We sat down with Paul Budvitis, CEO and Founder of Insurian, and picked his brain on employee development. He talks about how he would approach people and gives some tips on recruiting and training.

Why is training so important today?

You know, I'd like to start by saying I've had the greatest mentor, my dad, from the time I've been in the car business since I was five years old, and I think that the car business, from my view, selfishly, is the greatest industry that there is.

People fall in love with cars, and in my opinion, the opportunities in the future are going to be amazing for people, especially those, getting started right now.

The changes that are happening are unbelievable, but I think that one of the things that we need to look back on is maybe turn back the hands of time a little bit, and really empower people more and truly train them on all aspects of a business.

I got to see when my dad started out in the late 60s, they did everything, and they were delivering cars at the kitchen table and things like that.

I think that now we need to empower people, and by that, I just don't mean front to back, whatever your sales process is, that's your sales process, or wherever you want to go, that's it. We really need people to come in, and we need to turbocharge their knowledge about all aspects of the business, not just let them sit in their own area.

We need to take ownership of people, and I think that when we do that, and as an industry if we can deliver that story about how the future is amazing, and that you're going to come in here, and you're going to become the best business person you can be, you're going to learn an industry and skills as you've never seen before.

When a salesperson steps foot in a dealership, or a service advisor, or a technician, or anybody for that matter, they're going into a dealership that has multiple businesses under one roof, multiple personalities under one roof, and there is undoubtedly massive opportunity.

The Growth Mindset Culture 

The training, from my view, and you're speaking my language, I was very, very blessed at a young age, and I'm going to give some accolades to a mentor of mine, Les Shapiro, who was the head of training for all of Aon Corporation under Pat Ryan, wrote a book called The Training Effectiveness Handbook.

We have an opportunity, when we're talking about changing people's lives, is take a look at not just the skills they can get inside a dealership, but the life skills, because there are amazing people in our dealerships who are running their lives in amazing ways. And when you're talking training, if a person can take a look at where they are right now in their life, in a particular skill level, and that dealership is willing to transfer knowledge on a daily, weekly basis, and really engulf these people with amazing knowledge, that's one skill.

These people are going to see the difference between where they're at and where they can be., and if we all got on the same page with training and a message and knowledge transfer, and how we can make people's lives better, that's a very powerful message, because we get to do it every day with very, very high touch.

How should a dealership approach training?

How often do we have a people meeting? How often do we have a people success meeting?

And how often are we making sure that we have the right training that's happening in place in our dealerships?

When you start breaking this down, and you say, the most important meeting that we can have is our people meeting, and you break it down from there and say, we're going to talk about our recruitment outreach, we're going to talk about the competency skill levels, of our current people, we're going to take a reflection as a management team and say, okay, great. What are the skills that we need to elevate? What do we need to train on, and training only takes place when there are role plays. When people are guiding that, and that leads to a very, very important thing.

One that's been very successful for me is, you have to train the people in your organization to be trainers. If you teach them a learning mindset, where you require them to have a mindset where they need to learn the skills of your store, how to treat customers, what we say to customers, how we interact with customers, as if they're going to train the next person, I think you can inspire learning a lot differently.

But you have to live that on a weekly basis. And you have to point out when it's happening, and when it happened. When people in your organization can identify that, you're going to be in for some really interesting changes.

But it's not easy. It takes 60-90 days, 120 days, maybe even six months to get that kind of feedback and communication going. But the moment it starts happening, you start raising the bar on the communication and the people in your organization.

Why is roleplay so important?

We have to teach people that growth comes from being comfortable with being uncomfortable, and when your people can give honest feedback at scale inside your organization and say, you know, you hit everything perfectly, but you know, these couple of things could have been improved, whether it was your tone or you're talking too fast.

It's not always what we say. It's maybe that we're not looking at people. If you have an organization that can deliver the type of feedback, okay, recognize high-level behavior and continue to raise the bar, you're 100% correct. You're going to move the needle and your people are going to perform better when new things come down the road, new technology and vehicles, which is going to be rapidly growing. We all know that.

How can dealers recruit talent today?

People are the most important asset, but why? I would tell you that if you're a dealer principal or a general manager, what's the most important sale that one of your leaders could make in any given day, any given week or any given month, that would be what if you brought in the next 20 plus car a month salesperson and he had an impact from the beginning.

Things that I've done in my life, I've been blessed to travel around the country and implement programs, turn dealerships around, and raise gross profits. I had a dealer who brought me in and wanted me to implement dealership-wide strategies, but he was losing $60,000, $70,000 a month in his used car department. And I said you don't need me to do us all. Let me, let me pay attention to your used car department. 

We evaluated the team as a whole, the personalities, skill levels, and everything. We went out and through some market research, we found who the best person in the brand was at selling used cars, and we went out and got them in a pretty short amount of time, shorter than what most of the time it takes, because it can take eight, nine, 10, a year, year and a half to recruit a real impact player.

That person ended up bringing two people. We took that dealership from 60 units a month to 160 units a month in less than 90 days.

So when you're looking at this, it's about mindset. It's about that people meeting and knowing that you are one person away in your department from raising the bar on where you're at. When you take a look at somebody who's a 20-car-a-month salesperson and the true impact that they have, that's the most invaluable thing and the most valuable activity.

So how many hours should a manager be in building relationships in the community, and getting to know most of the people in the car business around them? What value is that to have that conversation? And how long should that meeting be on a weekly basis?

How should a dealership be forecasting talent needs?

