Kelly Kleinman: [00:00:07] Hello, everybody. This is Kelly Kleinman. And you are listening to the DealershipNews.com podcast, where we spotlight the who’s happening in the automotive industry. It’s footsoldiers, visionaries, salesmen, GM’s, owners, service managers and industry vendors alike. Our guest today is Mr. Greg Iverson, the Internet BDC marketing director at Felix Chevrolet. Good afternoon.

Greg Iverson: [00:00:31] Good afternoon. Kelly.. How are you, sir?

Kelly Kleinman: [00:00:33] I am doing great. And I am very happy to be speaking with you this afternoon. Before we get into how cool your job is. Let’s talk about what got you into the car business to begin with. Was it something that you always loved? Are you a marketing guy or did you sort of slide in the auto business organically and make the most of it?

Greg Iverson: [00:00:53] That’s a great question. You know, I for years I’ve heard that the car industry is kind of an accidental business. And for me, it was just that I was working for Sony Records and was in Australia bouncing back from Los Angeles to Sydney. And I met Holden Reps. Holden is a General Motors car down in Australia. And I met some American guys working down there. This was 1993 and there was a certain pub that we would all frequent.

Greg Iverson: [00:01:20] It was the only place to get good cranberry juice in Sydney. And we were drinking it straight just so everybody knows we weren’t mixing it with anything. But just over two or three months of conversing with these guys and the opportunities, I ended up signing up with General Motors coming on board as a rep to teach people about the cars just kind of, you know, walk around knowledge and basic. They were going to train me. Three months later, I moved to Sydney. And within three or four months of being on the job and visiting eight or nine dealerships in the Sydney area, I had two or three owners telling me that not that I was wasting my time, but that would make more money and have more fun selling cars. So in 1994, I ended up going to a Holden group, Hunter Holden, which is in Sydney, St Leonard’s, North Sydney, six dealerships. And that’s how I started selling Holdens in Australia.

Kelly Kleinman: [00:02:12] Holy cow. Do you. I should say holy wombat. You do you miss in Australia? No.

Greg Iverson: [00:02:18] Yeah, I tell you what, for any American that is looking to vacation, definitely make sure you go there. But if you’re ever looking for a place to live, you know, not that I would live anywhere. I’d lived there for five years and was happy to get back. It is a fantastic place for Americans. There’s a lot of American culture there. We kind of come from the same cut of cloth. And it’s it’s kind of the Americans that I met down there that were living there said it reminded them of California in the 1950s. So very clean. You really don’t see homeless people. But one of the most fantastic places on earth.

Kelly Kleinman: [00:02:51] Yeah. My brother in-law lived in Perth for a while. I think he still lives here, but he works in Singapore. He opened up the Nobu in Perth. So he’s a sushi guy. Yeah.

Greg Iverson: [00:03:01] So you see Perth as a fantastic city, the most the most isolated city in the world with over a million population. So it’s a it’s a bit of a trek. So. But it is a beautiful place.

Kelly Kleinman: [00:03:12] Sounds good to me. I wouldn’t mind spending a little bit of time. Actually, we plan on that two years from now. We’re going to be going there, Maui, next year to celebrate my kids graduating from high school. Then we’re gonna go to Perth. So congratulations.

Kelly Kleinman: [00:03:24] Thanks. We’re going to fast forward. You spent you spent five years at Norm Reeves Honda, the top Honda dealer in the world. Pretty much setting the bar for Internet BDC in the industry. You went on to turn a number of other dealerships around and now you’re at Felix pretty much doing the same. Talk to us about your career path and how you’ve turned Felix Chevrolet into the fifth fastest growing Chevrolet dealer on planet Earth.

Greg Iverson: [00:03:50] Well, yeah, I mean, when I stayed in Australia for five years, pretty much stayed as a salesman, but was lucky enough to meet Tom Stooker and Tom Stooker, you know, has a training Australian Training Institute in Sydney. And going to his training, I kind of hooked up with him being the only American in the group and was offered a job in ’98. When I got back from Australia to work with him out of Hoffman Estates, Illinois, I ended up going to Toyota of North Hollywood, which is I live in Burbank and I kind of put Tom off for a year or two. So when I got back in ’98, Internet was kind of just starting and my general manager, I was hired as its sales trainer, wanted me to delve into Internet, which I did. It was I would say everything is kind of the same. It’s a it’s a people business. The margins are definitely different. And the way it works is different. But from North Hollywood Toyota, I followed my GSM to the Keyes group, spent five years with the Keys Automotive Group at a Toyota dealership in running the Internet and in nine excuse me in 2008 went to Norm Reeves Honda was recruited by them. And as you said, yeah, we used to joke. It’s the biggest Honda dealership left of Jupiter, you know, doing a thousand to twelve hundred cars a month. They hit in ’08 with the economy.

[00:05:04] And then the following year with the tsunami. Honda took a hit on imported cars and the market took a hit. But the store was still managing to do seven, eight hundred cars a month and spent five years there. From there, I went to CarPros, Kia, the largest KIA group in the country, spent two years there and was recruited by Darrell Holter, the president of downtown L.A. Motor Group, two years ago. So two years ago, they own pretty much all the dealerships in downtown Los Angeles from Nissan to Porsche, Audi and Volkswagen. And they had a Nissan dealership in Carson. And I was brought on board as kind of a platform manager for Internet. And within six months, they decided to sell pretty much all of the stores except the Felix store to the Lithia Auto Group, which now owns the dealerships, not the land, but the land is held by the family. And two years ago, I came on board at Felix Chevrolet to a store that I don’t want to say was left to the wayside. But the past 10 years, the Seamus group had spent a lot of money refurbishing all the dealerships, new buildings. And Felix, in a sense, was left to the wayside. So when I got here two years ago, the store was really underperforming and was in a bit of a ditch.

Kelly Kleinman: [00:06:23] Yeah, it’s not in the ditch anymore. We before.

Greg Iverson: [00:06:26] No, sir,.

Kelly Kleinman: [00:06:27] Not at all. You’ve done a great job. But before we get into that, let’s talk about when you do get into a dealership, you’ve been brought on for whatever reason, obviously for a turnaround. What are the essentials in creating well to Internet sales department? And what does your checklist look like when you are called on to turn things around?

Greg Iverson: [00:06:47] You know, I guess, you know, everybody out there listening, you know, you have mentors and you learn along the way and, you know, hopefully you have some smart car people teaching you. And I was very fortunate. The people in Australia, the operators down there were very the Kaplan family, which ran Hunter Holden, and they always talked about what they said, the triple P’s policy, processes and people. And that kind of stuck with me and Tom Snooker had a different version of that. But my first thing is I first thing I want to see is I want to see the policies in the store, what they implement, what they want done. Second is processes. And then finally, we get to the staff, the people, and look at how those people are performing within those processes and policies. And that’ll give you kind of an indicator of a few things. Maybe we don’t have the right people, maybe our process isn’t right. And, you know, definitely from what I’ve seen in 24 years, 25 years, is that, you know, you really need to have all three in line for things to work.

Kelly Kleinman: [00:07:44] It’s the perfect the perfect segway for our next question. You talked about the three P’s policy, processes and people. It’s talk about people for a moment in that would be what kind of attention is spent on cultural diversification, your online marketing. Can you even do that in online marketing?

Greg Iverson: [00:08:00] You know, that’s a great question, and, you know, it’s it’s really, I guess, first of all, is going to be based geographically where you’re at. I mean, you know, America is a multicultural country where we are located in Los Angeles. We’ve been in the same place since 1955. You know, over the years, the demographics have changed. In this part of L.A., we’re actually right across from USC to college. Currently, about 75 percent of the people that live within 15 miles of our dealership, which is the highly most densely populated area in L.A., 75 percent are Hispanic. And that can be a combination of Mexican Americans. That can be a combination of Central Americans. And then you start delving off into different things. We have advertising 70 to 75 percent of our sales people speak Spanish. 75 percent of our advertising is Hispanic, whether it’s TV and radio. And then you kind of go into little subcultures, too, because, you know, the Spanish is different in El Salvador than it is in Mexico. And you kind of have different tactics as far as language in certain words. So it gets a little bit more complicated than people think. But, you know, one thing, too, is 85 to 90 percent of Hispanics do speak English. And I’d say a good half of them would rather speak English. So it’s kind of a fine line. You’re trying to cover all your bases without insulting people. But ultimately, you know, you have to make sure that your message gets out there to everybody.

Kelly Kleinman: [00:09:26] And we actually have a article and a series of articles going out about cultural diversity. And we are in the process of putting that together, both from a marketing standpoint, in a hiring standpoint. And we all know that for any dealer to have success, it needs to be a cost effective talent acquisition process in play. Obviously, you have that. I’m curious as to what system or vendor do you use to attract candidates and what characteristics do you look for when seeking talent that can effectively execute said game plan?

Greg Iverson: [00:09:57] Ok. Another great question. Well, I mean, we’ve got multi levels. You know, all dealerships now are probably online with their H.R. in their store. And most of these companies will use a company called H.R. Hot Link do have the ability to do recruiting for you. I do work with a company that is GM recommended called Pro’s PR OS and they do recruiting for me. And fortunately, in the last two years, in the last year, we’re the fastest growing Chevy dealership in the country. And this year, we are fifth in the zone, which is basically 75 dealerships from Santa Barbara down to San Diego. So getting to the last point, you know, professional salespeople, guys that are Chevy guys or gals, too, that are GM, you know, experience, you know, they look at the top stores in L.A., you have a real class of professional salesmen. I don’t wanna say that bounce around a lot, but when they are looking to go to another store, they know what stores are performing. So in the past two years, that has helped us, you know, basically have walking applications. My H.R. company does a great job, you know, basically online platforms, whether it’s through Monster and there’s other platforms for jobs. We do that also internally with our pros recruitment. And, you know, as far as what I’m looking for. I mean, you know, California is pretty litigious. I have to do background checks on everybody, which is a combination of their driving records. So there’s DMV checks involved and they have to have sales license in California, which ties in the DMV again. And then ultimately we do drug testing. So, you know, our first kind of hurdle is to make sure that those those tests are passed and then we can move on to the interviewing stage. And, you know, depending on the store, normally up we looked at, you know, for the lack of a better term, Greenpeace people new to the industry.

Greg Iverson: [00:11:40] But we had a training, a little college where they would go for five or six days. And we had a group of trainers that spent their time doing that. So I always look at onboarding new people if it’s possible. I think smaller stores and I just feel it’s in a sense would be a smaller store. It’s a little bit harder for us. So I do look for GM experience, you know, as far as a language, you know, once again, most of our business is Hispanic, but most of the Hispanic speak English. So if you don’t speak Spanish, it’s not you know, it doesn’t really change anything. It’s not going to kill you. Obviously, if you do speak Spanish, that’s an extra asset that you have. And, you know, everybody interviews a little bit different. I’d like to kind of role play and go over what the job entails. And for me, it’s all about driving traffic. If you’re selling cars in an Internet department and you’re in front of your CRM and you’re getting leads, really what makes it happen is your phone calls and your phone skills. So I’d like to do a little bit of roleplaying. You know, I’ll play an easy customer. I’ll play a tough customer. I want to see how they handle objections, how they swept Segway into the next area. And, you know, in checking references, you know, it’s it’s it’s something that I don’t think a lot of people do, but it’s a good thing to check references. And then I think tied into the background and the drug testing and the DMV checks gives you a pretty good indicator of somebodies character.

Kelly Kleinman: [00:13:00] Yeah, no, I agree. And it is a fact that most people don’t check references. It’s tough to find good help, especially now in automotive, especially in certain towns. I know that a group that I just interviewed out of Colorado, out of Denver, I believe we’re discussing that issue. It’s where they were and there was no unemployment issue whatsoever. So they have to you have to hire from other dealerships or they go out there and trying to find people who are newbies, basically, but have the I mean, the the wherewithal and the desire to kind of take a look at the opportunities that that are with them and that dealership. So let’s talk about media sources which provide you with the best traffic and or leads. Who do you use? What are some of the vendors that you’ve brought into the dealership that you feel to do a good job by you?

Greg Iverson: [00:13:51] Well, you know, that’s another great question, sir. I’m tied to Fox dealer. They’re based out of Pasadena. I like it that their local fox dealer is a Web site provider.

Greg Iverson: [00:14:03] They do. They have all aspects of my search as CEO, ACM, ACIM paper click. You know, being with Chevy, you know, certain OEMs want. Yeah, you know, Chevy does a lot of stuff with C.D. K. I believe they signed up naked lines, naked lines. So it’s kind of like all the car manufacturers. You’ll get a list of who you can work with. And generally, it’s all about co-op, who you can work with. That’s co-op. And from there, you move on. I’ve worked with dealer dot.com. I’ve worked with SDK. I’ve worked with, you know, pretty much all the big ones out there. Fox dealer in the past five years has kind of become hot news in Los Angeles on the West Coast. Their Web sites are, you know, have a different feel to it. They’re FCO and SVM is unbelievable. They are actually GM certified and have that co-op ability. And I think infinities pick them up and also Harley-Davidson Davidson. So, you know, with with 20 years of doing this, I’ve kind of had experience with all of them, but I really look to Fox for most of my stuff. Obviously, I have OEM leads like I think all dealerships now are buying leads from the manufacturers. So there’s a certain quota that I have to get from Chevy. And to be quite frank, they’re really not that bad of leads as far as third party vendors. You know, it’s kind of across the board. I tell people you’re never really gonna get the same closing percentages. I try to look at lead providers or third party lead providers as kind of like a buffet.

Greg Iverson: [00:15:31] You know what? I’m going through the buffet line. Some of this stuff is going to be a little bit more expensive than the other. But ultimately unfold, you know, not to expect. Yeah. Ultimately, you know, my my paper, my cost per sale might be a little bit different. My cost per lead. But you’re never gonna find all of them. And what I want to do is I want a buffet of lead providers, because my job is you know, I’ve been told this for 20 years to sell me all the cars for all the money with all the good CSI. So the third parties up and down. I’ve had good luck with cars, dot.com in certain parts of Los Angeles and in other parts. I haven’t. They’re tied into the newspaper, The L.A. Times. So some of that’ll make a difference based on subscription areas. I’ve dabbled with TrueCar on and off. It’s you know, there’s some legal issues going on with TrueCar that this company really can’t get involved with at this point. But I’ve worked with car gurus who I really do like their used car leads and their platform and their back in tool is really kind of whiz bang. And and I enjoy working with them. I also have cars direct. I do a little bit of spy fi with cars direct. My store inherently is kind of a special finance store just because of the location. And, you know, that is basically it.

Greg Iverson: [00:16:44] My quest, all you see is me auto trader. Hey, I’m sorry. I’m pulling up my provider, sir. I do have auto trader that when I kind of set it and forget it, our general manager, who is actually an excuse car guy and is good with auto trader, kind of loves to handle that himself.

Greg Iverson: [00:16:57] And we do have the Edmunds platform. So I do enjoy Edmunds. I think Edmunds is one of the better platforms out there that that maybe has been lost in the shuffle recently.

Kelly Kleinman: [00:17:07] Question about the type of traffic and the type of leads now. You mentioned that you you’re a fan of car gurus. We did a we have a magazine coming out actually. We’ll be getting it. It’s going out to sixteen thousand seven hundred dealers. And it does a comparison between car gurus and cars dot.com. So you might find that interesting. It’s strictly based on what I consider the six main metrics based on traffic onto the Web site and how that traffic behaves. So we think about it, right. It’s a pretty, pretty holistic look at, I’d say about a hundred seventy five car dealers when we came down with a conclusion. But there’s not that much difference between them, frankly. Here’s the question. Would you prefer direct paid into organic traffic? Where do you get better closing metrics from those third party providers? Those cars that Gonski argue is auto traders.

Greg Iverson: [00:17:58] You know, the one thing regarding organic because of who we are, Felix Chevrolet, and we instill it into our employees. I mean, there’s history in the walls. You know, when you look at our our great organic numbers, I mean, they’re off the chart. People are literally just going and looking specifically for us. And for a number of reasons.

Greg Iverson: [00:18:15] It’s not you know, we we have, you know, Felix Chevrolet gear, the t shirts, the hats. I mean, we place orders. You know, people are ordering stuff from China. So but as far as you know, it’s kind of a weird mix. I our CEO and SVM work very well. Ultimately, you know, my third party providers are probably two or three percentage points, meaning six, seven, eight percent closing ratio compared to my pure organic stuff coming through my website and stuff coming through. So. So Cal Sevier.

Kelly Kleinman: [00:18:45] Interesting. What about Facebook Marketplace?

