The Dealer Playbook
The Dealer Playbook

Episode 530 · 1 week ago

Ben Hadley: Can digital and physical meet at the dealership?

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Ben is the CEO and founder of Autogenous, a community of high-growth dealership marketing specialists that identifies challenges and creates innovative technologies to solve them.

Ben has worked at some of the most prominent firms in our industry, including Prodigy (now Upstart), Clarivoy, and Dealer Inspire.

He has over a decade of experience in the automobile industry and has assisted thousands of dealerships in maximizing their sales efforts by streamlining the coordination between their marketing channels and in-store sales process. He is also an expert at making connections that others miss - what a skill!

This episode delves into the history of vehicle dealerships and explores what's on the horizon for the industry overall—and perhaps most importantly—how car dealerships can prepare to meet shifting customer expectations.

Compared to the earliest gas-powered automobiles produced in the 1880s, electric and hybrid vehicles of today (EVs) are almost unrecognizable. The same cannot be said about the actual procedure of purchasing a car, which has remained mostly the same over the years. While technological, cultural, and societal changes have affected the old dealership model, most car-selling procedures have remained the same. Where does that leave us?

As more consumers seek the opportunity to buy cars online, auto dealership owners and general managers (GMs) must assess how the traditional car-buying cycle must change to suit customer expectations.

Ben believes that technology does not replace humans but enhances them by making them smarter, faster, and better at connecting the dots. He continues by explaining his thought process: "The first places we created transparency weren't brand and culture. We began by evaluating pricing and the vehicles, both of which reduce our work to a commodity. It's okay if the customer negotiates if you only discuss the price. Because you basically told them already, is that all you possess? And that was all we did for a considerable amount of time."

Consequently, when you commoditize your product, you also create a second-order impact of commoditizing the client, akin to the perfect storm of reducing customers to mere steel. And automobiles are essentially identical to repurposed steel; they are merely commodities.

Then it will get easier and more accessible for technology to comprehend commodities, and you will have essentially laid the groundwork for technology to replace humans. Consequently, we need to double down on humanity and double focus on technology geared toward the end user rather than the customer.

Another common thread among the various technological advancements and innovations of the past ten years or so is that nearly all of them were made with the car buyer in mind. They weren't made with the BDC worker, marketer, or GM in mind.

"Those guys were kind of the other option, and so I picture a future that we need to pivot towards, which is kind of like Ironman, where, you know, Jarvis actually makes Ironman great, but he is not as good on his own. Even with Tony Stark in there, it just isn't the same. You have to take action by pressing buttons, giving orders, etc."

When people go out to purchase a vehicle, they seek convenience and simplicity. Most consumers still prefer the personalized, human touch that can only be provided by a local dealership, despite the growing popularity of online-only auto sales.

To succeed in the future, car dealerships will need to find new approaches to integrating digital resources while delivering cutting-edge customer service in person.

So, should dealers and original equipment manufacturers continue to pursue their own parallel paths, or should they join forces and share the client connection – and the revenues it creates – in new multichannel ways? And what does the future business model look like? Is it an open, universally accessible platform? Or is it a network model built on unique collaborations with third parties?

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The car business is rapidly changing, and modern car dealers are meeting the demand. I'm Michael Cirillo, and together we're going to explore what it takes to create a thriving dealership and life in the retail automotive industry. Join me each week for inspiring conversations with subject matter experts that are designed to help you grow. This is the Dealer Playbook. Alright, gangs, So you know, well, at this point in time that I don't ever have questions prepared for my guests. I'd like to keep a conversational in tone and I mean and today that thesis will pay off because I could say to our guest, that's a lovely sweater you have on, and he'd be like, well, the interesting thing about sweaters is that in ancient Egypt when they were weaving, you know, And I love that about our guests. Today, I'm sitting down with none other than Ben Hadley. He is the CEO and founder at Auto Genius. Has had quite the history and automotive working for some very influential companies in our space. Ben, thanks so much for joining me on the Dealer Playbook Podcast. I'm pumped to be here, so uh I got to know you through the a Soda Boys, the Bearded Band of Brothers and Uh, and so you know, I had followed you from afar on LinkedIn, read some of your posts, really enjoyed your narrative on you know, just different things, not not even necessarily automotive, Like I see you've got some narrative about Twitter and everything going on. And I love your perspective, like the fact that you can easily hop onto a platform and just say, hey, a car dealer owns one of the top ten most influential social media platforms now like nobody thinks of out it from that angle, you know, And so I always appreciate that. Have you always thought deeply or differently about things like is that something that happened or developed more as an adult, or have you always noticed that about yourself as you've grown up. I I quite honestly just started noticing it because of a comment you made on the intro on the Sodu collap Spot podcast that turned into a thing that I'll do called cloud thoughts um so much so that now I'm stopping myself. I was downstairs, uh, making some coffee, and it dawned on me, this is a classic dawned on me, like, you know, does uh is it faster to heat something up or to cool it down? And you know, and initially you're...

