Latest / Auto Collabs / From Mountain Drives to Bachelorette Parties with Alan Krutsch
Transcript
- 0:00Michael, I see you have a hollow body guitar hanging in the background. [upbeat music] This is Auto Collabs. Is this, is this a new addition to you or just a new addition to the studio?
- 0:16[laughs] Just a new addition to the studio, 'cause all of my guitars are still in Canada, but my wife felt bad and bought this for me for Christmas. Ah. Wow.
- 0:25And it just fills the space better than those weird wood things I had hanging up. [laughs] Yeah. Well, this is more personal too. You know- So there's a thing...
- 0:34I, I used to hang my guitars up in, in, in my, in, like, rooms in my house. Mm-hmm. And I realized at some point that I played my guitars less when they were hu- hanging on the wall. Really? Yes. Interesting.
- 0:45Every, e- every time. Yeah, I think the conventional wisdom is usually opposite of that. Right. I know, but when I hung them up, I felt like weird pulling them down and putting them back up. I don't know.
- 0:54That was just me. So I just perceived- I, I had the same thing... that that guitar is just gonna stay there forever. I had the same thing. That was a phase where the...
- 1:01I went through the same phase, but it was usually...
- 1:03It, it was mostly because my middle son, Tristan, was a climber as a kid, and I was worried that I was just gonna, like, walk into my studio and he was gonna be- [laughs] And it swings, right?
- 1:13He- yeah, he's just hanging off of one of them. [laughs] Ah, it's so great. I'm trying to think of how we're gonna tie this to today's guest, Alan Crutch, with FUSE Auto Tech.
- 1:22Alan is one of my favorite people to talk to because he's like a Renaissance man, right? You could, like, talk... He doesn't wanna talk about, like, a specific product or anything.
- 1:31He always just want, like, "Let's zoom it out for a second." Yes. "And let's talk about how all these things are implications on what we're trying to do in this one lane."
- 1:39And I was like, "You know, that's my kind of person." I would gladly get in a three-hour conversation, uh, when we really just got together to talk about something that would take two minutes. It's just how I roll.
- 1:49Dare we say it's like- [laughs]... a perfectly crafted augmented ninth chord- Ah. Where all the notes- The old augmented ninth...
- 1:59individually sound like crap, but when combined, you got a r- you got a real strong jazz tune. You, you gotta Google that one- [laughs]... if you have no idea what he's talking about.
- 2:08But yeah, if you play an augmented ninth chord, people are gonna be like, "Is that thing broken?" [laughs] Right? Yes. [hums] And that's, like, all the different facets of what he's experienced in the auto industry.
- 2:18That's a great point. Well, let's see if we can get Alan to play an augmented ninth chord in our interview and our conversation with him.
- 2:28[upbeat music] Alan, it, this is actually the first time we've, like, sat down, not in, like, the rush of a- another event or something, and had a conversation. So thanks for joining us today.
- 2:40It's, uh, yeah, it's the first time. And here, here I am in my, uh, prestigious Bozeman, Montana home office. Ah. Uh, [laughs] judging me guys.
- 2:51I te- actually, what's great about your home office is every time I get on with you, I always think that could be a Zoom background. [laughs] It could be. Or it could just be that your office is so dialed in- Yeah...
- 3:03and has all the books that a Zoom background would have. [laughs] Absolutely. Yeah, no. I, uh, there, there's plenty of signaling going on, if you were to look at the books.
- 3:12It reminds me of the people that go onto CNN- [laughs]... and you always see kind of their latest book. Ah. You know? Right. That's just calling out. Right, follow- right next to, like,
- 3:22the Harvard textbooks that they got at the antique store, right? It's like, "Oh, I'm very, very prestigious reading this, uh, I just handled these this month." No, I- "This will be next on my different stacks."
- 3:31I have to tell you guys, I'm, I'm kind of uncomfortable. I'm trying to put my finger on it and, you know, maybe... Oh yeah, this will help. [laughs] Ah, see. Now, that's better. That's better.
- 3:48There you go. [laughs] If you're just listening, he just, he just reaches aside after, after a, a semi, uh, Emmy Award-winning acting job- [laughs]...