Greg Iverson: [00:18:50] Yeah, we’re involved in that. We’ve got here two years ago and like I said, the store was lacking in a lot of areas. One of it was Facebook. They did have a program where they were posting pictures of people who who bought cars next to the salesman, which I think is all great. But I you know, I try not to use a platform as like a hard sell for me. I try to look at it as like I’m in somebodies backyard at a barbecue and I’m trying to make friends. Sure. So we do a number of things because of who we are. You know, our Felix the Cat statue is at the L.A. Museum for a national show. And we try to, you know, incorporate a lot of the community stuff. We work with the local police departments. We sponsor Special Olympics down here. We sponsor events at USC. We sponsor events with the downtown L.A. business corridor, the Figaro, a business corridor. So we try to you know, we try to kind of stay away from a hard sell on Facebook, but we do kind of incorporate where we just have a lot of Felix Chevrolet fans. People want to know what we’re doing in the community. They want to see what new T-shirts we came out with. They do like to take a look at the new blazer that came out with. But I would say about 75 percent of our content on Facebook is is not directly sales related to buying a specific car.

Kelly Kleinman: [00:20:06] I look at the pictures that salesmen have, they’re posing with somebody that just sold a vehicle to. That’s sort of the spin. It is a big game display here, the head of the right head display in the man cave.

Greg Iverson: [00:20:22] But nonetheless, I mean, I remember the day where people would take the Polaroids. This is in the 90s and put it in their workstation. And yeah, I mean, I think that stuff is effective. You know, you got you got somebody sitting at your desk and they see a few hundred pictures of happy people. It can’t hurt you. But I think with the diversity of Facebook and the amount of people that it reaches, you know, there’s a better way to do it as you gauge the efficacy of your marketing efforts.

Kelly Kleinman: [00:20:47] How deep a dive do you take at the analytics in determining what really works and what you perceived to be working?

Greg Iverson: [00:20:53] Thank you once again, sir. That’s a very good question. You know, a lot of people say they look at stuff and I’ve been in a lot of these, you know, monthly ad meetings and, you know, a lot of people look for the numbers that they want to look for. We delve down pretty deep. Foxes is their support team is really good. They they come out, you know, being that they’re 12 miles away from us. My rep comes out every month and we sit down for an hour and we look at my spend and we look at how much my cost per click is. So I would advise, you know, to people in the beginning, I had no idea of what this what any of this stuff was. And I learned along the way for a number of reasons. One is just I just wanted to know myself. But, you know, my advice is, you know, if you if you’re not sure about it, have your rep explain things to you. And it is the Dells or the dive is well worth it. You really want to go.

Greg Iverson: [00:21:41] And when you’re spending, you know, 10, we’re spending upwards of twenty two thousand a month, you know, on all this stuff. It’s well worth to look into what’s working, what areas are working. Where am I pulling my traffic from? Maybe I can pull back in this area and add to another. So instead of sitting in the meetings and just kind of nodding your head, you know, agreeing with what your rep is telling you, you you might want to, you know, go another way.

Kelly Kleinman: [00:22:06] Are you familiar with auto flight by any chance? No, sir. They have metrics broken down like you can’t believe they’re actually we’re doing an article on them in our magazine. I’m out. I’ll send you a link. You could check them out. What they can provide for marketing purposes to any dealership is unbelievable. They know who’s selling what. How many they’ve sold, what they’re selling for price wise. You know what your competitors are doing, not only rather shabby dealers, but other car dealers. It’s out there. I think they get it from urban science, but they have an impressive array of of data sets up.

Greg Iverson: [00:22:41] What does that kind of use to be auto? Yeah, we kind of use vAuto for the used car side of that. Certainly interesting to see how that plays on the new car side.

Kelly Kleinman: [00:22:47] Yeah. Yeah. I’ll send you a link. Talk to me about what the dealership does to give back to the community.

Greg Iverson: [00:22:55] You know, this dealership. I mean, the history of this dealership could almost be a made for TV movie. And, you know, I think it’s actually gonna be on 60 Minutes in about a year and a half. We’re coming up on our hundredth anniversary in 2021. Sell even more. It’s really interesting. But no. It’s a family owned business. The Sharma’s family has owned it since 1955. And from that, they built it into an empire. And they come from rather humble beginnings. I mean, the original owner, Nick Seamus, bought the dealership from the owners in the 50s and and was curbing cars in front of his house during high school. So the kid was a born salesman. He immediately got involved with the community. As far as donating to Christmas funds, the homeless problem really wasn’t as bad as it was in the 50s. But I think he started the way for the daughters and Darryl Holter, who have taken over in the past 20 years. So we’re involved with the LAPD, the Southwest Police Division. We donate cars to them for events. They do these runs every year.

Greg Iverson: [00:23:56] Baker to Las Vegas. We donate vehicles for the police officers. Involved with the L.A. car show, which actually the original owner, Winslow Felix, was one of the originators of the L.A. car show over 100 years ago. And you know, Darrell are CEO and president, you know, always talks about the only reason we’re here is because of our community. These people come in and spend money with us and we have to make sure we take care of them. So, you know, we are really all over the place. We’re getting ready to do a golf tournament. Once again, Southwest Police Division over in Rancho Cucamonga. We go out there at 7:00 in the morning and two days of golf for the police officers, the Special Olympics. We just finished about two months ago. We’re involved with USC. The students, the fraternities and sororities have these events on campus where it’s kind of it can be anything from a book fair. Last year, they did like a book fair tied into a Harry Potter costume event. We donated cars, you know, for the event. We do a raffle.

Greg Iverson: [00:24:55] So, you know, being where we’re at and downtown Los Angeles, I just mentioned it a few minutes ago. Our Felix the Cat statue, one of the originals in our showroom is at the Italian American Museum. We donate money to the museum down there for a number of events. And the owners are truly philanthropists in many ways,.

Kelly Kleinman: [00:25:13] Why do I suddenly feel like buying a car from you, sir?

Greg Iverson: [00:25:18] Don’t worry. We can we can work that out for you. And here you go. Well, you know.

Greg Iverson: [00:25:22] You know, I got into this business for a number of reasons. But, you know, it’s really a people business. So, you know, going back to the interview process, you know, you got to be into. I mean, cars is one thing, but you have to be into, you know, talking to people and having a conversation and having it be real. And and, you know, Officer, if you bought a car for me, I promise that I take care of you. OK. No worries.

Kelly Kleinman: [00:25:42] I do believe that I’m not so satisfied with the last couple folks that bought a car from Mother’s Day that I might be looking for a pickup here soon. I’ll let you know. Hey, it’s funny.

Greg Iverson: [00:25:51] My mom my mom’s 75 and I sent her out last year to go shopping and she called me about two dealerships in. And she goes, now I know why you do pretty good. I go, why she goes, these car salesmen. They keep wanting my phone number and I telling them no. So as I tell people, we don’t have people from Stanford or M.I.T. knocking down our doors. It really is kind of an accidental business. And I think if you have, you know, a combination of good people skills and you’re genuine and you’re willing to work, you’ll do fine.

Kelly Kleinman: [00:26:18] Yeah. Where do you where do you see the automotive business in 10 years? Well, the percentage of online sales match or exceed on site sales by then. Any idea?

Greg Iverson: [00:26:30] You know, that’s an interesting question. I get that ask that a lot. I mean, other than how things are gonna be, what cars are going to be Iran, are they all going to be, you know, hydrogen or they’re going to be electric or. I think one thing is that you’re probably going to see less number of dealerships. I think that you’re going to see bigger and bigger groups buying up stores and maybe making it less competitive. It seems to be happening in L.A. where you had, you know, the 0 8 crash was kind of it where you had, you know, 50 GM dealerships within 30 square miles and now there’s maybe 22.

Greg Iverson: [00:27:01] And I think with devices, I mean, for me, it’s you know, and I tell my retail guys this, you know, 95 percent of your customers have been online. They just have not submitted a lead. So pretty much everybody is shopping online. The number I think is going to change in a sense. I think like Roadster is one of the companies out there that’s kind of interesting. And and drive AECOM logistically, you know, doing this online business where you’re at home, you know, companies like Car Varna. I am skeptical about that. And I think it’s for a number of reasons. One is liability. You know, I mean, you know, if all 30 of my deliveries, you know, on a Saturday meant that I had to send people to somebodies houses. You know, that’s. I mean, there’s going to be an accident every now and then. So I are the car. Maybe there’s something wrong and then they’ve got to come back. I think the way it’s set up now where people want to come in, they want to kick tires, they can get all the information in advance, which is what they have right now. But I think from a standpoint of liability, I really don’t see these companies like Roadster taking over half the business where people are sitting at home eating a sandwich, waiting for the car to be delivered. I think there’ll be a percentage of that. And as far as online sales. Yeah, I think, you know, incrementally, it’s just going to go up and up. And as devices change, you know, everyone is on smartphones. Who knows what’s around the corner in 10 years or 20 years as technology changes and makes things easier for people to gather information. I think there’s going to be a point where probably 100 percent of every car sell the customer has been online. They’ve done the research. And, you know, the question then will be just what percentage are submitting leads.

Kelly Kleinman: [00:28:35] Well, I want to thank you so much for spending some time with us today, folks. That’s Greg Iverson. Greg, great interview.

Greg Iverson: [00:28:43] Thank you, sir. You have a great day. And hello to everybody. Hope everybody good out there.

Kelly Kleinman: [00:28:46] All the best to you. He is the Internet BDC marketing director at Feeling Chevrolet. I am Kelly Kleinman. This is the DealershipNews.com podcast signing off for a Monday afternoon. Have a good day, everybody.

Felix Chevrolet Greg Iverson.wav

Kelly Kleinman: [00:00:07] Hello, everybody. This is Kelly Kleinman. And you are listening to the DealershipNews.com podcast, where we spotlight the who’s happening in the automotive industry. It’s footsoldiers, visionaries, salesmen, GM’s, owners, service managers and industry vendors alike. Our guest today is Mr. Greg Iverson, the Internet BDC marketing director at Felix Chevrolet. Good afternoon.

Greg Iverson: [00:00:31] Good afternoon. Kelly.. How are you, sir?

Kelly Kleinman: [00:00:33] I am doing great. And I am very happy to be speaking with you this afternoon. Before we get into how cool your job is. Let’s talk about what got you into the car business to begin with. Was it something that you always loved? Are you a marketing guy or did you sort of slide in the auto business organically and make the most of it?

Greg Iverson: [00:00:53] That’s a great question. You know, I for years I’ve heard that the car industry is kind of an accidental business. And for me, it was just that I was working for Sony Records and was in Australia bouncing back from Los Angeles to Sydney. And I met Holden Reps. Holden is a General Motors car down in Australia. And I met some American guys working down there. This was 1993 and there was a certain pub that we would all frequent.

Greg Iverson: [00:01:20] It was the only place to get good cranberry juice in Sydney. And we were drinking it straight just so everybody knows we weren’t mixing it with anything. But just over two or three months of conversing with these guys and the opportunities, I ended up signing up with General Motors coming on board as a rep to teach people about the cars just kind of, you know, walk around knowledge and basic. They were going to train me. Three months later, I moved to Sydney. And within three or four months of being on the job and visiting eight or nine dealerships in the Sydney area, I had two or three owners telling me that not that I was wasting my time, but that would make more money and have more fun selling cars. So in 1994, I ended up going to a Holden group, Hunter Holden, which is in Sydney, St Leonard’s, North Sydney, six dealerships. And that’s how I started selling Holdens in Australia.

Kelly Kleinman: [00:02:12] Holy cow. Do you. I should say holy wombat. You do you miss in Australia? No.

Greg Iverson: [00:02:18] Yeah, I tell you what, for any American that is looking to vacation, definitely make sure you go there. But if you’re ever looking for a place to live, you know, not that I would live anywhere. I’d lived there for five years and was happy to get back. It is a fantastic place for Americans. There’s a lot of American culture there. We kind of come from the same cut of cloth. And it’s it’s kind of the Americans that I met down there that were living there said it reminded them of California in the 1950s. So very clean. You really don’t see homeless people. But one of the most fantastic places on earth.

Kelly Kleinman: [00:02:51] Yeah. My brother in-law lived in Perth for a while. I think he still lives here, but he works in Singapore. He opened up the Nobu in Perth. So he’s a sushi guy. Yeah.

Greg Iverson: [00:03:01] So you see Perth as a fantastic city, the most the most isolated city in the world with over a million population. So it’s a it’s a bit of a trek. So. But it is a beautiful place.

Kelly Kleinman: [00:03:12] Sounds good to me. I wouldn’t mind spending a little bit of time. Actually, we plan on that two years from now. We’re going to be going there, Maui, next year to celebrate my kids graduating from high school. Then we’re gonna go to Perth. So congratulations.

Kelly Kleinman: [00:03:24] Thanks. We’re going to fast forward. You spent you spent five years at Norm Reeves Honda, the top Honda dealer in the world. Pretty much setting the bar for Internet BDC in the industry. You went on to turn a number of other dealerships around and now you’re at Felix pretty much doing the same. Talk to us about your career path and how you’ve turned Felix Chevrolet into the fifth fastest growing Chevrolet dealer on planet Earth.

Greg Iverson: [00:03:50] Well, yeah, I mean, when I stayed in Australia for five years, pretty much stayed as a salesman, but was lucky enough to meet Tom Stooker and Tom Stooker, you know, has a training Australian Training Institute in Sydney. And going to his training, I kind of hooked up with him being the only American in the group and was offered a job in ’98. When I got back from Australia to work with him out of Hoffman Estates, Illinois, I ended up going to Toyota of North Hollywood, which is I live in Burbank and I kind of put Tom off for a year or two. So when I got back in ’98, Internet was kind of just starting and my general manager, I was hired as its sales trainer, wanted me to delve into Internet, which I did. It was I would say everything is kind of the same. It’s a it’s a people business. The margins are definitely different. And the way it works is different. But from North Hollywood Toyota, I followed my GSM to the Keyes group, spent five years with the Keys Automotive Group at a Toyota dealership in running the Internet and in nine excuse me in 2008 went to Norm Reeves Honda was recruited by them. And as you said, yeah, we used to joke. It’s the biggest Honda dealership left of Jupiter, you know, doing a thousand to twelve hundred cars a month. They hit in ’08 with the economy.

[00:05:04] And then the following year with the tsunami. Honda took a hit on imported cars and the market took a hit. But the store was still managing to do seven, eight hundred cars a month and spent five years there. From there, I went to CarPros, Kia, the largest KIA group in the country, spent two years there and was recruited by Darrell Holter, the president of downtown L.A. Motor Group, two years ago. So two years ago, they own pretty much all the dealerships in downtown Los Angeles from Nissan to Porsche, Audi and Volkswagen. And they had a Nissan dealership in Carson. And I was brought on board as kind of a platform manager for Internet. And within six months, they decided to sell pretty much all of the stores except the Felix store to the Lithia Auto Group, which now owns the dealerships, not the land, but the land is held by the family. And two years ago, I came on board at Felix Chevrolet to a store that I don’t want to say was left to the wayside. But the past 10 years, the Seamus group had spent a lot of money refurbishing all the dealerships, new buildings. And Felix, in a sense, was left to the wayside. So when I got here two years ago, the store was really underperforming and was in a bit of a ditch.

Kelly Kleinman: [00:06:23] Yeah, it’s not in the ditch anymore. We before.

Greg Iverson: [00:06:26] No, sir,.

Kelly Kleinman: [00:06:27] Not at all. You’ve done a great job. But before we get into that, let’s talk about when you do get into a dealership, you’ve been brought on for whatever reason, obviously for a turnaround. What are the essentials in creating well to Internet sales department? And what does your checklist look like when you are called on to turn things around?

Greg Iverson: [00:06:47] You know, I guess, you know, everybody out there listening, you know, you have mentors and you learn along the way and, you know, hopefully you have some smart car people teaching you. And I was very fortunate. The people in Australia, the operators down there were very the Kaplan family, which ran Hunter Holden, and they always talked about what they said, the triple P’s policy, processes and people. And that kind of stuck with me and Tom Snooker had a different version of that. But my first thing is I first thing I want to see is I want to see the policies in the store, what they implement, what they want done. Second is processes. And then finally, we get to the staff, the people, and look at how those people are performing within those processes and policies. And that’ll give you kind of an indicator of a few things. Maybe we don’t have the right people, maybe our process isn’t right. And, you know, definitely from what I’ve seen in 24 years, 25 years, is that, you know, you really need to have all three in line for things to work.

Kelly Kleinman: [00:07:44] It’s the perfect the perfect segway for our next question. You talked about the three P’s policy, processes and people. It’s talk about people for a moment in that would be what kind of attention is spent on cultural diversification, your online marketing. Can you even do that in online marketing?

