Latest / Automotive Informants / The Compliance Advantage | AI, FTC Rules, Customer Trust & the Future of Dealerships

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The Compliance Advantage | AI, FTC Rules, Customer Trust & the Future of Dealerships · Automotive Informants

• IgniteUps.ai: Back. This is Automotive Informance. name is Chris Martinez, and we've got a a special guest. I actually first I I think I I ran into you in NADA one year and I saw you. and I I've actually been following you since then because I I think I've I've seen some of your content specifically I I want you to talk about here shortly is your book. but you've your former dealer. I want you to give you give my audience a a few, you know, nuggets on who your your background and and what and who you are. before we get that into that, we do have a great show for you guys. We have some topics and really good insights to hear from Tom. ⁓ but it Tom, go ahead. Tom Kline: Good. Well it's great to be here, Chris. Thanks for having me. I am Tom Klein. I'm a third generation car guy. ⁓ A former dealer for 30 years. and what I do, my company is called Better Vantage Point. and first book was called Tuck the Octopus. And Tuck the Octopus is ⁓ a phraseology that came up with with what it feels like when you wake up as a dealer, you put your feet on the floor, ⁓ and another at the store, and it feels trying to tuck an octopus into bed, ⁓ but the tentacles flopping all over the place, right? And so So my job as the dealer is to tuck those tentacles in and make sure that keeps moving in the right direction. So my firm, Better Vantage Point, is there to protect the dealer, to protect the dealer's legacy, protect their assets, and I'm a dealership bodyguard. So I go the operation and I assess what's going on what be done better and how they can do it in order to protect their assets and protect their legacy. I'm glad to be here. ⁓ IgniteUps.ai: That's awesome. No, I I'm I'm glad you're here because some of the conversations I've seen you or we have ⁓ on social media on LinkedIn. Excuse And it's you're it's got a wealth of knowledge. So I'm glad to to to have you here. Zach will actually he's actually going through some vendor things right now. So he may be jumping on here a little bit later. But One of the first topics I wanted to get your insights on, this is not unique to a specific state, but it's really the only reason why I I I wanted to bring it up is because ⁓ these addendums dealers it's it's a big deal that I've seen in Florida, I've seen it in in Texas. I've run ran a store before we had some addendums. but I think these letters that were got got got sent out to the automotive community. I want to know like how much should dealers really prepare? Because they got the warning shot from the the FTC, but I still hear and and see some some negotiations online that are happening that don't really sound like they are taking it too serious. ⁓ are your thoughts on that, Tom? Tom Kline: Yeah, so did an analysis of the ninety-seven groups that got the letters. the groups, actually, it's eighty-eight organizations. And when you those eighty-eight organizations down and separate them into many stores they have, sixty-five percent have one to stores. 65%. So lot of dealers that I talk to are like, yeah, I r that they're not really look coming for me because I only have two stores, one store, three stores. Statistically, I say that that's not correct, right? Because you mean you can do the you can do the work yourself, put it in Chat GPT, and ⁓ you know they're gonna analyze it and show you that it's sixty-five percent. and so the thing I would say is dealers who have the mentality that that it can't happen to me, are mistaken. And think as dealerships from a perspective ⁓ dealers should consider changing a probability-based thinking like it's not gonna happen to me to impact-based thinking which is what if does happen to me, how you know, am I prepared? W is it a enterprise-ending event, which in some cases it would be, where they go out of business as a result because each fine is fifty-three thousand dollars. if you're making the same mistake over and over ⁓ it's a problem. And dealers also think that it's it, you know, they can't get to them personally, where the FTC is going after one vice president and there's a pending case for 216 million against that person individually. So so all that in the background, what I would say is ⁓ The first order of business, if if I'm if I was back in my chair as a dealer, first order of business is taking care of customers. And and let me kind of a cliched thing, but I I I want to kind of drill on that if that's okay, Chris. Okay. So regulatory ⁓ c are about I will call two-legged problems. ⁓ IgniteUps.ai: Yeah, go ahead. Tom Kline: Two-legged problems are customers and employees. That's your two-legged problems. If you take care of your two-legged problems, you're gonna take care of 80% of your problems at the store. where regulators get involved is complaints. Now don't care a dealership you're right or if you're wrong. They don't care like the customer bought car as is ⁓ and they want four tires, is the example I always give. They don't care. just know that they've received too complaints about your dealership. And once they've received too many complaints, they don't ⁓ if if can ⁓ defend each every one of those complaints. It's too late by then. And so where ⁓ who are concerned these FTC and the state attorneys general, what they should do is concentrate first on customer complaints. ⁓ Now, when I say on them, I'm not telling you that they have to give in to every single complaint and give the customer exactly what