- 3:57and pulled out a black hat from the desk and put it on, so now we all [laughs] match. Oh my gosh. Well, I'll tell you what, whenever you mention the name Montana, my heart actually just slows down a few beats.
- 4:08My, my wife and I have been watching these, like, shows of people, like, buying houses in Montana, where, like, all the, all the city folk buy houses in Montana, and all the local folk pretend that they're excited about it.
- 4:18Yeah. And, uh, so, [laughs] so I, I love the idea of Montana. It's just a place that I've always wanted to visit. I will sometime. Maybe I'll just knock up.
- 4:26Um, we're getting in the conversation, thinking about what's going on in automotive right now. Um, you've always been kind of a broad thinker.
- 4:33So I like to ask the question, just in a broad sense, what has captured your attention as we're into Q1 now? Uh, you know, we're in January. We have, uh, you know, just kind of getting our bearings in Q1.
- 4:45Where is the trajectory of your thinking going? What is the thing that's actually captured your attention or imagination a little bit? Well, I think, uh, what is most exciting to me right now and
- 4:57is having the biggest impact on decisions, whether it's at retail, whether it's a vendor, whether it's an OEM, is the pace of change.
- 5:08And I, I'm sure I can't even list all of the factors, but you have the adoption of EVs. Uh, you have the adoption of new retail models powered by process, customer experience, and technology.
- 5:26You've got China. You know, I don't, I don't hear a lot about China, but when you step back and think about it, this is the world's largest auto market.
- 5:35You've got companies like BYD who have now passed Tesla in terms of sales, and, you know, all of us grew up in the car business never thinking about China. Right.
- 5:49Some of us are old enough, or old enough to remember, when the Japanese entered the US market. And of course, lots of naysayers there. "They'll never compete. Their cars are too small. Who cares?"That's a crazy thing.
- 6:06If you're new to the industry, that was an actual sentiment- Yeah... and conversation that existed. And then Toyota's like, thunk, Tundra. Look. [laughs] Actually, thousands of Tundras. Yeah, Toyota and Honda both.
- 6:20Toyota- Right... and Honda both, where, you know, you had these crazy dealers that were saying, "Yeah, pick me. I'll put one of those dealerships somewhere in Southern California and give it a try."
- 6:31And so, you know, are we going to see a similar thing, uh, with China? Um, you know, one of the little thought experiments that I talked to, uh, some colleagues about is, you know, imagine
- 6:47that you have a Chinese company, whether it's NIO, BYD, whoever it might be, and they decide to come to the US market. And let's say their product line looks like this: two models,
- 7:02crossover SUV, regular SUV, three colors each, two trim levels each. You've got cool and you've got cooler. Cool has most of what you want, including CarPlay.
- 7:16[laughs] Cooler has leather seats and a moonroof, and you can do this on an app because it's simple. Man. You know, now you subsidize the price. The CCP, Chinese Communist Party,
- 7:33they've got their thumb on the scale all the time, especially when they say, "We don't have our thumb on the scale and we're not subsidizing the auto industry." [laughs] So, you know,
- 7:44what, what are the things that are gonna happen in the next, not this quarter, but in the next five to 10 years when we have another global entry into the US car market? Chinese are going to get here somehow.
- 8:01And, um, you know, I was- Well, Byton is entering this month, literally. Right. They did. Think that's this year, this month. But, but- Yeah... BYD, I didn't know this, but you know, they're looking at the US.
- 8:12BYD makes all the electric buses for Los Angeles. They have an elec- No way. They have an electric bus factory in Lancaster, California. Wow. They've been here for a while. They're already here.
- 8:26They know how to hire people. Wow. So that just, again- Well, they know how to be here and not let anybody know they're here, right? Like [laughs] No. It's like plurality...
- 8:34they came in overnight when nobody was watching and [laughs] There you go. And of course, you know, while- Well, and your sense, not...
- 8:42Yeah, y- I think it's, what's interesting to me and, and when I'm, like, whether it's dealers, indust- it doesn't matter, OEMs, and people are like, "Well, that's five years, that's 10 years until there's, like, real market val- validity and viability for their product and, and how does that impact me?"