...like, well, that's just a bad question, because you know, like depends on what what things you're using to heat it up and to cool it down. So I noticed that my coffee always sort of like the pot that I used to make it, it seems to cool down really fast anyways. Uh So at first I was like, that's just a bad question, and then it led me to think about, like what are the qualities of a good question? And you know, like I think that's probably one of the things I contemplate the most right now, which is like are you asking good questions? Because it's so easy, my mind will will typically like connect dots that and you were joking about it. You're like, Ben's probably out there somewhere like looking at his seatbelt wondering why clouds formed, and that's like not that far out, uh, you know, from the truth. Um, But at the same time, it's it's it's almost too easy for my brain to like draw up some sort of pattern that might not even exist, right, And so then I have to like go back and say, who are you even asking? Is that even a good question? By the way, the answer is, um, it is it is faster, uh technically a very small margin to heat things up. Um. Though it does beg to to suggest, though that others have had the same question, because I would imagine questions like that lead to the thermal cups that all of it, like the Stanley cups that are a big fad right now, and you know a little insulated cups. Like people were like, well, how do we just slow it down even further? Right? So it led to it led to innovation. So and I think that's that's the thing that I think is really interesting. Though I think it makes for great comedy. And I don't want to invite people into the dark parts of my brain because oh no, some weird stuff happens there. Um, But it is true. And I think there is a place for that, and it's needed, especially in this industry, somebody to advocate for are we asking the right question after having followed a wormhole that brought brought them to that place? Because I think and and I'd love your thought on this. I mean, I feel like we've just taken so much at face value in our industry for for so long that now we're trying to kind of pick up the pieces. What's your take. Yeah, well, in this industry in particular, which is near and dear to my heart, I mean, I have my relatives own dealerships. This is all I've ever really done is being ADO. And but I get a perspective from both the dealership side and then on the vendor side. And on the vendor side, I think you are more surrounded by outside out the outside software companies...

...that sort of in the vcs and the the investors and all of those guys are going to influence um a certain perspective on how things should change, you know, on those dots. But then there's the reality of the dealership itself, which in a lot of ways, maybe maybe there's that dot, but they can't exit to the dot. And what I mean by that is that, like, okay, I'm gonna pick on d M S S for example, could you really operate a dealership with that one? I mean, yeah, right, you could. It would be difficult, It would be really hard, right, And then you know, up until recently, there's only only been two main players. So even like the amount of places you could exit too. If you've adopted one of those players super tough, it's like, oh, I can go from this guy to that guy basically mhm um. And you know, as you're thinking through innovation, it's like exit to me. The ability to say nope, I'm leaving that going over here to make this dot connect is where innovation really happens. And when you when you rob people of the ability to do that, you rob people the ability. You can show them that DOB, but you know they're not allowed to draw the line to it, right. Um. Yeah. So you know, in my head, it's always been about giving the dealership more exits and more more opportunity or more optionality. Um. And I think in today's world, you know, the dealers are there's a good hands handful of dealers that are like going to push the envelope regardless. But the vast majority of dealers I think have wanted to connect, to connect some other dot connect, try something new. But like whether it's the O E M mandates, whether it's shift digital, whether it's uh, the limited options just in general, time and time again, you're gonna be told no. And it's I think it's hard to um to have the wherewithal to like withstand constantly getting you know, oh, we can't connect that dot. Oh we can't connect that dot. That's really tough to be doing that for thirty years and be told no, you're just not allowed to do that, um over and over and over again. Right yeah, I mean that is like so so for us, Like in...