Greg Iverson: [00:08:00] You know, that’s a great question, and, you know, it’s it’s really, I guess, first of all, is going to be based geographically where you’re at. I mean, you know, America is a multicultural country where we are located in Los Angeles. We’ve been in the same place since 1955. You know, over the years, the demographics have changed. In this part of L.A., we’re actually right across from USC to college. Currently, about 75 percent of the people that live within 15 miles of our dealership, which is the highly most densely populated area in L.A., 75 percent are Hispanic. And that can be a combination of Mexican Americans. That can be a combination of Central Americans. And then you start delving off into different things. We have advertising 70 to 75 percent of our sales people speak Spanish. 75 percent of our advertising is Hispanic, whether it’s TV and radio. And then you kind of go into little subcultures, too, because, you know, the Spanish is different in El Salvador than it is in Mexico. And you kind of have different tactics as far as language in certain words. So it gets a little bit more complicated than people think. But, you know, one thing, too, is 85 to 90 percent of Hispanics do speak English. And I’d say a good half of them would rather speak English. So it’s kind of a fine line. You’re trying to cover all your bases without insulting people. But ultimately, you know, you have to make sure that your message gets out there to everybody.

Kelly Kleinman: [00:09:26] And we actually have a article and a series of articles going out about cultural diversity. And we are in the process of putting that together, both from a marketing standpoint, in a hiring standpoint. And we all know that for any dealer to have success, it needs to be a cost effective talent acquisition process in play. Obviously, you have that. I’m curious as to what system or vendor do you use to attract candidates and what characteristics do you look for when seeking talent that can effectively execute said game plan?

Greg Iverson: [00:09:57] Ok. Another great question. Well, I mean, we’ve got multi levels. You know, all dealerships now are probably online with their H.R. in their store. And most of these companies will use a company called H.R. Hot Link do have the ability to do recruiting for you. I do work with a company that is GM recommended called Pro’s PR OS and they do recruiting for me. And fortunately, in the last two years, in the last year, we’re the fastest growing Chevy dealership in the country. And this year, we are fifth in the zone, which is basically 75 dealerships from Santa Barbara down to San Diego. So getting to the last point, you know, professional salespeople, guys that are Chevy guys or gals, too, that are GM, you know, experience, you know, they look at the top stores in L.A., you have a real class of professional salesmen. I don’t wanna say that bounce around a lot, but when they are looking to go to another store, they know what stores are performing. So in the past two years, that has helped us, you know, basically have walking applications. My H.R. company does a great job, you know, basically online platforms, whether it’s through Monster and there’s other platforms for jobs. We do that also internally with our pros recruitment. And, you know, as far as what I’m looking for. I mean, you know, California is pretty litigious. I have to do background checks on everybody, which is a combination of their driving records. So there’s DMV checks involved and they have to have sales license in California, which ties in the DMV again. And then ultimately we do drug testing. So, you know, our first kind of hurdle is to make sure that those those tests are passed and then we can move on to the interviewing stage. And, you know, depending on the store, normally up we looked at, you know, for the lack of a better term, Greenpeace people new to the industry.

Greg Iverson: [00:11:40] But we had a training, a little college where they would go for five or six days. And we had a group of trainers that spent their time doing that. So I always look at onboarding new people if it’s possible. I think smaller stores and I just feel it’s in a sense would be a smaller store. It’s a little bit harder for us. So I do look for GM experience, you know, as far as a language, you know, once again, most of our business is Hispanic, but most of the Hispanic speak English. So if you don’t speak Spanish, it’s not you know, it doesn’t really change anything. It’s not going to kill you. Obviously, if you do speak Spanish, that’s an extra asset that you have. And, you know, everybody interviews a little bit different. I’d like to kind of role play and go over what the job entails. And for me, it’s all about driving traffic. If you’re selling cars in an Internet department and you’re in front of your CRM and you’re getting leads, really what makes it happen is your phone calls and your phone skills. So I’d like to do a little bit of roleplaying. You know, I’ll play an easy customer. I’ll play a tough customer. I want to see how they handle objections, how they swept Segway into the next area. And, you know, in checking references, you know, it’s it’s it’s something that I don’t think a lot of people do, but it’s a good thing to check references. And then I think tied into the background and the drug testing and the DMV checks gives you a pretty good indicator of somebodies character.

Kelly Kleinman: [00:13:00] Yeah, no, I agree. And it is a fact that most people don’t check references. It’s tough to find good help, especially now in automotive, especially in certain towns. I know that a group that I just interviewed out of Colorado, out of Denver, I believe we’re discussing that issue. It’s where they were and there was no unemployment issue whatsoever. So they have to you have to hire from other dealerships or they go out there and trying to find people who are newbies, basically, but have the I mean, the the wherewithal and the desire to kind of take a look at the opportunities that that are with them and that dealership. So let’s talk about media sources which provide you with the best traffic and or leads. Who do you use? What are some of the vendors that you’ve brought into the dealership that you feel to do a good job by you?

Greg Iverson: [00:13:51] Well, you know, that’s another great question, sir. I’m tied to Fox dealer. They’re based out of Pasadena. I like it that their local fox dealer is a Web site provider.

Greg Iverson: [00:14:03] They do. They have all aspects of my search as CEO, ACM, ACIM paper click. You know, being with Chevy, you know, certain OEMs want. Yeah, you know, Chevy does a lot of stuff with C.D. K. I believe they signed up naked lines, naked lines. So it’s kind of like all the car manufacturers. You’ll get a list of who you can work with. And generally, it’s all about co-op, who you can work with. That’s co-op. And from there, you move on. I’ve worked with dealer dot.com. I’ve worked with SDK. I’ve worked with, you know, pretty much all the big ones out there. Fox dealer in the past five years has kind of become hot news in Los Angeles on the West Coast. Their Web sites are, you know, have a different feel to it. They’re FCO and SVM is unbelievable. They are actually GM certified and have that co-op ability. And I think infinities pick them up and also Harley-Davidson Davidson. So, you know, with with 20 years of doing this, I’ve kind of had experience with all of them, but I really look to Fox for most of my stuff. Obviously, I have OEM leads like I think all dealerships now are buying leads from the manufacturers. So there’s a certain quota that I have to get from Chevy. And to be quite frank, they’re really not that bad of leads as far as third party vendors. You know, it’s kind of across the board. I tell people you’re never really gonna get the same closing percentages. I try to look at lead providers or third party lead providers as kind of like a buffet.

Greg Iverson: [00:15:31] You know what? I’m going through the buffet line. Some of this stuff is going to be a little bit more expensive than the other. But ultimately unfold, you know, not to expect. Yeah. Ultimately, you know, my my paper, my cost per sale might be a little bit different. My cost per lead. But you’re never gonna find all of them. And what I want to do is I want a buffet of lead providers, because my job is you know, I’ve been told this for 20 years to sell me all the cars for all the money with all the good CSI. So the third parties up and down. I’ve had good luck with cars, dot.com in certain parts of Los Angeles and in other parts. I haven’t. They’re tied into the newspaper, The L.A. Times. So some of that’ll make a difference based on subscription areas. I’ve dabbled with TrueCar on and off. It’s you know, there’s some legal issues going on with TrueCar that this company really can’t get involved with at this point. But I’ve worked with car gurus who I really do like their used car leads and their platform and their back in tool is really kind of whiz bang. And and I enjoy working with them. I also have cars direct. I do a little bit of spy fi with cars direct. My store inherently is kind of a special finance store just because of the location. And, you know, that is basically it.

Greg Iverson: [00:16:44] My quest, all you see is me auto trader. Hey, I’m sorry. I’m pulling up my provider, sir. I do have auto trader that when I kind of set it and forget it, our general manager, who is actually an excuse car guy and is good with auto trader, kind of loves to handle that himself.

Greg Iverson: [00:16:57] And we do have the Edmunds platform. So I do enjoy Edmunds. I think Edmunds is one of the better platforms out there that that maybe has been lost in the shuffle recently.

Kelly Kleinman: [00:17:07] Question about the type of traffic and the type of leads now. You mentioned that you you’re a fan of car gurus. We did a we have a magazine coming out actually. We’ll be getting it. It’s going out to sixteen thousand seven hundred dealers. And it does a comparison between car gurus and cars dot.com. So you might find that interesting. It’s strictly based on what I consider the six main metrics based on traffic onto the Web site and how that traffic behaves. So we think about it, right. It’s a pretty, pretty holistic look at, I’d say about a hundred seventy five car dealers when we came down with a conclusion. But there’s not that much difference between them, frankly. Here’s the question. Would you prefer direct paid into organic traffic? Where do you get better closing metrics from those third party providers? Those cars that Gonski argue is auto traders.

Greg Iverson: [00:17:58] You know, the one thing regarding organic because of who we are, Felix Chevrolet, and we instill it into our employees. I mean, there’s history in the walls. You know, when you look at our our great organic numbers, I mean, they’re off the chart. People are literally just going and looking specifically for us. And for a number of reasons.

Greg Iverson: [00:18:15] It’s not you know, we we have, you know, Felix Chevrolet gear, the t shirts, the hats. I mean, we place orders. You know, people are ordering stuff from China. So but as far as you know, it’s kind of a weird mix. I our CEO and SVM work very well. Ultimately, you know, my third party providers are probably two or three percentage points, meaning six, seven, eight percent closing ratio compared to my pure organic stuff coming through my website and stuff coming through. So. So Cal Sevier.

Kelly Kleinman: [00:18:45] Interesting. What about Facebook Marketplace?

Greg Iverson: [00:18:50] Yeah, we’re involved in that. We’ve got here two years ago and like I said, the store was lacking in a lot of areas. One of it was Facebook. They did have a program where they were posting pictures of people who who bought cars next to the salesman, which I think is all great. But I you know, I try not to use a platform as like a hard sell for me. I try to look at it as like I’m in somebodies backyard at a barbecue and I’m trying to make friends. Sure. So we do a number of things because of who we are. You know, our Felix the Cat statue is at the L.A. Museum for a national show. And we try to, you know, incorporate a lot of the community stuff. We work with the local police departments. We sponsor Special Olympics down here. We sponsor events at USC. We sponsor events with the downtown L.A. business corridor, the Figaro, a business corridor. So we try to you know, we try to kind of stay away from a hard sell on Facebook, but we do kind of incorporate where we just have a lot of Felix Chevrolet fans. People want to know what we’re doing in the community. They want to see what new T-shirts we came out with. They do like to take a look at the new blazer that came out with. But I would say about 75 percent of our content on Facebook is is not directly sales related to buying a specific car.

Kelly Kleinman: [00:20:06] I look at the pictures that salesmen have, they’re posing with somebody that just sold a vehicle to. That’s sort of the spin. It is a big game display here, the head of the right head display in the man cave.

Greg Iverson: [00:20:22] But nonetheless, I mean, I remember the day where people would take the Polaroids. This is in the 90s and put it in their workstation. And yeah, I mean, I think that stuff is effective. You know, you got you got somebody sitting at your desk and they see a few hundred pictures of happy people. It can’t hurt you. But I think with the diversity of Facebook and the amount of people that it reaches, you know, there’s a better way to do it as you gauge the efficacy of your marketing efforts.

Kelly Kleinman: [00:20:47] How deep a dive do you take at the analytics in determining what really works and what you perceived to be working?

Greg Iverson: [00:20:53] Thank you once again, sir. That’s a very good question. You know, a lot of people say they look at stuff and I’ve been in a lot of these, you know, monthly ad meetings and, you know, a lot of people look for the numbers that they want to look for. We delve down pretty deep. Foxes is their support team is really good. They they come out, you know, being that they’re 12 miles away from us. My rep comes out every month and we sit down for an hour and we look at my spend and we look at how much my cost per click is. So I would advise, you know, to people in the beginning, I had no idea of what this what any of this stuff was. And I learned along the way for a number of reasons. One is just I just wanted to know myself. But, you know, my advice is, you know, if you if you’re not sure about it, have your rep explain things to you. And it is the Dells or the dive is well worth it. You really want to go.

Greg Iverson: [00:21:41] And when you’re spending, you know, 10, we’re spending upwards of twenty two thousand a month, you know, on all this stuff. It’s well worth to look into what’s working, what areas are working. Where am I pulling my traffic from? Maybe I can pull back in this area and add to another. So instead of sitting in the meetings and just kind of nodding your head, you know, agreeing with what your rep is telling you, you you might want to, you know, go another way.

Kelly Kleinman: [00:22:06] Are you familiar with auto flight by any chance? No, sir. They have metrics broken down like you can’t believe they’re actually we’re doing an article on them in our magazine. I’m out. I’ll send you a link. You could check them out. What they can provide for marketing purposes to any dealership is unbelievable. They know who’s selling what. How many they’ve sold, what they’re selling for price wise. You know what your competitors are doing, not only rather shabby dealers, but other car dealers. It’s out there. I think they get it from urban science, but they have an impressive array of of data sets up.

Greg Iverson: [00:22:41] What does that kind of use to be auto? Yeah, we kind of use vAuto for the used car side of that. Certainly interesting to see how that plays on the new car side.

Kelly Kleinman: [00:22:47] Yeah. Yeah. I’ll send you a link. Talk to me about what the dealership does to give back to the community.

Greg Iverson: [00:22:55] You know, this dealership. I mean, the history of this dealership could almost be a made for TV movie. And, you know, I think it’s actually gonna be on 60 Minutes in about a year and a half. We’re coming up on our hundredth anniversary in 2021. Sell even more. It’s really interesting. But no. It’s a family owned business. The Sharma’s family has owned it since 1955. And from that, they built it into an empire. And they come from rather humble beginnings. I mean, the original owner, Nick Seamus, bought the dealership from the owners in the 50s and and was curbing cars in front of his house during high school. So the kid was a born salesman. He immediately got involved with the community. As far as donating to Christmas funds, the homeless problem really wasn’t as bad as it was in the 50s. But I think he started the way for the daughters and Darryl Holter, who have taken over in the past 20 years. So we’re involved with the LAPD, the Southwest Police Division. We donate cars to them for events. They do these runs every year.

Greg Iverson: [00:23:56] Baker to Las Vegas. We donate vehicles for the police officers. Involved with the L.A. car show, which actually the original owner, Winslow Felix, was one of the originators of the L.A. car show over 100 years ago. And you know, Darrell are CEO and president, you know, always talks about the only reason we’re here is because of our community. These people come in and spend money with us and we have to make sure we take care of them. So, you know, we are really all over the place. We’re getting ready to do a golf tournament. Once again, Southwest Police Division over in Rancho Cucamonga. We go out there at 7:00 in the morning and two days of golf for the police officers, the Special Olympics. We just finished about two months ago. We’re involved with USC. The students, the fraternities and sororities have these events on campus where it’s kind of it can be anything from a book fair. Last year, they did like a book fair tied into a Harry Potter costume event. We donated cars, you know, for the event. We do a raffle.

Greg Iverson: [00:24:55] So, you know, being where we’re at and downtown Los Angeles, I just mentioned it a few minutes ago. Our Felix the Cat statue, one of the originals in our showroom is at the Italian American Museum. We donate money to the museum down there for a number of events. And the owners are truly philanthropists in many ways,.

Kelly Kleinman: [00:25:13] Why do I suddenly feel like buying a car from you, sir?

Greg Iverson: [00:25:18] Don’t worry. We can we can work that out for you. And here you go. Well, you know.

Greg Iverson: [00:25:22] You know, I got into this business for a number of reasons. But, you know, it’s really a people business. So, you know, going back to the interview process, you know, you got to be into. I mean, cars is one thing, but you have to be into, you know, talking to people and having a conversation and having it be real. And and, you know, Officer, if you bought a car for me, I promise that I take care of you. OK. No worries.

Kelly Kleinman: [00:25:42] I do believe that I’m not so satisfied with the last couple folks that bought a car from Mother’s Day that I might be looking for a pickup here soon. I’ll let you know. Hey, it’s funny.

Greg Iverson: [00:25:51] My mom my mom’s 75 and I sent her out last year to go shopping and she called me about two dealerships in. And she goes, now I know why you do pretty good. I go, why she goes, these car salesmen. They keep wanting my phone number and I telling them no. So as I tell people, we don’t have people from Stanford or M.I.T. knocking down our doors. It really is kind of an accidental business. And I think if you have, you know, a combination of good people skills and you’re genuine and you’re willing to work, you’ll do fine.

Kelly Kleinman: [00:26:18] Yeah. Where do you where do you see the automotive business in 10 years? Well, the percentage of online sales match or exceed on site sales by then. Any idea?

Greg Iverson: [00:26:30] You know, that’s an interesting question. I get that ask that a lot. I mean, other than how things are gonna be, what cars are going to be Iran, are they all going to be, you know, hydrogen or they’re going to be electric or. I think one thing is that you’re probably going to see less number of dealerships. I think that you’re going to see bigger and bigger groups buying up stores and maybe making it less competitive. It seems to be happening in L.A. where you had, you know, the 0 8 crash was kind of it where you had, you know, 50 GM dealerships within 30 square miles and now there’s maybe 22.