they're asking for. of it is the customer needs to be heard. Some of them can be resolved with the $25 lunch gift certificate to Chili's. Some of them you need to give them four tires. And ⁓ and somebody needs manage those processes ⁓ to make sure when a customer, for example, Chris, when they when they complain on rate or on Google or Facebook or wherever they Write those reviews, somebody picks up the phone, calls them, gets them in the store, fixes the problem, and then asks the customers to update, and I use this word very specifically, would you mind updating your review to let people know that we're not such bad guys after all, is like how I phrase it, opposed to change. If you ask a customer ⁓ change their review, ⁓ gonna feel manipulated. They're gonna feel like the whole thing was just set up so that they go in and and do that and it's gonna come crashing down. And you can ask me how I know about this. So so go ahead. IgniteUps.ai: Well y y you know, ⁓ just let me kinda ⁓ piggyback on on that. ⁓ you ever read a book called Excellence Wins? Tom Kline: Not yet. I think it's in my I think it's in my bin over there to to get to. IgniteUps.ai: Yeah. Yeah, I I I think based the kind of like, you know, just taking care of the customer at the end of the day. Like that's what it's it's all about. Excellence wins is ⁓ written by the the co-founder of Ritz Carlton and it's a great book. It's definitely something I feel like every dealer should deploy in their business today and and they could learn a lot just from some of the conversations because I I've been in many instances where you you the the part of you just doesn't wanna, you know, give that hundred dollars or Or $50 or whatever it is to make a customer right because you feel like that's not the right thing. And the best thing to do is let's just, hey, let's, you know, chalk this one up as hey, this was not something that should have happened. Let's take care of the customer and move forward. And it could you could literally save yourself a lot of heartache just by doing some some just simple things like that. So yeah, no, it's exactly. Tom Kline: Here's my my I mean ⁓ my having been there, right, it does crank you to give those sometimes it cranks you to give those monies. But where I told where where the kind of the culture is like, look, not the Red Cross. We're not a non profit organization. Our mission here is take care of customers and make money. and it matter who's right or who's wrong. Like ⁓ get of that thinking. It's just antiquated ⁓ and care of the customer. Get the customer in, ⁓ split difference, whatever you have to do, but and and and I've advocated this before and you can see it on my YouTube channel or whatever, you have to bring the customer in two or three times to get them straight. I made the mistake early on, I made the mistake of having done the research on what the customer's problem was, saw the internet review, talked to the manager, talked to the salesman, talked to the F and I manager, did all my work and like I was ready to go when the customer came in. Like and they came in and I said, okay, so you know, like what's your problem? And like, here's the re here's the answer to your problem. Ta-da! they were like, no, not because they had to go through a process of talking and you know, interacting and back and forth. They weren't interested in quick the quick answer, even though it was the right answer for that particular customer. ⁓ And I learned from and I said, gosh, I have to make this of a process. That's customer-centric and not efficient for me. My efficiency, they don't care about my efficiencies, right? They don't, don't care that I already have the solution before they walk in. The customer wants to feel empowered. And I learned, another thing I learned from that is ⁓ give two options. We can do this or we do this. ⁓ And then don't feel like the the ⁓ answer is shoved down their throat, they feel Even the options I give them are never the same. Like, for example, I'll make three of I'm making this up of course, three payments of three hundred bucks. I'd be happy to your car payments for you to help you out. Or I'll give you a service credit for five hundred dollars. Right? Or whatever. ⁓ Right? ⁓ IgniteUps.ai: Yeah. Yeah, yeah. Tom Kline: Yeah, and and a service credit, remember, is only it's only fifty cents on the dollar because you make roughly fifty cents for every, you know, dollar you earn in the service department. So though there's economic inequities, giving them options really is helping them to feel empowered, and be surprised at what they choose. IgniteUps.ai: Well, let me ask you. So, you know, these I I I get that part, like you wanna take care of the customer, but when you when you look at addendums and what the dealer's going through today, there's there's some states that are are really kind of, you know, creating like a whole thing for them to do. But what if the customer they see some old reviews or who knows how they're gonna just go and go after certain people. I I think realistically the employees are going to turn on the the dealer before a consumer gets enough reviews where that alerts anybody at the FTC. But what what happens with the dealer that that's, you know, fixed all their pricing, they've done it right, they've got a whole team that's, you know, checking for compliance and does all that, but then the FTC says, okay, we're gonna look the next last six years. Tom Kline: Mm-hmm. IgniteUps.ai: What happens what happens then? Like they've already done it starting, you know, when the letters went out, they said, You know what, we're gonna do it the right way going forward. What happens? They get