- 8:58I think, like, at minimum, there's a reverse engineered process that goes, let's just say I believe that that's never gonna happen for five years. What am I needing to reverse engineer? I'm headed to NADA.
- 9:10I'm, I'm, I'm talking about my, my 2023 balance sheet. I'm thinking about my staffing, my, my HR policies. How do I reverse engineer?
- 9:20'Cause five years when it comes to, like, the trajectory of a business is not a long time. I mean, we just think about, like, how long ago COVID started. Some people are like, "It was yesterday," right?
- 9:30It's two and a half years ago, you know? It- Right... things, things move, you know? Well, I think y- you know, like most changes, it happens very gradually all of a sudden. Yeah. Yeah.
- 9:45Where it's slow, slow, slow, and then overnight you go, "Oh, my goodness. What just happened?"
- 9:52And, um, you know, when, when we look ahead, I think that there's, there's kinda two things if we go back just to some basic principles for all of our businesses.
- 10:02I'm, I'm loathe to give advice to car dealerships because I worked in dealerships a good part of my career. [laughs] And they don't need advice from dudes like me telling them how to run this very complicated business.
- 10:18I think our company can be helpful, but not gonna give advice, but I'm gonna talk about principles, which are, number one, efficiency.
- 10:26And I remember back when I was in a dealership and I told the folks that were on my team every year, I said, "All of us, including me, are gonna have to do more to earn the same money we did last year.
- 10:38It is the way of the world. You gotta be more productive, more efficient, and you gotta continue to deliver more value."
- 10:46So whether you're a, a vendor like us, whether you're a car dealership, it's looking for ways to be more efficient, to save cost, and deliver, uh, the value that you need to value.
- 10:58The second principle is customer experience. We have to compete on customer experience. If we think we can do it just on price, uh, just on location, just on the franchise or franchises that we're able to represent,
- 11:18that's not gonna get it.
- 11:19And I think the, as I've thought more about this, what strikes me is that today car shoppers, consumers, are comparing every experience to every other experience, not just the category experience. True, yeah.
- 11:35They're not saying, "Hey, you're pretty good for a car dealer." Yeah. [laughs] They're going, "Why don't I get treated
- 11:42at my Toyota, Chevrolet, you-name-it dealership like I get treated at Nordstrom, like I get treated at the Apple Store?" So we're being judged against- I think you can lower that-... the very best...
- 11:54I think you can lower that standard. They're not even thinking Nordstrom or Apple Store. They're like- [laughs]... "Why can't I be treated like I'm treated at my, you know, tech-forward grocery store," right?
- 12:05Like, why can't... Like, they're not even- Or Target store... I don't even think they're going- Or Walmart store... to Nordstrom and expecting that, right? Like the level- Right... is lower, I believe.
- 12:11Like, just think of a good- Right... real retailer that's not an exemplary retailer. They're just used to a- Yeah... a, a faster, more, you know, like, accommodating process, period. Yep.I, I think that's true.
- 12:24You know, there, there's certainly, um, retailers that have worked on process and experience. Uh, the other thing is just personality.
- 12:34I mean, sometimes you can have a little bit of a rocky personality, but if you've got the right culture in that business and people act like they care- Yep... everything kinda gets smoothed out. And- Yep. I love that...
- 12:48the reverse of that is true, too. If your process is a little rocky and you have indifferent people, then you go- Oh... "Oh, my goodness. Why am I giving-" Oh, that's a disaster... "How do we get out of this?" You know?
- 12:59So- Well, that's- But-... that's an interesting point. Like, when...
- 13:02'Cause everybody knows what that experience is, where something didn't go right, but the person taking care of you was so good that it didn't matter, right? Well, it didn't matter- Like, it didn't matter...
- 13:12and sometimes it's a, sometimes it's a plus. I mean, I don't think we wanna create problems, but- Absolutely...
- 13:18there's a lot of research says that if you're awesome at making a recovery and fixing a problem and making it right, you may actually earn more loyalty.
- 13:28And we've probably all been to one of those restaurants where something bad happened and the dish came out cold or whatever,
- 13:37but the manager was at your table in 30 seconds, and they're bringing- Knocked it out of the park... a round of drinks. And you go- You know-... "I'm always coming back." Absolutely. You know, the first...