Greg Iverson: [00:27:01] And I think with devices, I mean, for me, it’s you know, and I tell my retail guys this, you know, 95 percent of your customers have been online. They just have not submitted a lead. So pretty much everybody is shopping online. The number I think is going to change in a sense. I think like Roadster is one of the companies out there that’s kind of interesting. And and drive AECOM logistically, you know, doing this online business where you’re at home, you know, companies like Car Varna. I am skeptical about that. And I think it’s for a number of reasons. One is liability. You know, I mean, you know, if all 30 of my deliveries, you know, on a Saturday meant that I had to send people to somebodies houses. You know, that’s. I mean, there’s going to be an accident every now and then. So I are the car. Maybe there’s something wrong and then they’ve got to come back. I think the way it’s set up now where people want to come in, they want to kick tires, they can get all the information in advance, which is what they have right now. But I think from a standpoint of liability, I really don’t see these companies like Roadster taking over half the business where people are sitting at home eating a sandwich, waiting for the car to be delivered. I think there’ll be a percentage of that. And as far as online sales. Yeah, I think, you know, incrementally, it’s just going to go up and up. And as devices change, you know, everyone is on smartphones. Who knows what’s around the corner in 10 years or 20 years as technology changes and makes things easier for people to gather information. I think there’s going to be a point where probably 100 percent of every car sell the customer has been online. They’ve done the research. And, you know, the question then will be just what percentage are submitting leads.

Kelly Kleinman: [00:28:35] Well, I want to thank you so much for spending some time with us today, folks. That’s Greg Iverson. Greg, great interview.

Greg Iverson: [00:28:43] Thank you, sir. You have a great day. And hello to everybody. Hope everybody good out there.

Kelly Kleinman: [00:28:46] All the best to you. He is the Internet BDC marketing director at Feeling Chevrolet. I am Kelly Kleinman. This is the DealershipNews.com podcast signing off for a Monday afternoon. Have a good day, everybody.

Kelly Kleinman: [00:00:10] Hello, everybody. Kelly Kleinman and you are listening to the DealershipNews.com podcast, where we spotlight the who’s happening in the automotive industry. It’s footsoldiers, visionary, salesman, GMs, owners, service managers and industry vendors alike. Our guest today is the founding force behind a new company that not only protects dealer and customer alike from costly data breaches, but turns the solution into a profit center for the car dealer. Welcome Mat Arana of Identity Maxx. How you doing?

Matt Arana: [00:00:42] Matt Kelly. I’m doing great. Thanks for taking some time today.

Kelly Kleinman: [00:00:46] You bet. Very happy to have you on board. I do want to mention that today’s podcast is brought to you by the following preferred vendors Dealer Pay. They offer seamless integrated payment processing solutions, merchant services and credit card processing specifically for car dealers and the automotive industry. See Julie Douglas for any inquiries and Drive Centric. The offer is simple, yet powerful interface that anyone can use is intuitive CRM design makes it simple for salespeople to do their job and that’s to sell. Go #LiveWithDrive. Tell Steve Roessler. Dealership News sent you. Matt I’d like to start every interview off with one question. How the heck did you fall into the car industry?

Matt Arana: [00:01:30] Well, I’m sure everybody’s got an equally colorful story, but I am actually fairly new to the car industry specifically. But I found my way here after 15 years or so in the finance business. So I was in commercial lending with GE Capital and then Residential Lending for 10 years or so. I’ll rewind backwards. And the more exciting part about my backstory, really, for the first 10 years of my adult life and career, I was a rock and roll musician, toured all over the country and played music and kind of put off growing up until I was in my early 30s and kind of fell into the insurance business from a friend. Did specialty risk insurance, worked for GE Capital, doing commercial lending for seven years. I worked for a credit bureau and data company for several years before getting into the mortgage industry. So that’s what I did before this. I kind of got into the automotive space through a network of friends and some some of which are dealer principles that I was introduced to. And really just I was kind of I’ve always been fascinated by the car dealership industry in general because, you know, it’s ironic, but there’s some for some reason an association between the finance business and the automotive business, probably because car dealers are as much a finance company as they are selling vehicles in a lot of times. So from mutual acquaintances, I was introduced to a product that caught my attention being Identity Maxx specifically for dealerships. But relative to a lot of a lot of what I’ve experienced in my in my couple of decades of finance business.

Kelly Kleinman: [00:03:23] Matt, it makes sense to to find out to segway from finance into the automobile world, obviously they are somewhat finance companies, but it’s not so common to segway from playing gigs to getting into the finance. Who’d you play with? The what instrument you play.

Matt Arana: [00:03:42] It’s crazy. I still do play on weekends and I guess I’m still quote unquote professional. Because they pay me to do it. But it’s it’s more of a part time hobby playing. But I play guitar and sing and I play with a band called a number of different touring groups in my 20s. But I guess most notably a band called Modern Day Zero, which is a modern rock band we tour with like Nickelback and Puddle of Mud and Marilyn Manson and a lot of these, you know, more progressive rock bands and from like the late 90s through 2002 or so. So it was a lot of fun. I got to meet a lot of cool people and play some big stages. And, you know, we were we were as a movie, almost famous kind of that that was our story. We were we open for a lot of huge bands, but never quite pierced the veil ourselves. But we had a heck of a good time doing it.

Kelly Kleinman: [00:04:39] We could probably share some stories. In the meantime, let’s imagine that you are in an elevator with the president of Ford. What would your 30 sec. You have 30 seconds to do this. What would your elevator pitch sound like to keep him wanting more?

Matt Arana: [00:04:56] This is a tough question because, you know, from a manufacturer standpoint, they might not think that data breach at dealerships or, you know, obviously they understand compliance. But Mr Ford, President, how would you feel or how cool would it be if he knew that every dealership in America that had your name on it was 100 percent protected from any type of Identity theft, data breach. And if every customer that bought a Ford vehicle was offered that same protection for themselves and their families. Sound interesting. And I think he would probably want to hear more.

Kelly Kleinman: [00:05:35] Well, I think he’s at least going to take another couple floors. How’s that?

Matt Arana: [00:05:40] Good enough.

Kelly Kleinman: [00:05:40] He’ll stand up in the elevator. Well, let’s. Before we get into how that particular solution is monetized, obviously identity breach is a huge problem and dealerships are far more exposed than I think even many of them realize. So how does Identity Maxx, protect the dealer from the risks and the costs involved and how does that translate to limited exposure for a customer?

Matt Arana: [00:06:05] Right. So Identity Maxx, was created specifically for car dealers. But, you know, most consumers these days are aware of a variety of different identity theft protection programs that are out there, to, if not monitor certainly alert you if you’ve been breached or help you recover any lost assets that you’ve been breached. So it’s not an unfamiliar concept, but in the automotive space, as with in the finance business, the FTC and the Gramm-Leach-Bliley Act that was passed in ’99, I believe it’s been a long time, has imposed fines for violations of privacy and non-public information that crosses the desk of every single car dealership in America. So obviously the exposure was there and basically Identity Maxx was developed to cover the dealership in the event of a data breach, cover all of their employees and all of their families in the event of a data breach. And as a product that can be offered to every customer that buys a vehicle from that dealership and the product itself is is much more robust and comprehensive than a lot of the other identity theft protection programs that are out there from a consumer standpoint. But from a dealership standpoint, it it covers Most of what they need to be in compliance with the privacy rule, the safeguards rule, any red flags rule.

Kelly Kleinman: [00:07:45] Well, let’s see Matt, that they’re not in compliance or that they’re lacking compliance in certain areas. What are some of the punitive costs to a dealership that gets breached? I think dealers need to know the costs of taking data breach for granted.

Matt Arana: [00:08:00] Yeah, and it’s it’s hard to quantify that. I mean, actually give you the exact numbers with respect to if the FTC comes in and they want to place penalties for, you know, violations on their main for basic privacy stuff and they can come in and slap $100,000 fine on the privacy rule, it could be I think it’s $41,400 or some change. And then the safeguards laws and other $41,000. So that means if they come in and they say, OK, let’s see your data breach protection program, what do you have in place? Do you have a CIO is there someone we can speak with? And you failed to provide what they deem to be sufficient to cover those particular guidelines. And they’re slapping fines right and left. And they are, you know, like I say, coming from the finance business, both commercial and residential lending, especially audits are happening. Fines are being put in place and examples are being made across the industry, you know, to to enforce these guidelines. Now that that doesn’t take into account Kelly, the cost of having a data breach at the dealership. That’s just fines from the FTC, if you have a data breach, you’re absolutely exposed to class action lawsuits. And there are plenty of attorneys circling around waiting for these types of things, you know, to grab a big group of people that have been affected. And, you know, with dollar signs and in their eyes like they all do for any any time. There’s a mass affected situation like that. Your dealership could be. crippled, if not disabled. 100%. Especially small and mid-sized dealers. You know, the effects of class action lawsuits can be terrible, not to mention, you know, speaking of other damages, the reputation. Sure. If it gets out that you’ve been breached and it sort of implies that you are negligent or not really putting all that much importance on your customers’ private information. I mean, the loss of revenue to be immeasurable.

Kelly Kleinman: [00:10:08] Absolutely. Absolutely.

Matt Arana: [00:10:09] Very costly. And on a lot of levels.

Kelly Kleinman: [00:10:12] Well, it makes sense to engage in a program like this to me. If I was a car dealership. I’d be very, very concerned with it because it’s such a common problem. It’s so common that it seems that although there’s the potential for a reputation, you know, taking a hit, it seems to pass quickly because it’s become all so common. But it’s expensive from a financial standpoint and a reputation standpoint. Agreed. It is how? So let’s go through the process of I am at the desk, I’m doing the deal. How can a dealership profitize off of Identity Maxx? And what does the pitch to the customer sound like?

Matt Arana: [00:10:51] Well, here’s the thing. It’s, you know, protecting your dealership should be first and foremost, right? I mean, protection vs. profits. Not exclusively, but in the order of things. Because if you’re not protected, who cares about profit, you’re exposed and you could lose everything. Right. Versus, you know, dollars and cents on a deal. But the way this product is designed is that any dealership partners would offer five years of recovery to every person that buys a dealer or buys a vehicle from that particular dealership. So as a part of XYZ Automotive, we care about our dealerships, privacy, the data that comes through our dealership and we also care about our customers and their families. You protect a lot of other things in your life. You know, you have insurance on everything. But protecting yourselves and your family from financial catastrophe should be very much up there. So we care about our customers. We’re going to give 5 years to everybody that buys a vehicle from us and it protects them and every member of their household. Pretty cool. So that’s for every vehicle you have to offer it to everyone. Right. As a part of F&I when they’re at the desk signing the deal. This is where it not only pays for itself, but becomes profitable as an F&I product. Really? Hey, Mr. Smith. Jones. Whatever the case is, we appreciate your business. You’re going to receive five years of recovery from Identity Maxx. Give it to all the folks to buy the vehicles. Plus, they also offer 5 years of monitoring for yourself and everyone in the family, which means if anything suspicious happens on any of your accounts relative to your private information, you’ll be notified in the event of any damage, of any breaches or any affecting of this thing. You’ll be assigned a personal advocate that will go after all of your losses for you and reimburse you.

Matt Arana: [00:12:59] So it’s not in that reimburse you, but go after all of your losses without you having to do it yourself. So that’s that’s pretty much the pitch it’s nine bucks a month. How’s that sound to you? OK. Click a box and it becomes an F&I product. So terrific. Yeah. So at roughly 9% penetration and I’m using 100 vehicles a month as a round number and roughly 9-10% penetration on that upsell. The dealership now has no cost in offering to say every every customer. So anything above that becomes profit. Pretty attractive. I mean, obviously, every dealer can run their own numbers and see kind of where they’re at and where their break even is. And on that. And that’s that’s not taking into account Kelly. the value. The why buy here, the marketing potential that it has, there’s just a way to say a lot of car dealers are not thinking this forward. They’re not all that concerned about it. But we are. If you’re going to buy, buy from us.

Kelly Kleinman: [00:14:04] There’s a strong perception of value add. I agree. Yeah.

Matt Arana: [00:14:08] So you can’t really measure that necessarily. But it’s it’s pretty compelling. And that’s why I was drawn to this product. You know, it made so much sense on so many levels. I couldn’t really find a proverbial hole in the product where it wouldn’t make sense other than if a dealership is overly confident maybe and thinks because they have I’ve got cyber insurance or I’ve got a company that comes in and orders my emails every year I do this or that. It does not cover a full blown data breach and it does also not cover, you know, let’s just face it. If an employee writes down a customer’s credit card number and customer #2 comes and takes a cell phone photo of the credit card. That’s not cybersecurity. That’s that’s that’s a data breach in your dealership that came as a result of something that you’re not covered. But if you have this program in place, if it does safeguard against class action lawsuits, it can give you another level of security that you probably don’t already have.

Kelly Kleinman: [00:15:14] Well, listen, Matt, I want to thank you so much for coming on board today and breaking it down for us. Dealerships, beware he’ll be knocking at your door shortly. And I, again. Thanks for stopping by. Data breach is a huge problem and I think this provides an outstanding solution for it and at a great price to the consumer. Needless to say, Matt, thanks again.

Matt Arana: [00:15:37] I appreciate your time. Thanks.

Kelly Kleinman: [00:15:39] Well, folks, that’s about all she wrote. This is Kelly Kleinman. DealershipNews.com.  That was my podcast for Thursday afternoon. Have a great day and we’ll see you soon.

Kelly Kleinman: [00:16:02] I’m going to do another ending. OK.

Kelly Kleinman: [00:16:04] I want to thank Matt Arana of Identity Maxx, for stopping by and providing us with all that great information. This is Kelly Kleinman. DealershipNews.com. This podcast is over. We’ll see you soon. Have a great afternoon.

Kelly Kleinman: [00:00:15] Hello, everybody. This is Kelly Kleinman. Yes, you are listening to the DealershipNews.com podcast where we spotlight the who’s happening in the automotive industry. It’s footsoldiers, visionary salesman, GM’s, owners, service managers and industry vendors alike. Our guests today. Well, we have several, actually. And we’ll start off with the general manager and senior director, Worldwide Automotive, Mr. Ali Fawaz. We’ve got data scientist Brad Null. Brad, I’m sure you’ve got a more interesting title than that. And of course, the Top Gun of Reputation.com CEO Joe Fuca.

Joe Fuca: [00:00:54] You got it. You’re good.

Kelly Kleinman: [00:00:55] Okay. Okay, good. And I would say that that would be Italian. And they should know that because I grew up in an Italian neighborhood. Welcome to the podcast, gentlemen.

Kelly Kleinman: [00:01:02] Thanks. Very good. Well, let’s let’s kick this off with the genesis of Reputation.com.

Kelly Kleinman: [00:01:10] Obviously, the industry has had an issue with trust spanning many decades. Joke. Where did you see the opportunity to jump in and address the issue and bring your own set of best practices into direct competition with Podium and say, Digital Airstrike?

Joe Fuca: [00:01:25] Yeah. So the company Reputation.com actually started in 2006. It was focused on consumer behavior in the reputation space.

Joe Fuca: [00:01:37] And over the next several years, it was pretty clear to us that we wanted to start a data science program where we could manage the behaviors of consumers and what they thought of certain brands. And so what we did is we hired a chief data scientist, Brad Null about 10 years ago. And we created a group of data scientists that basically would look at this consumer behavior and the impact on brands. And as we’ve changed the company in 2015, really 2014/2015 era, we started focusing on helping large enterprise customers to understand everything that’s being said about them so they could understand that the true sentiment of what their customers think. And so Brad headed up that group of data scientists 10 years ago.

Joe Fuca: [00:02:35] And so really, the idea of having machine learning and artificial intelligence in the product, as you’re probably aware when you think of the consumer world and all the data that’s made and the worlds of Facebook book and Instagram and anything, really, it’s a social environment and the volumes we basically took the advantage of that and started to build out this whole platform, which we call Reputation.com today.

Joe Fuca: [00:03:04] And Brad heads up that data scientist group and that that really kind of changed the company as the machine learning started to mature. And as you probably know, machine learning gets more and more mature with time.

Joe Fuca: [00:03:18] It’s a little it’s actually a little better than wine because it actually gets better and better with time. Wine gets better with slowness of time. But this is more fun. I don’t even know if I’ve explained that right, but I think you get my point. Especially if you grew up in an Italian neighborhood, then you probably know what I’m talking about. But with the machine learning, we really kind of gained a true strategic competitive advantage. And so that’s when companies like Ford and General Motors came on board about five or six years ago and started to take advantage of the reputation platform, which we had the machine learning behind it. I don’t know Brad, if you want to comment a little bit on that, but I think it kind of hit the highlights.

Brad Null: [00:04:01] Yeah, definitely hit the highlights. Kelly. Yeah, definitely. Happy to go through some of that more depth as we go along here.

Kelly Kleinman: [00:04:07] Yeah, we’re gonna get into that. But it’s ironic that you mentioned whining because that’s a lot of what you gauge is people whining right.

Joe Fuca: [00:04:15] We’ve been dealing with the whining for a for a while.

