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What the Next Generation of Data Looks Like for the Auto Industry · Market Pulse

• Market Pulse Orbee Transcript 9/7/22 Brian Epo (00:00): Welcome to our Market Pulse podcast brought to you by Equifax. My name is Brian Epro, and I'll be your host for today's episode. Before we begin, I want to make a comment to you, our listeners, about something that I've been noticing quite a bit. I'm noticing this in a lot of different verticals, but in particular the auto industry, which is where I originated from. What we've been seeing over the course of the past couple of years is kind of diminishing returns on the use of data in the industry. There's been some usage of data that's actually harming the customer experience rather than enhancing the customer experience. The upside to that, though, what I'm also seeing is that the industry understands that that's going on and is looking for kind of next generation data sets, data tools in ways to engage with customers that actually do provide a better customer experience. But they're looking to make a lot more sophisticated use of data tools than they have in the past. Brian Epo (01:03): So if you've noticed the same thing, and you've kind of been wondering about what's going on, then this podcast is for you. And I thank you for joining. I hope that intro is indication enough that we intend to take a different tack with this podcast. What I don't want to do is have a conversation where we're just repeating what you're hearing from dozens of other podcasts, every week. We all know the types of conversations that we've been hearing for so long. Now, what we want to do is talk to people who are bringing new perspectives to the conversation. So the concept of perspective is what I want to bear down on first. And to start, let me give you a little bit of my perspective. I've been in the auto industry for 25 years. I was hired by a woman who'd been in the auto industry for 30 years before she hired me. Brian Epo (01:53): And she became my mentor. And she told me when she hired me kind of fresh out of college was that she could tell right away that I was a car guy. And, and that's true. I was born with the Hot Wheels in my hand. I always knew I was going into the industry. But I think we all those of us who work automotive understand what I mean by this, that when you speak to somebody, you know, if they're of the industry or not. We also know how difficult it is to enter the industry if you haven't been born to it, right? What has really made me look forward to today's conversation is the fact that we're going to have it with a gentleman named the Atul Patel, who's the CEO and co-founder of a digital automotive digital marketing platform called Orbee. Brian Epo (02:34): And what makes Atul so unique is that he wasn't born a car guy. It's somehow seaped into him. Prior to founding Orbee, Atul was with Countrywide financial for quite a while. And then he went on to co-found and sell five MarTech companies and ad tech companies while being deeply involved in a handful of other companies. His broad experience has given him vast exposure in marketing data and advertising tech that allows him to connect the dots in a way that a lot of people aren't able to do. Around seven years ago, he co-founded Orbee and made his entry into automotive. And what's very cool about Atul is he very quickly not only entered auto, but become an expert and become a known speaker and an opinion leader and a thought leader within the industry. He has in effect turned himself into a car guy, but he's a car guy who brings years of experience from outside the industry to bear on automotive topics and problems, and his perspectives allow him to question why things are the way they are and to work to build better solutions for OEMs and for dealers. Brian Epo (03:40): So there's the perspective of being a car guy from the beginning, such as my own. And there's a perspective from a guy like Atul who comes in from working with dozens of companies outside of auto and bringing some of what he learned in some of those best practices into auto. So thank you Atul for joining us. Atul Patel (03:57): Thanks for having me. Brian Epo (03:59): So I got to ask before we begin here. You must get this all the time, but what exactly is an Orbee? Atul Patel (04:06): Well, there's certainly something else you'd find if you Googled our name, so we have to work on our search engine optimization. But just a quick background on Orbee in general, the name actually came from the fact that we started by helping dealers take 360-degree photos of used vehicles. And so we got the word out of Orbital around. And that's really where it all started, but as we evolved over time, you know, the name stuck. And trust me, I think time and time again, should I rename? But we have such heavy brand recognition. Now we've worked with so many people in this industry. It doesn't make sense to. But, you know, over the course of becoming a tool for people to take photos of used cars, to becoming an actual playback tool of that media, to provide analytics of user engagement of that media, and then finally be able to really understand how users navigate websites, shop for a car, look at pages -- all of that data we started to learn and gain insights around. What could we do with this information? How could we help dealers garner sort of powerful insights from that data and personalize the experience more. So long story short, Orbee's evolution started far from where we are today. Brian Epo (05:39): So, you know, you mentioned personalization, right? And that's always been the, you know, for years now, we've been hearing more and more about personalization. And it's been funny over the course of the past few years, or like 10, 15 years. Right. Personalization when it first started up, was sending out an email that had, "Hey, Atul." And, that was state of the art. And what's amazing in the industry is that that's still considered by some out there who are performing automotive marketing to be as far with a personalization as they, they need to go. And I can't tell you, you know, at least twice a week, I get an email from a local auto dealer that says dear or hey brackets insert name here. Like they even forget to put my name into the email, right. Brian Epo (06:26): And, that's kind of, what's on my own career