Automotive News Retail Forum Panel: Creating Opportunities with Customer Data

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Emma Hancock, Automotive News: Good morning everyone and welcome to this special session presented—sorry, just getting comfortable—presented in partnership with our exclusive lead sponsor, Reynolds and Reynolds. In our session today. Yes, please applaud. In our session today, Creating Opportunities with Customer Data, we're going to be discussing how successful dealers are using data to drive better interactions with customers and drive better profitability. We have roughly 20 minutes together, and we're going to try and pack a lot into those 20 minutes. So let's get our discussion underway. It's my pleasure to introduce our panel this morning, Chris Walsh, president of Reynolds and Reynolds. Abe Samari, director of retail strategy at Swickard Automotive Group. And Sam Jarvie, VP of sales and F&I operations at Ken Garff Automotive Group. Welcome, everyone.

Chris Walsh: Thank you. It's great to be here.

Sam Jarvie: Thank you.

EH: Okay, so we know getting the right data, especially first party data, is more important than ever. Part of the challenge is data gaps, messy data coming in, un-unified customer records and so on. How have you changed the way you collect data?

CW: Well, I guess from my perspective, I think, you know, it's kind of a two-step process. One is to collect the data itself. So, when you have transactions, you collect data. That's not really the hard part. You have a lot of information about consumers, but a lot of times that information is residing in, I guess, silos, to a certain degree. So then the next challenge, the next step, which is the challenge, becomes how do you connect all that data so that you have kind of a unified view of that customer. So I think that's the way we see it from the technology side.

Abe Samari: Yeah. No, that's absolutely right. We, about 2 or 3 years ago, we went on a journey to create a data warehouse where we started storing a lot of our customer information, transactional information, information from our websites and even some of our OEM partners. So we started merging that. And initially we thought it was going to be easy not knowing a lot about data. But we hired some smart people, who helped us. But it was it was quite the journey to really unify all that information into one warehouse that we could use for various purposes.

SJ: Yeah, I would say similar to us. We had a data warehouse, but it transitioned from just financial data, deal data to all the other software systems we use, whether it's our digital retail tool, our CRM tool. And I think that's where the complexity is. It's really easy to report on sales and financial data. It's really, really hard to get the journey up that happened before the transaction.

EH: Well, we've been talking a lot about this getting ready for today, and I think I know the answer to this already, but how much have you come to rely on data and what areas of your business does it affect? It sounds like it's come to affect all areas of your business.

SJ: Yeah. I can't think of a portion of our business that it doesn't impact. Most customers, like 99% of them, I'm sure, start online and we start collecting data from that point. And then when they show up to the store, it's all through the CRM system into the transactional data and through the DMS. And then, afterwards, we want to retain them for service and then continue to market to them. And we need to understand all the consumer behaviors: what they've spent, what they're looking for to really maximize our profitability and sales with them.

AS: Yeah, we—a funny story. We went through a DMS transition and we had the data warehouse before and in transition, you know, the management team they were all like blind mice walking around. They're like, I have no idea, you know, what my numbers are. I need to know. And it was very telling, right? Everybody at every level in the organization uses data for everything. You know, whether it's the BDC or our regional vice president. And when we went through that transition it was very telling that, you know, how important it's become these days.

CW: Yeah, I think, you know, we—you certainly use data to make decisions in how you run your business and the things that you want to do. But I think the other side of it is, you know, the consumer side, right. Like, the more you know about the customer, the better experience you can provide for the customer. So if we were to go back to 2020 and say, what's 2024 going to be like, we would have said a majority of deals are going to be done completely online. Well, that hasn't even come close to, you know, manifesting itself. But what has happened is kind of what Sam touched on. So a customer does a bunch of research online. So it's a digital experience. And then at some point they come in the store and it's an analog experience or a brick and mortar experience. But when the customer comes in the store, it can't feel like you're starting over again. Right? It has to be a connected experience so that the data you collected digitally flows into the in-store experience of the customer. It's a seamless transition for them and it doesn't feel like it's the first time we've met or you don't really know what I'm here for or what I want to buy—the conversation just kind of picks up from there.

EH: Yeah. That's so true. So you mentioned the consumer or the customer. And, you know, how can data genuinely contribute to a stronger relationship and a stronger experience? Do you have any real life examples of data driven touchpoints with customers where you've really seen it make a difference and you thought, you know, there's some proof of how it's working?

