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.

During this roundtable, we focus on goal setting in the new year. This ranges from goals for ourselves, and our teams, but also how to encourage our team members to set goals for themselves. As we know as leaders in organizations, allowing our team to set their own expectations/goals almost always improves follow-through.



We had a great discussion with Michael King, ECommerce Performance Specialist at RevolutionParts about his experience with dealerships and parts eCommerce.

What is the origin of RevolutionParts?

Well, you know, the whole concept for me came about 20 years ago. I was working for a dealership on Cape Cod, and we got the opportunity to build a brand-new dealership. When I designed the parts room, I designed my parts office directly behind the counter so that I could hear the transactions, both on the tech side and on the retail side.

More and more, I heard a very poor buyer experience for the retail customer. They'd come in looking for something. They'd be greeted with a grumpy parts guy, which we all know doesn't exist. And you know, the first thing would be, I need your VIN number. Well, I don't have it. So they go trudge out to the parking lot, get their registration, and they come back in.

You look up the part. I don't have it in stock. It'll take two days to get. So the whole the whole concept of the retail buying experience was just not a good one. So at that point, the original equipment retailing of parts was kind of in its infancy and there was only one customer at that time who they're not around anymore because it didn't involve the times like RP does.

And I just launched the site, struggled with it a little bit, new to e-commerce. But you know one thing led to another I enhanced the customer experience, kind of refined the way that we did things, ship things, price things and you know, before you know, it, 20 years went by and, you know, the business was doing $25 million a year in sales.

Are the buyers inside or outside of the dealer's PMA?

The overwhelming majority, if you talk to anybody running an e-commerce store out of a dealership, is parts sold outside of their primary area.

For me, when I was running the store, I purposely did not advertise in my area because I didn't want to compete with myself. A body shop or a repair shop buys parts for me on the wholesale level, then I'm advertising that same part at close to the same price on a retail level. It creates friction for not only them and their customers, but the dealership in the service of customers.

I always made sure I advertised outside of my marketing area, and I'll bet you'll find if you did an analysis, you probably find 95 to 98% of the sales online are outside of the dealership's primarily market.

How do you address lower margins on eCommerce parts?

The reality of it is, do you want 10% of something or 100% of nothing? Because all of all of the online well, 99%, 98% of the online business that you do, you're never going to see that customer.

Those were unrealized sales. So by creating this extra channel, yeah, you're selling a little bit less than retail, but you know, you're increasing your volume of sales way past where they would be.

You've also got to remember, too, that when you sell it online, you're selling two items, you sell in parts and you're selling shipping. They're both a profit center. You might be selling that part to a retail customer at cost plus 10, plus 15, whatever your feelings are for that number. But also if you manage your shipping properly, you're making 20 to 30% profit margins on your shipping. So at the end of the day, you're getting basically the same money for that retail part. You're just doing it in a different fashion.

How does RevolutionParts help dealers with shipping?

You know, for years I battled with the shipping carriers, and I always had the same kind of routine with them. UPS wanted it all. FedEx wanted it all. Nobody got all of it. I always had multiple carriers just for safety's sake and for choices. But when FedEx came in and wanted more packages, well your deal has to be better. If you are a better deal, you're going to win. So it always kept the two carriers very honest about what they were giving us for rates because they knew if they tried to take advantage of us, they'd stop losing packages.

The RP platform does the same exact thing. When you bring up your order to ship it, it shows you all the available carriers that you have at your disposal. It shows you how much they're going to charge.

By using a volume approach now, we can offer big volume discounts to little stores that are just starting off. They have no sales history. So that helps them be competitive right out of the gate. You don't have to suffer through lousy shipping rates for the first year until you get your volume up. The carrier has already done it for you. You get the best USPS rates. We just launched FedEx which I think is in beta right now. We had UPS which is coming back. I was shipping a thousand packages a day which gave me huge bargaining power with the carriers. Well, now a small dealership was sending out three packages a day gets that same exact power because he's part of the RP family and the amount of packages going through the platform just gets him the best rates there are.

What are successful dealers doing?