journey what I've enjoyed learning and seeing and helping with is moving way beyond that type of personalization, kind of personalization level one into the much more sophisticated personalization that companies like Orbee are able to enable for auto dealers. Bearing down on personalization for just a bit. So if we move beyond what a lot of the companies are doing now, which is basically just adding a name in to make it seem like the email was directly sent to you, right with your name. What can be done with personalization and what kind of a difference can it make using up to date technology in today's capabilities out there? Atul Patel (07:07): Yeah, that's a great question. You know, there's a lot of work to do even now. I think the true personalization, the dream sort of scenario, which you might see in science fiction movies and whatnot. We're, we're really sort of many years away from that. And it'll constantly be a moving target as consumers pull back, based on privacy rules. Pull back the data that they're willing to share that makes personalization powerful. But in the current state of our industry, the automotive industry, there are some inherent obstacles to achieve that level of personalization that we're trying to get to. And we all want it. We experience it as consumers. We value it, you know, and I'm not talking about the coupons that come out of your you know, POS is when you're at the retail store and there's this foot long, two foot long coupon piece of paper. But there is a powerful benefit to contextual personalization. Atul Patel (08:16): I certainly respond way better when the marketing messaging is personalized. There's a lot of different angles to it. Like you said. Sometimes it's being able to speak to me by my name. Sometimes it understands where I'm at in my life stage. There's certain triggers that cause that personalization caused that message to come to me. You know, a great example is school recently started for many of us, for our children. And you start seeing a lot of messaging. Now that isn't necessarily personalized to me. You know, they don't really take the data that they potentially have and use that to their benefit. For instance, there are certain retail stores that do know, in fact that I have three children, they're all boys. And they probably generally know based on my historical purchases, size wise, how old they are or what size they are. Atul Patel (09:12): So, theoretically you can actually follow me from here on out as I'm a parent for the next 10 years around personalized marketing. Again, there's so much work, that data work that needs to be put into achieve that. So in our industry, there are a lot of silos of data, right? So you have these things called dealer management systems, DMS. This is sort of equivalent to an ERP. Just powerful financial customer data are in these systems, but they haven't evolved much. You know, these are systems that have been around for decades and they're only now producing APIs. So just imagine, right, when you think about the ability to personalize, the ability to build these custom experiences, you need APIs. That's the fundamental building blocks of modern you know, technology. But they don't have those things. Atul Patel (10:13): And then you also have customer relationship management systems, which mostly have become storage of all the historical interactions with the customer. So they have sort of capabilities around email and capabilities around note taking, but it's very much an archaic storage capability. You just put it in and you forget about it. And so, and then of course you have all these website systems, these end user experiences, right? You got your websites, your chat tools, your forms, which can include credit forms or lead forms. And so you have all of these endpoints where the consumer is interacting and you take all of these layers of systems and they don't actually communicate with each other. It's very difficult to do that. And I think that's going to be the biggest obstacle worth solving over the next few years here is the sort of democratization or the opening and the integration or consolidation of this data. Atul Patel (11:17): And there's a couple of benefits to that. On one side, the consumer benefits, because all of these disparate touch points they've had with an automotive dealership and we'll talk about sort of OEM versus dealership as well. If they could see all of that data in one place, then the consumer is going to absolutely see more powerful, contextual, personalized messaging that makes sense for them, right. We don't have time anymore to go to a webpage and see things that are so unrelated, right? You go to your OTT services. You go to your video consumption services, your subscription services, your music services, your eCommerce sites. And what do you expect? You expect the homepage to be extremely relevant. Give you updates on your recent order. Tell you what else you might want to buy. All of those things are time savers. Atul Patel (12:16): And in our industry, I could go shop for a car at the brand name, right? So I could go to a brand, maybe build my sort of beautiful new truck or EV. And then by the time I'm speaking to an individual dealership in my neighborhood, they have no contextual awareness of what I just did. And so you have both horizontal sort of data disparities, right? Between the brand experience and the dealership. And then you have vertical sort of segmentation of data around DMSS and CRMs, you name an acronym, there's probably a system for it. So I think Brian, you know, the opportunity here is to bring it all together and then you can actually do event based. You know, they call it event-based marketing, where, you know, Brian, you do certain set of events and leading up to that final. You know, if you do a certain set of events, you fit into a model and that model allows you to be personalized. And, you know, the messaging could say, okay, if he did a, B, C, and D here's what another million people like that did. Here's the inevitable next step, let me personalize that experience for him using his data, as well as the broader model that kind of is how most of the recommendations we get in our media consumption and our shopping sort of, that's how it applies in that in those industries. Atul Patel (13:49): But right now in automotive, you see a lot of opportunity