I think that this starts at a very, very high level in knowing what the capabilities of your leaders in your organization are to be able to plan. When you take a look at a dealership, there are a few key areas that they all need to raise the bar competency-wise, right?

Volume, margins, expense reduction, people, employee satisfaction, customer satisfaction, and setting a requirement throughout the year, once at least, maybe twice, for them to put and deliver what plans they're going to implement in their departments and how they're going to achieve those plans, 

That's a very big one because now you're going to be able to evaluate, as the leader of the organization, how good are the plans that are coming. How good are the ideas and are they going to be able to execute? Because in their plans, if they don't have the execution criteria and what it's going to cost, then you're failing before you start. 

But at the same time, when you're taking a look at these plans, if there's not a very, very strong emphasis on finding people, then you probably need to start with that, because people are always going to be the answer to growth and being able to acquire new dealerships.

And they're going to give you the ones that are able to execute on your plans.

How to identify management coaching opportunities.

So you know, when you're the leader, and you're seeing somebody who's extremely talented, maybe they're struggling on some of this planning process, that's a big opportunity, you know, to step in and help them become a better business person.

What's the organization missing? As it relates to this planning, how are we going to do it? But as it relates to the people equation, if your people can't turn on their juices when they're putting in place business plans, and get you sold on ideas, then they probably are not going to be able to sell your people on coming into your organization. So it's an important step, and it's really all related.

But you know, we started off with, hey, why don't more dealers do it? And I would tell you, we need to have the people meeting every week, you know, and who's talking to who, and what plans we need to have in place, and who are the movers and shakers in the market, and how are we going to grow people? How are we going to find people? How are we going to get more people referred to us?

And how are we going to make sure we connect with those people when they do come across our table? Are we wowing them?

You know, because I know that there are all types of things out there and tools about recruiting, and what needs to go into your job description, and you need to have a clear mission and vision statement, and, you know, in your compensation ranges, and how do you optimize the recruiting website for mobile?

But what we're talking about here is, as the leader of the organization, when a potential candidate is talking to one of your people, how are they going to feel? It's so different than buying a product, you know, how is this going to change my life?

We have got to be in a position as leaders inside dealerships, to be able to portray to people that this is going to change their lives.

How can a dealership raise the bar of its culture?

As trainers, we know, and we've seen that, regardless of whether it's a customer service skill, one portion of a road to a sale, just delivery, right, or a follow-up call, okay, that we can really have an impact in a lot of things just by the training of how we do that, and people will see that.

I think that optimism is really important. I also think that we have to be accountable to the organization and the people that we're training that when we see people who are not raising the bar when we're raising the bar, they're not putting in the time when we're putting in the time, they're not delivering the results and improving, you know, to the degree, in fact, they may be detracting, you know, there's a point at which we owe it to the people around that we're going to be committed to a, you know, goal-oriented, okay, successful organization, okay, well, those require people that want to come on board. We also have to know, when, hey, we've trained you, you can go be successful, we're a great organization, you're going to do well, but it's time to move on because we do have to raise the bar internally.

Creating a winning employee referral program.

This is one that is really, really important, okay, and should be part of the people meeting and should be something that's constantly evaluated, there are so many elements.

And again, they're HR people, they probably have other vendors that are familiar with the requirements of garnering and implementing employee referral programs, how they compensate employees and what they do, do they have a mentoring program in place, and things like that.

I would say this, okay, that all those things are relatively easy, and those are tactics, having a mobile app, that you're able to send somebody when you meet them, very simple things to do, having a splash page and a recruiting page, that your managers can send somebody that they're really interested in, very easy things to do, how you get your entire organization on the same page to tell them and outline them what we're looking for in our organization, and how people are going to feel when they are done with the interview process, and when they get onboarded.

So the execution needs to be planned at the time you're setting up the easy things. The response time for how quickly you get back to an employee referral may be even more important than the response time on selling one car. Because that referral could be 10, 15, 20 cars a month, like, right like that extra.

So having the execution items, having your managers on the same page, you know, having the right personality profiles, and those things in place for people to take, so that you know how they're going to fit in with the team, they know how they're going to fit in with other expert people that perform well in the job and your organization, okay.

Those are things that need to be put in advance so they can be done quickly.

They can be done quickly.

Dealerships need a strong process for recruitment.

Again, having these people conversations, not just with managers, but department-wide. , you. Here's what we're looking for, here's why we're going to be the best in service.

You know, LinkedIn is the greatest thing in the world, social media is the greatest thing in the world because we get to look at every day, the amazing dealers and leaders in our industry that make a commitment to this. And there's more than is reflected online, but we now get to see these things in place.

And you know, some of these places are, they're capturing some of the top people. I did work for years back, for a Honda store, and they had probably the best recruiting strategy I've ever seen. They went out and over a course of a period of time, captured the top nine Honda salespeople within a three-state area, and they had flexible programs and assistance and everything.

The lowest person on the totem pole sold 30 cars a month.

This is an industry opportunity.

Imagine if, from an industry standpoint, if we're having positive conversations about where our industry is going, and we're implementing and executing positive conversations for people that we're introducing to our industry, you know, this is an industry opportunity for us to captivate, you know, a generation of people to really hone their skills and change their lives.

When you look at, top performing dealer personnel, they're some of the highest paid people in the communities that they live. You know, everything from service to sales, to leadership roles.

And, you can't really put a price on it.



