sorts of challenges that we're facing, we go back to really how important our own first-party data is as a dealership. We certainly should be activating it on social channels. You should be activating as part of your lifecycle communication So again, any any sort of channel that you can you can reach so on and we should be activating or activating that data.

How first-party data and conquest work together.

If we zoom even out of the auto industry, it's the same idea. We could sell as much as we want over but if we're churning we've got a whole bucket. We've got to plug that bucket to really enjoy the fruits of that labor.

I do tend to agree that those things tend to work in tandem. If we don't have that really strong retention program in play where we are hitting those incredibly important touchpoints like first service, second service, this first 2 to 3-year window where we see defection sort of blossom or balloon pretty quickly. If we don't have that piece in place, then all the conquesting is going to lead to defection.

They work in tandem. Having that data-driven intelligence retention cycle communication piece in place is incredibly important, because it just feeds its own cycle.

What is stopping dealers from fully optimizing their first-party data?

Yeah, I think the short answer is it can be difficult. When we think about where this first party lives across the dealership, it could be in multiple pieces of software across multiple vendors. So we've got we've got customer data. And the thing about the DMS and the CRM, we've got all this incoming traffic, whether it's call tracking or walk-ins or the anonymous traffic we're seeing on the website, it's got the behavioral sort of engagement traffic inside some of the vendors who are using our site. Maybe a chatbot, for example. So we have we have all this data living in lots of different places.

So one part of it is, hey, how do I sort of aggregate this too? The second part is, as we've sort of seen in the industry, there are potentially some costs associated with actually being able to use your own data. Three is, if you talk to dealers they'll question the value of the accuracy of this data.

So we have that integrated lots of different silos. We had concerns over the accuracy of this current set of data. And then you have to get that out of the systems that are at at at your store into these other systems where you can activate against it, maybe get to a third party provider or maybe it's directly to some of these platforms, but there are quite a few steps here.

Any one of those steps could add some friction be the point where they go ahead and sort of ask "is this working for us?" So to think about why we don't see more utilization of action in our first-party data, I think it's just those series of challenges.

But ultimately those that are to extract those audiences and those segments out of those systems and use them to create incredibly timely and relevant marketing and advertising messages, we see some impressive results.

Do I need a CDP?

I might buck the trend here a little bit. If I checked out the dealer and they asked why they need a CDP, I don't know yet, right? Maybe not, but I do think there are components of a CDP that make an awful lot of sense. Does a dealer need to go and make an investment in this incremental piece of software? That's a larger conversation around what the current setup looks like. How many rooftops do they have? What's their overall sort of sense of the accuracy of the data that lives in some of these systems?

I think you could all agree that the reason why the CDP conversation is relevant today is because I think we could agree that there's probably an opportunity to clean the data currently sitting in our system. Certainly, an opportunity to mine that data segment that an intelligent way.

So we're going a step beyond some of that really generic communication. So we're doing some little more tactful stuff on the outreach space and like I said, it can be difficult to get something like that out of some of those business systems, out of the DMS, out of the CRM, and into the whole platform.

So does a dealership need a CDP? I would say that's a much bigger conversation. Are there CDP-like functions that a majority of dealers probably could leverage? The answer is yes. Again, that ties back to the idea that they've got a data hygiene process cleaning up the data, segmenting that data, and then helping them activate against that data.

What can a dealer do to have cleaner data?

To simplify this, in my mind, there are probably just two sides of this coin. There's the input and then there is the opportunity to clean up the input, and that obviously gets complicated. We get feedback, we activate against that input, we learn from it, did it actually deliver, did it bounce? But it starts with the input.

That's training and or a business rule you put in place in terms of making sure that there are complete, accurate thought-out records that are being entered. And then on the backside of that is you have a process in place, whether it's a third party or the vendor to help clean it up, because inevitably, even if it's entered correctly, we all know that certainly email addresses change. Names could change through marriage. So there are elements beyond just inaccurate inputs that require some sort of update to discuss the records. But that to me, to me, it starts with valuing the completeness and the accuracy of the input. And then it's having a process in place or a partner to help with the cleanup.