- 13:48The, the only dealership I actually worked in as an employee was my... The first time I ever went in a dealership, I was a service advisor, and the owner, his name's Chris Burritt, Burritt Chevrolet in Oswego, New York.
- 13:57Now his son runs it, of course. Jenn- he's the third generation running it. Yeah. But Chris Burritt said to me, 'cause I was a service advisor, I'd never...
- 14:03You know, I, I, I knew people and I like people, which is the only reason he hired me, 'cause I didn't know anything about cars.
- 14:08[laughs] And, and he said, he said, "When there's a problem," he goes, "That's your opportunity to make a more loyal customer than ever you, you ever would've been able to if there was never a problem."
- 14:20He's like, "Because when there's a problem," he goes, "They will remember how you fix it more than they'll remember the problem if you do it right." And it's exactly what you're talking about.
- 14:28I know, I know a couple GMs that they're like, "My favorite part of the day is when someone brings me a fire." Heat case. Right? [laughs] Yeah. [laughs] Bring on the heat case. I'm coming for it, right?
- 14:38'Cause it's just, like- Yeah... lavish everything on, you know? Everybody's happy to serve the, the smiling customer. So I agree. Well, and, and here's, here's what I think is, is...
- 14:49And it, and it doesn't just go to customer experience. I think that
- 14:54in retail, we have this responsibility to understand that every part of the retail experience, whether it be touching, you know, like, the, the actual sales experience or the marketing experience or the after sales experience, is that all of that is being put up against just general retail.
- 15:13And- Yeah... e- even just, like, the platforms that people are engaging with pre-sale, uh, is important because their, their mindset is, "I'm doing..."
- 15:24Like, for instance, give you, give you a little insight into the mind of Kyle. All right? So, um- Oh, boy. Oh, boy. Kyle has this one. Oh. Okay. Slow it down, everybody. Sit down.
- 15:35Every time, slow it down so we can keep up. Go ahead. [laughs] No.
- 15:38So, I, I mean, this is real simple, but, um, you know, so here in Nashville, we have these, you know, the little parking sp- space, spaces where you pay, you scan a QR code, and then you have to pay to park.
- 15:50Well, one of the most ridiculous things to me ever is that, is that I can be in an app-based solution that's completely digital, no physical location, and all of the sudden get to the checkout screen to pay for my $2.50 checkout- [laughs]
- 16:11... and they make me enter the card number with, on my phone. I'm like, everybody knows you're gonna be using your phone, and you haven't... Like, the ability to integrate Stripe into that, right? Apple Pay.
- 16:25Uh, uh, so that Apple Pay and Google Wallet and all that type of stuff.
- 16:28So when I think about that, I think about all those micro moments of, like, the interaction, not even just, like, the person-to-person interaction, but the micro moments along any shopping journey or service journey that start to cause some level of disbelief.
- 16:44It may not even be a heat case, but we're kind of, like, battling this retail ecosystem that is so tech forward and so process forward that if we don't recognize that those are drop points, even if we never hear about them, that are, that are contributing to someone maybe going...
- 17:01Like, back to your point of, of Japan, like, maybe VinFast has a deposit where you drop Apple Pay in it, and they couldn't succeed with that even though they tried with, uh, you know, the other new car that they were looking for.
- 17:15I, I have some insight into Nashville parking technology for you, Kyle. So what you've experienced there is a, um, purposeful, um,
- 17:30process to try to bring down the number of bachelorette parties that come- [laughs]... to Nashville every year. They're trying to discourage- You can't... [laughs] You can't beat them away.
- 17:43They're trying to discourage- It's not possible. They're coming.
- 17:45[laughs] That poor drunken wobble up and down the street, uh, in Nashville with these lovely young ladies on their last hurrah, uh, uh- [laughs] Riding, riding around on pedal taverns in the dozens. Yeah.
- 18:02Just everywhere. Woo! It's ugly. Right, a lot of woo. [laughs] You, you knew exactly, uh, you knew exactly what the whole issue is there. See? Solved. So we- Done...
- 18:12but Ky- but Kyle, your point is a good one and, and going back to kinda some basic principles, faster, simpler, easier always wins. And so- Yeah...
