How Kiosks and Service Advisors Work Together

Greg Uland:  All right, Todd Marcelle with GoMoto, thank you so much for sitting down and talking.

Todd Marcelle:  Hey, not a problem, Greg. Thanks for having me.

GU:  Yep, for sure. So, Todd, it seems like for all of us, we get into the automotive industry and we sort of stay here in one capacity or another. So can you give a little background on your history and just kind of your path in automotive?

TM:  Yeah, it's kind of an interesting one. Certainly, I'm not born and raised in automotive. I had an opportunity kind of my earlier career as an investment banker and joined some early growth stage companies and saw that path. I really wanted to be an entrepreneur and so, had built and sold a couple companies. And about 10 years ago, we had an opportunity with my co-founder to buy our first dealership. His family had come from the wholesale side of the business, and so he wanted to kind of get into the new car dealership world. And so I kind of helped him acquire that dealership and we kind of got into it and realized that there were some inefficiencies there. And so as an entrepreneur, having just sold my last e-commerce business, I kind of looked at some of the problems and said, "Hey, could we go build a solution to kind of solve some of our own problems as a new dealer?" And lo and behold, that's where kind of GoMoto started, and the formation of the company kind of grew from there. And, you know, we were fortunate enough to really hone in on a couple pain points that we as dealers really cared about and solved. And ultimately, that led us to a really nice solution that has a great opportunity now to help change the way we interact with our customers. And so it's kind of an interesting journey, but we're happy we're here now.

GU:  Yeah, for sure. So how long ago was that that that you guys bought that dealership?

TM:  About 10 years ago. So, we bought it, we were really green, right? We young guys, we had no clue about frankly, we thought running a store was really easy and we thought all the software would work seamlessly and anything we deployed would just instantly solve our problems. And we quickly realized, you know, you really got to think about those choices because, you know, I kind of joke, I was just having breakfast with a dealer this morning. And he's a new dealer. And kind of listening to his challenges of, all of a sudden, you know, I went from a GM role to an owner. Now I'm dealing with employee matters. I'm dealing with payroll, I'm dealing with financing, I'm dealing with inventory. I'm dealing with software agreements. And so, you know, we were overwhelmed by that. And quickly, I realized that I'm not very good at running a dealership. What I'm really good at is spotting a problem, figuring out a way to solve it, and then, you know, building something to go attack that. And so, you know, we were fortunate that we had that yin and yang with Ben and myself to be able to have somebody focus on the dealership operations and then somebody focus on kind of the problem solving of building software to go do that.

GU:  So when you think about that, what are the biggest changes you've seen in how a service advisor operates, their job is, and how would you kind of define the characteristics that make a good service advisor today?

TM:  Yeah, so let's take that question in two parts because I think it's really important. I think there's been an evolution in service technology. So 10 years ago, you know, customers would just show up and very few would actually schedule an appointment, right? Then scheduling software came in and that kind of transitioned our business from a wild wild west to a plan type of business where, you know, we started to see 20%, then 30, then 40, then 50. You know, most dealerships now run at, you know, 70, 80, some 100% capacity on appointments and have very little ability to service kind of the walk-in type of customer, right? So that's been a big evolution because it's forced us to change the way we do business. But more importantly, it's also given us more intelligence about the customer. Because when a customer walks in, you don't know what problem they have. Now when they set an appointment, you actually have a process by which to understand and decipher kind of what the initial problem is or service. We have a BDC that actually calls and confirms and asks some key questions, and it prepares our advisors and the technology, frankly, that we want to select, to be much more curated to the process that we want to have. And so then it goes into OK, what does that mean for the service advisor? Well, you know, 10 years ago, the service advisor was the main conduit by which we had a relationship with the dealership. And that still hasn't changed. What has changed is ultimately the way that we want to treat our customers. Because COVID, good or bad, right, has created a convenience experience for our customers that they expect everything, you know, frankly, on demand, when they want it, how they want it, right? And so, that's forced us as dealers and as a technology partner to think about what do we need to do to ensure that we offer an omnichannel experience to our customers, right? So I break customers into kind of three sets now, right? You have the old-school customer, right, that still wants to come in and have that one-to-one relationship with the advisor, right? You then have kind of the newer age consumer, right, that is--think EV customer, right? That all of it is technologically leading, right? So the older set of customers, about 20%. The kind of newer customer, you know, the EV type of customer that's all about ultra convenience, is, you know, 20, 30% and they want to literally not talk to anybody. Phone or text message that the car is done, do everything electronically, and then pick the car up, you know, at their terms. And then you have kind of the middle of the road that are now adopting that kind of mode where they've kind of transitioned into, "I like convenience. I want to be able to come in. I don't want to wait for 30 minutes," right? "I want trust. I want transparency. And I want convenience." And that's the majority of our customer base today. And so what's happened with the advisors is that kind of that opening end because life has just gotten busier, has moved away from kind of that trust building that used to happen 10 years ago when you walked in and spent 20 minutes. It's now happening post MPI. So what customers want is a fast, convenient experience, but they still want the trusted relationship of the advisor to call them or text them or email them, for example, an electronic MPI, where once they've had the opportunity to actually look at the vehicle, inspect it, and share those results with me as a consumer, that's where the trust is. Because, you know, I think there's an old school debate about, you know, when that customer walks in, I do that, you know, dedicated walk around and spend 10 minutes trying to upsell them. Customers are still skeptical, right, about that process. What they're not skeptical about because they've learned the buying habits from kind of e-commerce is that, "I'm willing to make the investment to come to you as a dealer."