As far as crushing it goes, nobody surprises me because it can be done. If you're diligent at your craft, anybody can be successful in doing this. One of the huge things that I see that I promote is the customer journey. The customer journey has to be perfect. Somebody sitting in their living room with their laptop buying a part wants the exact same hand-holding treatment as somebody standing in front of your retail counter. If you're if you're willing to do that, it doesn't mean giving the store away, because that absolutely is not customer service. But if you pay attention to the customer journey, then when you're doing advertising to get started and kind of building your brand as you move forward and the customer journey is your main focus, you have to buy in.

You have to spend less and less to get customer traffic because now you're building repeat customers. You've done exactly what they expected you to do: give them a great product at a great price, a reasonable timeframe, and good communication. That part of it is paramount if you want to succeed. Then the other part is just being proactive with your site, taking pictures, enhancing descriptions, things that make your store different from another store that maybe isn't going through the effort to do that. By far, the customer experience is definitely a big driver for success.

What does the average eCommerce customer look like?

Most of our customers, if you look at demographics, which I'll leave to our geniuses in our advertising agency here at RP. But demographics, it's workaday people, you know, 25 to 55, not necessarily do-it-yourselfers because not all of them are, but they get cost-conscious about where they spend their money. They want service.

They're not going to settle for being ignored when they send you an email. They're educated people and they they just want a better value. They think the last few years have been a little rough. And I think especially now more than ever, you know, it's a person that works for a living, looking for a better way to spend his money or her money and get as much as they can in return.

How do you sell OEM against aftermarket?

Well, it's not only that the grade. I mean, obviously, OEM is the preferred replacement part. You always want to use what the factory specs. But again, it goes back to that customer journey.

If you go to an aftermarket store and you buy something, how's that? If they need more information from you, how's the communication? If you need to make a return, if a package gets lost, it typically is not as personal and that's what people want. They want to be treated like a real-life customer walking in and saying, "Hey, Joe, how are you? What do you need today?" They want that same kind of experience and they don't always get it in the aftermarket world. So having great customer experience and then offering an original part at a very competitive and sometimes even less expensive, you know, that's a good combination for success.

How does Customer Success work with dealerships?

I work hand in hand with a lot of dealers, some small, some large. I'll look at the way they interact with people and then I'll just start tutoring and coaching them, saying, well, you know, this kind of response is a little bit on the empathetic side on this one here. You're getting carried away with your answers.

I just teach them how to react, because when you're a counter guy and you're dealing with technicians, service advisors, used car managers, there's not a ton of empathy that goes on in that environment. Bringing that to the table for your atypical parts guy is part of the process and just kind of educate them and show them the path to success.

I use a little store that I kind of took on as a project and taught him, and it's only a little two-person store and they had a revolution store. They were doing pretty well, you know, 15, 20,000 a month in sales. And I just took them on and said, "Listen, I'm going to kind of show you how this all supposed to happen. And if you follow what I teach, you will continue to build on it. If I find that you're not listening to me, then we'll just part of our team go our separate ways."

So we did that. We worked on customer communication, we worked on the site content, we worked on packaging and promotion, and they don't spend any more money on advertising than they did a year ago, which was only 1500 dollars a month, which in the eCommerce world is pretty modest. They still have only two people. They're still in the same-sized parts room with the same inventory. Instead of doing 15, 20 a month, they doing 100 to 120 a month and there was no investment involved other than this is how eCommerce works. This is what your customers expect. And if you kind of follow the best practices you can be as successful as you want to be.

The value of a vendor with dealer experience

It helps, you know, and I do understand even as a tech or shop owner, I understand the challenge. My dad owned his own shop. My grandfather had it before him. I got to grow up through the struggles that they had running small repair facilities and, take that 20 years or 30 years later into today's times where technology is a challenge, the cost of tools, the cost of insurance, you know, it's not an easy task for a shop owner to keep the doors open. Anything that we can do from our side to make sourcing the parts they need easier, more efficient, I see that as a big part of our future as well.

What's the future of eCommerce?

We have all kinds of really wild things going, where we're trying to bring not only original equipment parts to the masses through the platform, but we're looking at aftermarket sources. We're looking at accessories performance. We have such a great team of engineers and they're very nimble.