...my company, we have our tech development side of things, and I feel like that has kind of also summed up my career because there's this weird thing that happens when you work with developers, software developers in particular, where they there's so many of them that want and need work, but then their entire existence once they have the work is to find ways to not do the work. Like it's this weird like, oh that would take that would take so long, and that would be really like you're always battling this like oh, but then there's this thing that you need to think during It's like it's like do you want to do it or not? You know, is it a good idea? And so I find like in my career it's it's been a fun challenge where you're like, Okay, you're constantly to your point. I feel like I've constantly had to find the next most creative way to we've in and out of that, and early on it annoyed me so much. I'd be like, just just do the thing just now. I'm like I've actually found pleasure and being like, okay, how do I push my mind to its limit to find that creative alternative? And I think, you know, there are people like Patrick a Bad and and um, you know set like several sales people obviously that have found ways that work for them to weave in and out of you know, I don't know the regulatory limitations and things of that nature, and so I'm curious how you see that? Is it like we said about the d MS, it would be difficult to run without a d MS, not impossible, but difficult. But inside of this ecosystem that we've built for ourselves essentially, are you seeing creative paths that can lead people to getting ahead despite have some of those long teable Don't get me wrong, I think, um, I think it is a lot harder to create art when someone just says, here's a blank sheet of paper, because you get, you get, you get. You're like, well, do you want do you want me to paint? Do you want me to use these colors, Like, it's like so overwhelming. All you have is a blank piece of paper. But if I said, hey, create art using colored pencils and these three colors, becomes tremendously easier because you have boundary. And I think creativity only happens within boundary and so you know, in some ways, like I was just saying, it's like there's a ton of boundaries in automotive. Um. But that is also why I think there's creative minds like Patrick A. Bodh that that exists that are like thriving because is they don't look...

...at that as necessarily as a as a down downside. They're like, oh, that's awesome, Like You've given me these three colors. That's where I'm going to perform. Um. So no, I mean, that's actually one of the things I love about this industry is is finding the needle or threatening the needle, you know, um, And that's one of the most fun things you can possibly do. I think it's like, is is finding a solution to something that seems totally unsolvable. Yeah, I love that switching gears a little bit. Your linked in profile headline states that you are a digital retail NERD. M. Yeah, what is a digital retail NERD? And how did you arrive at such level of nerdiness. I've been there since the very beginning. I think. Um, there's a small independent dealership in Utah that the first day Carbonna ever launched, they stopped by the booth. When I was over at Dealer dot Com. They stopped by our booth and they were like, hey, like, what's going on? And I was I'm supposed to be pitching Dealer dot com stuff, and I was like, screw all that. Check this out. There's these guys called Carbona and they're making this whole buy from home thing. You should look at that. And it was so cool because years later they this is like four or five years later after that moment, they found me at an n A d A floor and they were like, hey, we actually we made it ourselves. We made a sort of Utah Carvona competitor um and if I remember the name, I'll send it to you for the show notes. But um, you know, so, like, one of the things I've always noticed is that it's not until sort of a third party comes along that a dealer decides to innovate and that's unfortunate, but this is sort of the pattern. It's like in Edmonds, KBB Auto Trader they all existed, and so did dealer dot com, but hardly anybody wanted a dealer dot com website. In two thousand four, I think it was dealer Track purchased this new vendor that had come on and said online credit apps is like gonna be a thing. Right in two thousand and I think it was like six seven eight somewhere in there, you have these like business plans that come out, and it's ones for a company called True Car, the other ones for a company called car Grews. They literally just go to investors as they say, we're gonna copy exactly what KBB an Auto Trader and cars dot com did, but we think that the consumer wants price transparency, so we're just going to reveal a little bit more. Oh...