to bring together all of that data and then augment that data with additional external third-party information that makes it even more powerful and contextual. Brian Epo (14:04): So to summarize what you just said, right? The first thing is the data silos, right? So there's a bunch of different homes for data that don't talk to each other at the average dealership. Or, and even at the average OEM. I mean, let's not kid anybody. They're just as siloed as the dealers are in a lot of cases. So you have the data silos. You also have the quality of the data inside of those silos, right? You just touched on it a little bit where there's incredibly powerful first-party data. There's incredibly powerful third-party data. It's the idea of marrying those together and then making the silos talk to each other in order to provide a customer experience that's way beyond just sending me an email that has my name on it. Brian Epo (14:52): So it is sending me an email that it has my name on it, but also it's sending me an email that has the vehicle that I'm likely going to want to buy at a price that I can definitely pay. Or I, I shouldn't even say pay, I should say, afford. Another great example of how data has evolved. You know, back when you and I entered the industry Atul, or begin our careers, it was a huge deal to know how much money somebody made. What was on their W2 every year, right? So what's that person's average income? Now, you know, as an example of the additional sophistication that's available, is does it really matter if we know how much Atul's W2 is versus what if we actually know what Atul can afford? So that's that second level of that next level of sophistication that's available inside of these silos. And what you're saying though, is that you know the next generation is taking that improved data, breaking it out of the silos and joining it up into one overarching silo that can mix it all together and then make the best offers and offer the best solutions to consumers. Atul Patel (16:01): Absolutely. Brian Epo (16:01): I nailed that? Atul Patel (16:02): You did. Yeah. You know, in terms of all of this external data that's available, we talk about income. We talk about other behavioral data, demographic data, household data. And the consumer really can benefit from having all of this data integrated. Because like you said, getting the right offer, getting. You know, we all don't have time, enough time to shop through all, you know, and go through filters and filters of things that make sense for us. If the brand or the companies that are trying to sell us things do some of that work and use some of our data in a privacy safe way, from a first party data standpoint, then it just speeds up the process and creates a far better customer experience. And that is definitely missing in our industry. And we think that we're just around the corner in terms of breaking through on this type of level of contextual personalization. Brian Epo (17:01): Yep. And that's great because contextual personalization leads to more relevance, right? The worst sin you can possibly do in marketing is be irrelevant to the people you're marketing to. And if you get good at contextual personalization, then a couple things happen. You become relevant, but B you can start as you were alluding to a few minutes ago, start building models based on what you see working for contextual personalization. And everybody's favorite example, but my all-time favorite example is Amazon. In terms of contextual personalization, they have gotten so good at this, that they actually have a program where they're attempting to... They can literally discern what you're going to buy before you're gonna buy it. And they actually have a beta program or a program they've been considering doing where they actually send you items that they believe you'll buy Brian Epo (17:49): if you just try it once. And that comes from unbelievable a collection of data, but B not treating the data as being an individual silos. But, you know, you actually touched on something. You know, use that magic word privacy a minute ago. Right. It's a incredibly important topic right now, especially in this whole concept of personalization. So I know you've been one of the emerging thought leaders around how the auto industry needs to take consumer privacy seriously. How do you reconcile being in MarTech and ad tech and yet being an advocate for privacy? Atul Patel (18:29): Yeah. I think when you take those two words, ad tech and MarTech, they mean so many things, right? On one side it's advertising, reaching you everywhere you are. You know, while you're watching content, listening to music, driving down a freeway and looking at billboards. And then you have MarTech, which is, you know usually leans towards personalizing my messaging, chat, email, on site. And one of the big opportunities for automotive dealerships and really the automotive industry as a whole is using personal data that is provided either passively or actively by the consumer. So actively by them filling out a form, requesting information, chatting with an agent and passively looking at certain pages and certain offers. When you put that together and you think of it more from a first party data standpoint, you know, that that's such a powerful word. Atul Patel (19:32): And I think it's underestimated. Right now, when we talk about first party data, that means the consumer almost understands that they've given you this information. This is not about reading an article at a magazine about camping, and then being followed around with camping advertising. There's certainly a place for that. And I think that's going to be the first thing to be transformed in this sort of new age of privacy. And that's what you see a lot of the device companies platforms out there are controlling how much of that data gets sort of shared outside of your purview. But when it comes to me engaging with an auto dealership, I want them to know that, I want them to use all the data that I've given them, that they've been able to augment and enrich and say, you know, I don't think they're going to buy a new car right now. But you know, it might make sense based on where they live, the signals they've provided the services they've done with us in the past five years, their patterns over the last 20 years in their car ownership, elements about our current