Latest / Auto Collabs / How To Actually Reach In-Market Shoppers with Dave Karasick
Transcript
- 0:00[yawning] Yeah, nice. How you start the episode with a yawn. [upbeat music] This is Auto Collabs. Oh, that's nice. Yes. Okay. When- All the people are now yawning that are listening.
- 0:16[laughs] That's, that's exactly the intended effect of any podcast. Did I make you yawn? Leave a comment. Great. I, I wasn't looking. So yeah, leave a comment. [laughs] That'd be great. Comment with your favorite emoji.
- 0:28Yeah, let me- That's perfect... let me know you yawned. Yeah. Oh my gosh. Look, we- whenever we get to spend a little time together in person, which we did recently in New York, I'm always amazed at two things.
- 0:40Um, number one- How short Michael is. [laughs] Oh my, oh my gosh. I hadn't done it in so long. It's been so long. Me- uh- I apologize. All right, give me your number one.
- 0:50Give me your- I was making sure my mic was lower than your nose- I think I forgot my number one... 'cause I wanted to be like, "Eee." [laughs] The bzh.
- 0:56[laughs] Number one is how much faster conversation goes when you're in person- Yep, yeah... and ideas flow. Number two, I wonder how we get anything done. [laughs] I don't understand it. I don't understand it.
- 1:10And I wonder how we haven't got in more trouble. Yeah. I- You know, the one thing that dawned on me is how fast you guys walk with those long legs of yours. [laughs] Oh, I know.
- 1:19I was hauling up, up Seven- uh, what street was it? We walked like 30 city blocks- Hold up in New York and he walks- Yeah... and I'm like, uh- He was like, "How do we get out of here faster?" Frank Sinatra playing-...
- 1:26bowl- going bowling. I'm like, "Daloodaloo doo doo doo." [laughs] You guys are just like, "Vroom, vroom, vroom." I know.
- 1:31I had the, I had the Jets on, but made up for it with, because we had time for some really great pizza. Oh my goodness. Oh. Well, you, you actually kinda came in with the data on the pizza, Carl.
- 1:41I mean, it's, it's a lot easier to find a good slice in New York City, granted. Like, you kinda make a left in any pizza shop, and you're like, "This is really good." But- Yeah, but- You went-...
- 1:50to know there was data on it, like know there was a rating on it, that it was rated by Dave Portnoy- Yep... that we had to- So good... test him out and see...
- 1:58Like, this kind of actually ties into what I think we need to talk about with our guest today. It is. Uh, data and urban science. Data and cooking right there. Oh. [laughs] It's right there, right? It's like boom.
- 2:08We get these pre- we get these pre-interview- Ah... things. I'm gonna bring it up probably right as we get started, because it's the most interesting one-liner, and it's all about data and cooking. Yeah. So, yeah.
- 2:18And now I'm hungry. You're hungry for data. Let's get into it. [upbeat music] All right, we're hanging out with Dave. Dave, uh, man, thanks for joining us today. Your beard precedes you. So...
- 2:33[laughs] Literally, it looks like such a, such a burly, manly beard that when you walk around, the first thing to break the plane of the finish line is your beard. Gosh, I hope so. It's so good.
- 2:43[laughs] You know when Dave shaves off his beard, it reveals another beard. He's like... It, it, it, it definitely allows me to walk into a room with... Yeah. It's so good. What did you say, Michael?
- 2:49I said when Dave shaves his beard, it reveals another beard. That's right. [laughs] That's actually just his beard's beard? There's a skit about this somewhere. A lot of beard beard, yeah. Like, I, this is the day beard.
- 2:59I have a night beard for later on, yeah. [laughs] My evening beard. It's so good. All right, I have to read, because we, we like to, you know, get to... There's a, there's a little bit of background. There's a little...
- 3:09Uh, we, we're not, we're not afraid to say, like, we ask questions of our guests before they come on here. And the way... I don't know if you wrote this, someone else wrote this, GPT.
- 3:18I don't care who wrote it, but this is the- I-... this is the first phrase, 'cause we gotta dive into it. It said, "Once upon a time in the early '90s," and that now I'm like sitting by the fire. I went right back.
- 3:27You know? I know where I was in the early '90s. Right. So I'm like, "I... That was, that's where I was."