In this episode of DrivingSales Defining Leadership, hosts Bart Wilson and J.D. Mixon sit down with special guest Michael Hayes, Director of the NADA Academy. With over four decades in the auto industry, Michael shares his invaluable insights on leadership and the evolution of dealership management. Together, they explore how modern software changes impact dealership operations and discuss strategies for fostering a culture of innovation and excellence. Tune in to gain a deeper understanding of what today's workforce looks for in a career and how leaders can adapt to meet these evolving expectations.

Join Dan Trinidad, Founder and CEO of Benchmark Data, as he dives deep into the crucial question every business faces: "What's my ROI?" Discover practical tips on how to optimize your marketing strategies, enhance process efficiency, and leverage software systems for better business outcomes. Whether you're a business owner, general manager, or executive, this video will empower you with the knowledge to understand and improve your return on investment across various marketing channels.

Key Highlights:

• Understanding ROI in marketing and how to measure it effectively.
• Strategies for enhancing operational efficiency to boost ROI.
• Insights on integrating software solutions for optimal performance.

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.

Welcome to the future of automotive dealership management with our latest episode of the "Driving Sales Defining Leadership Podcast," titled "How to Create Sales Manager Scorecards". Join our expert hosts, Bart Wilson, Craig Wilson, and J.D. Mixon, as they explore the dynamic role of managerial scorecards in enhancing dealership operations and leadership quality. This episode delves into the critical question of creating scorecards for new or used car sales managers to drive performance.

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Derek Simonds of Numa breaks down where AI is today, where we're going, and how to stay out of trouble.

In the fast-paced world of automotive retail, achieving harmony between sales, service, and brand management is crucial for success. With Automotive Communication Solutions at its core, these experts are pioneering the path towards a streamlined operational model that elevates both customer satisfaction and dealership performance. Discover how a Unified Dealership Management process can transform your business, enhancing Dealership Operational Efficiency every step of the way.

Listen while Eric Glass and Jeff dePascale of CallRevu help us unify our dealerships:

In a recent conversation with Jasen Rice, CEO/Owner of Lotpop, he gave us an update on the current state of the used car market and how new car inventories and seasonality are going to impact used vehicles in the coming months.

How is the used car market?

Well, you know, the tax season, we're in that middle of that part where it's starting to pick up, it's gotten busy. I do think we're at the tail end of it.

We turned out shopper activity. We look at Google Trends, people looking for used cars, and activity, and we always see either a February or March peak in that shopper index, and then it starts dropping off. What we've noticed off of those trending metrics is that we've hit that tipping point, I think, and then it typically goes down about 20% on their metrics between now and the middle of April.

Once that happens, you know, the thing is dealers right now are really busy, so they don't feel it yet. The customers who are done shopping might be still acquiring the vehicles. That's going to happen between, you know, now and the next couple of weeks, and dealerships usually don't react until it gets painful.

It will take about another 30 minutes for the smoke to clear in the tax season, which will put us right about the middle of April, because you think about it, April 15th is the deadline, right? Anybody that's waiting until the last minute to file probably owes money. I know that's typically what I do. I'm not going to file right away and write a check. I'm going to delay that as soon as I can, so dealers will start feeling it by mid-April and rolling into May. But they're doing pretty strong right now.

Google Trends and the Shopper Index

Now, that's basically kind of the shopper index again, and when I look at Google Trends, they do it on a scale of 0 to 100. And so, and it depends on the timeframe you look.

If you look right now, let's say at the last year, the peak of that shopper index has probably hit over the last, about last week, so that would be at a hundred on the Google Shopper Trends. Then by mid-April, it'll drop down to about 80, so that's about the 20% drop. What we'll see is about a, anywhere from about a 10 to 18% drop in volume though with that.

So as the shopper count goes down, the volume will follow. Now, the Google Trends, this isn't like Google tracking, you know, shoppers. What I'm looking at in Google Trends, and if you go to google.com/trends, you can type in any word, fishing, and see if that's trending up or down because it's springtime. You could type in whatever, Taylor Swift and Travis Kelce, whatever.

But if you type in used cars, so basically how many people go into Google, typing in used cars, that's the trending metric that I'm looking at. And it goes verbatim with our dealer's two-week volume. We track dealers on used car inventory management. We want a dealer to sell a hundred percent of their inventory every month. What we look at is what's going on in the last two weeks, and then the goal would be to sell 50% of your inventory in a two-week window. And we track those metrics, right?

And so as the shopper count goes up seasonally, the two-week sales volume goes up. And then as the shop count goes down, the volume goes down with it. Again, we've hit the peak and usually, that volume follows about a week or two after. So as the shopper count goes up a week or two later, the dealer's volume goes up. As the shopper count starting to go down, we're in that second week right now, that's where we'll start seeing that volume go down.

Anywhere probably I could say 10 to 20%, but more accurately probably 12 to 18%, we'll see that volume start going down because right now they're selling well above their 50% sale rate. A lot of our dealers were hitting 62%, on average was a 62% sale rate. This means that if they had 100, on average, our dealers had 100 in stock, they're selling 124, 125 of that 100. We will see that drop about 12%, but also that's in about a two-week window. We'll see that 62 go down to 50, and then we'll see that 50 drop down to 43. That 43%, again, you times that by two, that means out of 100, now you're going to be selling 86. We'll start seeing that in about the next 30 days.

How strong is used car pricing?

That's what that people say, at least what I've seen in articles when people say strong is the average price.  The average price went from 38 grand to 42 grand, or the average price on used went from 18 grand to 22 grand.

Now does that mean it's strong? Now that's, yeah, it's a higher dollar car. So it's a higher-dollar car. Now strong meaning price to market, like, hey, where are my cars leaving the market?