lifestyle and the fact that some people work from home. We don't drive around as much. Atul Patel (20:41): We live in the suburbs. When you take all of that data and say, let's not chase him now to try to buy a car. Let's warm him up. Let's keep him informed with what new models are coming. We don't want to mix up the fact that personalization doesn't mean sell more cars right now. Personalization could even mean build the right life cycle journey that fits each individual consumer so that when the time comes that they're ready to buy a car, or they have a certain sort of thought in mind, that you're there at the right time. And I think there's very systematic marketing. You know, I'm in a new home. Where we're hitting about a year into it, and I've got 12 postcards about home inspection, right? That's not personalization. That's just simple data driven list making and direct mail. Atul Patel (21:34): And, there's nothing wrong with it, right? Because you must reach new customers. But the builder that I bought my house from has way more data about me and what I care about, and my backstory. Because again, you know, they were my builder. That's who I bought from. I actually got my mortgage through an affiliated company. And so being able to use first-party data, it gives an auto dealership an opportunity to have so much more data than any other company has. When you go to the internet and you read an article, they're just piecing together the string of what you've done over your online activity. But a dealership has all this information and they don't harness it. And again, it's because of these silos. So when we pull all that together, and as you said, when you model what is working and what is not, you could actually identify who you should reach out to, at what time, what kind of messaging, what kind of offer. And that's the power of first-party data. Brian Epo (22:44): You know, it's interesting, you mentioned that because you mentioned journey, right. And throughout my career I've worked with a lot of, particularly the manufacturers, on their own mapping of their customer journeys. And the reality is if you're doing contextual personalization correctly, you realize that there's way more than one customer journey, right? There's hundreds, if not thousands of them. But if you do it well enough, you can start creating your own internal segments based on that data. Right? So you're able to model and then create. Hey, Atul's on this type of customer journey, so we're going to react to him this way versus Brian's on this customer journey. So, we're going to react to him this way. What's really interesting is the way personalization, good personalization is rewarded by good modeling, which is rewarded by good creation of customer journeys. And therefore hopefully at the end of the day, selling more vehicles and selling more services inside the industry. Atul Patel (23:38): Yeah. And let me mention one quick thing about model modeling. You know we tend to think that, you know, someone like an eCommerce giant could easily A/B test an idea in five minutes, right? Because the sheer volume of traffic that they see, they can do these A/B tests and make immediate decisions. Auto dealers individually have a much lower volume. Web traffic, lower volume leads, lower volume sales, at least compared to these giant scenarios. So I believe that technology has evolved so much that you can actually segment smaller groups, right? You obviously don't want to segment to the point where you've got an individual user. But if you, if you are selling this consumer products, you could actually use, you don't need statistical significance. I think that's a different definition. We need to rethink that definition for auto dealers because yeah, the volume's not big enough to do this analysis, but I think if they do take the time to take their entire history of data, process it through this first party sort of insights, right. Atul Patel (24:52): Enrich that data, they could identify over the course of decades, what has worked for their brand. And they could see how that has changed over time. And almost sort of evolve accordingly and almost predict, Hey, like now with this sort of EV wave, you know, what am I going to change based on the history that I've had with my consumers over the last two decades. What am I going to do differently with EVs? How am I going to market to them? How am I going to sort of make them aware of these options? All of that can be done with even the amount of data that dealers have, which isn't as large as a music subscription company. You know, they have mounds of data, but I think dealers can actually do a lot with what they have today. Brian Epo (25:41): Absolutely. And especially when you look at the average price of a vehicle now, in the $40,000 to $45,000 range, right? If you are segmenting your database where if you're doing audience targeting, if you find three people who match that criteria, you can't ever make that work. But if I can sell three additional cars as a result of being able to do that micro segmenting by leveraging my data, it's more than worthwhile. It's actually a topic for another podcast, which would be how close we're getting to actually being able to do one to one marketing. And, you know, again, when I entered the industry 25 years ago, people were talking about one to one marketing. It's finally available. I mean, you can do one to one marketing now based on what we've just been talking about here. It's just, you need to understand that that capability exists. All right. So one last question for you. For anyone who would like to learn more, to connect with you, to learn more about Orbee, where can they find you? Atul Patel (26:41): Well, they could find me on LinkedIn or go visit us at Orbee.com. That's O-R-B-E-e.com. And when you visit, you'll see a broad spectrum of capabilities and conversational items. So, you know, don't get stuck on one. We actually believe that marketing is such a broad category and we're doing a lot of work bringing it all in one. So when you do try to reach out to us and you read about it, get curious, reach out to us. Happy to have a conversation, Brian Epo (27:15): Beautiful. Break those silos and enhance that data. That's the name of the game? Great. Atul. Thank you so much for joining us for today's Market Pulse podcast and for this excellent conversation.