I always come up with these crazy ideas where I see this local shop, you know, small shop, three bays. And the only way the shop can be successful is with the shop owner under the hood. He can't afford to be in his office talking to people. My idea was, the next evolution of RevolutionParts is we integrate voice to text and artificial intelligence. So when that guy has his head under the hood, he's got a wrench in his hand. And he said, "All right, I know what's wrong with this car. I need a water pump, I need a dry belt, I need a tensioner". He just voiced, "Open revolution, insert last eight of the VIN." These are what I need for parts. Check availability, select the same-day delivery feature an hour later those parts of delivered to him by one of his local dealerships. There are all kinds of opportunities then and we're working on all of them.

eCommerce levels the playing field.

I think the one thing that I would like to emphasize is the size of the dealership, the size of the parts room means nothing. E-commerce is a level playing field.

And it's not just the U.S. I mean, it's a great big world out there. There are people all over the world who want parts and American cars find their way into every nook and cranny of the globe. You never know where a person is that wants to buy something from you.

Keep an open mind about e-commerce and be diligent about your craft. You've got to love it. I love selling parts. And you can be like that little dealership. You can be a little dealership that has a parts room that is smaller than my living room and still do a million and change. That's nothing to sneeze at. That's pretty respectable.

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We recently chatted with Gary Graves, CEO of TotalCX, about the current state of call management and how he sees the future.

How has AI impacted the Call Management category?

AI, when used responsibly, will take data context, whether it's historical or in the moment, and provide insights that would be cost-prohibitive for a company to employ people to do. So if you take like the mundane process of crunching a lot of information to determine whether the outcome of an event happened or not, now that's a good way to depict how a lot of companies are using AI and how we're using AI today.

There are also companies that are using A.I. to provide a pass-through service such as chatbots and even phone engagement through artificial intelligence. And that has been necessitated by a lack of proper process for handling consumer inquiries.

We've all bought a car. And, you know, that process can be extremely cumbersomel. Even when it gets to the service side, it's always hard to get someone on the phone. It's usually a broken process that creates that.

That broken process creates an opportunity for A.I. to create a handling system for people to be serviced by a machine immediately versus waiting on hold and having a poor experience to talk to a human.

How can AI enable proactive call monitoring?

I'm not sure how many providers are doing that, but we've been doing that for quite some time. I think that a lot of them are doing it on the on the post-call side, which is good because what was being done prior was sending dealers conversations and recorded calls over to third-world countries where they could have low-cost labor to provide a price point that the dealer could stomach. They're at a great price point and I expect there to be a lot of derivative products that come down the line as a lot of these companies start to take ownership of their own AI journey.

You'd be surprised at how many companies in our space are now using, you know, ChatGPT or some derivative of Openai's or another platform that's very similar service versus investing in the talent and infrastructure, and they kind of take ownership of that model. And when you first see that is when these companies have a white outage. And if ten companies in automotive that are having issues with their servers at that time, you'll know they are.

How is TotalCX building their AI?

Well, I mean, I mean, let's face it, you know, the funding that OpenAI had to build is ridiculous. We can't we can't even begin to compete. But at the same time, there are a lot of open-source starting points. I'm going to give away some trade secrets here, so this is an exclusive for you guys. One of the things that we do is we take a hybrid approach. Instead of using these models to serve our customers or to serve our business processes directly, we use them to generate additional data that we train on. We train our own models on the data generated by these commercial models in addition to the data that we have from our own operations.

So we kind of have the best of both worlds. We have the organic, grassroots data that's indicative of the way our customers operate. And we also have the shiny new object version of it with all the bells and whistles that enriches the data. So we kind of take a hybrid approach.

Are customers comfortable communicating with AI?

If they can get what they need in a matter of minutes 3 minutes with the machine versus 9 minutes or 12 minutes or three callbacks with the human, obviously they're going to be better served by the machine. Ultimately, the best experience, though, is that when they call, they speak to someone who can help them immediately.

And that's good for all parties because now the relationship like a machine will not or the chatbot or voice bot will not perpetuate a relationship. It will facilitate the delivery of a service or establishment of an appointment and things like that. But in terms of brand building, driving customers toward loyalty building, that is something that always will have to have a human touch. And there's never going to be someone to refer to. No one says, "Yeah, you should call my machine. Over here at ABC Motors, They get my oil changed much quicker and lower cost."