- 18:22when you put friction like that into something as seemingly simple as a parking lot-People get frustrated.
- 18:29On the other hand, when you do it well, you buy an iPhone at an Apple store and you go, "Wait, what just happened? I spent $1,200 and I'm out of here." People compare that to the car buying experience.
- 18:42It isn't fair, but you're right. They're looking at all those little moments and going, "Why is this taking so long? Why am I sitting in the lounge waiting to give somebody money?
- 18:51Um, why is the person that's supposed to help me buy a car getting up three or four times to talk to that other person?" [laughs] "If that other person is so smart, why aren't they over here at the desk helping me?"
- 19:05Helping me, right. [laughs] You know, so all of these little things, I think, um, they contribute to that lack of satisfaction. And, and further, I think that what happens
- 19:18in car dealers where we know that there, in many cases, are opportunity for improvement, is that people are nice. Shoppers are mostly nice and they're mostly patient. And so we should not mistake
- 19:36the basic niceness of human beings, the level of patience, for extreme satisfaction. And so I fear, and this is a, a generalization, that in some dealerships where they think, "We give a great customer experience.
- 19:53We har- hardly ever get any complaints." I don't complain about my dentist. I don't like going there. I like having clean teeth, but it's something I do every once in a while, and when it's over I go, "Yeah, great."
- 20:08But I don't sit there and rave and say, "God, that dentist is great." And I fear some people may think of buying a car like that. A little bit painful, but I get it. And- Right...
- 20:20I feel really great once I leave with my new car. Because, and I, I mean this is... I, I, I don't mean to insult anybody. Maybe I will. I'm sorry. There's nobody, at least on this call, that's been at a backyard barbecue
- 20:39and had somebody say, "Oh, you're in the car business. Hey, I gotta tell you about this. It was so awesome. I picked out this car. I met a really nice person, and then I got to wait in their lounge for some old...
- 20:53drinkin' old coffee to talk to somebody else in an office that I didn't wanna go into." It was the best. [laughs] "And it only took three and a half hours." I feel- "Man, it was cool." Boy, I wanna do it again.
- 21:06Nobody says that. Nobody says that because it is a little bit of a clunky process. What a lot of people say is, "I like my car dealer. I love my new Chevy. I love my new Ford."
- 21:17Uh- They don't talk about the process 'cause it's not good... "I got a pretty good car guy there. He calls me back. She calls me back. They follow up." But the whole process, probably some opportunity for improvement.
- 21:29And it's one of the things that we work on at, at Fuse Auto Tech, and we certainly work on it with our, our consulting division, is how do we pull the friction out of this?
- 21:42And I dare see- say even add a little delight to the process. That it- Mm... went a little faster, went a little easier.
- 21:51And one of the things that's missing from the car buying process, just a personal opinion here, is that the lack of control on the part of the shopper.
- 22:01And so when you start to give them transparent payment options on a screen, when you let them see what's going on, they feel like they're in control. That starts to lead to trust.
- 22:16And to use a, a, a car driving analogy, we've all probably been on a mountain road with a family vacation. No fun being in the passenger seat looking over the cliff. If your hands are on the wheel, everything seems fine.
- 22:32I think this is like- That's a good one... buying a car. Like, this is like buying a car for some people, where they're going, "I'm about ready to spend $50,000. What are those two people- Oh, that's a good one...
- 22:42talking about over at the desk?" Oh, man. Um, as opposed to, they're bringing me along with them. I can see it on the screen. Um, I'm starting to relax a little bit. So, um- Yep. That's a great, that's a great visual.
- 22:57Such a great analogy.
- 22:58And actually, what's interesting is we're kind of like starting and, well, getting closer to the ending of our day today, but we wrapped up with a podcast today that, like, relationships are built on trust, and building that trust through a relationship.
- 23:10And if there's moments of surprise and delight that build on the trust, uh- Yeah...
- 23:14I think that that's where we're gonna, that's where we're gonna build lifetime, uh, customers both for dealerships and for OEMs and all of that. Well, Alan, I'm telling you, we...
- 23:24Uh, the three of us could probably jam for three more hours- Oh, sure... 'cause that's just the way we go. Uh, but- We should... it's been a pleasure hanging out with you.
