ASOTU and Reynolds at NADA 2024

Paul J Daly: All right, I'm here with Chris Walsh, president of the Reynolds and Reynolds company. Chris, thanks for joining us.

Chris Walsh: No problem, my pleasure. Thanks for having me.

PD: Oh, it's a pleasure. You guys have a great spot. Obviously, everybody says that NADA feels—the energy is amazing and it feels something's different this year. It's something we always say, but I think it's because it's always true. From your perspective, you obviously touch a lot of dealers and a lot of pieces of the industry, what do you feel is different this year in '24?

CW: Well I think we've got more new products that we're releasing, more new functionality we're releasing than ever before. I think we're really trying to—we were talking a few minutes ago, you know, connecting the dots between the role that we play in the industry and how can we partner with other entities in the industry to provide—whether it's a better workflow or just a better overall product. So think of things like, eContracting is a good example. Right? We're not a lender. We need to partner with lenders to build the right integration into their lending platforms which I think in turn provides a better solution for our customers. I like to think it provides a better solution for consumers buying cars which is really what we're all going for.

PD: For sure. Now you did, you were on a panel yesterday at the Automotive News Retail Forum. Tell us what the summary of that panel is and why you think that was so important.

CW: Yeah, so it was really all about data and we were fortunate to be joined by Abe Samari, who's the chief data scientist at the Swickard Automotive Group and Sam Jarvie, who's one of the vice presidents at the Ken Garff organization. So they know way more about data than I do, but it was really interesting to hear them talk about how they view data and what are the challenges and really where they're going with it. And it's, you know, what I took away from it is, it is a journey that they're on. No one's got it figured out yet. Everyone's going through and making some mistakes but when they make the mistakes, they're learning. I'm trying to learn. Reynolds is trying to learn, you know, what part can we play in providing better data to customers. Because typically when you think about the data that's in a DMS it's kind of rearview mirror kind of data. Right? Like you bought a car, you come in for service so it's kind of historical. What we're really interested in is what can we do that tells you what is the consumer likely to do next? Because people move, people get married, their lifestyle changes and now they're looking for different kinds of vehicles. So if you know what they're really interested in and where they want to go next, I mean, it stands to reason that you're going to talk to the customer differently. You're going to market to the customer differently. So I think the messages will be much more relevant to the consumer and I think that's what consumers really want.

PD: Without a doubt. And I think people understand there have been some changes going on at Reynolds. And there's a shift in perspective. What do you think the dealer mindset is when they're entering like some exploration of Reynolds products and how are you meeting them there?

CW: Well, you know, when I got in this position I began to travel around the country talking to customers about where do we perform really well, where are the opportunities for us to be better. And I really wanted, you know, kind of frank, candid feedback. And I got it.

PD: Dealers are never really afraid to give you frank, candid feedback whether you ask for it or not.

CW: That's exactly true. More so on the East Coast than the middle of the country.

PD: I mean, you know—well you're from the Northeast or you lived in the Northeast so you understand at least, like, you have the thick skin, you can deal with it.

CW: Yeah, I can take it. So, but what I learned is that, hey, we think you guys have great products and we think you guys have really fantastic people. But there was some friction that existed in our relationship with our customers and that's what I was really looking to eliminate is that friction. Because what I want us to be focused on, I think about why does Reynolds exist in the first place. And I think it's real simple for us. I think we exist to help our customers be successful. And I do think it's that simple. And I think when everybody in the organization starts thinking that way and starts waking up and going to work and, "This is what my job is," we build better products. We have better support. We build out our infrastructure to meet the evolving needs of customers. And it's really resonated with our customers. You remove that friction and now we're seeing much more adoption from a new products perspective.

PD: So we're heading into 2024, it's just the very beginning of February. There's all these things shaking up in the industry and the big EV conversation, Big Data conversations. What do you see, like where can we be as an industry and where are you going to help us be by the end of this year?

CW: Well I mentioned eContracting. I think eContracting is one of the biggest initiatives we have as a company. I think providing a better workflow there for dealers, taking a dealer from 10 days of contract in transit down to two is—provides tremendous cash flow benefit to them that they can now take that cash and redeploy it in other ways that are more beneficial to their growth. I think that's a big initiative. We talked about data. So whether it's a CDP initiative or just how do we provide better data so that they can make better decisions and provide a better experience for their customers, that's really important to us. I think, you know, I was thinking about this the other day, we had a customer in. If you think about the complexity of selling a car, it is easily the most complex transaction that exists in our country right now.

PD: Why do you think it's the most, more than a house?

CW: I think it's more than a house.

PD: Why?

CW: I mean, there's so many other—there's so many pieces to make it all work. You've got, certainly you've got technology. You've got the people that are doing the transaction. You've got lenders, you've got OEM, you've got a ton of regulatory pressures that are being exerted on dealers that they've now got to deal with. You've got things like FTC safeguards. You know, how do I make sure that the data is being protected and how do we provide a great experience for our consumers to make it fun to buy a car and make them want to buy a car from you. Not just this car, but their next car, the cars for their kids. So I think anything we can do to reduce that complexity and simplify that is something that we're really interested in doing.

PD: Well that's a great point. Now that you framed it up that way, it has me thinking like all of those complexities that are in there—and a lot of those could be part of say a real estate transaction. However, there's an expectation by the consumer of speed in an auto transaction that now dealers are expected to deliver on that complexity immediately. So, I mean, I think that the speed, even the fast contracting, adds a very important and unavoidable layer to that conversation.

CW: Yeah, and I think speed is important but, you know, what I hear a lot from dealers is like, "Don't take away my ability to manage the transaction. Don't take my ability to make sure that the transaction's accurate." That you've got perfect-penny payments. So that you've got a really strong workflow so when the customer is online and it's $499 a month and they come in and all of a sudden I'm at $547, that doesn't feel right for the customer. So that's a big part of it as well.

PD: I mean, that's part of the stigma that we push back against because even, there may be legitimate reasons for that to change that way. But the second that happens, the customer's thinking, like, you're playing games and that's exactly what you're trying to avoid.

CW: Yeah, I mean, we are firm believers in the franchise automobile retailing system.

PD: Amen.

CW: We think it is the absolute best way to sell cars. I mean, you look at everything that's been going on in the last couple years, you know, since Covid. All the changes that dealers have had to adapt to. And I've been in this business for 37 years and I've seen all sorts of changes but what's amazing about our customers, about this industry, is their resiliency and their ability to always figure it out and always find a way to get past the issues. To eliminate the question marks and to do everything they can to provide a great experience for their consumers. So, are we all perfect? We're not all perfect. But are we striving to be perfect? I think everybody's striving to be perfect.

PD: Well thank you so much for spending some time with us. We're excited for the work that you're doing and your heart for the industry as well. Thank you so much.

CW: Thank you, appreciate it.