- 3:31He said, "I was a broke, unemployed chef with nothing but a dream and a serious lack of jobs prospects, so naturally I wandered into a GM dealership." [laughs] Make $70,000 in your first year. I'm in.
- 3:45[laughs] Gosh, I would kill for that. Dave, okay, take us back to broke chef, because now I'm super intrigued by the chef portion of this whole legacy.
- 3:54Gosh, I, you know, I had a culinary career that started at a, at a small hotel in my hometown, very nice hotel, and quickly grew to, to expand to where I was a corporate chef for a company called Gilbert Robinson, which, um, they, uh, they ran Daryl's and, and Houlihan's, if you remember those, uh, those restaurants.
- 4:14Yeah. Yes. So I was a corporate chef for them in their test kitchen.
- 4:16And, um, back then we were making everything from scratch, but as you know, as time and things progress, uh, they wanted the things to be faster and quicker and easier to execute.
- 4:28And so they started going away from, you know, fresh ingredients and, um, and, and homemade recipes, and started bringing in powders and bases and, and things like that. Yeah. And, uh, it just really- Yeah...
- 4:41kinda took the, the, the oomph out of it, right? The fun out of it. And so, um, the last time I... When I, I got fired for speaking my mind about it, and I, uh- [laughs]... I didn't have anything to do.
- 4:56And, and, uh- Uh-huh... somebody said, somebody said, "Hey, if you're gonna be successful and you're gonna make some money, you need to be selling big-ticket items," and it was either real estate or cars.
- 5:05And real estate, I realized I needed to have a license for. Ooh. Um, and I needed to have training and stuff like that.
- 5:11But when I walked into a GM dealership, uh, Hampton Chevrolet in, in Hampton, Virginia, they hired me on the spot. They checked your pulse. [laughs] That's right. [laughs] Walking in here, right? Yeah.
- 5:23And, uh, and I was selling cars the next day. I, I just got a, "Here you go. Here's the keys. Here's the tags. There's the cars. Good luck to you," right?
- 5:31And, um- When you're, when you're a chef in a test kitchen, like, does everyone wear a bracelet that says, "What would Jacques Pépin do?" [laughs] Or like, "What would, what would Julia Child do?" Like, what...
- 5:43'Cause, 'cause isn't he, like, the master chef of test kitchens? Yeah. So it was, uh, it was unique, right? So the... I ran the entire kitchen, but we had a separate part that only specialized in a few menu items.
- 5:56And so that special part was responsible for quality testing, and then going out to the consumers after they ordered it and asking, you know, very, very similar to what we do with surveys now, right? "How did you enjoy?
- 6:08What was the flavor like? What would you like to see differently?"And, um, you know, get that feedback.
- 6:13And then if it went well through that test kitchen process, then we rolled it out to the entire menu and then across the company. And so- Oh, that's amazing.
- 6:19That always fascinates me because I'm like, "Look at the lengths you're willing to go to for a $35 meal," and imagine if there was some sort of R&D customer- Hm... experience,
- 6:30you know, department in a dealership that's like, "This isn't a $35 meal, it's a $68,000 buy." [laughs] "And we'd like to just, you know, try a new... We're trying out a new experience to make it better for you.
- 6:43Would you be willing to participate?" Yeah, right. Well, look- We don't have R&D. We don't, we literally don't have R&D as a lane in retail auto. Not, not largely. There are some dealerships that have it.
- 6:56Some kind of- But we don't have, we don't have a lane in auto for it. We do. I mean- Um, matter of fact, I work with a lot of- There you go...
- 7:02I, I work with a lot of dealers with our tools that, um, are able to do research and development based on the data they see- Well-... and change their processes and get better, so yeah, it's, it's- Okay.
- 7:11Then let's get into that because you basically stayed in the industry for 22 years. You eventually became a GM.
- 7:17Uh, you know, uh, in your words, you said, "Herding, herding salespeople and managing chaos, making processes work, squeezing every dollar of profit out." So you've been in the seat.
- 7:28You've been trying to make sense of what works and what doesn't work, navigating a lot of situations happened in the 22 years starting in the early '90s. So now what you're doing is actually back to what you
- 7:42kind of like test kitchen mode- Yeah... like you said, with the data. So, like, tell us about that. Yeah, so full circle, right?