an old complaint and then they say, You know what? The FTC comes and says we're gonna look at the last six years. what what happens to a dealer then? Tom Kline: Yeah. Well, first, I think it's important to know that the FTC has ⁓ scraping capability where they can you know scrape your website. ⁓ there was a 14 point some odd million dollar grant they got, I think back in 2024 to you know enhance their technology there. I don't think it was a coincidence that in December of that year they went after Lindsay. That's when the Lindsay Automotive case started. And believe that's when the Lithia case started was in December of 24. But to to answer your question, you know, if you need to be prepared For for a regulator to come in. So, what does that look like to me? means you have to have one source of truth at the store from a risk and compliance perspective, where everything funnels up to one area, and the comes in, ⁓ you should prepared on any given day to say, come on in, a seat. Let me show you what we do for compliance. Let me explain to you that we're that We're doing compliance training with all our employees every month ⁓ having them sign acknowledgements on current events. we use Tom Klein's book that's coming out in October called The Ten-Minute Tuck. It's better ⁓ to than explain, is the of the book. to create a of compliance. ⁓ We have audit we do trainings afterwards. We go back to the FI managers to make sure that they're doing many. IgniteUps.ai: Yeah. Tom Kline: menus make sure that the customer ⁓ signing four of paper If they're buying any products of kind, right? If a customer's buying something, there should be a buyer's order showing the price. There should should be listed on the installment sales contract. It should be accepted on the menu, and then there should be a product enrollment form. So if the FTC says, Well, these customers didn't know what they were buying, you say, Well, now wait a second, there, Mr. FTC and Mr. State Attorney General. I have four pieces of paper where they signed acknowledging the product, right? all you know, making sure all these processes are in place I think is how you are transparent, conduct your business in such a way that there's no the attorneys call the five finger close, ⁓ is they say you put your hand like this on of the installment sales contract and say sign here. ⁓ That's alligate that's how the plaintiff lawyers say that ⁓ that car dealers do business. They make sure that they can't see the pricing or anything. and and by by virtue of you showing their employee guidebook and in all these different policies and procedures, I think they FTC and the state AGs say, got it, I get it. we'll you know we'll we'll take care of Mrs. Jones and Mrs. Smith and Mrs. McGillicuddy and ⁓ whoever and and see you later. I think that's how that goes. IgniteUps.ai: Yeah, you know, it's it's interesting. you'd by now somebody would have already created the technology to to do all of that. 'Cause when I think about, you know, adding more paperwork, I'm always thinking like, man, do are we gonna have this this create the the never ending death of paperwork at a store by adding more? and so ⁓ it it'd interesting to see when, you know, the technology catches up. I know some companies are are actively going that direction today. of the stories that I heard recently at Tesla and where Musk basically was, you know, challenging his president, saying, Hey, look, how many clicks does it take to buy a pizza? And they found out that it was like eighteen clicks. And then said, Well, how many how many clicks does it take to buy a Tesla? And so there was like fifty sixty. I forget exactly what the number was. But once he said, Okay, let's get it down to to eighteen. So they had to go and challenge their attorneys to figure out, you know, how many signatures they really needed. and what they found was because dealers there's been so much different, you know, dealers get slapped on the wrist so many different times that they've inadvertently created more signatures than that are even really necessary on a retail installment contract. And so as a result, they reduced the amount of signatures that are needed on a retail installment contract. So they were able to reduce the amount of clicks that it took to buy a Tesla. And so it's it's interesting that that we're we're kind of encouraging more those s signs, but I think we really to figure out a way to get the technology to kind of catch up to that. But I do think it's better safe than than sorry, and I do think you're right. They they definitely need some kind of checks and balances. Do you think so right now you you said you you recently went to a dealer group and spent hours doing some studies at those stores. make sure they are compliant. What are some of the dealer what are the some of the things that the dealer should do ⁓ to prepare for something like that? Do you have a whole team? Do they get their whole staff? Like is it a whole culture shift? ⁓ does that look like exactly? Tom Kline: Yeah, I mean it is of all to comment on your previous thing and then I'll answer that question. I think there's a difference between giving the customer a digital experience where they can buy a car online coming in and to explore what a gap policy is, for example, right? And so think you can have a much more streamlined process if s if giving the customer a full digital ability to buy a car online ⁓ versus ⁓ somebody in taking the demo and wanting to hear about all the products and and and that whole thing. So just to to comment your test. Tesla thing. regards to your question about what dealer groups should be considering. First, I'm hearing a lot of chatter