Right now, I mean, I was just looking at a dealer that's priced at a little over 100% market or 103% of the market, meaning he's 3% above the average, and he's selling 65% in two weeks or 130% a month. He's able right now to ask for a premium, at least in his market, to ask for a premium and still keep the volume going.

That's all going to change here in the next couple of weeks. So it depends on what you mean is a premium. Is it because it's a higher dollar or can I ask for a higher percentage of market? And this is where a lot of dealerships, again, this 30 to 45-day window is where a lot of dealerships are going to miss the boat.

What I mean by that is they're having a strong February, and March. They're going to have to go replace this inventory, so when they go to the auction to replace the cars, they're willing to step up because they're short and they want to keep the momentum, and so we're going to have what I call a false positive. What I mean by that is it will be positive in the fact that wholesale values will still be strong, again, over the next three to four weeks, because as dealers are selling this volume, they're going to go to the auction, they're going to step up. That's a premium at the lane, so it makes it look like the market's still at a premium.

But as things start slowing down over the next two weeks, the volume is going to go down. They can't sell anymore. They're going to have a hard time selling at 100% of market in three weeks from now. They're going to have to start selling at 95, 98% of the market, meaning two to five percent below market to keep that inventory moving. They're going to go to the auction, and pay a premium over the next two weeks to keep the pipeline full.

The problem is in about two to three weeks, where they got to sell it and what they paid for it isn’t going to match. So the false positive is, it's a positive, looks like things are strong, but it's a false number because you're pretty much going to have to end up selling it for what you bought it for, and that window of time from mid-April to end of May, dealers are going to say, well, I'm not going to sell for that. I had to pay more than that. I'm not going to lose money on this car. It's going for this much at the auction. Well, it doesn't matter.

Customers are dictating the retail market and wholesale won't follow until about two to three weeks after retail starts dropping off. As retail starts dropping off in mid-April, wholesale will start dropping off in May and then it's going to be a catch-22. You have to have the inventory, but to sell it, the gross isn't going to be there. But that's why you always want to keep your inventory lean and clean and be a buyer at current market value, so when the market goes down because nobody's buying, you can be buying because you're not stuck in a bunch of aged cars. And again, this is the next 45 days, dealers are going to have to pay attention to this.

Will the market rebound in Q3 or Q4?

What happens is July and August, we see a little bit of an uptick in shopper activity. Again, a little bit of an uptick in volume, and then I'm talking used cars.

I think a lot of that happened, and I'm talking about tracking this for 10-plus years, we'll start seeing a little bit of a summer uptick. It falls around that July and August area.

I think a lot of that has to do, because I scratched my head at that, and some of its road trips and things like that, people are replenishing cars and stuff. But I think what happens is there's a lot of, and I know this is probably a more true statement now. Again, I have no way to validate this, but watching the shopper patterns, I'll show how I can defend this statement is, I think a lot of that uptick in used car activity.

Now it doesn't go back up to the 100, what I was talking about earlier in February, March, it might go up in the 70s, instead of being down to 40s and 50s shopper activities, it'll go up to about 60, we get a little bit of uptick.

And the reason why I think that happens is I think it's wrapped around the new car summer sales events, Toyota summer sales-athons, right? So there's a lot of good deals happening on new cars in the summer months, a lot of leasing and things like that, that attract people to shop for cars again? The reason why I say I can back that up is back in 2020, 2021, and a little bit of 2022, we didn't have new cars, and so there weren't a lot of summer sales-athons and that shopper index didn't spike back up from 50 to 60. It just kind of stayed the same and trailed down all the way to the end of the year.

If March is at 100 on a scale of zero to 100 on the shopper index, it's down in the 40s by December. So usually we get this March 100% shopper tax season, drops down to about 60s and 70s into going into the spring, and gets into the 50s and tips back up in the 60s or so in July, August, and then goes down all the way to about 40% going into December.

The reason why I bring that up is I don't know if we'll get the used car activity. I think it'll come because I think there's going to be a lot of attention on new cars come summer sales-athons and summer sales events. Inventories there for most manufacturers, Chrysler, Dodge, Jeep, Rams, and mostly Ford stores. The domestics have the inventory. Honda still struggles with it as a little bit there, but the domestics, and especially any Stellantis-type dealership, are already running pretty decent incentives.

I think by summer, the incentives are going to be even bigger. I almost think this year, if it's not springtime or summertime, it's going to be by the end of the year, you're probably going to see some of the biggest incentives ever because interest rates are still high and a lot of people have a lot of negative equity. So if these manufacturers want to continue to sell a lot of new cars, you're going to have to give special rates, which I think Chrysler has 0% or 1.9 for 72 months, but no rebate combination. By summer, I think you get the incentive and the rebate combination going on like, hey, 1.9 for 72 months and three grand rebates to get a lot of new car activity going. I do think that come summer, we're going to get a lot of new car activity, which then what happens is we're going to get a lot of trade-ins, which will continue to make use car values continue to drop. It peaked at like, the average price went from $18,000 to $22,000 average price for a used car, which just shot up.

I think that number is going to be back down to $16,000 after summertime for used cars because we're going to get a lot of trade-ins on new cars.

Now that's speculation. I know we're going to get a lot of new car activity with summer sales events, but I do think used car values are going to get really soft all the way to the next tax season after this window goes if new cars become really popular in the summer.

 How has the market remained this strong with the higher interest rates?