SJ: Yeah. I think whether you look at the sales or service side, there's a lot of great examples. Chris nailed it. When a customer does so much research online, if we start back at the first step of the sales process, it's very frustrating for them. And so when we can see what they’ve done online, we can pick it up like a relay race. We're just picking up from where they left off and then continuing through the store, but then so many times we don't sell them the car and then they go back into that digital experience. And so I think it's bridging the gap between the traditional and the digital experience and letting the customer choose their journey. And we have to be supportive of it. And then in service, it's the same thing. If we recommend services on their prior visit that they needed that they maybe didn't have time to do and then we don't address this time, they start to wonder if we told them the truth last time. And so for us, we have that front and center so we can bring it up when they check in their car the next time, or even it facilitates through our call center. So if they call in for an appointment, the call center is going to be asking if they want to schedule those same services. So it just makes it an easy process for the customer.

AS: Yeah. I think the most important thing for us, I mean, I think the journey is really just starting, especially for a lot of dealerships, including ourselves. But in our call center, one specific example is that we have, you know, now sort of a unified view of the consumer. And so if they're looking for a vehicle, especially if they've done business with us, we can help them across multiple brands or even on the service side. So it gives us a better perspective of the customer. And really they're used to that when they're working with other companies. Right? Like Amazon and things like that. That it's really delivering what the customer wants and needs and they really expect it from us.

CW: Yeah. And I think, you know, from a marketing perspective, right, I mean, customers change, right? You know, people get married and their last name may change. People move. People have families and they start looking at different kinds of vehicles that they weren't traditionally buying before. So if you look at a traditional customer file, it's what I would kind of consider kind of rearview mirror information. Right? You know what they bought from you. You know, if they come in for service, you know what that looks like. So it's all things that they have done. What you don't really know is what are they likely to do next? And I think that's the next step in trying to understand where the consumer's going. So you can make it more of a guided transaction with them. Like if you know they're looking at SUVs, then that's the way you're going to communicate with them. That's the way you're going to market to them. And you can get that—so you've got the rearview mirror information, but then you've got information that might reside in chat. Information that might reside in email or text. You've got information that, you know, we're really interested in what we can do from a phone system perspective. You know, what can we transcribe from a phone conversation to bring in to the name file? So now you know a lot more about the customer, what they're going to do next. So if you know that, you're going to talk to them differently, you're going to market to them differently. And I think, for the customer, the benefit to them is it's a much more relevant conversation, which I think is what everybody wants.

EH: I mean, when you talk about how the customer is constantly changing, something that you said when we were first talking about this day, Sam, was how it's never over when it comes to data. It's always—you're always having to go back and reevaluate. And, you know, for dealers that haven't even started yet and taken that plunge, it's okay because you're still learning. You're still learning. Everyone is still sort of, you know, every day evolving.

SJ: Yeah. For sure. What I love is when there's a great news article about another automotive group that says they figured it out. And, because I love getting those texts from our executive team wondering why we're so far behind. So maybe that comment was a little bit of job preservation, but, like, we haven't figured it out. We figured out how far we've gotten to. But every day we learn something more, we learn how to use the data better. And I think that's really the commitment. Whether you're starting brand new or whether you've been in it a long time, is you're not committing for a month or a year or ten years, you're committing kind of forever. Because, like Chris said, customers change, their preferences change. They want different things. The market changes. And so we just have to keep adapting and learning from them so that we can serve them better.

EH: Abe, has it been the same for you? The commitment to data?

AS: Yeah, it's, you know, like Sam said, it's initially a challenge really, to get everybody on board for investing in it because it's not particularly cheap. But it's really important. And everyone's living online. If you're not using data, I would recommend to start. And you start—you have the foundation, right? You build the house from the foundation, you build it. You don't really there's no silver bullet, right? You don't all of a sudden have it and all your problems are solved. You're really just—you're building and you're building. You're providing better service for your employees and the customer. Right? So it needs to be a win-win for your employees and the customers. Otherwise it'll never take off.

CW: And I think you got to make it important to the organization. I mean it's normally like—it's like many things that happen. If it's driven from the top, you know, that it's important to the organization that filters down through the entire organization. And obviously you have to inspect it. You know, what you expect. But, you know, when service advisors are, you know, it's 7:30 in the morning and they got that long line they're trying to get people through. Like make sure you capture as much, you know, data as you can. And then from our perspective, like how can we help clean that data. And like I talked about people moving and so national change of address. And, you know, people sell their car to a third party. So you know, VIN title transfer, you know, what happens there. So we can do more to clean that data as we go. But it certainly is I think a partnership that really takes both of us to make it work.