...that's a great price, you know, that's all we're gonna do. Really change that, right, And you know, two thousand and twelve, maybe eleven is Carbon comes out simultaneously, Cox Auto Um or maybe it was still Dealer Track at the time. They came out with was like payment Driver, Finance Driver, and some other vehicle driver or something like that. And it was really this attempt at digital retailing, and every single time you have those sort of moments, most of the dealerships were like nah, after that noise. I actually remember when I first started uh pitching dealership websites in like two thousand nine, there was a good portion of dealers that would say, well, I don't want a website per se, I just want a web page. I just put my address on the page. Like, don't put cars, because if you put cars, then they're not going to come in and see them, you know. And you're like, no, no, no, people want cars and pictures and stuff on the website. So what's like the through line there, Well, there's part of it which is like what the hell is digital retailing? It's been this evolution from from sort of just showing the car to the eventual conclusion of like, oh no, like people do some people do really want to just purchase this thing, right. Um. Then there's the other flip of it, which is so I you know, you asked the question like, how do you become a digital retailing NERD? I don't. I can't point to one particular event because you know, really this has been the inevitability of of of all of this. It's like, you know, at one point in two thousand three, we had this thing in a CRM that said Internet lead. Today we still have this thing called Internet lead. Why do we still have this thing called Internet lead? They're all Internet leads, you know. And it's this sort of like woe begone term that's like that's still included in today's present. And I think digital retailing is going to be one of those woe begone terms that still exists in today's present. We just needed a way to encompass it um and to product it and brand it and bundle it and package it and make it a new even though it's really something that started in you know, Yeah, there's this piece uh you know, you said something that um triggered the thought in me, which is when websites first came out, the worry was, oh, no, then nobody's gonna come to our lot, And your re ascertain assurance...

...on the back end of that is like, no, that people want to see this first, and then that's actually gonna compel or encourage them to come to the lot. Now we're seeing this this narrative of like technology is just going to kill all of the human jobs. So, as someone that can you know, where you understand technology and you consult and advise on tech startups, how do you marry this? Are we going full circle? Is that kind of are you seeing that? As a similar sentiment as to when websites came out and people thought, no, like is there room for human I want to I guess what I'm trying. My my ulterior motive is like to get the perspective of someone who understands technology to perhaps give some assurances to the human, the living, breathing humans that no, technology is not going to completely not So I think I can give you both heads. The first side, which is where where my preferences are. Um, would be like going back to that timeline of events from today, all that's really happening is internal for the dealer's eyes only. Data is just you know, like an onion is just getting more and more stripped away and more and more transparent to the customer. HM, that's all right. It's like started with photos of vehicle, then it became price of car. Then it became um uh, price comparative to others, you know, so on and so forth, and today the people that are really you know, kicking ass out there are Uh, they've they've already done all that. They've been super transparent, you know, to that degree, and now it's becoming let's be transparent with our values, right, what do we stand for? And that really creates a brand. Um what transparent in um, the sales people themselves, so like what's our culture? Uh? And so technology really can't replace any of those things, right, Like there is a certain craving that people have. I was, I was writing about this a little while ago. Actually I wrote a little bit about it today, which is like, did you a retailing had its best possible years on the start of COVID? I mean if you asked, hey, did your retailing company or Amazon or Shopify? Ideally, like what would you love to happen? So your product is forced to grow? And they would say, how about the government gives everybody some money to experiment?...

I saw this shuts down all the other local businesses. Um, so that you have to go online to order things? Uh? And um, what was the third? Free money shut down everybody else? Um? I don't know, check my linked in for the third. Either way, right, we had a perfect circumstance for for that growth, right, Amazon just laid off eleven thousand people. Shopify laid off an insane amount of people a few months ago. Um, what you captured is like, this is the best that digital retailing could ever really do. This is the best that growth numbers e commerce could ever do, because you gave the perfect environmental conditions. Unfortunately, people made the mistake of kind of like using that to forecast out I or and whatever that as if that was going to last forever um. But I think the other piece of this is that like, habits are very real, Like the consumers want and need to do what they did before is something that you know, we're all kind of trying to fight and change. But the other lesson I think is that there's always going to be a reversion to the means. So what you see is that you you like, even in my own life where I work from home, I love the serendipity of going to a coffee shop and running into someone, Oh my god, we haven't seen each other, right, Or going to a target and like oh hey, you know, um, and the and the internet really robs you of all of that, and so you know, in some ways, I think there's there's pent up sort of um demand to be in a showroom, to talk to a human too, you know, to like shake a hand, look at a person in the eyes. Um. And you know, I don't. I think that's actually going to be something we appreciate more and more because we were finally robbed of it, m right, so we forgot how important it was. Uh. And so I think in the long term, you know, technology preference would be technology doesn't replace humans. It just supplements them and makes them, you know, uh, smarter, faster, better at connecting, deeper, connecting. Right now, Okay, let me give you the like alternative argument though, sure, right, Um, the first places we created transparency weren't wasn't in Brandon, wasn't in culture, and wasn't in in what we're finally doing today. The first things we did was in price, uh and in vehicle, both of which basically commoditize what we do.