Really what's going to happen until rates get back below that 5% rate is it's the "need market" and not the "want market", hey, I want a new vehicle, no, I kind of need a new vehicle. And that's where I think the market stayed strong too because we got up to, I think over 12-year average for the car on the road. At some point in time, these cars are tapping out and they have to be replaced.

Mine wasn't, but I had an F-350 diesel dually that the warranty was up in six months and I had big old 36-inch tires and they're six tires and they're 500 a piece. It was like $3,000 worth of tires that I would have to replace something and okay, do I do that or get rid of it now while the tires are decent and get something new?

So anyways, I do think it's going to be more of a need up until instead of a want economy, and right now a lot of cars are aging out and they need to be replaced, so that's where it kind of keeps it strong.

I think people are open to refinancing in a year or two when the rates go down. But once they get below that 5%, I think it does open up the floodgates for more things to be sold.

New and used car pricing.

I think used cars are going to drop down to about the $16,000 range this year. I posted on Facebook a while back, probably three or four months ago, that there's a market trend where it showed the average used car went from 14 grand to 16 grand, and then at COVID it shot all the way up to 22,000 and it took about a year or two to do that. But then in less than a year, it's gone already back down to 20,000 and 18,000. And so just the normal trajectory would have put us around a $16,000 average used car price by 2025 or 2026 if COVID wouldn't have happened. We would have gone to 16 grand if COVID wouldn't have happened. COVID did happen, and it jumped up to 22 grand.

It's already down to 18 pretty quickly and I think we'll get to 16 before 2025, 26 because of, like I said earlier, I think people are going to gravitate toward new cars to get the better rate and to get a rebate to help them get out of a car they might've bought in the last two to three years, negative equity wise. Also, I think the deals are going to be good enough, again, going back to these cars being so old on the road.

I do think used cars will go down. I could be wrong, but it might stick around the 18 grand, I think a lot of cars are going to get traded in on new, they're going to be cheaper, 8 grand, 10 grand, 12 grand type cars that people have been holding on to.

I think that will help drive this down. New cars though, Chrysler I know, I think on Jeep they dropped the MSRP 4 grand. Look at what Elon Musk doing with Teslas and they dropped the prices on those, which forces, I think Ford did on their Lightning, dropped their prices.

I think these manufacturers are starting to drop MSRPs down a little bit more realistic. But the technology is there to kind of defend it. I keep looking, I look out the window of the truck I bought, it's got the lane assist and the almost automatic driving, the depth, I mean, I know a lot of cars have that, but the Apple CarPlays, the technology, the automatic headlights, and no emergency brake, I mean, there's just some technology that defends the extra cost on these cars. But I do think we're going to hit a wall with that for a little bit.

I definitely don't think manufacturers, especially like Stellantis are going to keep raising their prices when the inventory is sitting right now. If anything, they're cutting back, which they did on the Jeeps Cherokees, and they're doing the rebates and incentives. That's where I think the incentives get really big. I don't know if they really want to go in there and drop the MSRPs, that way they can a year or two from now keep that type of number, but I think they put these big rebates on them to help offset that added cost that probably not there anymore.

Because you think about it, they went up really quickly because of the part shortage, right? When they have to buy a part for extra money because of the shortage, they're going to have to add it to the MSRP. If the part shortage is no longer there, they can't defend that price range, so instead of dropping MSRP and losing credibility on that, I think they'd throw it in a rebate and make it look like the good guys trying to stir business up.

How does LotWalk help dealers with their used car inventory?

Well, again, so let's talk used cars and a lot of this, especially through COVID, you're going to apply it to new cars too. But I want them to sell their current rate. If they have 100 cars, let's sell 100 cars, okay? You don't need 100 cars to sell 70. If you got 100, let's sell 100.

So let's get the volume there, but increase the gross also, and how you do that is increase the amount of cars you sell fresh. You ask any dealer, when's the best time to make the most money on a car? Day one. If you increase the amount of cars you sell within that first 30 days, your gross will go up and sustain. Our goal is for them to do 60 to 70% of their sales in the first 30 days.

You do that, you're really maximizing gross, minimizing bleed through aging problems and costing your gross, and then your volume kicks in with that. When 70% of your sales are going out in less than 30 days, you're able to turn that inventory faster.

But the new approach also is lead management. One of the things, and the reason why we call it product LotWalk is you do a physical lot walk. You look for any issues on your lot, fill in holes, and dirty cars, but also you do a lot walk to make sure that any customers are out there being met and greeted on your physical lot. The virtual lot, you've never been able to do that before because you have a CRM over here that's run by an internet BDC department that this tool doesn't talk cars. I'll explain that in a minute. And then you have an inventory management tool over here that really doesn't talk customers.

So what we've done over the last year or two is put these two worlds together, and it really exposed to me, because I started doing internet sales in 1997, we've been doing it, not wrong, but we've been doing it the same for 25 years. We follow up with leads based on the age of lead. When we get a fresh lead, we're calling it and emailing it every day, every other day, because it's a fresh lead. and that 30, 40-day lead, we're lucky if they're still following up with them, or maybe it's every other week by then.

What I realized is when we get a lead, we don't know when the customer is two days out or two months out. So managing it based on the age of the lead could be irrelevant to where the customer is in their buying cycle. They're either doing something quickly or starting their research. But I don't know until I get a hold of them. so it's really not an effective way to follow up with leads.

The other area that we're looking at is inventory issues to keep that inventory turning, right? Well, you've got to figure out if I'm not selling 100, carrying 100, selling 100, and not doing 60 or 70 in the first 30 days, I got to figure out why. What's slowing me down? It could be something like your heavy and large pickup trucks.