EH: So. Well, let's talk about getting started for our audience. Because we know that you've already started. So the investment with a data-oriented approach is going to be different for small groups versus large groups. And their needs may be different. So there's so many options out there. What are the main considerations for dealer groups that are just getting started? Or for dealer groups considering the shift to a single unified dealership system? What do you think? What was it for you, Sam?

SJ: Like, I guess advice if you're just getting started—I don't think anyone is probably just getting started. So maybe a better way to say it is you're ready to take the next step. I think you need to start at the top, like Chris said, because without their buy in, it'll never get across the finish line. It is so hard and frustrating and slow and difficult to organize all the data so that we can digest it. And then after we ingest and digest it, we have to serve it up to the people that are going to use it to make better decisions. And so like the advice is you got to be committed from the top. We're big enough that we have a CTO and we actually have had a couple over the last several years, trying to find the right one. And I don't believe this, but some people think car people are kind of pushy and impatient. And so maybe we got to be a little more patient with the people gathering the data. But I think first and foremost decide what your problem—what problem are you trying to solve? And then what data do you need to solve that problem? Then reach out to the vendors. You don't necessarily need a data warehouse with everything. You can have disparate systems and pull data together and, you know, manage on Excel sheets like we did for a lot of years. But I think what you can't move forward with is no commitment. You got to have a commitment and it has to start at the top.

AS: Yeah, absolutely. One interesting story for us that really motivated us is we were at a conference, non-automotive, and we saw small grocery stores, small retailers, and they were starting to use a lot of these tools. Right. They were using, you know, advanced databases. They were using some of these tools and they're small businesses making a lot less money than us. And so, obviously, the pandemic afforded us the ability to spend a little bit more money. But really, you know, seeing these small businesses and really the technology has become cheaper. Really recently. And so, you know, so there's a lot of opportunities out there. There's a lot of technologies, a lot of businesses or partners that can really help you. But really, you got to find out, what are you going to use it for as a business? If you just build it and don't use it, that's really, you know, where it sort of falls. And then like you said, the leadership at the top questions why we're investing the money in it.

CW: Yeah. I think Sam kind of nailed it. I mean the first—it's like any problem that you have, like what are you trying to solve for? Right? Am I trying to provide a better consumer experience? If you're—if that's your problem then you're going to collect certain types of data and make that important. Is it to make my employees more efficient? Then you're going to collect the certain data that can help you do that. Maybe it's multiple things. It doesn't have to be just one thing, but I think defining what you're trying to accomplish or where you feel like you're weak and then, you know, building things around that. But it's certainly going to be more challenging, I think, for smaller dealers that can't afford, you know, a chief technology officer or, you know, a chief data scientist. You know, not everybody can afford that, but it can still be done. Just have to define what you want to do and how you go about it.

EH: I'm going to take a question from our audience. So there's one here. Abe, Sam, what was the light bulb moment for your store's leadership where they finally could see the power of unified data in full Technicolor? I think, Sam, you had mentioned this happened at least ten—was it ten years ago maybe?

SJ: Say that one more time?

EH: The light bulb moment. Ten years ago, maybe.

SJ: Yeah, I mean, it was at least ten years ago. I think our company's built a little different. So I always joke like, Ken Garff is a reporting company and we got in automotive because it's so complex and it really stressed us. And so we've—our DNA has always been reporting. And so we've—I don't know that for us there's necessarily a light bulb moment. There's been new ideas that we facilitate through the organization and talk about, because it is so difficult. So we changed from one data house provider to a different one. And just that change in ingesting and transferring the data has taken almost three years. And so like I—maybe the light bulb moment happened 3 or 4 years ago when we realized, hey, this current system's awesome for what we used to be. But as we grow and we need more technology and faster speeds to process the data, we have to move. And that was really—so I guess the necessity was the light bulb moment for us.

AS: Yeah. Jeff Swickard, our dealer, he came from the technology industry, so he's always been pushing the organization. The light bulb has been the light bulbs in different people within the organization, right? People who maybe don't believe in it and they see something happen or they get frustrated. Like the, you know, customer coming online and coming into the store submitting a survey. You know, they're upset about their experience with that transition and those light bulbs, you know, you're able to solve those problems. And then different people start seeing the light. And it's been sort of a slow progression. But, I think most people now in the organization believe it. They see it work.

EH: Well, yeah, sorry. Go ahead, Chris.