- 23:30Uh, I can't wait to see you in person at NADA and, and, uh, continue kind of just dreaming up what the car industry, uh, will be like. So on behalf of, uh, myself and Paul, thanks for joining us here on Auto Flaps.
- 23:43[upbeat music] I promised there was nothing combined with the fact that we talked about Cirillo's guitar and his background in that, uh, in that episode.
- 23:54[laughs] I was not trying to go with, like, the background joke or anything like that. Yeah. Um, but it is interesting because, uh, speaking of background, stop, segue Tam, different podcast. Um, the- [laughs]
- 24:06the, you know, the, the background, the bre- the, the, the depth of knowledge that Alan has from, uh, both being in dealerships and out of dealerships to really see...
- 24:16Like, uh, to, to have that zoom out picture and, and, and take a measured approach at the next, the m- next movement of our industry, and recognize that this consumer experience, this customer having, uh, you know, their hands on the wheel of the process, I think is really, really important for our industry to understand.
- 24:34That customers do have their hands on the wheel of the majority of purchase process these days. And, and it's a guided process, though.
- 24:42And, and instead of having to, like, manhandle customers through some sort of sales process, that, that they actually have a new opportunity with technology, and that actually frees people up- Oh, big time...
- 24:53to do better, you know? It's like you think about-If, if a customer doesn't have, doesn't feel like they have their hands on the wheel, what are they all of a sudden going to do?
- 25:03They're gonna start fighting for control, or- Yep... they're gonna just leave. Yep.
- 25:08So it's almost like the, the thinking of like, instead of thinking, like in sales training and stuff, a lot of it historically is like, "How can I keep control of this process? How can I keep control of the word track?
- 25:17How can I keep control of what they're going to say or want to do next?"
- 25:21But what if the, what if the perception was shifted to, "How can I continually give them control of this process so that they didn't fight for the wheel and they went through it?"
- 25:30That, that's an interesting conversation. One that Alan's obviously- I mean, at, at one point he brings up the, the concept of the dentist.
- 25:36And, you know, every dentist on planet Earth, in order to forecast their revenue, tries to get you back in every six months.
- 25:43But you ever notice that when they tell you you need to come back, even though you know you need to go- I don't need to go... you're like, "No, no, no, no, no."
- 25:49And ultimately it's when you feel pain, when you have to take a wood chisel to your teeth. It's too late. [laughs] Yeah, it's too late. It's too late.
- 25:56But, but it goes to show that no matter what's prescribed for us, our human nature is always, "No. Well, I need to be in control." So to me, it's just validation around what you said, Paul, that
- 26:07just let them have the control. Like, y- you know, I think w- sooner or later we need to realize that the chairs in our showrooms sell six cars a month just 'cause they exist. You know what I mean? Mm-hmm.
- 26:19Like, customers- Ooh, that's hard to hear. [laughs] That's hard to hear for some people now. But it, but it's- Oh... like for me, I'm one of the guys that just goes and sits in the chair. Like, "Oh, cool.
- 26:29The doors are unlocked. I'm gonna sit down." Right. [laughs] "Put the papers in front of me. Where do I sign?" And that's, that's the case for a lot of people because they have more control now than they, they ever have.
- 26:38And I mean, this didn't happen overnight. Google's been around for how long? Right. Google has been placing more control back into the consumer's hands.
- 26:45So it's like follow suit or kinda step aside and, and customers will find their own way to, to make things happen.
- 26:53Well, we have a- But anyway- We hope you enjoyed this conversation with Alan Crutch of Fuse Auto Tech, uh, from myself, Kyle, Paul over there, Michael Cirillo, here at Auto Collabs. Thanks for listening.
- 27:06Sign up for our free and fun to read daily email for a free shot of relevant news in automotive, retail, media, and pop culture. You can get it now at asotu.com. That's A-S-O-T-U dot com.
- 27:19If you love this podcast, please leave us a review and share it with a friend. Thanks again for listening. We'll see you next time.
- 27:25[upbeat music] Welcome to Auto Collabs. Welcome to Auto Collabs. [laughs] Why are we recording? Are we rolling yet?
- 27:44Not yet.