And it is difficult. Again, as these records are constantly, email addresses are changing, and vehicles are going to be disposed. Ownership data is constantly changing, If you don't have a line of sight to that through the service department. They are defecting in some way. So there is there is a pretty big need, I would say, for these tools to bring in a partner or at least help with the data validation piece.

What questions can I ask to make sure a potential vendor helps me maximize my first-party data?

One, on the product side, right, we're product-obsessed. So the first thing I would say is we're not product-obsessed, we're trying to solve problems. Does this new piece of software actually solve an active problem in terms of mapping it back to data?

I think the question you have to dig into is around transparency. Am I going to have more perspective or any perspective into what I gave you? What data is owned by that third-party vendor versus what is shared with me and what is actually capable of writing back to any of my internal systems? So any engagement with what happens there is actually additive to what I'm already collecting.

As it pertains to specifics, depending on what this vendor is and what we're trying to accomplish, I think dealers' perspective is want to make sure that we understand what we're tracking visibility into. If there is engagement, especially around customer records, or PII, it is writing back appropriately so I can work that lead and I can work that piece of information.

How do you decide to build an additional product for dealers?

That is a good question. Because we start thinking about the customer lifecycle, the amount of touchpoints we have. Well, one, we've got multiple profit centers we're talking about, But really in the case of Affinitiv, we're really touching both the sales and the server side of the house. So how do we approach it? Well, I think we think about it in a couple of different ways.

So we have a suite of solutions that are packaged to be really solutions-oriented. We've got our service technologies packages. They're going to help dealers with online scheduling and booking appointments. We've got a check-in software, we've got multipoint inspection software. We've got messaging and video software that allows technicians to communicate back from the service drive to the consumer. That obviously adds value and drives ROI. We build individual products that sort of package together to solve these individual problems.

On the sales side, we have trade-in and we've got data mining solutions. But the way I like to think about it is really due to the the customer lifecycle marketing. Our platform is really the flywheel here. It's the thing that adds inertia to the business. If that thing's running appropriately, then we're moving a consumer right through this cycle. Then we add these appropriate software experiences at these different touchpoints that we can then hopefully delight the consumer with. From the first touch point of thank you for buying from us, if you have any questions that sort of after-sales communication really kicks off this flywheel.

Then we have some really important milestones. We've got first-serve or second-service. We've got that ongoing service. So due for service, we got the scheduled service communication. That piece is really what we know run drives loyalty. We see that when someone services their vehicle at the dealership are 67% more likely to actually buy the car from that dealership.

So we use that flywheel to then drive that person through our service layer technology software. So that supports that part of the ownership piece. And then hopefully that customer ends up in a positive equity position, for example, where they're getting to a point where they are there in the market and we can start to help again with value when they're trading or understanding if there's an opportunity for them to trade and trade up similar payments or through our data mining and equity mining solution.

So again, you've got this flywheel driving that person to that next engagement piece. And hopefully, we get back to the sales piece again where we have the agency services that get where we're conquesting and we're driving retention, we're exposing the market to inventory price and branding type messaging so that we can complete that sale and that kicks off that flywheel again.

That's what I like to think about it, and really the flywheel here is that lifecycle marketing communication. And then we build bundles of solutions that dealers can tack on that address those individual touchpoints.

What are successful dealers doing?

That's a fairly easy answer. They built a process around the software that they've invested in. There is onboarding software, there's training people on software. That's all part of it. But building an operational process in the dealership around how they're actually going to use the software, how it's going to fit in, how they're going to work that customer list, whether on a daily basis, who's responsible, what parts of it, how they're going to move that communication right throughout the operational flow that's that makes all the difference.

The partners that are leveraging the software and using it, have built a process around using it, so it doesn't matter what day of the week it is, or who's on staff that day, they understand there's an expectation. Those are the ones that are seeing the most success. The ones that have onboarded the software and trained on it but have not built the process around it to really encourage engagement, that's where we start to see some of the performance jump off.

How does Affinitiv support their dealers?

It's an area that Affinitiv certainly prides itself on, which is really our fields and customer support teams. When we go through the process of onboarding a new client on a piece of software, there's a dedicated team there to ensure they're up to speed in terms of training There is always a team that's checking in on utilization and there to respond to any concerns or questions they might have.