GU:  Yeah.

TM:  What I really appreciate is if you could take the time, effort, and energy to learn about my vehicle and then share those results with me and feedback.

GU:  Well and I think that's the key is people are so--and it's not just automotive, it's not just service advisors, but in general, you're open to listening but you want to be educated, right?

TM:  100 percent.

GU:  You don't want to be just kind of pitched. You know, if there's something valuable then let's have a conversation. But if it's just, you know, "Hey maybe we could get your wiper blades changed." Or, you know, like. "No, I don't that's not what I'm here for. Like, tell me what's wrong with my car, it's making a knocking noise and I need to get it fixed. I want to make sure it's not going to break down." So when you have the answer to that question and you can educate them, to your point, that's when that relationship can really be built and it becomes more built on trust than on me trying to pitch you something.

TM:  100%. And, you know, what we're trying to focus on, you know, certainly with GoMoto is taking the kind of remedial tasks out, right? So when a customer comes in, you know, automating that process just like we do with the scheduling process. There's still, you know, sometimes a human involved to confirm that process. But what we really want to do is make sure, hey, is it the correct contact information, right? Can we make sure that we offer that customer trade appraisal? Can we make sure that we offer some basic upsells so that everyone wins? Because still as a service advisor, if I have that customer go through that process, guess what? I still win because I get those upsells, right, if those customers add them. And what we've found is when you give customers the option upon check-in to really kind of let them lead their own path per se, they buy more on the check-in process through a mobile or kind of kiosk experience. And then they actually buy more from the advisor because the advisors now have a quote-unquote perception of "Hey, I've taken the time, effort, and energy to build that trust and credibility and present you with factual information that I've actually had time to deem as critical."

GU:  So, and you think about that and it makes sense to me, right? And I think it makes sense to a lot of people. But, I also think there's a natural perception that whenever you introduce technology, I mean a kiosk by definition is self-serve, right?

TM:  Sure, absolutely.

GU:  So there's a natural perception that the kiosk is taking over the advisor's job or at least part of the advisor's job, making the advisor less valuable. Why do you think that's such a pervasive perception?

TM:  Well, I think it's just natural because you've seen it across other industry verticals. And so, you know, as a dealer, and what we always say is, you want to deploy capital and people to their greatest efficiency and greatest purpose, right? And so, I asked the question, you know, if I know 80% of my customers prefer to have an experience that's self-led, I want to make sure I'm offering that experience. That just means that I need to now train and educate my advisors to be able to handle the secondary conversation. Because what I hear from advisors all the time is, yes, there's fear of, "Hey, it takes my job." My response is, it doesn't take your job, it actually makes your job more valuable. Because now you have the time, effort, and energy to actually spend with each customer walking through the MPI experience, right? Because that's ultimately where you're going to get the greatest value to extend the lifetime value of that customer, right? Because you're going to be able to educate them, you have more time to do that. So if I can save you two hours on kind of the remedial work upfront, but give you that time back and allocate that towards really building trusts and building those long-lasting relationships with your customer, would you do that? And the answer I get back unequivocally is, "Yes." And so that's a really important element, but there is the fear, right? We've seen it in the airline industry. The airline industry hasn't, you know, reduced head count. What they've done is made the experience easier, right, from a check-in experience. And they've invested that money in better gate agency, better technology, better flight attendants, better pilots. Expanded their business so there's a bigger pie now for those employees to participate. It's no different in automotive retail.

GU:  That's fair. So, when dealers are able to kind of buy into this idea, and really service advisors not just dealers because I think it's the end-user that has to buy in, right? If they don't buy-in, it doesn't matter. So when the service advisor buys in, what types of results are you seeing, if any, you know, positive or negative honestly, when they say, "OK. This kiosk, this self-service kiosk, can actually enhance what I do and make us more successful. What does that translate to?