Our example is, let's say you have 30 in stock and you've only sold, I don't know, 10 of them in the last two weeks. Well, if you sold 10 in two weeks if you times that by two, you're only on pace to sell 20 in a month, but you have 30 in stock. So if you want to turn your inventory every month and you have 30 in stock, but only on pace to sell 20, you're 10 units heavy in large pickup trucks, right? So that could be why you're slowing down. Okay, well, let's isolate large pickup trucks in our inventory.

But here's the next question I would ask a dealer. If you have a truck problem and you happen to have any leads on your trucks, how often would you want to call and email these leads to get your truck sale rate up so you're not just dropping a bunch of prices? And guess what they'll say? I'd want to call them every day, every other day.

And this is the point is, the reason why I said earlier, CRMs doesn't talk cars. You can't go into a CRM and say, give me my truck leads. Much less you can't go into a CRM and say, give me my truck leads where the car's still in inventory and it hasn't been sold from that underneath that customer. Or give me my truck leads that the car's still in stock and I haven't contacted in the last two days.

Because again, if I have a truck problem, I would want to call and email these leads every day, every other day. I don't care if it's a 50-day-old lead or a two-day-old lead. I need to get my trucks going, so let's call and email my truck leads. But again, in the CRM, you can't do it.

Our lot walk tools allowed us to do that now. And we could say, hey, you got a truck problem. Let's isolate the trucks before we make adjustments. Let's go look at our leads. Let's increase our contact ratios over here. And now we can actually attack leads based on situations on my lot and not just based on the age of the lead.

To me, that's a huge concept that we never really had in the industry when it came to inventory management or lead management, these two worlds should be running side by side.

 These two departments should be run by one person or at least share the same office and come up with a game plan every day and say, here's where inventory is struggling. Here's where I need you to focus on the activity with your leads today.

The impact of inventory on Internet leads.

We're recycling the leads. We're marketing, getting all these leads, and what we found was there were three numbers that I thought were important that we found.

The first one is like 60% to 70% of your current active leads, if you look at zero to 60-day old leads, 60 days' worth of leads, 60% to 70% of them are on cars that are no longer in stock. They can't buy the car that they inquired about because the car is sold. So that was one number.

The second number was half of your current leads on the car still in stock, half of those leads are on just 10% of your inventory, so if you have a hundred cars, okay, half your leads are just on 10 cars. I like to tell a dealer, think of a lead as an activity. I get a lead, I'm going to do a call or an email and an activity. So if my team did a hundred calls and emails today, okay, half of those calls and emails, because half my leads are on just, it's just going to impact 10 of my hundred vehicles. Think of that.

The third number was half your cars have no leads. If I have a hundred cars, 50 of them don't even have leads at all. This is where the eye gets, this is really where I open my eyes and go, huh, that means half of my cars get no activity at all. What am I doing about those? And that goes back into marketing dollars. Do I, do I go spend money and advertise this car? Do I drop the price and cost me money or the 60% over here that was on cars and no longer in stock? What if I recycle them?

That customer who wanted that F-150 at $40,000, but it sold last week, it's a 30-day-old lead. Do I just get off of them because it's a 30-day-old lead and the car he wanted, it's no longer in stock? Or where most people, 60, 70% end up buying a different car than they acquired in the first place, right? So why don't we take that 30-day-old lead and say, Mr. Rice, I know that the F-150 you're interested in has sold, but are you open to other large pickup trucks around 40 grand? Because if you are, I got a Ram 1500, I got a Silverado, I got another F-150, right? Offer them a switch opportunity because we would do it on the showroom floor.

So why don't we take the customers over here, the 60% that can't buy the car there anymore, and see if there's a match on my inventory, especially the 50% that don't have leads? Hey, I don't have a lead on this Focus, but I got five people looking for a compact car around 18 grand. Let's call and email them before I just go drop my price.

That’s where I say, inventory management should be lead management and lead management should be inventory management. These two departments have to go hand in hand to maximize those dollars.

Discover how managerial scorecards can redefine leadership and drive efficiency in automotive dealerships. "Measuring Management: Should Managers Have Scorecards?" is a thought-provoking podcast episode hosted by Bart Wilson and J.D. Mixon, who bring over three decades of combined experience in automotive retail. Join them as they explore the transformative potential of implementing scorecards for managerial roles.

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Explore the forefront of automotive purchasing with "Indulge in the Future of Car Buying" — a captivating interview with Matt Chinn of Gubagoo, presented by DrivingSales. Dive deep into the transformative digital retailing solutions that are reshaping how dealerships interact with customers online and in-store. In this insightful conversation, discover how Gubagoo is leading the charge in integrating digital tools for a seamless car buying and selling experience, especially in the evolving landscape post-COVID.

What is the current dealership climate on digital retailing?

COVID sped everything up, kind of forecasted the direction that Gubagoo among many companies that offered digital retailing thought we were going anyway. Coming out of that we've seen a slower adoption. I think people are eager to do what they haven't been able to do and that is get into a store and test drive vehicle, kick the tires, so to speak.

There has been kind of a lull, but just taking the opportunity to take advantage of the entire car shopping experience. But for us, where that really comes in is kind of move in the direction of maybe the the need or desire that we thought was going to be there to buy a car exclusively online, that was required out of necessity from COVID, has been reduced a little bit and now the the real demand is for that blended buying experience so that online and in store to match and to be seamless. I think that's really the need for digital retailing is most important. 

