Sales Down This Summer? Get the Why… and a Path to Improvement

Brian Pasch0:00Hi, this is Brian Pasch, and welcome to another exciting podcast interview. On today's show, I'm sitting down with Jonathan Lucenay. He's the CEO of Client Command. And we're going to talk about how their Active Shopper Network isn't just solving marketing and sales challenges, but it's also giving dealers a little bit of insights into shopping behavior, especially with some of the shifts in consumer sentiment around tariffs. Jonathan, welcome to the show.

Jonathan Lucenay0:40Hey, thank you, Brian. Glad to be with you and your listeners.

Brian Pasch0:43Well, let's dive in. So, just for groundwork, Jonathan, you've been on my podcast before. You have a patented tech platform called the Active Shopper Network, which identifies consumers who are shopping. Who are shopping for vehicles or now service. And you're doing that through your patent, which tracks people and what they do online, which includes marketplace websites, Google search, research sites, OEM sites. And so you have a good, really, visibility at what people are doing around the country. I want to talk about using this data as a strategic weapon. I believe the OEM should be looking at Active Shopper Network and their planning studies. I believe dealer groups should be looking at the Active Shopper Network for moving inventory between stores. So let's just talk a little bit about the first half of this year. We are at the halfway point. We're in July now.

Brian Pasch1:45And tell me about what the shopping traffic, the active shoppers look like from January to when tariffs were announced. And then what happened immediately after that? Because I had some dealers who said, man, March and April were really strong months. It almost like there was a pull ahead effect. So let's talk about this first six months of 2025.

Jonathan Lucenay2:14Yeah, Brian, the American consumer is literally hanging on every headline. And we see it in their shopping behavior. So seasonality does play a role. But in a normal month, you have 20 to 30 million people that shop in some capacity. And if you really want to look at where the spikes happen and where the valleys take place. You have to break it down to weekly. And when you look at it weekly, it gets really crazy about the time the truck tariffs were announced. All of a sudden, shopping activity was the opposite of what you would expect. Some bad economic news, typically shopping activity goes down. Well, in this case, it went straight up.

Jonathan Lucenay3:14And every time it was extended, it went up more. And then it would tank when a tariff went in or there was something negative in the news. Maybe the president said something or the Fed chair said something about rates. People were like, oh, no, no, can't buy, can't buy. And so it showed this extreme volatility, where you have a shopper that, in some cases, very intense shoppers are ready to buy. And then somebody opens their mouth. All of a sudden, that shopper's out of the market. You don't see them again for 60 days. Maybe a quarter. So there's opportunity, but you almost have to grab it the instant they're hot.

Brian Pasch3:59Yeah, you know, and it brings up a great point that the reason why consumers rushed out, and of course, I love dealers and their entrepreneurial spirit. It was like, buy the car before the tariffs. And even now, you know, Zachys, which is a very popular wine merchant online, is like, these are pre-tariff wines. So people are using it creatively. I know the OEMs didn't really want dealers doing that. But I also have some dealers now that had a slow June. I don't know if you've talked to other dealers. You know, was this the pull-ahead effect of March and April? Is there something else going on?

Brian Pasch4:43And I know that there was hope when Trump was elected that interest rates would start to go down. They haven't. We do see that Powell is talking about maybe the first cuts happening in the fall. Do you think people are kind of waiting for that shoe to drop? What are you seeing? How many people are actively shopping now? Is it below trend, like below that normal 20 to 30? Is it on the lower side? Where are we today? Because the summer months are challenging.

Jonathan Lucenay5:18We are at pre-tariff levels in shopping. But what you have to remember is seasonally, we should be a little bit higher than where we were in January. And we're not substantially higher than where we were in January. So I think we've got a bit of, you know, prices have adjusted. They've gone up. And so people feel that. And then you've got people that are shopping, but their intensity is not super high. So you have a lot of people waiting and looking. The looky-loos, if you will, are sitting there waiting on something to happen, whether it's the rate cut or some, you know, deal that cuts some of these tariffs.

Jonathan Lucenay6:04Or maybe they're just waiting for big incentive money. That's for somebody smarter than me to figure out. I'm watching the consumer data. And what I'm seeing is the number of shoppers has increased back up, edged back up over what it was before tariffs. But it's not where it should be for the season.