and seeing a lot of things about add-on products. I think important to kind of take a minute on that, which is The if you're putting add-on products, should be disclosed and included in advertised price. So ⁓ when customer gets to the store, ⁓ if you've let's just say tint, that the price they're gonna get and the price that's physically on the vehicle is the same one as the advertised price. So the customer's getting tint. that's you know, an opt-in program. But if the customer gets to the store and all of a sudden the vehicle has upgraded wheels and a spray and bedliner and all these other things that weren't advertised and are not part of that advertised price, then that's an opt-out, which is problematic. Right? You can't that's a that's equivalent of a bait and switch as far as the FTC is concerned. So first thing is making sure that whatever you're advertising on ⁓ is what's on IgniteUps.ai: You know what I find fascinating, Tom, is that I mean, that was the whole reason why they created a Monroni, right? Like this this isn't something that's new, But then somehow one dealer kind of got away with it, another dealer got away with it, and before you know it, like everybody's got these addendums that they never disclose online and they they put this little disclaimer on there that say dealer ads are extra. And then nobody knows what that means until they get to the store. And then you're like, okay, yeah, you have to buy this, you know? And it's it's interesting that that kind of went crazy here in Texas, and I've seen some in Florida. And let's not get into like dock fees all over the place that you know how how expensive those have gotten, but I do think they're necessary in in some some areas for sure, but Tom Kline: Right. IgniteUps.ai: What is like talk to me because I you know there's some articles recently about how Car Gurus is telling dealers that if you don't disclose them properly, you're not going to be on our platform. I heard TrueCar is going that direction and all these other third-party listing sites. How does a dealer really prepare for that if they have ads? Tom Kline: Yeah. to to ⁓ follow on your comment and then I'll ask that question again. ⁓ So I think it's I think it's important I I hear a lot of complaints I guess lack of a better way of saying it. IgniteUps.ai: Yeah. Tom Kline: The dealers feel like they're being picked on, which is not the case here, because the FTC has been very clear, they've gone after pharmaceutical companies. They've gone after Live Nation and and what's the other Not seat geek, the I can't remember of it, right off the top of my head, but they just fined them ten million dollars, right? And because of their as an example, because of their convenience fee. So which so convenient and nobody, you know, it at the end it pops up and everybody hates it and everybody goes crazy. Well, that's the same as adding products that the customer doesn't know about. It's the same thing. It's not convenient and the customer doesn't want it. So, I I I think that's the case. Now s since I've answered that I've forgotten your question, so I apologize. IgniteUps.ai: No worries, it's all good. just thinking about like how do dealers well, let me just answer one more question based on what you just said. I think there's a lot it opens up more conversation about dealers are now charging for the credit card fees and they are posting that online but it's not it's kind of a moving number, just it's just a percentage, right? ⁓ so what do dealers need to do there? But then more importantly, I think my my real question is about like the third party listings and how how they should be pricing and and what what that should be. Tom Kline: Right. ⁓ right. Right. So, card fees first. There is software now that is dynamic that if somebody presents a whatever the affinity card is, it will adjust so you're charging the right amount and you're not overcharging ⁓ ⁓ the customer or undercharging yourself. So that technology is there. my my recommendation is if you don't have that as part of your processor, you do some math, do some calculations, be able show how you came up with whatever it is that you use based on ⁓ real math, fuzzy math, and make sure that that gets uploaded to your source of truth so that every if anybody ever questions it, you're not fumbling around, you know, trying to trying to it. was question number one. Quest question number I apologize again. ⁓ IgniteUps.ai: No worries, it's all good, man. Yeah, the s the second question was on on third party listings on the pricing. Tom Kline: Third party listings. Yeah, yeah, yeah. So in third party listings ⁓ I I think it's important to establish a cadence of auditing make sure that you can take 10 cars, 10 used cars from the stores, ⁓ and sure that the mapping is correct and and sure that someone is doing that work. Either either you hire to do that work for you or that you're doing it. and then again documenting it so that if there is a discrepancy, ⁓ you can say, look, month, every quarter, every day, every whatever it is, whatever you're comfortable with. do this, ⁓ okay, not infallible, and yes, gonna make mistakes and we'll correct th this one, but you can't say that we're purposely misleading or purposely this because we have a process, here's our written process. ⁓ Uploaded to your one source of truth, and here are the audit results going through and we go through and we correct them when we find that there's a problem. So, you the it's it's the the DMS to the feeds to the home net or what it's clunky. Like it's all very clunky. And ⁓ IgniteUps.ai: think the worst part worst part is it's not real time in in a lot of cases. So like, you