The definition of digital retailing differs from customer to customer.

That's what we see it as moving more in that direction. I think you nailed it. I think the previous notion, especially from dealers, was that the customers are gonna want to buy A to Z online, and that might not be the case now. We had to go through the experience like we just talked about, but the the demand is still there that you need to be able to offer some sort of shopping experience online, even if it's not fully a buying experience online.

And it's really important so that all the work the consumer's done, when they show up, it matches 1 to 1. And it like I said, it just builds that blended experience and the numbers and the interactions that they have online matter. It's not just smokescreens of what you want them to think they're seeing., it actually is like that.

Where do you find dealers struggle with digital retailing consistency?

 Some of it is just capabilities, working with tools that don't speak well to each other. Maybe they have a website that comes with a digital retailing experience, but has no interactions or talking to their DMS or CRM. So in the inventory that they're looking for online maybe isn't updating as quickly. The numbers that they're seeing online aren't backed by actual lenders or the desking tool would desk a deal that's not going to match at all. I think for us, it's really just using such disjointed tools. 

You've got dealers who say, Yeah, I have a digital retailing tool, that's what customers demand, but then when they go instore or they try to back up and try to do the car buying process, as if they didn't do any of that work themselves. Those are the things that immediately fracture trust and hurt the consumer experience.

Lack of consistency is frustrating to the customer.

I think it's a kind of akin to the existence of DoorDash and Ubereats. If you're going online and you're like, "it makes it so simple, here's all the information, here's all the stuff I want", and I place the order and what shows up isn't what I ordered. I don't know if I'm calling DoorDash or I'm calling the restaurant. The restaurant doesn't have any record. They say that's DoorDash's fault. That's not my fault. And if that happens to the car process, you get there, these numbers that you talked about are fractured. It's going to lead to that same experience.

I hate to say it, but there are restaurants I don't frequent anymore because the online to physical interaction just didn't match and there wasn't any support or trust in those tools that I had. 

What are top dealers doing right?

I think you find this with any software application. It's the commitment to the tool that you're paying for and training and dedication from the staff. We have a chat platform that is all hands off if you want it to be, but where you really see the improvement is where they have the dedication of the staff and have people that are bought into the tool as well and are handling those conversations, moving people through the digital retailing process, moving them from a conversation, just a chat question out of the blue about inventory to okay, here's how you explore your payments, execute a credit app and things like that. 

I think when you have that commitment end to end it, you can really feel it. Whenever a customer arrives in store, they understand what you were talking about. We can pick up right on our iPad. We can jump right in. I think that and commitment to the applications and the software that you're purchasing, that's going to drive the difference. 

How does Gubagoo approach support?

There's onboard training. We want to make sure that people are in the store training people how to use these products.

I think the big differentiator for us is our client success team. You have someone you know tied to your account immediately right off the bat that is there to support you, is there to show you the different things you do to leverage and implement in the store, train you up on things and give you like real honest, conversational reporting when these things are happening to show how either your salesforce or your team is using the tools.

What is the best digital retailing structure?

I think the scale of dealerships you work with varies wildly, so I'm not going to say anything is like a one size fits all approach. I think anytime you are working within silos, that just creates the opportunity for communication breaks and gaps. I prefer if there's the opportunity to eliminate those silos that have everybody on the floor understand, whether your BDC, or maybe you have a chat team, or maybe it's just one Internet manager that's trying to facilitate all this, the people on the floor are aware of what's happening on the Internet side whether they're working those leads themselves or not. As long as the communication is consistent that if someone arrives into the store, everybody on that floor can understand how they may or may not have interacted with on your website.

I feel like that's a big miss a lot of times that your sales folks don't even understand what's possible on their website. They haven't got anything for themselves. They haven't gone through that digital retailing experience to see what a customer is going to see before they arrive at the dealership. I think going through that process one time and level setting for all the salespeople, they'll have a better understanding of what the expectation will be when the actual customer arrives.

So regardless of who's working the leads in the back end, I think that consistent communication and level setting is what's really going to drive success and make for a better customer experience when they arrive on a lot. 

What are some chat trends you are seeing?

I don't have the stats in front of me, I probably should, but a lot of these chats that we're handling and we manage, that we train our chat specialists to handle as well as the AI within the tool, is to handle these like concierge chats.

When I think of the fixed ops side, I think of that a lot. Our goal with sales is that we want to gather PII, we want to make these are actionable leads. We want to work them into digital retailing so that you're working a deal when you get that information not just chase down lead information. 

On the fixed side, it's a little more interesting because there's not that 1 to 1 as much. But if as we say, if our websites are truly extension of the showroom and extension of the dealership, when someone hops on, when they are chatting, they expect it to be someone in the dealership. That's where we use AI and our chat specialists really step up and if you want hours we know what they are and we respond immediately.

We have integrations that allow you to schedule your service appointment directly within the chat and have that turned around immediately. A lot of those concierge chats are the ones that really step up, and that's a huge bulk of what people expect when they land on a website. They interact with somebody and it's surprising how often those fall flat or require follow up when consumers today demand that 1 to 1 immediate answer. I feel like that's probably the biggest role that we play on a fixed side. 

What is your philosophy on AI in chat?

We believe our model is very much like Goldilocks terms. If you want to have the AI there to answer easy, simple questions that people want immediately and you want to be able to turn that around just to make sure that interaction was good and they got what they needed quickly and then our chat specialists are trained to jump in when those conversations get more complicated. Where does it make sense to start with PII, let's get this person working, here's a vehicle or two that they should be shopping and then they know to when to notify the dealership of when there's what we call like rescue opportunities for them to jump into chat themselves.