And there's like the age old adages, like, you know, if you talk about price and that's all your value is, don't be surprised if the consumer comes in and negotiates, right, because you've just basically told them that's what that's all you got right, and that's all we did for like a really long period of time. Great price, fair price, whatever. And so when you commoditize your product, you're also creating a second order effect of commoditizing them with the customer. And and that is like the perfect sort of storm of creating. Um, Hey, if customers are basically just steal in cars are just basically the same like reconfigured steal these are just commodities, then yeah, it's going to become easier and easier for technology to to understand commodity, you know, to like to trade those and yeah, and then you're basically creating the foundation for technology to replace human And so in my point of view, we just need to double down on human, right, and double down on technology that's designed for the end user and not the consumer. So the other through line that you would see through at all this technique enablement and the innovation over the last that's a ten years decade is that almost all of those products they were designed for the consumer that's buying the car, they weren't really designed for uh, you know, the BDC person, the marketing person, the general manager. Those guys were sort of this like alternative like, oh yeah, by the way, here's a dashboard. You can log in and look at the report. Right, we weren't a primary person, um and, so I imagine a future that we need to pivot to, which is sort of like iron Man Jarvis suit, where you know, Jarvis really makes iron Man better, but he's not as he's not good on his own. You know, you still need Tony Stark sitting in the helmet, you know, pushing the buttons, saying the commands, doing the things. Yeah. I love that analogy. I was listening to or watching rather a snippet with UM, I mean this tech YouTuber Mark Marquess Brownlee don't okay, yeah, okay, so yeah, if it will link to him in the show notes if you're not familiar, But I mean, like, this guy has built a massive presence basically doing tech reviews. Um. He was talking about something similar to this, so and and it had to do with Facebook or sorry, Meta's entire double triple quadruple down on Metaverse and where they're headed there and basically pivoting the entire ship to go to this you know, alternate reality type thing. Um. And he described kind of what you're saying here.

Um, where he's like on on the one hand, there's some really cool things that that he's seen, for example, the ability to put the goggles on and see your work environment in front of you. But then all of a sudden be able to have two extra computer monitors that you can interact with and you know, as if you had three computer monitors on your on your desk, but you don't, actually so things that can augment and to your points, supplement I can see a benefit in It's like, oh sweet, I don't have to actually have my whole desk taken up by more devices, more hardware. I can actually supplement that by just throwing on the goggles. But then also to your point, there's this very real but once those goggles are on, I isolate myself from the rest of my surroundings. Yeah no, I mean, um hm CALLI okay. So yeah, I think most dude, we're get ready for about here. So I think I think most uh enormous tech companies, guys that go way past the billion there, they take advantage of of um contradiction. So I think contradiction is actually the best thing in the world. It's the most human thing and it will be probably really important UM in the future. For to determine if AI can even really exist is how AIS wrangle with contradiction. A couple of things I would point out. One is Mr Beast Marquis Brownlee A. I can't replace them because you get you get to know them so well, so intimately, right, And that's just another onion layer. You know, dealers should do the same salespeople at dealers ships should do the same. They should have a brand UM and I think micro branding at the dealership level, where I think what people are calling tier four branding, which I really like, UM, is gonna be super important. Okay, but now back to the tech thing. So if you can capitalize on both sides of a contradiction, you're gonna you're gonna just gonna win. Okay. So in the eighties, think about the mall al right, just your regular retail mall, and the contradiction being that that people really want to be unique, right, but they also want to belong and those two don't really fit great with each other. Right. It's like, oh, I'm unique, nobody else listens to this music. Oh crap, everybody does, so I should listen to some other music or more poignantly. I'm a teenager and I want to be unique. So you know what, I'm gonna be a goth. I'm gonna go to hot topic with all the other goths, right. Or no, I'm gonna be a skater and we're gonna go a pack son with all the other skaters. Right. So it's like this moment of uniqueness and then as soon as you walk into...