know, you you might like a dealer might get a lead and w from the third party side, but it might take eighteen minutes before it actually hits the CRM. And, know, if you sell the car, it may take or you you sell a car, it may take two, three days before it comes off the third party site. So w you know, is there anything there that dealers can improve on, or is it just it is what it is, and if they get slapped on the wrist for not having that car there when it's when they advertised it, I mean, wha wh how granular are they gonna get? Tom Kline: I think back to our conversation about taking care of customer problems, if not taking care of customer problems, they're gonna get more granular. it i and it d it just depends. But again, policies and procedures. Are you following ⁓ are you are being judicious? I I I say it's the prudent man rule. which is what would a prudent person do in that circumstance. Is one da now the Chris Mufarage I think said it needs to come off in one or two days. That may or may not be the case, right? You should have a process in place that well this is kind of a two-prong problem. you have a process in place where they come off the website, but your sales agent should be trained that if a customer comes ⁓ in a sold vehicle, a vehicle that has already been sold, that they take care of the customer. Mr. Customer, that one was just sold, ⁓ but can we can either get you another exact one like that or order one and accommodate the same price, right? That's a training process. problem. That's making sure that that your frontline people aren't saying things to a customer ⁓ will in you know infuriate them and them into into, you know, well it's just bait and switch and they don't care and that kind of thing. I mean that's a training problem there. ⁓ IgniteUps.ai: Well, Tom, I I actually I really like the direction y you went with this because really at the end of the day, if you it's you know, if you you take care of the customer, you can solve a lot of these types of issues. And think about what this this other article kind of leads me to this one post that we did that I did just recently where somebody on TikTok decided he was gonna go ahead and, you know, defend his review or defend his actions this review. And it got millions of followers. And I don't know if that that dealer or that GM or whoever the manager was, if he's still working there or not, but they had to come in and kinda eat like, you know, apologize that they they, you know, pushed back that hard. And I it really didn't even read the full interaction. I just kinda read the headline and I said, Well look, what you know, 'cause I've been put in positions where I wanna say something like, Hey, look, you you lied and you said this and you know, maybe call out the customer a little bit. But know, this with ⁓ know the the social media as big as it is today and the the potential for virality, it it it's encouraging to hear you talk about, you know, taking care of the customer and taking the high road. I I think most dealers or Not I feel like most dealers do take the high road, but there are some dealers that are gonna push back and and say things like that what whatever this dealer did. And I it's it's important that you know this topic that you're bringing up and you keep kind of going back to, you know, customer service, customer experience, and and the dealers that get that I think win long term. Tom Kline: Yeah, I mean t there's two things on that. Number one, one of one of my most favorite speaking topics is I've I came up with a lot of research, various Dealer responses on what not to do. Like this is like an hour on how not to respond. I mean, of the ⁓ think my favorite one of all time is the customer said, I didn't sign anything. And instead of the dealer again bringing the customer in trying to resolve the problem, he posted the customer's signature and said, Here's your signature. ⁓ don't tell me you didn't you weren't here and you didn't sign for the car and you know, getting in there and just trying to ⁓ the customer up. Which crazy. that IgniteUps.ai: Well, you know, it's it they actually the in the book Excellence Wins, he he actually talks about that specifically where this lady he said he talks about an incident where some lady or some man, somebody something happened where they tripped or it it was something and they they could have come in and and sued the but because the manager went out, took care of the person and and did what they they should have done and take care of the customer. they didn't, you know, pursue anything, but then he he he points out a time where someone didn't take the high road and they they literally know pushed back and it ended up costing the company you know a substantial sum and it up costing that that person their job. So, you know, it's you know at the end of the day, I know in in in today's environment you got politics have gotten gotten crazier than they've they've ever have you know, I think you're you're you're saying some some advice about taking the high road and and ⁓ importantly taking care of the customer and because at the end of the day that's that's the game, right? We're we're here to sell more cars, service more customers, and the only way you're gonna do that is with the reputation that you take care of that customer. So yeah. Tom Kline: Yeah, I mean I give an another one of my favorite recent examples is I was at a client's and we were talking about a particular he was having a problem with and I gave him counsel on what I how I thought he should handle it. and he said and he like snapped too and he was like, ⁓ my god, I have to show you this. And ⁓ w a disgruntled ⁓ his competitor