Brian Pasch6:27You know, that's really important for dealers to hear because, you know, I consult with many dealer groups. And they're like, whew, June, we had some stores that were really struggling. And that would make sense, right? So your data is showing all of the active shoppers in the U.S. by region or by model or by car type. You can slice it any way you want, but we're under trend. You know, one of the things that was interesting to me, I was talking to some of the dealers, and even though the prices may not have gone up from the OEMs, they have cut back on the rebates and incentives.

Brian Pasch7:11And this is kind of a double whammy because that means that the dealers don't have a lot to scream about, you know, maybe that $4,000 or $5,000 off is now $1,500 or maybe even taken away. So we're in this quandary of, hey, if I don't have large incentives or rebates, which dealers got, you know, addicted to, if consumers are maybe holding off, they're waiting for a late summer or September finance reduction in the lending rate, what would you tell dealers they should be doing? Because obviously you have a different approach to selling cars because you're seeing people when they first go into market, and so you have a competitive edge, your customers have a competitive edge to grab that customer's attention or potential customer's attention before everyone else.

Brian Pasch8:10What would you tell dealers right now who are saying, look, June was brutal. I cannot have a bad July and August if people are waiting for rates to come down. What would you tell them to do?

Jonathan Lucenay8:21Well, at the end of the day, every car sale, and you've been in the car business a long time, so have I. Every car sale is a person that's driving that car over the curb. I think digital advertising is great. I'm a huge fan of programmatic and all the things you can do with anonymous data, but you've got to get one-to-one with the consumer to sell the car. And what I would tell you is with the volatility we've seen in shopping behavior is if you can get the information on who's shopping and you can get ads in front of that person or even better, create conversations with that individual about buying the car while they're hot.

Jonathan Lucenay9:07Now, before our president or our Fed chair makes a comment that changes their behavior, you have an incredible opportunity to close deals. There are enough shoppers right now, Brian, for dealers to have a record July and a record August.

Brian Pasch9:23And I love that because it really teases a question for the dealers who are listening. Are you spraying and praying? Are you really a sharpshooter spending the money in the right places? Recently, you did an amazing test in conjunction with Spectrum Reach because they were trying to offer to their dealers a better way to do connected and streaming video advertising. But instead of just doing the whole PMA or a list of zip codes, they came to you and said, look, for this dealer group, give us the active shoppers for these brands, both the one that they sold in conquest. And in the past they were using maybe Experian or Equifax, active shoppers, and your Active Shopper Network is the only patented Active Shopper Network.

Brian Pasch10:30What was the difference that Spectrum saw in the ROI of using your audiences on demand versus what they were previously offering to dealers?

Jonathan Lucenay10:43The ROI shot up to 40 to 1.

Brian Pasch10:47Wow.

Jonathan Lucenay10:48So there were 28 dealers in the test. The average dealer spent about $5,000 and made $200,000 in gross.

Brian Pasch11:00Wow. You know, and when dealers hear that, they may say, oh, I don't understand how that's possible. And let me try to explain it because, you know, I've been communicating the power of audience. In fact, you coined the phrase that 2025 would be the year of the audience. So let me just set the stage. Google has in-market shoppers and Facebook has in-market shoppers. And we don't know how this list was created. We don't have a way to audit it. But here's one thing you should know. When you load up your own list, you know, say, hey, these are 800 people who came to my website and they were shopping.

Brian Pasch11:46Google and Facebook says, no, it's not big enough. You have to mix in or model audiences. And to me, that's dilutive. You've tested the quality of these audiences. There's nothing. They're not even close to the quality of shoppers that the Active Shopper Network has. And I'll allow you to share that test. But imagine dealers, instead of hoping that the pure and modeled audience works, the Active Shopper is looking for the intensity signals, not someone who went to a VDP and spent three or four seconds on a Facebook click. And it was, you know, they were looking at a, you know, Dodge Challenger or, you know, some aspirational Porsche.

Brian Pasch12:33You know, these are people who are doing repeated tasks that you're tracking and you put them into different intensity levels that dealers can target. So, dealers, instead of using modeled audiences with watered-down counts just because these platforms made an arbitrary line, what happens if you put your money in front of the people who are truly active shopping? That is email. You deliver email. You deliver direct mail. You can do social media. Jonathan, for dealers who are used to trusting Google or Facebook, when you ran their audiences against the Active Shopper Network, what percentage of their audiences could you confirm were real active shoppers?