What are the shortcomings of AI communication today?

Consider a scenario where someone is calling in on a recall on their vehicle and they're in the third year of the finance on that vehicle. When they're calling in because of that recall there's a chance that they're coming up their three years and they may want to transition to a new vehicle. So they may ask the question or that may be a conversation that leads to the discussion of that potential opportunity in a subsequent transfer to sales. I can't see that happening in a known AI service, you know, voice bot scenario.

What are common issues dealers have with their phone processes?

So there are a couple of different categories. So the first one is a process issue, and the process issue is typically one where they call in, they get placed on hold. They're on hold for a while and then they hang up, they call back and they ask again and then they get transferred to voicemail. They just never end up getting routed to the proper place. So that typically is a process issue in terms of how those calls are handled.

The other thing is customers having to exert an undue amount of effor to be a customer at a dealership. There are even conversations where the customer reminds the the person they're talking to, Hey, I'm the customer here and I have to call back three times in order to speak to the service manager because my car is supposed to be ready two days ago." You hear these types of conversations a lot.

So the majority of it is a lack of responsiveness, which is typically associated with a process issue of how their phone menu is set up. You press one to get here, you press three to get there. So they call back again and you hear or you have calls where the customer will state. I called back three times. I've been on hold for 12 minutes.

When you have a customer telling you about their experience in a way that's not positive, not only are they telling you, but they're also going to express their discontent when it comes to referrals or the next time they buy a car, like I'm just never going there again, or they may just take their service business elsewhere, which will also mean when the time comes to roll that vehicle, they're not going to roll it at that dealership.

How has COVID impacted dealership phone processes?

There's a friend of mine has a saying. He's an industry veteran and he says that good habits are developed in bad times and bad habits are developed in good times. So the inventory shortage, chip shortage, and everything that happened post-COVID and during the market adjustment and all the record-breaking profit that the automotive retailers experience, I mean, I think that could be called a good time.

You know, so a lot of bad habits were cultivated because they didn't have to have a lot of effort. People were buying cars sight unseen especially trucks, because there was just a tremendous shortage. Now we have dealership groups that are calling us now that the feeding frenzy is over and they're trying to improve their customer experience because they're having a large number of disgruntled customers all associated with the level of service they receive and responsiveness to service concerns.

How vendors can help with phone processes

I think there are vendors in the space that are, looking to help a lot of it. This isn't a new problem. This cycle, it happened during Cash for Clunkers and any other type of market event that changed the dynamic of supply and demand.

So we're here again. And I think that it's up to us vendors who are in the sales cycle for our car dealership customers to innovate and help them toe the line on their processes and tighten them up. And I think, you know, now dealers are becoming more receptive to it.

How does TotalCX approach phone training?

We approach it internally first and foremost because we have to eat our own dog food. That's why we changed our name. And now we've created a Chief Experience Officer position and all of our customer success people became Experienced Managers because if we want to teach something, then we also have to live with those same values.

So in terms of phone training, the first thing to do is to have a baseline. You have to understand what you're dealing with because not every dealership has the same issues or the same problems. So establishing a baseline and analyzing calls by department for a week or so will give you a good baseline to understand, you know, what's happening with that dealership.

You don't want to put a Band-Aid on it or some Novocaine or just smooth the issue over. You want to get down to causality. What is the root cause of this issue and what can be done to address it? This is sometimes it's as much as a cultural issue that stems from the top-down management style in automotive that's been pervasive for years, where the GM is driving down to the sales manager, this is your number. You hit this number. You'll make this number or find a new job. That translates down to the salespeople who have the same mindset. If it doesn't seem to be a promising opportunity or profitable deal I'm not going to give it a lot of attention. That means that the value of each customer is now being read by the salespeople.

This is all stuff that you can see and measure based on, you know, the conversations and the outcomes from these types of transactions. But we really have to understand the root cause. So we always start with root cause analysis and then, you know, create a custom approach to helping that dealership group, you know, solve their issues.

The importance of phone analytics

I think that there are more numbers than just op line and gross profit that matter and also indicate health and growth. If you think about it in any car dealership, most of them have a six-figure per rooftop marketing budget, or something even more than that.