TM:  Yeah, so a couple things. So I think one is, when you think about the experience there's kind of a bunch of different factors that we look at. We're always trying to solve a couple pain points, you know. The first and foremost is that we're offering the consumer the experience they want, right? So 85 percent of customers that come through the self-service experience say that they would prefer to do this than go through the traditional advisor-led process, right? So that to me is confidence enough, right, that hey, the technology works but more importantly the customers want that. OK. So then let's transition into, OK, what within that check-in experience or checkout experience really we as dealers benefit from, the consumer benefits from and it ultimately raises, you know, everybody's success at the dealership. Well number one is contact information. Very simple thing that we all think is, you know, we take for granted. But it's the most important thing because most customers now prefer text. You know, we have a 90 plus percent positivity rate when customers come in, they update and choose cell phone. And they put the updated cell phone number in. Well that's wildly valuable to me as a dealer because now I can communicate various service updates. I can send, you know, my MPI. And then I can communicate then when they become kind of prospects in the sales process, I have a direct communication to them. Number two, we all know about the inventory shortages right now. Your best customers are the ones that are sitting in your service lane, right? Because you can buy the car from them, and you can flip them into something else. So we've seen, you know, now, under certain terms, we offer an appraisal for basically every customer. You set the parameters, but, obviously we're not doing it for somebody that just came in and leased a car, but, you know, after your set parameter, maybe two years, three years. We have customers, we're seeing, you know, 11, 12 we have some stores that do 22 percent of customers raise their hand and say, "I'd like to trade my car in and buy a new car from you." Well they're our most profitable customers. Number three is upsells. You know, we see, you know, on average anywhere from 13 to 25 percent of customers will actually raise their hand and buy something additional just upon check-in.

GU:  So what type of stuff's getting bought on check-in? So I'm just thinking about the check-in process and we talked earlier you mentioned, you know, people want to go through the easy stuff, kind of get the check-in done and then the advisor can recommend what's actually needed on the car. So at check-in, what types of things are people buying? I mean, is it those wiper blades and that kind of stuff or like what types of pieces?

TM:  You're thinking about the right way, right? Wiper blades are our most profitable sale. Wiper blades, upgrades on the actual oil change, you know, that they were currently looking at. Tire rotations.

GU:  Going to synthetic or something like that?

TM:  Yeah, synthetic. Or actually adding in maybe a couple additional things that--maybe they're there for a $29.95 you know oil change but for $49 we'll change a filter or we'll may do an interior deodorizer.

Things like that, you know, ultimately allow the customer some comfort and trust. Right? But again, it's no different than when you're on Amazon, they say, you know, "Other customers have bought," or you should--and customers are naturally trained to do that so they automatically kind of, you know, add to that bucket. And so, you know, if I can go grab $30, $40, $50 of additional upsell revenue, that's wildly profitable, not only for me as a dealer, but also for the advisor, right? Because I'm making commission on that. And I now have another opportunity to sell them post-MPI on work that they actually truly need to have done that's critical and safety worthy on that vehicle.

GU:  All right, that's fair. All right. So Todd, we are-- we're at NADA, right? And there's thousands of dealers here. Everybody's excited to be back in person for sure. So let's say you're at the GoMoto booth and dealer walks by and it's somebody who's a little hesitant about kiosks. Give me the pitch. What do you-- What are you...

TM:  Very simple question, right? Are you the customer, right, when you go into a grocery store and there's eight potential lines. Five are self-service, three are, you know, led by a human, and the line is 15 to 20 minutes. Are you the person that's going to wait in line for the 15 or 20 minutes? Or are you the person that would rather check-in and go through and check out in a minute or less, right? I say that question. Number two is, are you the customer that goes in and actually talks to a bank teller or do you use an ATM? Right? Or last time I checked and you filled up gas at seven dollars a gallon, are you the customer goes to full service or do you do it yourself, right? And are in and out? And so what we have to realize is that the customer has spoken and that they, you know, kind of demand that we offer this omnichannel experience, right? And the easiest one I always say is Starbucks for myself, right? I've got two young kids, my schedule is crazy packed on a Saturday, Sunday with all different sporting events. The easiest thing for me, right? Now, you know, no--nothing against Starbucks. I like their coffee, but it's not the best coffee, you know, in my area, right? I prefer to go support a local coffee shop that I've gone to for 10 years that I love their coffee. But you know what they don't have? They don't have mobile ordering. And so for me at 7:00 a.m. with two kids that are hungry and have a full day of sports, I can literally get in the car and I can look and say, "OK, there's a four minute wait at the Starbucks that's five minutes away on the way to practice. Henry, Lucy, what would you like? Normal order, pumpkin bread and a bagel? Yes. And chocolate milk? OK." Boom, boom, boom. It's ready in five minutes. I pull up, my wife runs and grabs it, and we're done. Right? That to me is convenience. That's what I expect as a consumer. And so, you know, as a dealer, we have to take away our perception that our customers are unique or different. The same customer that comes into our store to service their vehicle or buy their vehicle, you know, there's a reason e-commerce has exploded during COVID for buying cars. No different on the service lane. They expect a concierge service, they expect kiosks, they expect a fast, transparent and efficient experience. If you cannot offer that, there's a reason why, you know, other avenues exist to service your vehicle.

GU:  Yeah. That's good, that's good. All right. So very important question then, what sports are the kids in?

TM:  Yeah. So my daughter Lucy, 10, is big into lacrosse.

GU:  OK.

TM:  So she's kind of made the transition and kind of declared that's her sport. My son Henry, 6, he likes to try everything. He's a big football player. Loves soccer. Just tried wrestling. This year in the winter, basketball. And they're both big skiers as well. So we've had about 12 days on the mountain this winter with both of them. So they've really enjoyed that.

GU:  Good stuff. All right. Well Todd Marcelle, GoMoto, thanks so much for talking and have a great show.

TM:  Thank you so much, Greg. Cheers.

GU:  All right. See you.