...the room or the store and you see everybody else just like you. Right. It's actually something I think dealers should start thinking more about. Is you know, like Tesla, for example, there's a certain like snootiness or something. There's a certain thing about Tesla buyers snootiness. Sorry, I have a Tesla so I can say this, um, but there is a certain thing about Tesla buyers that, like, you could stick them all into a room and they probably would find common ground where it's harder to do with most of your other brands that try to go very wide. Okay, that's one for Meta. Meta somehow figured out how to disconnect all of us and also connect all of us, right, So it's like, hey, you can connect with anybody in the world. Now, the only caveat is you have to disconnect with everything that's near you. So if you ever find yourself like on a couch next to your wife or spouse and one of you has a phone in front of your face and you're checking through Instagram or Facebook or whatever, you're disconnecting locally so that you can connect, you know, with someone random outside. And so meta, I mean the actual like metaverse is like taking that thought process to the extreme. It's like, hey, forget literally everything around you. Um. I always always think that's really creepy, uh that you know, And probably the nineteen twenties you had movie screens maybe thirty five ft away from you, and then in the nineteen fifties you get this TV screen it's ten ft away from you. And then the nineties you get a computer screen it's now two ft away from you, and then you get this phone and it's like one ft away from you. So there's this natural progression of screen just getting closer to face that I also think as a trend line. Um. But you know, and so I think that's actually I think Zuckerberg is like way way over skis a little bit on this one, I don't think, I think again, back to the Amazon Shopify reverse reversion to the mean thing. I don't think we're at a time where people are like, you know, what I really need is less human interaction. I think there's still this giant craving for like, you know, I kind of enjoyed flying on a plane recently just because I was like, hey, this person I could talk to, you know, yeah, yeah, you enjoy I mean I could use a few it could use fewer odors, yeah. But aside from that, and and fewer people making their shoes off right, it's like you can't you can't spend coffee breath right now? Yeah, that's right, you know, like in the same token. I thought that was really...

...interesting while you know, in Canada we were locked down, like locked down, and you know, kids were all doing the online school and zoom classes, and I thought it was really interesting that just a few months earlier you have to your point teens with screens like this NonStop Instagram, this and that, and with just a few months of overload to their perception, they were like, I never want to look at a computer ever again. I'm so sick of looking at I just I want to be out with my friends, I want to see people. I somehow really want to go to the family reunion. All of a sudden, like there was so like this innate human desire to have human to human interaction, which I think is really interesting, especially how we're moving, but also validates what you've been saying as a thread UM through this conversation, Ben, which is the need for dealers to double down on human The brand, the micro brand or Tier four brand like you're talking about, I think is so so valuable and going to continue to be valuable as we move into and beyond. UM. One last question, obviously, to turn back to you, how can those listening or watching get in touch with you, follow you, learn more about you. I think mostly hit me on LinkedIn. It's probably the fastest way I'm usually on there. If there's dealers listening that are super progressive and want to join the auto Genious community, UM www. Dot auto Genius dot io is where you can apply, and it's basically I think we're at about a thousand rooftops now wow. UM, just super private on purpose, like an insane knowledge base where some of the best marketers in the industry can basically go to either ask questions or answer questions. UM. And really the thought was can we design automotive? Can we architect it better if collectively the end user has a larger voice. So that's that's our big goal is you know, one of the things that we really want right now is more open APIs as an example, UM and we're already working with some companies to basically say, hey, look like this is a demand for this group of people. So if you want, if you want to join the fight, that's a good place to hang out with me too. Awesome, Ben Hadley, thanks so much for joining me on the Dealer Playbook podcast. Thanks for having me. I'm Michaels. Hello and...

...you've been listening to the Dealer Playbook Podcast. If you haven't yet, please click the subscribe button wherever you're listening right now, leave a rating or review and share it with a colleague. Thanks for listening. M.

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