So we really believe in like that balance between artificial for immediacy, which people demand today and the human touch to make sure that they are getting where they need to go and we are supplying the best possible help lead to deal information to the dealership.

Redesigning chat interfaces.

 We've got this one example that seems so subtle, but it was pretty impactful for the dealers. Coming out of NADA a couple of months ago, we had a simple like an option for the dealer to have a redesigned chat interface. It's not the bubble that pops up, that just screens at you right when you're on the website, but it's one that's a little bit more subtle that people can react with. We're listening to dealers, giving them the tools that they're hearing from people that they want on their website and allowing them to customize these interfaces to be what they want.

Because every website is going to be different in terms of how much real estate they want covered by a chat agent, for example. So we listen, we react, we create different interfaces that they can choose from. But we also do want to be present and be there, so when people have questions, they know to come to us and have the answers immediately, that they will get their answers immediately. 

Consumers are more and more getting comfortable interacting with these chat agents, and they have a higher expectancy of getting the right answer. I remember when these things first popped out, it was so kind of like a it was a coin flip whether or not this was going to be a go, or do you just kind of like trained your brain to ignore it? But now more and more on it is like customer service. People are willing to engage the chat agents and actually get answers as opposed to here, we'll call you with answers.

That's what we train our chat specialists to do. 

How comfortable are consumers chatting with AI?

Candidly, the way that people are more and more comfortable, like interacting with your expectations, they are people who don't care. I think there's an expectation when you interact with somebody first on the website, you kind of expect this is the person that's going to facilitate, get my conversation to the right to the right person. So that's where AI comes in and answers all those like immediate question that is like that. You just want answers immediately. No person needs to hop on an answer that we know you're hours. You set those yourself, all that good stuff, and then a person can come in and take over and kind of pick up right where I left off. It's a very seamless interaction. But they're getting our chat specialist chat specifically for these chat conversations. And then when someone from the dealership comes out, we make it very clear like this is someone that's physically at the dealership, they're the person you're going to talk to you when you get there.

For the most part, when people hop on and handle chat, they're not concerned that they are talking with AI, what they're concerned about is the quality and the answer that they get. And that's where we try to put our focus. 

What does the future look like for Gubagoo?

For Gubagoo specifically, our focus has always been trying to create the best consumer experience and dealerships and providing their customers. What we've found is that people want immediacy. They want answers now. Down the line our focus is kind of going to be kind of like a CRM, and create a platform that allows for that immediacy, that messaging, and it gives dealers the opportunity to know where their prospect is online, and be able to reach out and engage in any step of their car-buying journey. Blending it so that you don't have your chat, the digital retailing, that goes from your digital retailing tool a prospecting that might not have any information on it. 

Our goal is to combine that all into one to make for that optimal consumer experience. It's just another opportunity for that disjointed experience that we talked about for online store. If you've got prospecting tools like CRM that aren't talking, that don't have any idea of what chat conversations you had or how far along they got in their digital retailing experience, where they're shopping for their own vehicle, where do they abandoned, then you're creating another disjointed experience where they're going to go jump on some prospecting schedule for internet leads. It's just going to seem like they don't know I that already picked my vehicle, that I'm just waiting on this credit application. Our goal is to create that kind of CRM that pulls that all together and create for that even more optimal consumer experience.

That's on the horizon out a ways. But I know that that's the kind of direction Gubagoo is thinking and wanting to go, essentially make sure that all those consumer interactions are together. 

A digital retailing customer is not a lead.

We really try to differentiate ourselves from a lead provider because this is all part of the consumer journey, really just maximizing and capitalizing on their intent and giving the dealerships the tools. 

If you're getting something from your digital retailing tool it shouldn't be seen as a lead, in my opinion. That's a partially worked deal. It's just picking up where you left off. It's engaging the customer, getting to the dealership, just finalizing some steps. That's my view of digital retailing, and we want to create a tool that is it providing lead information so a dealer doesn't have to chase down and see if this is a real email address or a real phone number.

We're creating a conversational experience with the customer that is working them down the funnel of this digital retailing experience where by the time they get to the dealership, they should know obviously all the PII information that normally lead would have. But we know it's good because they have shopping intent on the website, what vehicles they are interested in, what payments they want, maybe their exact credit score if they run the credit application. We know what their trade-in is. We know what lender and loan payment they picked. They're coming to you with that partially created deal. I view it all as a consumer experience and the digital retailing tool should signal some really strong intent for dealerships and it should equip them to be able to pick up right where that consumer left off.

And I think the CRM is the next iteration of that because we're just trying to identify every gap in that car buying journey and try to fill it with a tool that we think can talk to your other tools and create that better consumer experience.

Dive into the heart of adult education within the automotive industry in this insightful episode of "Driving Sales, Defining Leadership." This time, hosts Bart Wilson and J.D. Mixon are joined by John Diaz, a seasoned Learning and Development Specialist from Principle Auto Group. With a rich background in educational programs and a passion for adult learning, John sheds light on how adult education principles are revolutionizing training and development in the automotive sector.

Highlights of the Episode:

• Exploring the principles of adult learning in the context of the automotive industry
• John Diaz's journey from educational expert to automotive learning innovator
• Key strategies for implementing effective adult learning programs in dealerships
• Overcoming the unique challenges of adult education in a fast-paced industry
• Leveraging technology and innovative methods to enhance adult learning experiences