CW: I was just gonna say for us, you know, we—I learned this, you know, about three years ago when I got in this position. One of the things I wanted to do was, you know, understand how our customers viewed us. How can we add more value to the relationship? And, you know, so I get answers to those questions. But inevitably we'd talk about, you know, technology and what they're looking to do. And it became clear from talking to customers that there was a real need, you know, whether you want to call it a customer data platform, a CDP, or data warehousing, whatever it is, there's a real need to kind of collect data from these disparate systems and house it in one place where it's accessible so you can make better decisions. You can have a better customer experience. And it just became this, you know, kind of over and over again, I just would hear it. And, you know, we came back and as a team, as a leadership team, we began to talk about, okay, what can we do, you know, to provide more value here. And we got to look at it a couple different ways. You know, how do we provide value to, you know, a Swickard Automotive Group and a Ken Garff Automotive Group. And how do we provide value for, you know, a single point GM or Ford store that has different needs and different intellectual resources that maybe not everybody has and they have different levels of complexity that they're able to kind of absorb. So it's been real important to us because I've learned that it's real important to our customers.

EH: Well, we've got about 90 seconds left, but there was a follow up to when we were talking about getting started or making that shift. And it's really about, I think a lot of people want to know who within the store or within your stores is shepherding these efforts. Like, who does it fall on? And we had talked earlier, Sam, about having a chief technology officer. And Abe, I know it's a different approach at your stores. So who do you think should be shepherding this commitment to data?

SJ: I think it's a joint effort between IT and operations. It has to be. I'm kind of laughing at—there's a question down there that said, how did you find the right CTO?

EH: Yeah.

SJ: And like, I don't think we ever had the wrong CTO. I think each CTO built on themselves. And so like, we had one that decided to retire and then one decided to take a job in a different industry, came from a different industry. And then the current one did come from automotive and hospitality. And finding the right one is I think we just built on each one. If our original CTO didn't retire, we would have built through him. The new CTO is really sales driven. And so being from the sales side, like I love him because he speaks my language.

AS: Yeah, I mean for us it's really, it starts from the top and then—but in terms of the technical side, there's another question about, you know, sort of an IT or data department. And we do have an IT team and we also have a data department. And then we also use some overseas ETL for the data warehouse. So, but there's not one leader over it. It really is Jeff Swickard who's really managing and helping and motivating the team. And, you know, a lot of our regional RVPs are looking for use cases, right? They're trying to solve problems at the store level. They're trying to make the stores' lives easier. And really, it's a joint effort, right? They're going to our data team or the IT team and solving those problems, providing the reports or even coming up with, you know, interesting, efficient ways to solve problems. And so it's been quite a journey, but everybody's on board. But you need everybody on board. Otherwise, you know, it's—it'll get stopped quickly.

EH: All right. Well, we are, just about, I think, actually, we're over time. I'm going to do really quickly rapid fire. Last question. The future, AI, very broad term. But very quickly, what areas of AI are you excited about? Do you see it at all touching your business soon?

SJ: Oh, yeah, I think 100%. I mean, I think the easy initial launch is just through our CRM and customer responses. Not necessarily auto chats, but helping our sales advisors write emails. Sometimes we struggle with coherency and spelling and AI seems to do a pretty good job. So I think that's an immediate reaction. And then it's just going to trickle down to probably every facet of our business eventually.

AS: Yeah. Same here. We're looking at the CRM. We've got a couple of pilots with the stores where we're using AI to help the salespeople, almost like assistants. And then we're also looking at cameras as well. AI is helping us identify, you know, traffic flows or where customers are and employees aren't. So we're looking at cameras and AI as well. But, the marketing department loves AI because it helps them, you know, creative ideas. But those are really the big areas that we're experimenting, but very exciting.

CW: Yeah, I see it like the CRM is certainly important. I see it like a, almost like a digital assistant. You know, certainly the auto responder, you can do a lot with chat, like our chat platform will go from a AI to a live person because it knows, based on the question that was asked, that this is a question that needs to be answered by, you know, a human being, not by AI. I think from a—I think about a phone system, you know, there's still so much traffic, you know, in the phone space that if you, if you're able, you know, to transcribe those calls and pick out keywords that will tell you, you know, this is a, you know, pissed off customer or this is a customer that, you know, maybe they use the words ready to buy or they say the word buy. And if you were to—if you could take those things through that tagging and then put something in front of a general manager or a sales manager that says, these are the customers you need to prioritize, you know, to get to today. They're upset about something or they want to buy something. Like, you can now start to prioritize your day and focus a little bit more on what's important because you've got additional data that maybe you didn't have before. So we're really interested in what we can do from that perspective.

EH: Amazing. Sounds very exciting. Well, now we really are out of time. I'd like to thank our amazing panelists for sharing their insights and experience with us today. Chris, Abe, and Sam, thank you and thank you to our audience today.