Joe Fuca: [00:04:19] We when we look at our business, we think of three major entities. Right. There’s 1) How do we help companies get found, which is all around search. And we have competitors in that world. And most of our largest clients want us to help streamline their ability to be found in Google and to be streamlined in the way they’re found. And and they actually engage them with appointment-setting and those types of things. And then the second area that we work in is sentiment, which is really what the reputation report was all built from. And that is what customers really think of you. And can you drill into that? Well, I’ll I’ll lead. I’ll use your words. Can you drill into the whining by location, by industry, and then compare it to other people’s locations and industries that are your competitors? And and that really was the genesis of Reputation.com for some of our companies. And then the last area that we work with is we do a lot of the voice of the customer analysis through using our survey tool as well as our insights product to understand, you know, more in-depth analysis of what their customers really saying.

Kelly Kleinman: [00:05:33] Well, okay. So that that’s sort of gives you a pretty good idea of what you do in general. What are you doing? And you’ve probably mentioned it. The other folks are not doing what separates you from the aforementioned reputation specialists. Some people call it reputation marketing, you know, as opposed to reputation management and such. Yeah. If you could expand a little bit on that because you’re gathering data on a regular basis, I don’t think the other folks who are that concerned with it. And then the next question will be a little bit more about, you know, who came up with the idea of, well, let’s let’s follow that first and we’ll talk about the automotive reputation report, which I love.

Joe Fuca: [00:06:09] Yeah, it’s cool. So we, um, we basically we feel like we’re the, you know, I hate to say it, but I feel like we’re the grandfather of online reputation management. Most of those other competitors that you mentioned are are much newer in the space. We we feel like we’ve got a pretty big platform in terms of being able to understand the customer on many points. And because of our machine learning and what we’ve done in terms of this data, you can be a customer or not be a customer and we’ll give you the same amount of data. And that’s the beauty where we come in, where most of the competitors have to have their information in a private structured data format. What the hell does that mean? It means if I’m Qualtrics or Medallion or Podium or any these types of companies that are just doing surveys, then they have all of the data about their customer in a private environment, which is there’s nothing wrong with that. It’s certainly what I call one data listener. But what we do that’s so different than all the competition is that we have data listeners on many areas and we call it data in the wild, which is where the consumer leaves information about you and your performance, whether you like it or not, in the public format. And that’s really where the sweetness comes in with us, where we we can track what you’re saying and a social platform like Twitter or we can track everything you’re saying and reviews and we can do it by industry, industry specialists sites. We’re connected to a 190 different sites. And so, yeah, most of our competitors are usually just focused on one specific area and we really kind of gather all of the data, whether it’s private or public, whether it’s structured or unstructured.

Kelly Kleinman: [00:07:59] Whose idea was it and how long did it take to complete this particular 2019 automotive reputation report? No. By the way, the fact that you have Reputation.com, it occurred to me that you must have been the first one in the pool, so to speak, because you got that domain name, right. Who wouldn’t want that if you’re in the business.

Joe Fuca: [00:08:16] Absolutely.

Brad Null: [00:08:20] Kelly. This is Brad, I’ll jump in.

Brad Null: [00:08:22] And I kind of start with the last part first, because like all that stuff that Joe’s talking about and all of it ties into these the reputation scores, which are kind of featured prominently in the report as well. And when you talk about those scores, all this stuff about, you know, what we’ve been doing with machine learning and data science and aging like a fine wine over the last, you know, eight to 10 years, a lot of that from the beginning of when we started building this this enterprise system. We’ve been trying to build these reputation scores and which is really all this data, all this data that Joe was talking about in the wild, all the reviews, the social posts, the listings, the search results. How do we bring that into this? You know, kind of. What’s the KPI of your reputation that we can build? So we’ve been working on that. You know how long we’ve been working on it for almost a decade now. And and really the idea the criteria behind that score is really all of this information. And Joe talked about kind of these these three areas. And that’s part of what differentiates these reputation scores versus some kind of traditional customer satisfaction or sentiment metric, because we’re trying to understand all of this information and how it fits together online. So there’s three main components of it, which you probably saw in the report, one of those being the sentiment. How do we get at, you know, what the customer sentiment is about you, your dealerships, your location, but also, you know, the visibility. How good a job are you making your company, your location, your dealership visible online? In the engagement side of it. How well are you engaging with your customers and all all three of those? We’ve got a lot of interesting data in the wild about those. And we do a lot of analysis not just to kind of help you understand how good you’re doing at each of those, but as you’ve seen in the report to how all those fit together to try to drive value for your business to tie, you know, not just give you a number that helps you measure your reputation, but understand how that fits together to other things like where you rank in search, how many vehicles you’re selling, customer retention, all those sorts of things. So those are the scores. Those are the big components. We’ve been working on that forever. And then going back to kind of these reputation reports, as Joe mentioned as well, since we can gather this data not just for our customers, but really for, for instance, for any auto dealership in the U.S., we’ve been gathering more and more data and really started putting together, you know, some of these reports, you know, over the last couple of years. And finally, just in the last few months, kind of came to fruition with with the idea kind of really working collaboratively of this iteration of the the auto report, really the most comprehensive report we’ve been able to put out so far.

Kelly Kleinman: [00:10:45] So in a sense, the report gives you a dealership grade in a very important area, which is visibility and the quality of that visibility. I understand.

Joe Fuca: [00:10:57] Yeah, that’s that’s a good way of saying it, and really, if you think about it, the way we did the report is we split it up into some areas that would just almost educate the market about why it’s so important, why it’s tied to revenue. But also split it up in a way that people can look at things in a way that the auto dealers really do, which is, hey, you know, who is the best brand? What why are they the best brand? And then how about large groups? What are those look like? Who’s good within the large groups or how about individual dealerships? What we’ve been seeing over the last couple of years is people are starting to use the reputation score in a competitive way. So why not give them the report with ranking them? And so now we’re starting to see some real traction in the market where some of their large groups are competing with one another. I don’t know if you’ve seen the AutoNation commercials, but there was a full set of commercials from AutoNation promoting that they were the number one public forums, large group. And those have been all over the wire for the last couple of months. And we’ve been told that a couple of our others, I’ll just say it that way, are going to go live with their own campaigns starting in October. So we’re pretty excited about some of the traction.

Kelly Kleinman: [00:12:21] Well, that answered my next question, which was why was the report developed? Was it to give authority enhanced competitive edge to Reputation.com, which I think it will anyway? Or was it more of a market study with that effect, but it’s also to enhance the quality of the visibility? Well, you can use it as an enhancement of your quality visibility. But let’s face it, when somebody goes to buy a car, the first thing they’re going to go to a search. Search is where it all starts. And, you know, being seen is one thing and then being respected due to what the people are actually seeing is a whole ‘nother deal. I will always take a look at the reviews of that dealership before I buy a vehicle. So I’m curious as to which criteria carry the most weight in scoring, considering that many dealers, just the you know, they use AI to bury bad reviews under a sea of 4s and 5s virtually deflect them completely from being published altogether, which was a way a lot of them started. You know, I actually was part of that for a little while where it would prompt you to, you know, to to give a review. If it was a negative review, it never got published. It was a positive review. They’d push you to up or they would automatically push it to Yelp or Google or Facebook or one of any other open apps that were on that particular customer’s computer.

Kelly Kleinman: [00:13:42] So there’s a question somewhere, I guess, criteria and weight of scoring.

Joe Fuca: [00:13:48] Yeah. So the interesting thing. So a couple of here, some positive things, right, for auto right where we’re focused on auto. The good news is auto as an industry has a lot of feedback, which is good. I know you talked about earlier potentially being negative feedback, but we’re actually encouraged that the auto industry accepts this kind of critiquing, I’ll call it by a bad word. But they accept critique and they’ve been improving. And if you look at the average, like we reported on automotive versus other industries, there’s obviously a higher reputation score now than all the other industries, like hospitality, dining, real estate, whatever. But if you look at the auto industry there, they’ve really kind of responded. And other than hospitality is really nice in terms of volumes of reviews for their for their dealerships. And I think I think they’re promoting and critiquing themselves in a way now they’re actually trying to improve their business. So there’s two things I want to say there. One is I think auto is excited and challenged by this type of criteria. And then I also think that remember, when we talk about the criteria, remember, we’re talking sales and service.

Joe Fuca: [00:15:05] Right. Because in the auto industry, service has become such an important piece of not only their business, but also their profit. And the ability to have strong service ratings is almost as important as the sales ratings in terms of pricing and those types of things. So so when we think about the criteria used in the reputation report, we took a look at 16,000 dealerships in North America, actually just the US. And I say that because we’re coming out with an international version soon, which will include non-U.S., obviously. And the 16,000 dealerships were part of the criteria. And then we split that criteria based on probably three major categories we try to look at the engagement score, the sentiment score, and then we kind of do some twists around, you know, the locations where they’re where their engagement and their and their sentiments score. So it’s kind of like that’s kind of how we break it up. And then there’s all kinds of dials inside of those major categories. That helpful?

Kelly Kleinman: [00:16:17] Yeah, it’s helpful. The interview will go for another three hours if we get into those subcategories. Can you draw a direct correlation between an increase in sales and an increase in reputation’s scored to show up his direct attribution? Or is it more of a third party influencer testimonial tool of sorts that the dealership uses in branding in the initial stages of a product search like I mentioned before?

Joe Fuca: [00:16:40] It’s really interesting. I’ll let Brad comment on a couple of things here, too. But we we’ve we spent a lot of time and effort with the data science team using actual sales results by location for some of the largest OEMs in the world and tracked reputation score over a two year period at those locations versus sales versus their reputation score. Brad, you can go ahead and jump in there a little bit.

Brad Null: [00:17:08] But yeah, I would say Kelly. This is Brad by the way that we’ve definitely we’ve done a lot of analysis to to tie, you know, direct correlation, direct relationship between the reputation score and not just sales, but but ROI and various sorts. Because as we were taught and I was talking about earlier, that’s really how we tried to build the reputation score so that we could understand how all these signals were tracking to value for for our dealerships, for instance. And until we do a lot of analysis looking at how all this stuff fits together to impact things like search rankings, like online conversion, you know, generating online traffic, foot traffic, sales, customer retention, you know, repeat visits. So, yeah. So definitely we’ve done a lot of that analysis to understand not just how kind of the overall score maps to these things, but how all of those those different components, you know, fit together and how to weight things so that we can try to get the most actionable score possible.

Kelly Kleinman: [00:18:05] What kind of manpower is involved in that? The question I have and I think there’s been some discussion behind the scenes about something that, you know, a project that I had in mind to do with you folks. And that would be is the data constantly coming in? Are you scraping the Internet and is compiling somewhere? How does it work?

Brad Null: [00:18:27] Yes. So, yes, the data is constantly coming in.

Brad Null: [00:18:30] I mean, as Joe mentioned before, referencing both, you know, the 190+ integration that we have, certainly others, there’s engineering manpower on the back end to set those up to make sure that those those remain stable, those integrations, those partnerships we have with companies like Google and other many other companies to make sure we can get that data. But that, you know, that’s that’s an engineering effort where we set that up, we maintain that. And the artificial intelligence machine learning, it’s just that it’s obviously our team, as Joe mentioned, has put a lot of effort over time into building. And we’re constantly refining these algorithms through, you know, constantly. You know, we’re there’s still so much more that we’re unearthing and so much more data. We’re constantly trying to get smarter and more actionable insights here. But by and large, you know, that that whole system that goes through and gathers the data and calculates the scores and pulls out insights, you know, down to a dealership level, that is that is part of our core platform now. So that stuff is is running, you know, just like any, you know, enterprise software platform.

Kelly Kleinman: [00:19:31] What’s next for 2020, guys?

Joe Fuca: [00:19:36] Good question. Well, I think it’s interesting, you know, we the based on the feedback that we got with this report, we were super encouraged that the coverage we got. You know, if you look at the report, you’ll see there’s some really compelling quotes from some of our customers in there from both Hendrick as well as AutoNation and Sonic Group. And I think what’s coming next in 2020 is is actually we’re going to produce a live view that will be updated once a month on the rankings of their rep scores on our actual Web site. So we’re gonna create a auto specific reputation score so that people can see how they’re doing on a monthly basis to see if they’re tracking on, you know, increasing their rep score or not. We’re finding a lot of our customers using the reputation score to potentially even pay bonuses and people being inspired and their management teams to have great reputations score. So I think the report in ’19 has created sort of this view that people want to see it more often. So we’re going to do that on our Web site. So in 2020, you’ll see our Web site launched with an area where people can check by location their their rep score in late 2019, early ’20. We’re gonna come out with our reputation score report on international, which we have a really big you know, there’s obviously a big group of autos in Europe and some of our customers, too. So we want to make sure we do an international view of this.

Joe Fuca: [00:21:15] And then I think it’s sort of stay tuned on 2020’s auto report in North America again, because I think what we’ll continue to do is not only post our people are doing on their rep scores, but we’ll get to a point where we’ll allow them to slice and dice the data even more interactively.

Joe Fuca: [00:21:34] And you’ll see that in probably our 2020 view, we’re coming out with a new version of our own reputation score product, which again, this report is not our product.

Joe Fuca: [00:21:46] This is an analyst report based on our data. But our own individual reputation score product will be coming out with new release towards the end of this year, early next year. Reputation Score 2.0. And there will be all kinds of new things in there that will probably, you know, configure and talk about as we look at really helping our customer base improve their reputation score and giving them more interactions on how they can improve it. Giving examples. So you might have excellent reviews, but your reviews need to be improved in terms of the volume and size of those reviews because they carry more weight that there’s more data. So we’re going to help our customers figure out how to do that in their review requesting and try to encourage them to, you know, get customers a little bigger review. So that’s just one example of probably a hundred that they could do to help their reputation score and we’ll get more interactive with them.

Kelly Kleinman: [00:22:47] Sounds great. I just received an update here.

Kelly Kleinman: [00:22:51] This interview got a 10 on a review score. So we’re going to have to factor that in the things. Guys, I want to thank you for joining us. That was the top kind of Reputation.com CEO Joe Fuca.

Joe Fuca: [00:23:05] Right. There you got it.

Kelly Kleinman: [00:23:09] Ali Fawaz, and Brad Null.

Kelly Kleinman: [00:23:12] This is Kelly Kleinman. Guys, hold the line. I want to thank everybody for joining us on the DealershipNews.com podcast. We’ll see you soon.

Kelly Kleinman: [00:00:14] Hello, this is Kelly. Kleinman.

Kelly Kleinman: [00:00:21] You are listening to the DealershipNews.com podcast, where we spotlight the who’s happening in the automotive industry. It’s footsoldiers, visionaries, salesmen, GMs, owners, service managers and industry vendors alike. Our guest today is a veteran of the car biz battles for many years and a person who I believe has his finger on the pulse of today’s online buyer. His business is digital retailing, and he is Mr. Tom Murray of WebBuy. Tom, thanks for docking with us today.

Tom Murray: [00:00:52] Hi, Kelly.. It’s a pleasure to be with you. And thanks for taking a few moments to visit.

Kelly Kleinman: [00:00:56] Well, thank you. I’d like to ask each of our guests how they got into the automotive industry and what makes them stay.

Kelly Kleinman: [00:01:04] So let’s ask you the same.

Tom Murray: [00:01:05] Great question. Started out as a college summer job in the late 80s selling Fords, and it was just supposed to be a break right during the summer. I was doing construction work and went through the training class. My second month, I sold 41 new Fords, won a trip to the Bahamas. And at that time that the amount of money that I made was astronomical. And I was taking pre law classes. I wanted to be an attorney and I said, I really like this this business. And 30 years later, I’m still here and I’m still passionate about our industry.

Tom Murray: [00:01:42] So a long and crazy journey. I spent the first third of my career in retail almost 15 years. Every job in a car dealership, including, you know, fixed operations, went on to be a general manager of some high volume stores and then was a partner in a dealer group. And in 1999, when there was a little family feud I bought, they bought me out my equity back. And I went to work for the old Pat Ryan company.

Tom Murray: [00:02:10] Today it’s Assurant, it had many names over the years, but I spent 13 years there and was the President and Chief Operating Officer of North American operations up until 2012, when Texas Pacific acquired our company. And I decided to put this word in quotes “retire”.

Kelly Kleinman: [00:02:28] But you never really do. You got pulled back in.

Tom Murray: [00:02:32] I did. I did. I met a fellow I did meet years before that.

Tom Murray: [00:02:38] Steve Zabala, my co-founder, owns a number of dealerships. And in Billings, Montana, it’s called the Rimrock Auto Group.

Tom Murray: [00:02:47] And he was actually a client. He sat on the board of one of my old companies, Captive Reinsurance Company. Actually, I think he still sits on that board today. But that aside, we started talking. We got to know each other professionally, you know, in those reinsurance meetings and then socially. And we came together meeting of the minds and said, nobody’s doing Amazon for the car business and why in 2012.