- 7:49So, you know, one of the important things is to get feedback on what is happening currently, so you can understand if there's any gaps in improvement, right?
- 7:57And so, you know, util- I've always been a data guy, and it was a very easy transition. Once you get in the world of automotive, man, data seems to come from everywhere, right?
- 8:07But it's tough to make sense of it, and it's tough to know which data is, is best to use and how to utilize it, and then take advantage of it.
- 8:15And so, um, you know, I really spent the last eight or s- seven or eight years working with dealerships on these, on Urban Science solutions, helping them continue to squeeze every dollar out of a, out of a deal, continue to squeeze every sale out of a bucket of leads that they're getting on a regular basis.
- 8:34And the r- the way you gotta look at it is, is, you know, how have things been progressing over the last, let's say, 90 days, right? You know, I... The, the...
- 8:42I'm gonna be speaking to past performance predicts future behavior. Now, I started that, that little catch line, um, in, in high school because that's how I choose, chose to d- how, how I asked girls out, right?
- 8:53So- [laughs] Um, if they, if they were nice in the past, if they had good reputations- [laughs]... you know, then I would consider them.
- 9:02If they were, you know, they're total, you know, if they're total Bs, then, you know, I just, I went on down the road. Yeah. And, uh, so- I think the ladies have a similar process, too.
- 9:12[laughs] They, I'm sure they do, right? I, I- I'm confident in that, yes. Absolutely. Well, you know, um, anyway, so it worked out so well for me anyways.
- 9:21[laughs] I, it worked out so well for me that I've been married several times, so I'm a great closer but a terrible, I have terrible retention rates. But, um- [laughs]
- 9:29But the, the, the fact is you've really gotta understand the background of what's happening at your dealership, and there's some key KPIs that you can look at that say, "Hey, if I don't change anything, this is gonna continue to happen."
- 9:41And really, it's identifying those KPIs that I wanna help dealers, you know, kinda look at and find out, "Hey, w- what's happening in my background, and where can I best deploy that change to get a better b- to get a, a better result, you know, from, from the processes that we're doing or from the sales that we're, that we're, uh, having, the leads that we're generating, the inventory that we're, um, that we're carrying?
- 10:04How can we get better at doing the things that make us who we do, who we are in the automotive world?"
- 10:09You know, one of the things that I've known about, uh, Urban Science and the data that's available there and, and some of, actually, when I used that data when I was at a dealership, is there's a lot of, like, demographics, like, local data available.
- 10:23And you've said something like, "Past performance is future results."
- 10:27One of the things that I've, that has always been of interest to dealers is conquesting or targeting net new areas of business around them or net new personas. Yet
- 10:40what I'm hearing you say, and what I've seen the data say over and over and over, is the buying matrix of a given dealership is very localized. It's very... And, and, and meaning by persona or by area.
- 10:55And that if you were to just go deeper with that persona or that area, you would drive broader results because there's enough there there.
- 11:05Are you seeing that data still ring true, especially as people are becoming less and less loyal? Yeah.
- 11:12So there is a lot of, uh, y- there's a lot of interest in our dealers in, in knowing where those customers go when they don't go to them, right?
- 11:20And it's really, that's kind of the gauge, the model that, um, dealers are latching into. If I understand why the customer didn't buy from me, then I can improve my processes so that I don't accompany that in the future.
- 11:35And, you know, whether it be knowing who the dealer is that's taking the leads from them, knowing where geographically those leads are coming in from, knowing which salespeople have challenges with different lead sources, all those things really, uh, when the dealership understands that, they can start to adjust processes to better improve their tactics at the store and, and drive measurable results.
- 12:01What we see is that-Most dealers, regardless if the customer started as an internet lead, a phone lead, or even a showroom lead, but the follow-up is a one s- is a, is a one size fits all type of scenario, right?
- 12:14We're just, "These are the templates that we have. These are our processes that we have." But it doesn't seek to understand the customer or where they're at in the marketplace.
- 12:23And the one thing that customer and cars have in common is that they're both very complicated machines, and we have to know both of them very well in order to, um, in order to sell more cars and be sales effective in, with our dealerships.
- 12:38And so, the question is, we know a lot about the cars, right? We get, we get brochures on them. We get, you know, all kinds of tech specs and websites dedicated to the specs of the car to help our people understand them.