So they spend all this money to create all this opportunity. And how much money and effort do they spend to ensure that they're handling that attention, that traffic that they paid for to produce the outcome that they're actually trying to get? So they're paying attention to spend over here, and the outcome over here in terms of the balance sheet.

But all the things that happen in between, that's where the CRM companies and companies like us come in to try to help give additional context and perspective of what's happening between those two milestones.

What are successful dealers doing today?

They're they're a little more progressive. So we also use Google Analytics inside of our platform to understand, you know, user adoption, how our dealers use our platform so we can see what areas they leverage, what areas they don't, and in what frequency to help us create a better platform and also to give our Experience Managers some context and to help advocate for better usage.

But the people who are the raving, die-hard fans are the people who use the platform in totality. And one of the downsides of our platform is that it's powerful. We have the richest analytical offering in automotive hands down. And the problem for that is that there isn't necessarily a person or a job position in a dealership that has trans-departmental powers to fully leverage the platform.

You have all these different stakeholders who may or may not work together productively like they're supposed to inside a dealership. So the dealership groups that have the most invested into our platform are the people who have empowered someone to go across sales, finance, and service and parts to make sure that all of these departments are, meeting the same bar of customer service and customer experience.

How should dealers use an outsourced BDC?

I don't think it's a long-term solution because I think that at the end of the day, you want the dealership to own the relationship. Our outsourced BDC is a domestic product, meaning all of the agents are American citizens working here, typically in a contiguous 48, and they all handle typically like overflow while a dealer has a moment to take a breath and try to design a better process or a better outcome.

It may be because they're buying stores hand over fist because there are a lot of transitions in the marketplace right now. And so as they're onboarding all of these dealerships, there tends to be processes that are broken in this new acquisition. And the best way to fix it temporarily is to just outsource it to ABC.

And then we'll kind of walk that back as we help them establish and stand up the proper processes to support it themselves. So think of it kind of like roadside assistance, if you will, for overflow phone calls for dealership service and sales.

AI is going to change everything

Yeah, I tell you, A.I. is going to change everything. It's going to change the world. Specifically to our market, The things that we've been doing since our initial partnership with Google back in 2017, when we brought live transcription like transcribing a call as is happening with keyword alerts. For example, if somebody says the safe words "pepperoni pizza", t somebody gets a text message. Like so we've been doing that for a long time.

And we had, you know, we had a technology advantage over our competitors because they just couldn't seem to get there. But now just like like that, you know, they're there, but not because of their own innovation. It's because the climate has totally changed, which is awesome, because now that applies pressure to everyone in the marketplace to continue to innovate in order to differentiate and disrupt and stay relevant.

And for us, like that's that's that's the kind of pressure, you know, we respond to. So it's gonna be pretty fun.

It’s 5:37 PM on a Friday. You just received a notification that your parts have been delayed. And your customer was scheduled to be there any minute.

What now?

This is just one of the many ugly scenarios that confront you in the parts department. Headaches like these somehow have a way of finding you, like a moth to a flame.

How do you effectively manage these situations without losing a customer’s trust? (or your GM’s trust?)

Are there ways to avoid these uncomfortable scenes and keep customers happy?

The truth is there is a lot you can do to better control the situation. And Mel Smith & Ken Harrison will show you how this webinar.

Like many dealers, Buckeye Honda needed to adapt to customers’ online shift during COVID. But in order to improve the sales process for both consumers and employees, Buckeye Honda new connecting the online and in-store experience would be key.

Discover how Buckeye Honda leveraged Upstart Auto Retail across online, in-store and financing to increase profits, close rates and provide more affordable financing options to their customers.

Key Takeaways:

- Faster training and onboarding: hear how Buckeye Honda streamlined training and onboarding for their sales teams, allowing them to confidently use the new tool within just a week

- More affordable financing options: learn how Upstart is presenting the lowest rate 71% of the time for Buckeye, enabling more affordable financing options for consumers

- Higher efficiency and higher close rates: discover how Buckeye has generated a 76 percent higher lead-to-close ratio, increasing vehicles sold from online leads from 83 to 146 over six months after implementing-Upstart Auto Retail.

- Improved customer engagement: learn how digitization boosts customer trust

Watch the recording of Boosting Car Sales & Profits with a Connected Online & In-Store Experience to learn more.