put ⁓ An AI generated rap song about how he got screwed by the dealership and posted it on TikTok and YouTube. And it's got of views now. And can imagine, I mean, just think about this for a second. Imagine being a agent at that store the day you find out that that that disgruntled customer has posted that you know on all these websites, right? And by the way, the rap is very clever. Like it's very it's very well done. Very done. and so y you you'll mortified and upset and and think about the the loss the soft cost loss of the productivity Of that sales department for that day and the next day. All the everybody's gonna be talking about is that rap song, right? You're not selling cars. not gonna that's not you're not selling cars that day or maybe that week. Everybody's head somewhere else. and and and they're defend if anybody in in the you know the local town, they're defending the dealership. ⁓ People calling them and telling, ⁓ my god, did you hear this? R I mean, ⁓ i it it's just i ⁓ you put a dollar figure on on ⁓ what kind of that does to productivity and reputation and and and like I can tell you as an example, I know of one dealership that had a class action start in a Two were sitting next each other and they were like they were about their cars and said to the other, Where'd you buy it? And where'd you buy ⁓ we both got screwed by the same and then I I know that settlement this was Twenty years ago? That settlement twenty years ago was eight million, nine million, that doesn't include the attorneys' fees, that doesn't include the loss of reputation. Like the numbers are astronomical and when people going back to something I said earlier, have to change your thinking from probability based thinking to impact based thinking. IgniteUps.ai: Yeah, and and that eight million dollars in today's money is was probably like forty million or something crazy. You know what I'm saying? Yeah, it's yeah, well here here ⁓ kind of piggyback, here's another article that I I wrote about recently ⁓ is partnering up with Chat GPT. ⁓ Tom Kline: Sure, a hundred percent. IgniteUps.ai: When ChatGPT's got over a billion users every week, it's a big deal. think dealers need to be more aware ⁓ of, know, an SEO strategy that can really help them in these areas. And you know, th there's this talk on a lot of forums where AEO, GEO, SEO, it's all the same thing essentially. You just gotta optimize your site for the different types of conversations people have and asking questions. But the reason why I bring this one up is because Yelp for years, I've I've had my challenges as a dealer with Yelp because I always felt like the only re way that they would help me is if I signed up with them. Tom Kline: Right. IgniteUps.ai: And most of the time it's just people yelling about you know an experience. And so like all my other review sites, for whatever reason, I can get them to four and a half, five stars. But for some reason, that company I could never get to you know four stars. Like it was like always three and a half stars or something. Because even though I'd get real results on these reviews, they would just hide those reviews. So in this day and age of you know companies. companies like this partnering with you know places that you that they have a voice for the consumer. What do you how you how do dealers need to prepare and can is there any way to combat things like that? Tom Kline: I think this this kind of ties into a conversation I had with a dealer group last night, 15 stores, he I'm getting bombarded with complaints and lawsuits from both employees and customers. And I Where you think it's coming from? And he said, There's no question it's coming from AI. And I said, how do you know? And he know, we went through it and there's no question. I mean, ⁓ I and that's not the first time I've heard that. I've heard that a very very recently. ⁓ And these AI agents are helping customers complain. They're helping are gonna complain to ⁓ the state, know, AGs, they're helping customers Yelp, they're helping customers complain ⁓ to dealers and them to lawyers and the whole thing. So having a strategy a of of ⁓ dealing With these is just something that I think is essential. And and I'm not trying to know harp on this by any stretch, but but the best risk mitigation strategies for dealerships is handle your two legged problems. And just it. What and and does that mean you're gonna give up some ⁓ some it's ⁓ yes, course you're gonna give up some. Does it mean you're gonna save in the long run? There's no question. I mean we've we've talked about ⁓ like different examples in the last 30 minutes of what what happens, right? And and hope is still not a strategy. still, mean, it's just not. and so bul you know I would also dealers, of course, to bolster their defenses when they're looking at their insurance. most businesses, the last study saw said that 66% of business don't know what's in their policy. And I would tell you it's closer to ninety percent or ninety-five percent, right? Dealers spend hundreds of thousands or millions of dollars on insurance and they don't know what their policy ⁓ covers and what it doesn't. And so think that's a huge mitigating factor at dealing with these customer problems, the ones that grow into lawsuits or the EEOC problems that grow into regulatory issues. And so while I'm not specifically answering your your Yelp question like do number one, number two, number three, ⁓ because I think there is I don't think there is a number one, number two, number three on on your Yelp question. so I mean that is actually the answer. But coming with a strategy on how you're going to deal with these and just my opinion is blowing