- 12:50But what tools does a dealership have to better understand the customer journey? And, and that's what's really kind of been a, a lightning rod in the industry, so to speak.
- 12:59CDPs have taken off, for example, um, because, because, you know, they're interested in all that customer data to be able to fine-tune internal processes to take advantage of that. And it's relatively easy.
- 13:12Once you've got the data laid out in front of you, you can see these trends. I mean, they light up like, like, uh, like flashlights in the dark. Mm.
- 13:18Um, you know, when the solutions, and all of a sudden dealers click and they see that and like, "Wow, why aren't we doing a better job with this? We have a process in place." Well, maybe it's not the right process.
- 13:27And, and, you know, any kind of data that you can get to uncover what those process is, is really beneficial in the long run. Do you see- This is really, Kyle and I were talking about this just the other day,
- 13:38the, how the technology can speed up the human interaction piece, and that, you know, the, this, this thing in our industry where it's like tech first, tech first, tech first.
- 13:52You know, going back to what, now Kyle and you both have said, past data predicts future behavior, and behavior leads us to the human.
- 14:00And as long as human beings are buying cars, then we need these types of insights that you're talking about to better inform the way that n- that we should behave for the customer, right? Correct.
- 14:16And so often it's like the strategy begins with, with a shiny object, and that's why it falls apart and why there's no adoption. I like what you're talking about here.
- 14:27It's like, but we can use the data to predict where we should move next. But the critical component here is that a human being must take an action. Correct.
- 14:37And that is, it is the human aspect that really bonds the customer to the dealership, right?
- 14:42How, how do you help the dealership move from cont- how do you help the customer that you're working with move from contact to close, right?
- 14:50All customers have these, these things in, in their brain that they need to overcome before they're gonna purchase a new car.
- 14:56And, you know, when I got in the industry 20-plus years ago, it was, you know, you had to sit in front of a customer and you had to ask certain questions, right? "Who's gonna be the primary driver?
- 15:06Uh, what options did you have on your last car that you want on your next car?"
- 15:09I mean, things to help us understand where the customer was, not only in their journey, but what they were looking for specifically so we could tailor our sales approach to the customer to meet them where they are in the marketplace.
- 15:21Well, that same need from the customer still exists today.
- 15:25The problem is, is that now that we've got this interference of the internet lead and the emails, it's hard to build that personable con- that personal touch again with the customer like we were when we were face to face shaking hands.
- 15:38And so, the dealers that are really kind of gr- um, the dealers that are
- 15:46utilizing the data to change their behavior on how they work with the consumer is really building value in the consumer's mind and loyalty and long-term engagement.
- 15:58We've got, we see, we see lead sources that, that close in a few days. We see lead sources that generally close in a few weeks. And then we see lead sources that might close after two or three months.
- 16:10And if the dealers don't recognize that some customers are high funnel and some customers are low funnel, and they're not attacking those customers where they are in that journey, then the, all of a sudden they, they risk being irrelevant in the customer's mind.
- 16:24They keep sending out, "Hey, are you ready to test drive?" Well, just so happens that this lead source, you know, the data shows this customer's probably two months away from making a decision.
- 16:33So, does that test drive- Right. So, the answer's no. Stop asking. [laughs] Correct. Right? Right. Yeah, yeah. So, how do you- Well, how do you, but how do you keep the team engaged on something like that?
- 16:41What are you seeing in success to keep the... Because I'm, if I'm a salesperson, I'm like, "How do I find a deal in the next one to three days," right? Two mon- right. It's like two months from now.
- 16:48Two months, you kidding me? Call me when you're ready. So, that is the thing. Yeah. Right? Like- Yeah.
- 16:51How do you, how do you adjust processes to keep your team engaged and not, like, let leads go to die or let leads get missed that need to be prioritized, that are maybe getting deprioritized because of volume, right?
- 17:04Yeah. So, there's a couple of different ways that, that we suggest.
- 17:06First of all, if you know who's left your business, who's customers in your CRM right now, the average defection rate in the United States right now is about, is just clo- just shy of 20%, 19.6%.
- 17:17So, that means the average dealer opens up their CRM in the morning, almost 20% of those customers have already left the marketplace, and the, and the dealer doesn't even know about them. Right. Wow.