There are certainly in software opportunities to ask questions or continue to to see about new developments. But if we're being honest with ourselves, it's it's really back to that customer support team that really drives the engagement that drives the value for our ongoing customers.

What challenges are dealers facing today?

So we talked a little bit about defection. I think there are a couple of challenges we have where some of these customer lifecycle marketing problems fit really well. I kind of think of them as the convergence of a lot of these issues. We have economic headwinds, right? We're certainly all tracking to that.

We understand the really the incredible importance of the fixed side of the business in terms of just the gross profit. We've got royalty issues. So we are seeing defection on both the sales side as well as on the service side, I believe I read somewhere recently that that dealer market share of appointments is down 35% since 2021. About 30% of consumers service their vehicle at the dealership. The other 70% obviously are doing some of those independent shops. So we're seeing loyalty lagging at both the sales side as well as the service side. That rolls up to the overall loyalty issue that we're having. Of course, inventory is driving this.

We're also seeing incentives come back, which is also complicating it, because all of a sudden now you're potentially fighting for market share over what the OEM is pushing out in terms of incentives Loyalty is an issue.

And then this other sort of thing I see alliances are to be able to offer an experience economy. This idea that consumers are really prioritizing the experience they get from a brand at the same level or even above what the product or service they would receive from them is. So when we ask consumers who recently bought a car why they bought my dealership, would they buy again, some of the trends that sort of bubble up or all around how easy was the purchase? Did I feel respected? Was my time respected? Did I get all my questions answered? Certainly price bubbles up in the top five, but it's not the top three. The top three are all around the overall experience. The dealers are facing economic headwinds. We've got loyalty headwinds and we've got this external economy that we have to compete in.

If you come to me and say, hey, I'm battling all three of those things, again, the convergence of those headwinds feels like a really strong customer lifecycle marketing solution. We want to make sure that from the moment that the sales cycle is done, that they feel like they're appreciated and then we're sending relevant, timely, and helpful communications to boost the overall experience. If we do that appropriately, we see we've got some strong numbers around retention and pressure on that first service, which we know is really important. And now all of a sudden we've got the loyalty piece ticked off there. So yes, those three challenges are the ones I hear an awful lot from the market. And if I really think about how we sort of try to sell both, that all comes back to that plan that we talked about, which is which is the customer lifecycle marketing strategy.

Why are we still talking about the customer experience?

Yeah, you know what? I think it's interesting. This is my talk track around experience, because I think sometimes we forget this. And Affinitiv is certainly in the service technology space. We've goto nline scheduling and booking software. So this is sort of the example I use. But if you're a dealership, and you've got consumers, booking their service online, certainly a huge indicator or contributor of their overall life perspective of the brand, their experience, they're not comparing you to the service scheduler capabilities of the dealership down the street. We don't live in a vacuum. They're comparing you to any sort of reservation or booking software that they've engaged with. When we think about driving a driving experience, it's not what the rest of the industry doing.

The bar is when that person booked their Airbnb, for the vacation rental. What did that process like when that person reserved the table at a local restaurant through Open Table. What was that experience like? The rest of the rest of the ecosystem. They're the ones setting the bar for what digital experiences should look like. So that's what we have to chase. If we're comparing ourselves to suggest within our industry, I think that's the wrong bar for us to try to reach.

Experience directly ties to loyalty.

I always say any engagement with the dealership is either adding or detracting from their overall perspective of the brand. You have the sales cycle. Great. Let's say it goes well. We know that's a huge indicator that they're likely to come back for service. Every time they're there, the opportunity is to either be additive or detract from the perspective of what the overall experience. And experience directly channels the loyalty.

It's a waterfall for sure. So we just have to make sure that all of those touchpoints are meeting some level of expectation. And it's easier said than done for sure. But that's where we have to think about it, right? We have to think about ourselves of what the consumer expectation looks like in the rest of the rest of the the other competitive categories. The other industries are going to drag us kicking and screaming. Right? If they make advanced bets on some of these other fronts, we have to be aware of that piece.