them off isn't the strategy and hopes it hope still doesn't work. IgniteUps.ai: Well, you know, I'll tell you one of the the advice that I had from somebody that I you know that that I, you know, hold a lot of value with and this was gosh, this had to have been ten years ago 'cause we I was going I was in the middle of this this whole like, man, I'm doing everything I can to get these Yelp reviews. I'm I'm getting my customers when I they're in my store. I'm telling, man, do me a huge favor. When you get an opportunity, don't do it in my store, but do it when you're at your house. Please, if you if you we if you valued what we did, please give us a a a thumbs up or good good good mark on Yelp. I mean, because for whatever reason, they just they I think they have it out for us, right? And so that was my perception 10 years ago. Now he said, look, just focus on all the other ones and just, you know, kind of Tom Kline: Right. Right. IgniteUps.ai: you know, enough you value in those other ones that it pushes Yelp so down. But when you look at Yelp's d been so strategic in getting those partnerships with Apple, like Apple Maps or now with GPT It i y you you almost need to in my opinion, I think now it that's not the the answer. I think the answer is you just gotta keep trying to get that voice heard, you know, and and the way you're gonna do it is with volume. So the more volume you can get in those reviews, ⁓ the more likely you're gonna be recommended. And I'll give you an example. I was in my my truck and so I what like about it is I use Grok and I tell Grok, Hey, take me to the nearest ⁓ I'm My I'm actually going through the process of having my my house rebuilt and need a a ⁓ a front door. And so I tell Grok, I go, Grok, take me to the nearest door company. I I don't even know if which you know, if those are even real. I didn't even know anything of like if you could go into a showroom and look at doors. I didn't know any of that. Right. So I asked Grok, I go, Grok, take me to the nearest Door company. And so it told me like three examples. And then one of the examples that said, Hey, but this one's got the best reviews. You may want to look at this one. And I said, take me to that one. Right. Because I'm on FSD and it takes me where I need to go. And so it take took me there. And after I did that whole experience, I I was like, Man, you know, dealers need to be prepared this ⁓ technology today it's in Tesla. But wait till it's in every OEM, this FSD, and more importantly, the reviews and all of that that I literally just had, you know, XAI take me where I needed to go. And but it based it on my decision was based on the review, it was based on its recommendation. I didn't even ask it which one had the best reviews. It gave me the recommendation. So that's where I think dealers need to be prepared because it's here. It's here today. It's not tomorrow. It's not five years from now. It's here right now. And if you don't have a strategy for that. Tom Kline: Right. IgniteUps.ai: you're you know, someone like myself that's actively engaged in the market and looking at where we where the where the business is today and how to compete today, you're you know, some someone in your market that prepared, they're gonna take away that market share. Tom Kline: Right. And it I think it's important to note here, getting back to the FTC for a second, can't ⁓ a sales agent for an outcome. Like you can't say, I'm gonna pay you fifty bucks if your customer gives us five stars. So FTC ⁓ the is onto that. And you pay for reviews, that's called astroturfing, right? I mean there and there's been FTC enforcement actions on astroturfing as well. IgniteUps.ai: Yeah, that was another big one, right? Yeah, yeah. Tom Kline: So you IgniteUps.ai: Yeah, expand on those a little bit. I I think the audience needs that that was another one I I we didn't get to last week. and just to give some some context, so there was an article that was written about and actually I I I think I I wrote something on it where, you know, dealers need to be aware that you know, if someone if you're telling a a customer, hey, you know, sign do this and I'll pay you fifty dollar gift certificate or twenty-five dollar, you know, coffee at Star. Starbucks if you give me a good survey, ⁓ you give me a hundred dollar or ⁓ a good survey, I'll give you gas or something. And so now Google is basically surveying customers after they give a review and say, Hey, did you get any kind of gift as a of this survey? If they say yes, they immediately take that off. And at some point you could completely get like delisted from Google too. So that's one part. And then the second part was that if you're paying salespeople to get only on positive reviews and not on negative, like dealers can be in trouble there too. Tom Kline: It's it's true. I mean it's you know, there was a vitamin company a couple of years ago that fined by the FTC because on Amazon, sp this is the one I specifically remember, because they a product and they had tens thousands of reviews, and they they took that product out, inserted a different product so looked like that ⁓ that the that the new product had all these reviews. Right? That's just deceptive. I mean, call it what you want. So you know, if if you're thinking about whatever you're thinking about, think could this be perceived as deceptive? ⁓ if it can, if it can be perceived that way, don't. And because ⁓ as you as you know, every We have like a Google purge that I've seen. I've been around long enough to see that like dealers wake up and then the next day like they have zero reviews. They had thousands and then the next day they have none. d and and claim they don't