- 17:27So, if, so for the first thing, first thing is, is if we eliminate follow-up on those customers, now every time the c- every time the dealership is dialing for dollars or typing an email to a consumer, they're actually reaching to somebody who is still in marketplace, right?
- 17:43And so, that confidence gives the BDC team or their sales team the, the initiative that they need to continue this long-term follow-up.
- 17:52Secondly, if you approach it from the customer standpoint, and you look at it like, "I need to know where this customer is in their journey in order for me to be effective to them," we have to ask.
- 18:03And I've got, I had one dealer, great example, and-Uh, she saw from her data that she had some customers coming in on her internet leads that were very low funnel.
- 18:14She had some customers that were mid-funnel, and she had some customers that are high funnel. And she's like, "How do I send a message out to these customers that's gonna resonate with everybody," right?
- 18:24And so, and I don't remember the exact s- the exact verbiage she used, but sh- her first email went out to the customer, "Hey, thanks for inquiring with us," right? "We value our relationship.
- 18:35If we know at the dealership that oftentimes when a customer, you know, sends us information or asks us a question about a vehicle, they could be just starting their journey,
- 18:44they could be somewhere where they're looking and researching models and equipment, maybe trim levels, or they, they know exactly what they want and they're ready to buy.
- 18:52If you let me know where you're at, I can make sure that I'm sending you the information that's relevant for where you are in the marketplace." Mm.
- 19:00And that kind of approach, all of a sudden she started hearing from those low funnel customers. Uh, she started hearing, it's like, "Well, if you just write, if you can give me this deal, then I'll buy the car today."
- 19:10And then consequence, she's also hearing from those customers that were higher funnel, "Hey, I just started this process. Don't really know where I'm gonna land. Um, my, my cousin has a car, has this car.
- 19:21Just thought I'd, I'd check it out." At least she started getting some engagement from them because it resonated with them. It wasn't the same approach that she was getting from every other dealership, right?
- 19:31"Come in now, come in now. Test drive now, test drive now." It sought to understand where the customer was in the marketplace so they could address those concerns, right?
- 19:39Mid, mid-funnel customers, they're worried about their trade. They're worried about being able to finance. They're worried about being able to, uh, you know, do they have money down payment, right?
- 19:47And so again, how does a dealer take those customers from contact to close knowing where they are in the funnel, provide them the information that they needs.
- 19:56If they just send out templates that don't try to move forward, the customer forward in the process or at least assist them, customers close their ears, they turn off their emails, and they stop responding. So- And then-
- 20:08I, I mean, as, as we get close to landing the plane here,
- 20:11I, I always like to ask this question because of all the people listening, typically there's a lot of low-hanging fruit that you're aware of because you see it time and time again.
- 20:21So I always like to think, like, okay, how can the most, most people possible do something mean- meaningful from this conversation?
- 20:28Where do you typically see the lowest hanging fruit where you analyze some data or you step into a situation and we're like, "A lot of people typically adjust this first or realize this when they get their first look"?
- 20:41Yeah.
- 20:41When they get their first look at the data, the number one problem area that, that just peaks out to every single dealer that gets at that aha, that, "Oh, my gosh, I didn't realize it," is their follow-up cadence somewhere between, between the eighth day of follow-up and the maybe the 21st day of follow-up.
- 21:02It check, they check the box that they completed, but it's not resonating with the customers. Mm-hmm.
- 21:07And, and literally that's where we see almost 40% of the defections that take place within a dealer's CRM is in that kind of timeframe.
- 21:15And so, instead of just checking the box and sending an email and checking in, dig in- We followed up. Right. Yeah. We followed up. Yeah.
- 21:22Dig into it with some purpose, some vigor, some meaning, something authentic, right? Grant Cardone used to say, "Give, give, give," right?
- 21:29What have you given, given the customer to inspire them to want to do business with you, to inspire them to want to email you back? Um, are, are you just checking boxes or are you working, are you selling, right?
- 21:41That's like, that's the key thing. Are you connecting with the customer? I think that's really the important message we wanna put out there. Mm. I mean, this just emphasizes what we care so deeply about.
- 21:53We're gonna be talking about even more at ASOTU CON and getting into this kind of information in more detail. Um, you know, the question comes up, well, how do we do it? How do we do it?
- 22:01This is exactly why you need to be in the room at, at ASOTU CON. But man, this has been such an enjoyable conversation.