Several trends are impacting dealers’ end-of-year inventory. New model year inventory is arriving, old model year inventory is discounted, and inventories are rebounding. These factors can work in your favor - if you avoid the freeze. It’s time to make room and move aging inventory. Leverage machine learning and AI to move your inventory faster.

In this webinar we were joined by Suzanne Reimer, the Chief Marketing Officer for Lotlinx. She dove into these trends and how they will affect your dealership’s profitability. She gave insights on how, with VIN-specific solutions driven by AI, you can implement at your dealership to move your inventory faster this winter. 

We discuss the results of our inventor polls:

Do you know all there is to know on your inventory to move it as fast as possible?

YES: 28%

NO: 71%

Where are you using AI in your dealership?

Inventory Search and Recomendations: 23% 

Consumer Demand: 7%

Digital Advertising: 46%

Customer Experience & Engagement: 15%

Sales Process: 7%

Takeaways: 

• Learn how to embrace AI
• Learn how your dealership’s profitability will be impacted by these trends
• Formulate a solution by leveraging VIN-specific strategies to move your inventory

Listen to learn about these trends that are impacting end-of-year inventory and what VIN-specific solutions you can implement in your dealership.

Improving employee engagement is a vital initiative in dealerships today. As the market ebbs and flows, interest rates and inventories fluctuate, an agile team can help you maintain some consistency. Additionally, a recent Gallup State of the American Workforce study discovered that engagement was a key component of successful companies. In fact, businesses with engaged employees were 21% more profitable.

One of the key factors of employee engagement was coaching. According to Gallup, employees in today's workforce desire more ongoing conversations instead of a yearly performance review.

At first glance, this implies fewer formal discussions and more informal conversations. However, this is not the case. To coach correctly and provide ongoing feedback, you need to have formal systems in place. Let's delve into what I mean.

Quotas and Metrics

An employee must know what "good" looks like in your dealership. This requires you to define success with a list of quotas and metrics. A quota is a measure of success. For example, "Appointment Set %." A metric is the specific number you expect the employee to achieve within the quota. For instance, you could define 60% appointment set as world-class, or a five-star rating.

Mapping out these quotas and metrics is a valuable exercise for managers. You can define the attributes of an exemplary job role and determine what is needed to enhance performance in each quota. A coaching session with an employee is not an "ad-hoc" effort but a directed conversation designed to help them improve.

Measuring Actuals vs. Quotas

You can't identify performance gaps without a formal, clear set of quotas and metrics that define success. Employees need to know what "good" looks like. You need to establish processes and reporting from your CRM, etc., that capture actual performance within the quotas defined above. This clear data then paves the way for informal, ongoing conversations. Both parties know what needs improvement, and your coaching can be tailored to their specific needs.

Coaching your team is a powerful way to improve performance. You can identify gaps in performance and leverage andragogy by assigning relevant, contextual activities and training. Because it's relevant, the employee has a better chance of absorbing and applying the coaching.

A Formal Process for Coaching

Effective coaching requires a consistent process. For example, it may begin with a review of the quotas vs. actuals, followed by a conversation on what the employee wants to improve. This should be a conversation, not a preaching session. You are there to guide the employee, not dictate what you want them to do.

To create an environment conducive to this open two-way conversation, you should have a formal process in place. The employee shouldn't have to guess how the session will progress. They need to know that the coaching session has clear expectations.

Creating a formalized process with clear data can foster an environment where managers and employees can focus on development. When the employee drives this coaching session, they become more invested in their career growth, promoting engagement. This engagement is the "secret sauce" your dealership needs to weather any economic storm and become more profitable.

If your dealership ain't leading with a Customer Data Platform and first-party data, you're last!

Watch the recording to learn from experts Scottie Sigmon (President of Hippo Media Group) and Brian Davis (VP of Sales and Solutions at Orbee). They share their insights on how first-party data provides opportunities for an entirely new level of personalization. For example, it allows you to identify exactly where a shopper is in the buying process, properly segment website traffic for increased conversions, and even automate your marketing and communication based on the customer's position in the lifecycle journey. 

In short, Scottie and Brian show you how first-party data allows you to work smarter. Much smarter.