know why that happens. I don't know specifically why, but I can guess that Google picks up that either they're not real or they're paid for or whatever the case is. as long as you're doing things, you know, in an above board way, you shouldn't have that problem. But I've seen at least two or three of those Google purges in my time. It happens every whatever, or three years or something, right? Where you wake up and you ⁓ IgniteUps.ai: Yeah, and that's a big deal because the ⁓ if you're off there, you're not getting recommended Chat GPT, Perplexity, Grok. If you don't have those types of reviews, you're almost invisible. So that's where other dealers can be, you know, pretty competitive. So it what I recommend dealers is like, man, if you thought you needed reviews back then, you need more reviews. I don't care if you have 4,000 reviews, you need double that. Like it's it's so important with this new AI engines today that it's a big deal. Like, and and then more importantly, the dealers, there's some things that they can do today is Tom Kline: Right. IgniteUps.ai: I i I find it fascinating when they don't have a TikTok or they don't have a LinkedIn. Like all of those things matter when it comes to have building your authority online for your SEO results and it it it drives me insane when I'm, you know, consulting for a store and they don't they only have YouTube, they but they don't have everything else, or they have Facebook, but they don't have everything else. And I'm like, Man, you guys are let's just start there. Let's do these basic things that can help your market authority and then I look at you know, they have a couple hundred view reviews and I'm like, You're you're just not enough. You need you need like a hundred times that. Like it's it's so important right now. It's it's crazy. But Tom, this has been this has been a lot of fun. I ⁓ you know, I think we can go on even longer. Like there's so much information and content that I think my my audience would definitely get value from and I'd definitely love to do this again. ⁓ but before we head out, you know, we we talked about certain things. Tom Kline: Great. IgniteUps.ai: kind of tie it all together and how can a dealer win today based on all the information we we said, you know, what can they do? Like what's step one after listening to this this podcast and and what can they do to to kind of execute and and play at a higher level? Tom Kline: Yeah, I mean I think think it's that I'm I'm not gonna downplay that the dealership isn't It is And it needs be that work needs to be done. Protect your legacy, protect your assets, right? I mean, as an as a quick example, you know, I walk into dealerships who think they have enough insurance, and just to use one to pick on one specific item, know, they say, Well, we've got five million dollars of liability insurance. To I respond, say, Okay, well, how much is your land and your building and your parts and your used cars and your blue sky worth? ⁓ And do the math, and I'm gonna pick a number out of the sky, but usually the number on a single point store is between between twenty and thirty million. ⁓ I say, okay, well, you know, ⁓ your lot attendant hits a school bus full of kids, seventy two kids You're self-insuring between that five million dollar level and the twenty-five million of what your enterprise is worth. Like you're totally exposed. And they're like, ⁓ my God, nobody ever told me that. And I never understood that. And so my answer to your question is is know what know what your assets are and know what you need to protect. And then start starting, right? None of are are are perfect in this in this area of of risk ⁓ and protecting the dealership and compliance and so paying for a software package like I know we pay for ABC companies so we're good and like if you've never checked what that company is doing for you and who's in charge of it and who periodically does audits of it and who's report like there's a lot there's work to be done there. So start by starting and is something you should work on. Fifteen minutes a day or whatever, twenty minutes a day, half an hour a day. It's just part of the routine that the dealer principal should have the discipline of making sure that they're protecting the store. Because doo doo does happen, and it happens to everybody, and it's not a a matter of ⁓ if, a matter of when. And I'm not here, I'm not I'm not a like a scare you kind of guy. I can just tell you that. in my thirty six years of doing this, you know, I see stuff that would make your hair white if it's not already. and I see it root and I see it routinely and I see it regularly and I see ⁓ problems become huge problems because not being attended to. And so a one thousand dollar problem can quickly become ⁓ a, know, state AG issue if you're not careful. So succinctly ⁓ that's my that's my key. IgniteUps.ai: Hundred percent. Tom Kline: My best council. IgniteUps.ai: I I I appreciate that. And and real quick, just ⁓ just for me, I think everything you said for sure they need to do. and put something get a plan, put it in writing, and I would start with the book Excellence Wins. I I think that is just a book to take care of your c consumer, the customer, and more importantly, when you take care of the people, you can avoid a of these headaches. So Until next time, thank you, Tom, for for coming on the on the podcast. And my audience, you know, please like, subscribe, share if you find any value. until next week, got a lot of other topics and zach should be back and we've got some other guests. But Tom, until next time, I appreciate it. Thank you so much. Tom Kline: Thanks, good to see you, appreciate it, Chris.