- 22:07We can't wait to connect with you in person, which is really I think the whole point of this thing, is how do we- Right... get from the tech to the in person- Yes... faster? Um- Exactly.
- 22:17Thanks so much for joining us on AutoClubs. I appreciate the time, guys, and I look forward to meeting you guys in person at ASOTU CON. [upbeat music] Do you think a T-shirt would sell if it just said, "I'm high funnel"?
- 22:33[laughs] [laughs] I mean, at what? That, at like, at- It would sell, it would sell like hot cakes. Okay, okay. I'm telling you. Where, where, where does that sell?
- 22:43That sells best in a city or at a, at a meetup of marketers. Yeah, it's like a CMO conference. And it, it's like, it's like- For sure...
- 22:52a guy's, a guy's willingness to say, like, "I'm not really interested yet, but you should try to get my attention." [laughs] "I'm high funnel." I'm high funnel. [laughs] It's very non-committal.
- 23:01Is anyone actually low funnel, though? Does anyone wanna- Oh, G- are you kidding me? [laughs] I'm, I'm a low guy. Anyone low funnel? That's always- I'm always low funnel. That's great at a bar. Yeah. "I'm low funnel."
- 23:11[laughs] Yeah. That, that, that gets you into all kinds of weird situations.
- 23:16[laughs] No, but I mean, here's, h- h- here's what's interesting, and I think this is, this is what, w- we're all chasing this thing that, I don't know, 2005 through 2009 everybody was like, "Oh, the internet exists."
- 23:27Like, "Now we're gonna know everything about everyone," and we still are sending 13-day follower, follow-up emails that say, "Are you still interested-" Or a generic... "in the car that you inquired about 13 days ago?"
- 23:38You know? That you were interested in. Yeah. Yeah. I, I think the biggest takeaway from that whole conversation for me was his, his last insight.
- 23:45He said every single dealer they talk to, there is a gap between what they are doing and what they think they are doing. Mm. That's right. And I think that that's, that's where the data comes in.
- 23:57Data's like, "This is what you're actually doing." Yeah. The eye-opener for me is when you consider, you know, 'cause we kinda talked about, he, he had mentioned, um, you know, first interaction to close, right?
- 24:09Um, and I f- I just think-Most dealers are in rural markets scattered across America. I mean, even Canada, for those that are tuning in from, from Canada. Most dealers, franchise dealers are in rural markets. Mm-hmm.
- 24:22And you look at the population of a rural market, let's just say it's 15,000.
- 24:26If you get 1,000 leads a month and you burn through 95% of them, you are effectively burning the entire population of your community in six months. Wow. Pshew. Dang.
- 24:40Um, but then I think about the re- like, I actually wrote Prius Tundra 4Runner because I think about, well, what's the flip side of what Dave's talking about? Uh, I experienced it.
- 24:50When you go into a dealership that has a dialed-in process and they know how to handle the opportunities, whether they're high-funnel, mid, or low, and they know how to recognize it, and their team is trained to pick up on those cues- Mm-hmm...
- 25:03it's like, we went from buying a, a Prius for our kids to learn to drive on at a Toyota store.
- 25:0928 days later, so impressed with the experience and how they interacted with us, that I walked in and said, "I want that Tundra." And now we're already back into thinking of, like, my wife really likes the new 4Runner.
- 25:22Whoa. They're, they're gonna get three deals out of us in the next, you know, 18 months. And now Emer, who you guys know, his wife's looking at a 4Runner because she's seen how excited we are. And it's just like that.
- 25:35My dad's thinking about trading in his to get a Tun- a Toyota. Like- Whoa... just think of the impact of picking up on cues, using data to, the behavior piece. That was the m- the, the unlock for me.
- 25:46It's ROI you can't see. It's like, use the data to inform behavior. It's ROI you can't see. The ROI- Yeah... you can't see. Ooh, come on. Coming soon to an ASOTU near you. Put a panel up on that. Let's go.
- 25:56All right, I think we've done enough damage for today. Thank you for being here with us. On behalf of Kyle Montzer, Michael Cirillo, and myself, thanks for being here with us on Auto Collapse.
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- 26:28[upbeat music] Welcome to Auto Collapse. [laughs] Welcome to Auto Collapse. [laughs] Why are we recording? [laughs] Are we rolling yet? Not yet.