Tom Murray: [00:03:12] So here we are seven years later and we decided to create and build a dealer centric tool to be able to allow dealers to engage that CarMax, Carvana demographic. And in my old life, CarMax was was one of my biggest customers and learned a lot from them about how they approach that niche of the conflict averse buyer. My time’s too valuable buyer and and the differentiation points that they employed, right. To engage those people and then ultimately sell them.

Tom Murray: [00:03:44] And as a quick aside, to finish the story they make in their annual report excuse me, they make a lot more money. Gross profit wise. And a franchise dealer does. And I think they figured out a long, long time ago that if you are transparent with a customer, your gross is actually go up, not down. It’s not that hard concept for people in the automobile automobile industry who’ve been in it a long time to get their head around where we’re going. My my background

Kelly Kleinman: [00:04:11] We’re going to that’s that’s that’s a background that’s perfectly suited for what you’re doing now. Now, let’s imagine that you and I are in an elevator together. We’re getting to the 30th floor of the DealershipNews building in Miami Beach, Florida. And you’ve got to give me a 30 second elevator pitch, not a 30 floor elevator pitch, but a 30 second elevator pitch. And you’re on.

Tom Murray: [00:04:34] No pressure there. I guess I would say that that, again, Carvana and some of these other disruptors have literally launched an all out assault on the franchise dealer to engage that demographic that I alluded to a moment ago. That’s literally exploding as we speak. Those buyers that are demanding a self-guided vehicle buying experience and you’ve got a couple options. You can stick your head in the sand and pretend that’s not happening or you can get out in front of it and be an active participant in your own rescue, WebBuy was created by dealers for dealers to provide that that path of engagement to that niche of people that want to do it digitally and are all inclusive solution allows you to engage these customers at the end, they can actually enjoy a complete digital journey with an Amazon proceed-to-checkout experience at the end, and even if they don’t complete the process digitally, they have knocked out the vast majority of the time consuming elements prior to arriving at the dealership. And that creates much lower funnel, higher quality and higher closing late closing rate leads for you and your team.

Kelly Kleinman: [00:05:37] So we’re talking about folks just in case you don’t know, just in case you’re living in the Stone Age and you shouldn’t be at this point because people don’t necessarily want to have to go to a dealership to buy a vehicle. I think a lot of them would like to do it online. Again, you’re talking about the Amazon experience. So why do dealers need a digital retailing solution on their websites? What are they missing? And why don’t Web sites come fully loaded with the same features? What you’re offering seems a little bit like a retrofit for Web sites that are out there currently.

Tom Murray: [00:06:11] That’s a terrific question. I guess the level set expectations, I would first say to you that the vast majority of franchise dealers in the United States today don’t have any digital retailing solution currently. Why do they need it? I kind of alluded to it a second ago. And again, you know, when I’m talking about people who CarMax is original, you know, go to market strategy with a conflict averse person. Right. Today, people forget about negotiating. There’s there’s a big subset of buyers who don’t even want to talk to another human being.

Tom Murray: [00:06:45] Right. They’re so precondition with a phone or tablet to do everything digitally, everything online that they they won’t even engage with you if you don’t have a path and a welcome mat of sorts. Digitally to say you’re you’re welcome here. Right. You can do business with us and you can do it your way on your terms. And and I think that’s a big foundational tenant to kind of start with. Right. So what are Web site providers missing, I guess, is the is the question you’re asking me, why don’t they come loaded with the same features? And I’ll answer that in a way that I answer some of my competitive.

Tom Murray: [00:07:28] Differentiation points. Right. One of them is that most of the people in the industry. And I’m not casting aspersions here. Right. But let’s face it, if you’ve never sold a car, you really don’t understand what it’s what it’s like on a blocking and tackling basis to do that and then to try and digitize that experience. It takes a lot of industry knowledge and those there’s granular points and then there’s micro granular points.

Tom Murray: [00:07:58] Right. And again, I’m not casting aspersions, but the vast majority of these people are either tech people or they’re vendors, software vendors, and they don’t really understand Kelly.. At the end of the day, what those micro granular impact drivers are transactionally. Right. And then how to transpose them from a green sharpie marker and a four square worksheet to a digital experience and kind of replicate it. Right. So that’s that’s challenge number one. And then when you look at the digital retailing companies, some of them are also Web site providers, by the way. And and that’s okay. But again, I would apply the same thing. And then the other differentiation point is that most of them came to the world as something else. Right. And again, not casting aspersions, but there’s a couple out there that came as lending apps. Right. We’re gonna triangulate the consumer and the dealer and the bank and we’re going to create a lending opportunity or we were a lead gen company or we were a, you know, fill in the blank Web site company. And now to transition to a digital retailing experience. I can tell you after seven years of Steve and I grinding this thing out and all of the things we’ve learned and the impact drivers in it.

Tom Murray: [00:09:12] There’s a million moving pieces and parts. And so for these folks who are trying to pivot now, right in the last six to 12 months, when they recognize that we’ve got a solution that’s not A to Z, it’s maybe A to D, or A to M, they’ve got to pivot and and backfill. Right.

Tom Murray: [00:09:32] All of the missing pieces and parts. And it’s a heavy lift. So I guess that’s a long winded answer to your question.

Kelly Kleinman: [00:09:37] Well, that’s OK. I understand that there are a lot of moving parts to it and it is very well suited for being an efficient funnel. And I like and I folks, I’ve seen it. I have been witness to the demo and it’s well thought out. It’s as well thought out of not more well thought out than some of the competition. But let’s talk about those guys. So what are the primary I mean, and you mentioned going A to D. You know, I had a conversation with Nick Marconi, Taylor Auto Group, right? Yeah. And and we were talking about your solution. And he said that he has had the conversation whereby people who just go as far as the credit app and the trade appraisal tool and then pull out, they don’t finish. The rest of the process are still closing at 40 percent, which tells me something. So let’s let’s talk about the primary features of WebBuy that separates it from some of the other digital retailing solutions like MotoInsight. You mentioned some companies who actually do make Web sites like DealerInspire, who also have a digital digital retailing solution. Make My Deal, let’s say Modal.

Tom Murray: [00:10:53] Another great question, let me back up to your to your point about Nick and Taylor Auto Group.

Tom Murray: [00:11:02] When you say it’s not a small point, right. If you’re talking about third party leads, the industry average is give or take 8 percent, 8 to 10 percent close rate. Right. Organic leads is somewhere in the neighborhood of 15 to 18 industry wide.

Tom Murray: [00:11:17] So when you say that you have a 40 percent close rate on an Internet lead, it’s I. I’d like to take a second and take a victory lap there. Kelly. to be very transparent with you because it really is impressive.

Tom Murray: [00:11:32] And we like to share those kinds of success stories, right. With the world and our current dealer partners and our prospective dealer partners. It’s it’s something that when you. Now back to your question related to competitive differentiation points. Right. So. So I think you said that he said that just the appraisal tool in the credit app features really contribute a lot to that 40 percent close rate. Right. So the first thing and I mentioned this, I think in my elevator pitch, maybe I use the words all inclusive. Okay. So I was a used car manager. I was a general manager. I bought thousands of cars at, at auctions at Manheim and DSA, right all over the country. And when I when I looked at the appraisal component of this, again, this has been a seven year journey. And I’m gonna get to your to your question in just a second. But so as part of this development process, as we’re engineering our solution, I kissed every frog in the industry, so to speak, because, frankly, we didn’t want to build a trade appraisal tool. We thought we would integrate with others. And the deeper I dove having a lot of experience in that area personally. Right. The more I found that the vast majority of these tools have pretty big holes in them. Right. So at the end of the day, the short story is we built it ourselves. We created a customized back-to-dealer centric trading appraisal tool with a dealer, controls all of the input drivers in the trade appraisal process. They decide how much they want to deduct for breaks. They they decide how much they want to add for chrome wheels, whatever. Pick your your impact drivers in the process. In the process. But what differentiates us from everybody else is that everybody else has a sandbox. And there’s four squares. Right. And you can’t go outside those walls to have any input or or personalization or customization at the dealer level. Right. And that’s one of the most important profit centers, right. In a dealership, because you not only make the new car deal, but then you want to make a big profit on the used car when you sell that as well.

Tom Murray: [00:13:43] And that I had a I had a dealer long time ago when I first became a used car manager, he said, you make your profit and a used car. Not when you sell it. When you buy it. When you take it in, that’s when you make your profit. So we wanted to customize a tool that that would be a dealer centric functionality. And then all inclusive have that reside within and as part of the solution. So at the end of the day, if a dealer can put someone into a sandbox. Right. And let them play, so to speak. Right. Have them have the control, have them kind of self-desk their deal and have all of these input drivers. The trade in the credit personalization piece where there’s there’s only one other company that I’m aware of that in less than 60 seconds can take a full credit application, not a soft pull, not a pre authorization, preapproval and ping the lenders and take a call back and display it with a deal that’s approved, done, paper hung ready to go. Right. So it’s an it’s an all inclusive process. And you ask me what differentiates us. I could I could spend an hour and we don’t have the time for me to go through each of those other companies and what pieces and parts they are missing as compared to WebBuy. But we’re the only one that I know of. Kelly. that right this minute can take a consumer from hello the 10 steps to the sale. Right. We’ve just digitized them. Prompt, friendly, enthusiastic greeting to Amazon proceed-to-checkout.

Tom Murray: [00:15:19] And I’m not aware of anybody else that can do that right now.

Kelly Kleinman: [00:15:21] It seems as though a lot of people are just right now beginning to devise ways of appealing to a buyer that they don’t know, but that there’s some generalities about. And those are younger buyers, millennial buyers we can call millennials why not who don’t want to talk to to sale.

Tom Murray: [00:15:40] Don’t call it a Gen Z person, a millennial. They get a tendency of not getting.

Tom Murray: [00:15:46] So just as that aside, I learn I’ve learned some lessons through this process of gauging a young. Younger demographic. Yeah, go ahead. I apologize.

Kelly Kleinman: [00:15:55] Well, it makes sense. You know, I’m sure video plays an important role in your solution as well, because people want to take a look at it. Maybe, maybe there’s other ways of implementing video. I think people are more open to taking a look at how a good video for the kind of product that they want to buy if it’s a new car. There’s plenty of it out there, if it’s a used car. Obviously, we’re talking about it’s hard to make videos through literally every piece of inventory that comes to the dealership. But let’s let’s get into it. Let’s get into that. Let’s get into what percentage of consumers finished the sales process online. What’s the time frame factory in stops and starts? Because that’s a unique feature that your solution has in. So what is the general time frame that it takes? To, to complete the transaction? And by the way, there’s the start and stop assembly line. Famous for my family while starting the application. I’ll come back to it three days, four days later after that. Finally I finish up and it’s done on my time. I feel a lot more comfortable with that. And I left to know that my data is already in there. It has literally saved. So go into that.

Tom Murray: [00:17:01] Yeah, well, one of the things that we provide is that saving functionality. Right. So when you enter your information and the baby’s crying, you get distracted, whatever. You can come back later, pick it up right where where you left off.

Tom Murray: [00:17:19] You can start in in in your sweats at your house and finish in the dealership. You can start in the dealership. You can you can finish at home. A lot of our dealers find a lot of value in what we call a showroom mode. So in let me back up just from the differentiation point, there’s only just one other thing I’d like to add. Sure. That really differentiate differentiates us. And that is to the dealer centric kind of theme. We allow the dealer to run their business digitally, just like they do manually in in an in-store process. So they control every aspect of the transaction. We don’t tell them what we have best practices that we share and will help and train and all of those things. But at the end of the day, you decide how you want to price your car. You decide how you want to appraise your trade. You decide, you know, the F&I metrics in terms of marking up loans and F&I product solicitation. You do all of that yourself. So you you’re still running your business just like you would if someone walked into the store. But to the to the value prop of this, where I’m going with the showroom mode is a lot of these tech companies and quote unquote, disruptors want to eliminate, frankly, dealership employees. So one of the biggest challenges that dealership has, as you well know.

Tom Murray: [00:18:40] Right. If it’s a Saturday afternoon at 1 o’clock and I have 15 salespeople, invariably I’m going to have 20 ups. Right. It’s just it’s how it works on a Saturday afternoon. So today, the way the process works is a Kelly.. I know you drove that Cherokee. You’ve already been here. You want it, you’re ready to buy it. I’m just finishing with the Smiths. If you want to have a seat or customer waiting area, I’ll get your coffee, a water, a soda, and I’ll be with you in 20 or 30 minutes. I’ll check back. Right. That’s what happens today. And half of those people, it’s not 20 minutes because we set a bad time expectation level to start with. Right. It’s 45 or an hour. And then they end up walking out the door and leaving and you never see them again. Option B is, hey, Kelly., I know you drove that that Cherokee. You’re ready to go. I’m just finishing up with the Smith. And a quick question for you. I don’t know if you’ve been in a Wal-Mart or a Target in the last couple of years, but if you have, you probably seen that at either end of the store there’s these self-service checkout kiosks. Well, you know, here at Kleinman Motors, we’re piloting a new program. In fact, I’m one of the coaches. And if you would have an appetite and interest, we could probably get you out of here a lot faster. A and B, you could do a lot of this yourself. Right. So at the end of the day, does that sound like something you would have an interest in doing?

Tom Murray: [00:19:53] What’s the answer gonna be eight, nine, 10 out of 10 times, right? Sure. You sit him down at a desk and they work that that they’ll just like CarMax.

Tom Murray: [00:20:02] Right. And your salesperson, instead of getting rid of salespeople, because we know how incredibly difficult that is today and in today’s world to recruit salespeople to begin with and then retain them as a dealership right now with WebBuy your salesperson can handle three ups at one time. Right.

Tom Murray: [00:20:24] You have your phone. And here we go. We open up the application and we start selling your car. So the answer to your question is a couple of questions you had there. It takes less than an hour start to finish. Again, it’s a small percentage today Kelly. of people who go all the way through the application. But as I said in that elevator pitch, what it does is it A) opens a door, puts out a welcome mat to that to that millennial. Gen Z, Gen X buyer that wants that self guided experience that probably you would probably never meet. Right. They don’t want to do business with you. If they have to go through that six hour root canal on a Saturday, they’re just not going to do it, True, and they’re going to find another way to do it. And that’s why CarVarna, frankly, is having so much success. Forget about whether you believe that their business model has sustenance long term. That’s not even a debate. What what they have validated is in 2017, give or take. They sold 40,000 cars in in 18, they sold 94,000 cars became number seven in the automotive list. Biggest retailers in the country. And this year, if my math is correct and the data I’ve read, they’re on pace to do almost two hundred thousand. So whether you whether you believe in their business model or not. One thing they’ve done is to validate the fact that this demographic is exploding and there is a tremendous number of buyers out there that want to do business this way. So again, I begin finished where I began. Do you have a path? You have a welcome mat that says, come on in. We can let you do it your way. We can. We can let you take control. Right. And so at the end of the day, even if you don’t sell them a car, the long winded moral of my story is the leads become lower funnel. They become higher quality. And as Nick told you when you spoke with him on the phone, it’s a 40 percent closing rate. Right. Versus eight, 10, 15.

Kelly Kleinman: [00:22:23] Yeah, it’s the old Burger King. Have it your way, right?

Tom Murray: [00:22:26] Yes. Well, that’s exactly what it is. Yeah.

Kelly Kleinman: [00:22:29] So when will online buying become the norm and when will we hit over 50 percent of the consumers going that route?

Tom Murray: [00:22:35] I think it’s going to be sooner than most people think. I think you have to have a saturation rate of digital retailing tools. And I’m not naive enough to think that we’re the smartest people in the room or we’ve got the only good mousetrap. I think you’re going to have to have consumer confidence where they believe from a trust factor. It’s becoming like Amazon, so to speak, right? Right. And I think that when you look at speaking of Amazon and the competitive threat to the franchise dealer, if you’re not aware of it. One of the articles I read in terms of their strategy, they want to get in the car business. Right. They’ve tried insurance and they’ve tried other businesses. And I think they really have an appetite to get in the car business. What I read was that they intend to partner with larger dealer groups. Right. With a lot of inventory. And to find a way to utilize Amazon as a as a selling service, augmenting using the dealership because a franchise law is right to be able to fulfill that. I’m just here to tell you, if you’re a franchise dealer and you have your head in the sand and you don’t see this train coming down the tracks at you, we need to wake up as an industry. Right. So you can either get out in front of it and create a path to engage with these people on your own accord. Right. Either as a dealer or in conjunction with an OEM or these disruptors are going to continue to chip away and attack the franchise dealer model.

Tom Murray: [00:24:06] It’s gonna happen sooner than than most people think. I think I think it’s going to be a couple of years and you really see the pendulum start to swing to the digital.

Kelly Kleinman: [00:24:17] Well, you know, it’s my opinion that everything is well, it’s not my opinion, the fact that everything starts in the search engines. So if you’re the first inclination, somebody has to go online and jump on a search engine and look for a model, your dealership better show up. So, your SEO better be tight. And once they get to that Web site, you better be able to take them into a funnel such as your offer, because that’s probably what they’re more interested in, that you’re going to keep it if it’s if it’s compelling and that’s it’s going to keep them on the Web site. You know, you get your retargeting and now, you know, they already have some confidence because it’s a simple solution. Suddenly they’re used to doing it. Is the Amazon model, so to speak, and they’re not being put off by a pushy salesman or anything like that. I’m with you. I’m with you. A hundred percent. And I really did enjoy the demo that you that you provided for me. It makes a lot of sense.

Tom Murray: [00:25:16] Thank you again. And you clearly get it right.

Tom Murray: [00:25:19] We still go down a rabbit trail for another hour on an optimization and advertising and digital versus traditional. And but at the end of the day, you summarized it very well. That’s where the world is and and where it’s heading. Yeah.

Kelly Kleinman: [00:25:31] Now, here’s another thought. Would you be interested in teaming up with a Web site provider, a developer whereby is one of their choices, when their menu options would be a full digital retailing solution, you know, buy, web buy or even white labelling for someone like that.

Tom Murray: [00:25:51] Well, it’s a it’s a it’s a fantastic question. I’m going to table the answer on that on the partnering part of that of your question. But but I will share with you that we currently white label a number of things. We have pulled out our car valuator trading tool because we’ve had so much success with it.

Tom Murray: [00:26:11] We have over 60 percent of the people Kelly. that start the appraisal and finish it. Over 60 percent of those people accept the wholesale offer like an MMR minus minus, minus minus.

Tom Murray: [00:26:26] And I think it’s because they’re in control of the process, right. They’re appraising their own car as opposed to Tom or Kelly. telling you we got to deduct 500 for this and 300 for that. And you’re the messenger. You’re the bad cop. Right. So we white label that, for example, with a trade association in the Chicago area where they’re just using that because there’s so much value in just the trade appraisal tool.

Tom Murray: [00:26:50] We’ve white labeled it for dealers, dealer groups and we’re in discussions with OEMs and others to we don’t need to be the front facing. We’re not looking for the glory and and and the logos. Right. We want to have our partners succeed in if that if that includes, you know, being in the back end or nobody notices us and white labeling it. We’re already doing that?

Tom Murray: [00:27:18] So I hope that answers your questions

Kelly Kleinman: [00:27:20] It answers my question. But I have another one. Do you know what this weekend is, Tom?

Tom Murray: [00:27:27] I give I’m I’m a immersed in work, so forgive my ignorance on the calendar.

Kelly Kleinman: [00:27:33] Tom, it’s the last weekend of summer of 2019, OK? And so because of that, I am now playing one of my favorites.

Kelly Kleinman: [00:27:44] It’s by the Beach Boys and it’s Pet Sounds because I’m going to catch a wave out of here work in California.

Tom Murray: [00:27:53] Enjoy the last weekend of summer and in whatever you in whatever you have planned. And it’s it’s a genuine pleasure to visit with you. Thank you for your time. I appreciate your voice and our industry.

Kelly Kleinman: [00:28:07] You are a bright guy and people I know a lot of people look to you for counsel, for advice, for guidance. And and you’re a terrific ambassador for our industry. I appreciate you.

Kelly Kleinman: [00:28:19] Well, thank you very much, folks. Tom Murray of WebBuy look into it. It makes sense. This is Kelly Kleinman. This is the last weekend of summer. Go out and enjoy it falls right around the corner, folks. It’s the DealershipNews.com podcast. I’m signing off time to catch a wave.

Kelly Kleinman: [00:28:50] That’s a wrap. We’re done.

Kelly Kleinman: [00:00:17] Hello, this is Kelly. Kleinman, and you are listening to the DealershipNews.com podcast, where we spotlight the who’s happening in the automotive industry. It’s foot soldiers, visionaries, salesmen, GMs, owners, service managers and industry vendors alike. Our guest today is a fellow that I had the pleasure to meet at the Digital Dealer Expo a few weeks back. He elucidated me on how Cover Genius Co-creates insurance policies and experiences for customers of the world’s largest digital platforms for mobility and home car sharing to retailers, Fintechs and more. As business models have changed, so has the insurance industry and the way they cover assets.

Kelly Kleinman: [00:00:58] And I’ll tell you what, guys, I’m just so happy. Happy as a lark to have with us Mr. Austin Ledgerwood

Austin Ledgerwood: [00:01:06] Thanks for having me, Kelly..

Kelly Kleinman: [00:01:07] It’s a pleasure. It’s a pleasure talking to you. Let’s start off with the typical question. I ask it virtually everybody, because everybody has a different route to get to where they are. And I’m just kind of curious as to how you got attached to the automotive industry. Of course, in your case, it might have nothing to do with the love of cars. What was your path into automotive?

Austin Ledgerwood: [00:01:27] Absolutely. Well, I did grow up with a love of cars. My dad is an avid car buyer. He’s done everything from restorations to driving new cars. Is his big favorite, was always Corvettes. So I kind of got that early feeling about cars when I was a kid.

Austin Ledgerwood: [00:01:50] And then when I got out of college, I had a great opportunity to go work for CarMax, which I learned more about cars then I ever really wanted to know as a buyer. And it really just kind of fueled that that real interest into this whole crazy auto industry.

Austin Ledgerwood: [00:02:11] It’s it’s it’s a lot of fun. I had to tell you that there’s never a boring day in automotive. And whether it’s working at a dealership, which I did for a while or sitting in a corporate office, it’s never boring. Kelly..

Kelly Kleinman: [00:02:22] What was your dad’s first Corvette?

Austin Ledgerwood: [00:02:24] He had a I want to say it was a 74, 74, but his most favorite one was that he bought and restored a ’61 Corvette red with the white inset panel on the sides. It is gorgeous. I mean, he even had a T-shirt made with it on it.

Kelly Kleinman: [00:02:45] Oh, sweet. They still have it.

Austin Ledgerwood: [00:02:47] No, he got rid of that probably…You know what? I’ll tell you what it was after a graduated from college because I remember I got the drive it for the first time. Oh, so he got I bought 20 years ago.

Kelly Kleinman: [00:02:58] You’re an old man. Well, let’s let’s let’s get into the meat and potatoes. How about the 30 second pitch make it an elevator pitch? Pretend that I’m the president of Fire Forward Auto Group and you want to sell me?

Austin Ledgerwood: [00:03:12] Absolutely. You know, like any dealer, you ought to be sitting there thinking about how do I truly acquire that sticky experience that everybody’s talking about. And really, the one thing that you still have your customers jumping outside to take care of is insurance. Either that or you have an agent in your on your property that you’re renting out necessary space. So for us, it’s really how do you treat that environment and actually we provide that environment where you can offer your customer that’s sitting in front of you auto insurance at the time of sale versus them having to go out and have a separate experience.

Kelly Kleinman: [00:03:51] Yeah. Okay. I’m sold now to best elucidate how Cover Genius works. Compare because you brought up a good point there. Compare the standard insurance purchase process employed now by most dealerships with customers for that matter, with how Cover Genius streamlines the process because it’s all about the process. From what I remember a conversation being and how you customize. But let’s get into the differences between the two standard and the Cover Genius method.

Austin Ledgerwood: [00:04:20] Absolutely. Well, if you think about it right now. As soon as you buy a car, you have to have insurance. You can’t drive it off the lot without insurance. So you do have a scenario where some insurance companies have a grace period. But realistically, the dealer needs you to have that car insured before you even leave a lot.

Austin Ledgerwood: [00:04:36] So right now, the setup is either you go on your phone and you look up quotes via an app, you have to your current provider or you go to an aggregator like the General or you know, there’s this couple different ones out there, there’s zebra or you have to make a separate phone call.

Austin Ledgerwood: [00:04:57] And what I would find funny is that regardless of what the path is, you have to provide the insurance company with the same information you’ve already provided to the dealer. And what I’m talking about is personal information, your address, your credit information, your driving history. Your type of car. All this information, the dealership has most of it. Because you’ve already provided it.

Austin Ledgerwood: [00:05:22] So now you have to take all that information again and send it to the insurance agency. And what they’re going to do is plug all that information in and then they’re going to send that same information repackaged back to the dealer with insurance approved. Which to me is just a crazy added step.

Austin Ledgerwood: [00:05:43] You know, if you think about it, the F&I, the name F&I came from finance and insurance and it was about securing auto insurance for your car. So that’s where, you know, the original F&I name came from. And now it’s morphed into other things in the real differences with the Cover Genius experiences that we now enable an F&I manager or a sales individual to actually show the retail consumer insurance quotes right there on the spot because they have all the information and it could be everything from the customer being able to self select all the particular different parameters for insurance or even if something as simple as good, better and best options for insurance. And that’s the real difference with Cover Genius is that with our API, we’re able to take that information and actually return products that are tailored to that customer, not the generic. Hey, here’s what it could be. Hey, here’s what it is for Kelly. as you’re buying in your car that you know Kelly.. That’s the real difference between us and the standard process now.

Kelly Kleinman: [00:06:53] Yeah. I’ll tell you my experience. Yeah. It starts with having had the same coverage I think for the last few years. I go through Costco, I’m about to add an old Audi into my fleet. I’ve got two sons. They’re both 17 years old. And I called Ameriprise, I believe so insurance company through Costco. And I had to give them all of the information mileage that I was going to drive, who is going to be assigned to which vehicle? And it still took. And I’ve been with them for a while. It still took about 40 minutes to get a final quote. So if somebody has a current provider, how do you compensate for a situation such as that? Somebody walks into a car dealership. They just want to add the car to their current policy, to their current policy and get a quote for adding that vehicle. Now, I’ll tell you, when I did call Ameriprise, they set it up to where I’m actually paying only twenty five dollars per month for this for this car, in addition to what were my normal payment was. So they were able to go in and sort of manipulate the numbers and give me a much better deal. You’re talking about possibly doing something like that, but certainly getting the consumer the best possible deal that’s out there in insurance for their vehicle. It is. What’s what’s the time savings and what do you find overall might be the dollars savings in something like that? I know. I know. They didn’t skip that question to you. I don’t want to throw you a curveball, but but I would like to hear what your answer is on something along those lines.

Austin Ledgerwood: [00:08:31] No. Absolutely. So we talk about time. You yourself just mentioned it right there that, you know, you’re looking at 40 minutes. So imagine that you’ve been in the dealership. For what the average time is, what, three and a half, four hours that people spend in a dealership. Yep. So you’ve been in the dealership. You’ve, you know, you’re negotiating to get the price you’re comfortable with. And now you’ve got to go have a separate conversation that may take you 40 minutes. That’s a pain in the butt. And then also taken to to the fact I think you hit on it. You went with the company that you’ve always had. Right. Correct.

Austin Ledgerwood: [00:09:10] You have without looking you have no idea that you’ve got the best rate, that you’ve got the ideal coverage for you. You went and this I do the same thing. You know, I have State Farm. I just called State Farm and said, hey, State Farm. I need to change our policy. I just bought a new car. Like, okay, no problem. Let’s go through the information. I don’t know if I’m getting the best deal now. I’m assuming I am because I’ve been with them forever. So for us, it’s that ability for you to see quotes that are particular to you, that are particular to this car, that are actually live in real time. So we can reduce the 40 minutes. We can reduce the effort of, you know, like you just said, having to provide all this information, spending time we can cut down or actually eliminate the need for you to do any research, because we’re going to go and get the particular rates particular to what you want. And then when you talk about in just terms of cost savings and money savings.

Austin Ledgerwood: [00:10:15] It could very well save you all kinds of money because you’re able now to shop and look for the best rate, you’re able to get particular details and see what you’re getting immediately. So in terms of time savings, huge. In terms of money savings, there’s absolutely an opportunity to save money through this process.

Kelly Kleinman: [00:10:35] Transparency and trust go hand in hand. No question. Absolutely. So one of the things that Cover Genius boasts is coverage customization. I would love to learn more about that. It sounds fascinating.

Austin Ledgerwood: [00:10:53] Absolutely. So a little backstory on Cover Genius.

Austin Ledgerwood: [00:10:56] You know, originally it was started, as you know, for the in the rental car market and travel market to where if Kelly.. We’re going to book a trip or Kelly., we’re renting a car, you know, hey, do I need to get a, you know, extra coverage for my trip?

Austin Ledgerwood: [00:11:13] And our founders were seeing was just consistent, this box mentality. You know, that, you know, no matter who it is, you’ll pay this. So it’s 50 bucks for me and it’s 50 bucks for you.

Austin Ledgerwood: [00:11:28] And I might have never had a claim and have all kinds of stellar credit and everything you could think of in my favor and you could have it better or worse. We would still pay the same price. That doesn’t seem like the right thing. So Cover Genius developed XCover, which is this is this really dynamic API that takes all of these different data points related around the customer. We’re related around the transaction in the related around the coverage parameters or desired coverage parameters, and it might even take previous purchases to help determine what products would be best for you. And that’s where we’re the real differentiate for us, is that we’re able to return real time customized products. So if you were to go through the just the simple auto coverage piece to where you like. All right. I want to do the state minimums, but I want to have rental car coverage and I want this. Hey, here’s a price immediately. And a key thing. Kelly. is you’re not going to get a phone call or e mails saying, hey, do you want to buy this? Hey, do you want to buy this? Which is a horrendous part. You know, if I go and put my information into some of the insurance aggregators, I may get 12 different emails and 12 different phone calls from 40 different people and they may all work in the same office. I have no idea that I’m going to get so many different phone calls that it just doesn’t make a bit of sense. I have. How do you sort through that to find the best deal?

Kelly Kleinman: [00:12:59] Right. Yeah, it becomes a jump ball of your personal data. It happens with classified auto shopping. Same exact thing. That’s problematic.

Austin Ledgerwood: [00:13:11] Absolutely. So when we talk about customization, it really is returning a product that is specific to the end user and it’s based on their data points and then other outside data points that they’ve contributed.

Kelly Kleinman: [00:13:29] Let’s chit chat about XCover. Break the concept down for us, complete with a value added proposition to businesses who jump in with.

Austin Ledgerwood: [00:13:39] Absolutely. So I kind of alluded to earlier XCover really this dynamic insurance API and, you know, I’m probably selling it short by saying just insurance, but it really is this dynamic API that can truly provide products that really are specific to the individual.

Austin Ledgerwood: [00:14:02] You know, there’s a lot of different platforms out there that say that they can, you know, fully understand what what the end user wants, what the retail customer wants. And they use all this different data and they use all this market data. We’re really focused on providing the individual data. You know, it’s not only bundling insurance policies that are relevant to that person, but our platform form helps support multiple currencies and languages. And that’s something key that as you’re travelling or as you move from different markets, you know, with auto insurance, it doesn’t hit so much. But let’s say that it is a Spanish speaking individual in South Florida or in Texas or California or New York or wherever they live, and they want to interact with Spanish. We have that ability to return products in the right language when there’s an issue and they converse with us. We have the ability to return information in the right language. And then also it starts to project out farther down the line, taken that customer level information. And looking at what they could be worth over the lifetime, what’s the loyalty? So not only does it let’s say that an individual uses purchase insurance through our platform at the dealership, which is integrated with the dealership’s DMS, that it also will help them understand, hey, you know, these products may help you down the line, too. Or also help them when they go into another engine. Let’s say that, you know, we have a strong partnership booking, it’ll recognize that this individual also bought this product here. This insurance product through this channel. Now, when they come through this channel and they’re using XCover, it recognizes their information again and gives them even better detailed product and information that’s really, you know, XCover’s real push.

Kelly Kleinman: [00:16:13] Now, you’re a global company. You guys have been around a while and you actually insure people and products all over the world.

Austin Ledgerwood: [00:16:23] Yes. What? You know, I joined Cover Genius in February and it is just such a fun, outstanding company to work for. I’ve been very fortunate my career to work for outstanding large companies like Cox Automotive, Southeast Toyota, Chain Family and then CarMax. And I generally have to tell you that there’s there’s so much excitement in this organization and there’s so much that I have learned from it being a truly international entity. You know, we have offices in Europe, offices and the Asian market.

Austin Ledgerwood: [00:16:59] And it’s really you know, one of the things for me that’s been really interesting is to understand how the automotive industry operates outside of just the U.S.. It is a fascinating how quick, you know, an industry like subscription is taking off in India and in Europe. I mean, just blowing up. So Cover Genius. We have the skill set and now we really have the knowledge base internationally to light this world on fire.

Kelly Kleinman: [00:17:32] Well, you know, that’s that’s actually a question that I did not include for this particular podcast, but it’s something that needs to be talked about. And that’s the fact that the ride share in that the ride subscription is something that is other mobility solutions and something needs to be considered. And you provide insurance for all of those solutions. You’re very much a forward thinking company on that level.

Austin Ledgerwood: [00:18:00] Absolutely. You know, one of the things that I love most is that, you know, my focus is mobility. And it’s really, you know, the the way for someone to get from point A to point B. And that would include everything from scooters, which I think is a very interesting market ride share subscription. And then, you know, the rental cars and the automotive and, you know, the general automotive market. I think that it  is such a wildly dynamic industry right now. And I’m genuinely excited to see how it progresses. I think that, you know, from an insurance standpoint, you’re going to start to see products that evolve into covering an individual regardless of their mode of transportation. So if I’m on a scooter, I’m covered. If I jump into a rental car, I’m covered or a subscription I’m covered, or if I’m in a ride share car, I’m covered. It’s really evolving.

Kelly Kleinman: [00:19:04] Yeah, exactly. Exactly. No. I own these things called trikes. Trikkes. Yes. And they’re a mobility device. They’re a you stand on it. It’s a three wheeled vehicle. It’s electric. Goes about 17 miles per hour. It gets about an hour’s worth of ride time on it. And we had it took us a little bit of time to find the proper insurance for something like that. That was about I want to see now about three years ago before they dropped all these little scooters down in Santa Monica, we were actually doing pretty good with it. Let’s let’s talk about claims because it can be a clunky process. I know. You know, usually. Oh, by the way, you mentioned being in rental car insurance. I was in the rental car industry myself. That was my first job out of college, my first real job. So I’m very familiar with it, to say the least. But let’s let’s get into the claims, because that’s basically what we were focusing on, putting people in rental cars after they’ve been in an accident. Usually you’ve got the incident that the vehicle gets towed to a preferred body shop and adjuster shoots out. The claim is processed. Customer gets a few quotes, maybe two to four weeks later, you have resolution. Is there anything different in the coverage genius world that provides a faster process as far as claims are concerned?

Austin Ledgerwood: [00:20:23] Oh. Absolutely. I’m glad you brought that up. No. You know, we have a platform. XClaim is our platform, our API for processing claims? And one of the things that we’re really proud of is that our MPS score is over 65. And what that means is and you know, some folks I had to look it up, you know, that’s how willing is a consumer going to refer you spend with you again, shop with you again, trust you.

Austin Ledgerwood: [00:20:56] So for the insurance industry, the average MPS score is probably in the high 20s. So for us to be over double that is amazing. And it really gets back to that.

Austin Ledgerwood: [00:21:11] We make decisions quickly through our claims process and we pay you quickly. And again, I mentioned it earlier with languages, you know, currencies. We process payments in 90 different currencies. And it’s all you know, it doesn’t matter how it comes through. We can do it to bank transfers, virtual card store credits, anything would do it.

Austin Ledgerwood: [00:21:37] E wallets in the communication in which we process the information to you is at lightning speed. And it really goes back to how do customers want to interact and how do they want to get paid. Because if they’re making a claim and it’s been approved, they won’t be paid immediately because odds are they’ve already come out of pocket, right?

Kelly Kleinman: [00:21:58] Yeah. Absolutely. What do you guys have for us? Plan. I’m sorry. I’m sorry he’s gone. No, I was. I did know that you were finished. I wanted to find out what you have in store for us for 2020. Certainly you’ve got something in the oven.

Austin Ledgerwood: [00:22:12] Absolutely. So I think that, you know, one of the key areas of where we’re seeing a lot of growth is around the scooters. Like we just mentioned. And then also subscription as we seen in Europe and India. It really is that market is exploding and it comes down to the needs.

Austin Ledgerwood: [00:22:35] You know, I hate to say it’s millennials. I think it’s everyone gets to a point where if I don’t have to own something, how to pay for it, you know, maybe I can get it. You know, Netflix is a great example. You know, maybe I can just subscribe to it. And for us, we’re really moving headstrong into this new mobility market and having coverage on demand, which is there’s a huge need for and there’s not a lot of opportunities.

Austin Ledgerwood: [00:23:02] And, you know, for the consumers, not a lot of not a lot of products for them to get a hold of. And then also, you know, integrating with DMSs to continue to push auto insurance is really going to take off. There’s a lot of digital retailing companies that like Cavana, vroom, Tesla that are really taking off. And one of the things they’re missing is having insurance as part of the process. And so we see that as a huge wide open space for us as well.

Kelly Kleinman: [00:23:35] I have one. One more question, and that would be your insight again into the future, probably a little bit beyond 2020. But is there the possibility that we could at one point have blanket coverage where I am covered in any mobile device or mobility device that I choose to ride and drive and ride on whatever I offer one price. So I’m going to spend X amount of dollars to go into an autonomously driven taxicab or vehicle, a scooter, a motorcycle, a car, whatever. Do you see something like that happening or is it always going to be itemized?

Austin Ledgerwood: [00:24:19] I would tell you this. Kelly. that you’re going to see it sooner rather than later. It is one of the top priorities that I have. And yes, you will see that. And I don’t think that’s long term. I think that’s in the short term, you will see great companies like coverage industry offering just that.

Kelly Kleinman: [00:24:37] Well, I want to say thank you so much for joining us. Folks.

Kelly Kleinman: [00:24:42] That was and is Austin Ledger, where the company is Cover Genius, and Austin, I want to I want to wish you a ton of continued success moving forwards. We’re working, folks. Reach you for more information.

Austin Ledgerwood: [00:24:56] Absolutely. They can reach me at Austin, A-U-S-T-I-N dot L at Cover Genius dot Com even through our Cover Genius dot com website. LinkedIn page, Twitter. All the good social media. We are out there. Just ask for Austin.

Kelly Kleinman: [00:25:11] Look, folks, that’s one of my new best friends. Austin Ledger with this is Kelly. Kleinman. You’re listening to the DealershipNews.com podcast. Actually, we’re done with for the day. We’ve got a couple more scheduled this week. So stand by for those, meanwhile. Have a great afternoon. I love that hokey 70s cheesy music.

John Sevier Podcast.wav

Kelly Kleinman: [00:00:18] Hello, this is Kelly Kleinman. And you’re listening to the DealershipNews.com podcast, where we spotlight the who’s happening in the automotive industry, its foot soldiers, visionary salesmen, GM owners, service managers and industry vendors alike.

Kelly Kleinman: [00:00:34] Our guest today is John Sevier of the soon to debut severe strategy broadcast, which will be available right here on DealershipNews.com. John has sharpened his sword as an Internet/BDC director for Northgate, Ford, Lincoln Kings, Toyota and most recently the Kenwood Dealer Group. So he knows a thing or two about working the web and getting results. John, welcome to the podcast and welcome to DealershipNews.com.

John Sevier: [00:01:02] Hey, Kelly, how are you today?

Kelly Kleinman: [00:01:04] I am doing great. It’s sunny in Southern California. We’ve got mid 80s. We’ve got sun and surf and bikinis. I couldn’t ask for more.

John Sevier: [00:01:13] I was going to. It’s hard to stay in an office today like today.

Kelly Kleinman: [00:01:16] One thing we don’t have is Kings Island. We have something called Disneyland. I’m teasing.

John Sevier: [00:01:23] Not really on the same playing field there. But, you know, we do love Kings Island.

Kelly Kleinman: [00:01:27] Kings Island is fantastic. I went to the University of Cincinnati, folks, and of course, Ohio State for the Ohio State University. For anybody who’s listen to the podcast before, you might have heard me mention that. Let’s let’s start off by finding out how the heck you got into the automotive industry. John, was it something you were attracted to or did you suddenly wake up to new car smell and stale coffee?

John Sevier: [00:01:50] You know, I kind of got pulled into the automotive industry. I used to run it and help manage a call center for a large bank. And, you know, managing around 100 people, doing customer service, a little bit of outbound sales on the phone.

John Sevier: [00:02:09] And, you know, there was an Internet director position that opened up with an automotive dealership. That was Northgate Ford at the time. And, you know, kind of went over there and get my toe in.

John Sevier: [00:02:22] And I’ll tell you what, I I don’t know that my love for this business can can ever be changed. You know, when I started there, it has been wonderful ever since. And I just got addicted to everything automotive, jumping in and making sure that, you know, it’s just a wonderful world to be a part of in sales.

John Sevier: [00:02:46] It’s competitive. And it’s kind of pulled me in ever since. And I don’t think I’m going anywhere anytime soon.

Kelly Kleinman: [00:02:53] Well, we hope you did well. We know where you’re going. You’re going up to one of the sharpest Internet guys in the industry. So why don’t you share with us, your industry timeline since you were hired? You mentioned Northgate, Ford, Lincoln. And what is it that you’ve learned in the years that you’ve been in the industry? And what do you need to teach to dealerships?

John Sevier: [00:03:12] You know, I I’m a huge data nerd, and I will fully admit it. You know, I started a while ago as an individual store. So just one dealership, one rooftop where I was managing a small staff of about three Internet sales representatives. And from there, I, you know, grew into sales manager role with a with a large dealership selling about six hundred cars plus a month. So that was definitely very interesting. And from there, I decided to take on the role for a centralized BDC for 14 dealerships and build that from the ground up. So, you know, as as you get started there and building that that whole foundation and hiring 20 plus people, writing all the processes and doing all of that, it definitely made me rely on some of the great minds that are out there because I told you I’m a huge data nerd. But the other thing is I will never stop learning. So there’s a lot of great content out there that I was able to really dive into and implement some of those ideas and strategies that helped me become who I am today. And in turn, you know, I think it’s important to realize your strengths and your opportunities. And one of my strengths is definitely the BDC world, the digital side of things, as well as a little bit of operations. And so I wanted to kind of give back and offer a place and a podcast for somebody to listen into to get some really strong information without all the fluff, just to be able to walk away after they listen to this podcast with actionable information and strategies that they can implement at their dealership. The same way I was able to learn and educate myself on some of the other platforms or forms that were out there before.

Kelly Kleinman: [00:05:14] Before we get into the pod. Yes. Which is something we’re all really looking forward to. Tell us what you’re doing now that allows you to fill up your shopping cart at the grocery store.

Kelly Kleinman: [00:05:27] I love that question, by the way, you know. You know, what I’m doing now is I am the current CEO of a company called Dealer Advantage BDC. So it took all of all of the information that I had. And, you know, the progressive tactics of shooting video, you know, really communicating with the customer and making an unbelievable BDC department. And I wanted to make sure that we could offer that to other dealerships that may not have the time or the capability to build their BDC and train them constantly and stay progressive. I mean, it is a lot of work and it’s definitely successful if you do it in the story, you know yourself. But let’s face it, you’ve got to get expert in there to really run it. You don’t want to just get some random person. So just like with everything else, we wanted to offer a solution to, you know, one of the problems that’s out there is handling your online customers. And, you know, we take pride in doing that and making sure that we deliver exactly what we say we’re going to deliver, which is a great online customer experience to get them to communicate with us and get them into your showroom.

Kelly Kleinman: [00:06:41] Sometimes you’re just not going to hire the greatest talent. Let’s face reality. It’s sort of a hit or miss. You try to get the best people in there. But if it’s a processes game and it works and I think you’re more than halfway there. So it’s important, as you mentioned, to have a solid BDC strategy. And that’s I guess that’s what you’re doing. You know, it’s just a matter of whether or not the dealerships want to go along with the program in getting everybody to buy it. But when they do talk to me about the results, they can expect.

John Sevier: [00:07:08] Yeah, I think it all starts with, you know, culture. And the reason I’m going to start there with your question is because, you know, you talked about hiring people and retaining them. One of the you know, you talked to a lot of Internet managers or BDC managers or just managers in general in the automotive space. And they they love to talk about their accomplishments or how many cars they saw. One of the big things that I like to discuss and, you know, wears a badge of honor is in the BBC world. When I was running a centralized BDC, which is just very recent before starting this company and offering a solution, we had around 25 to 30 employees for BDC wrapped handling these Internet lead. And in 2018, when we closed out the end of the year, we had a turnover rate of 9 percent. And that’s going to include involuntary, involuntary. And so we promoted people up. We really built a strong culture. So we have those experience BDC reps that honestly are trained and educated on the product, more so than some of the salespeople we even have in the dealership. And so what that’s allowed us to do is deliver, you know, a lot of response back to the customer that they’re talking to, somebody that’s actually educated and knows what they’re doing and going through a training program. We make training mandatory.

John Sevier: [00:08:32] And, you know, when you build a culture of success and, you know, the Internet level, what happens is you really get some strong results. You know, we talk about training. We talk about process. We talk about operations. But the biggest win for us is setting those clear expectations and building a culture where people actually enjoy coming to work, because as you know, you’ve heard it before. If you talk to somebody and they’re sitting up in their chair and they’re smiling and they’re having a great day or they’re enjoying what they’re doing, that conversation, that inflection and the tone, all of that comes across. And that’s some of the things that set us apart. And what we’re able to deliver for dealerships, you know, we’re shooting personalized videos for every single Internet response. There’s no excuse. Every single Internet lead that comes in, we’re gonna shoot a personalized video where we hold up a sign. Right. The customer’s name on it. And we see about a 70 to 80 percent click the rate.

John Sevier: [00:09:30] And that is what we’re able to deliver. We’re able to deliver a customer experience that they want to work with. Whatever dealership that we’re representing when we’re answering the Internet leaves for these, you know, other dealership, which right now where we’re growing with an intern, you get all the wonderful stuff from that.

John Sevier: [00:09:51] You get the appointments that show. You get the sales that come with it. But it starts with, you know, your team and building a strong culture and process around being able to deliver upon appointment, set and shown and visits and deliveries.

Kelly Kleinman: [00:10:07] Great answer. Well, let’s Paolo on the podcast. What do you want to accomplish? What’s the theme and how often are we going to be listening in?

John Sevier: [00:10:17] I again, I appreciate the question. The. The main thing that we want to do is try to get out a weekly podcast. We’re going to shoot or Tuesday or Wednesday of every week. We’ve already got some podcasts started that we’re really excited about. Just to touch base on something, I am definitely what I consider her an expert in the BDC world. But by no means am I an expert in every facet of the automotive industry, and I don’t think I should sit there and pretend to be. So what I’m really excited about is delivering a weekly podcast to where we are going to have industry experts on. We’ve got David Cain, who’s going to be on there. We got Sean Kelly. And I’m not trying to name drop, but these are a lot of people that I have a ton of respect. Well, we have Steve Wrestler. I mean, we just did a podcast on video and video engagement with customers. So when you listen in every single week, whether you’re on break, your lunch, you know, your drive. We want to be able to deliver that podcast that you can walk away and have great information and new techniques and strategies to implement at your dealership.

Kelly Kleinman: [00:11:28] Well, you’re mentioning Sean Kelly and Steve Roessler. I have no idea who those guys are, but teasing unbelievable individuals. My favorite people in the industry. So you’re going to be working out of a skit. Are you going to be working out of a fashionable podcast studio in beautiful downtown Burbank, or have you repurposed your uncle’s tool shed in Beaver Creek or something in between?

John Sevier: [00:11:51] You know, it’s funny. We are in the BDC that we’ve built for Dealer Advantage BDC. We are in an old dealership. So we’ve got the glass front. That’s where we have the podcast. So we want to make sure we did this right. You know, we definitely have our studio, but it’s not where you are. We don’t have the sandy beaches and the wonderful weather. You know, you’re around. I mean, I’m in Cincinnati, Ohio, where, you know, I could I could go into work. And if you 60 degrees and, you know, by the time I leave is 20 and, you know, by the by the time I decide to go to bed, it back up to 80 degrees again. You never know what’s going to be what the weather is going to be out here.

Kelly Kleinman: [00:12:29] Well, it all sounds fantastic. You have my full support. I want to thank you for popping in and give us giving us the lowdown on severe strategy. I consider it a must listen for any dealership looking to get an edge up and then some, you know, good luck with that. When are we going to be here and. What’s what’s the timeframe?

John Sevier: [00:12:45] So we’re launching next week.

John Sevier: [00:12:48] We plan on today is the eight. We plan on getting our first podcast out so everybody can listen to it. And that’s the one on engagement around how to implement video into your dealership. Best practices around video. That’s going to be launching on the 13th of August 2 next Tuesday, 13 of 13th of August.

Kelly Kleinman: [00:13:09] That’s right. I will be flying to a beautiful Columbus, Ohio. Oh, by the way, I’m sorry. I’ll be flying into Cleveland, then into Columbus on the 16th, and then I’ll be in Las Vegas at the Digital Dealer show. You’d be going digital dealer by any chance.

[00:13:27] I am not. I promised the family that we would go on a vacation before we kick off everything for, you know, full court press full steam ahead with the podcast, because I want to make sure that you know what we say, we’re giving the content out that we deliver upon that. So we’re going to be taking a vacation during that time. So I’ll be missing digital dealer.

John Sevier: [00:13:50] But I will be at every other conference of teams that coming up within the next year.

Kelly Kleinman: [00:13:55] Maybe we’ll do a podcast together. Well, folks, you’ll be able to hear him on DealershipNews.com very soon. So stay tuned for severe strategy. The podcast is up and coming. Well, that’s off for today. I’m headed to the beach. Going to catch the last waves of summer. See you soon.