Jonathan Lucenay13:19Between 10 and 20, depending on the audience we ran, it was 10 to 20% of these model predictive audiences were actually shopping for a vehicle. At the time, they were given as an audience member by these big companies you named. And you know what? The other 80%, Brian, I think most of your listeners are probably fairly well-to-do. And most of them have, you know, pretty good awareness of a vehicle. But if your neighbor bought something else that was $70,000, and you have similar demographics, does that mean you're going to run out and buy something for $70,000? Probably not.

Brian Pasch14:08Yeah. And this is where-

Jonathan Lucenay14:10It looks like it's great to a point, but it doesn't create conversions. And what it does is people actually shopping. And you mentioned dealers have the option to choose an intensity score. You can choose the last date the consumer was seen shopping. You can pour them in an audience. And you don't have to use Client Command's media, although you mentioned some, and there's OTT options as well. And we're happy to provide those. But if a dealer has an agency that they like, and we have some dealer groups with their own agencies-

Brian Pasch14:45That's right.

Jonathan Lucenay14:45Where they just, they take the audiences and then they deploy the audiences themselves. Others are, hey, I just need to be able to push a button and have it work. And then, so that's where you get into the more automated things that, where we can provide that through a marketing automation platform. And it's fairly streamlined.

Brian Pasch15:08You know, Jonathan, for dealers who have been struggling, this is really important, this conversation. Look, in every market, there are winners and losers. And changes in general managers, changes in local competitive forces, this business is never predictable. But dealers need to understand that if their ad dollars are going to people who are actively shopping, and I know it sounds kind of silly that I'm saying this in 2025. If you're using that same audience for your OTT, and they're seeing it on their TV screens, if they're seeing it in their social stream, if they're seeing it in their Google stream or display, if they're seeing it in email or direct mail, and you're just focusing on the people who are really actively shopping, not a diluted list of 20% shoppers and 80% fluff because of some arbitrary count.

Brian Pasch16:12That's where things can really change. Now, of course, it's a matter of trust. Sometimes dealers say, well, why would Google inflate the quality? Well, you know why. They're focused on revenue of click revenue. They're not necessarily worried about how many cars you sell. And you can say the same thing on Facebook. You know, why would Facebook use a watered-down audience? Well, think about it. They get paid for every click, whether you sell a car or not. So we need to understand that a data-driven dealership needs to be testing different audiences, right? Now, let's talk about tactically. If there's a dealer here who's been struggling, let's just say, hey, they're a Volvo dealer or a Hyundai dealer.

Brian Pasch16:58And I'm sure most Infiniti dealers are struggling, but that could be another whole problem with that brand. But let's just say I'm a Hyundai dealer, and I want to know how many people are actively shopping in, you know, a radius or a zip code. How easy is it for them to talk to someone from your team to understand how big that audience is and what it would take to have enough frequency to get their message in front of those consumers?

Jonathan Lucenay17:27Brian, it's so easy that you don't even have to talk to someone. If you go to our website, clientcommand.com, or you hit me up on LinkedIn, Jonathan Lucenay, it's pretty straightforward and easy to find. There are not a bunch of us, only one. If you ask for a mini demo and give us a little information about where you are and the brands you sell, et cetera, we will send you a three-minute video that will show you what the Active Shopper Network sees in your area. And then if you want to talk to somebody to expand it, figure out how to turn it on in various ways, you can.

Jonathan Lucenay18:11But if you just want the information, clientcommand.com, request a mini demo, and you're going to get something in your inbox within a day or so that's going to have a custom video just for you with Active Shopper data. And I would add, you mentioned Infiniti. There are not a ton of Infiniti shoppers. So when you start thinking about, hey, I may be selling a brand that doesn't have as many shoppers right now, or I've got, somehow I'm the one that got lucky enough to take a bunch of the vehicles the OEM couldn't get rid of, and now I've got to sell all these things. If you know exactly who's shopping for that particular vehicle, it's a lot easier.

Jonathan Lucenay19:02Check out the Active Shopper Network in that regard. While you're letting me talk, can I loop back to a comment you made a minute ago?

Brian Pasch19:10Sure, please.

Jonathan Lucenay19:11So, you mentioned competitive advantage. And I just, I think it's worth a second to think about your competitors have the same problems that you have. Now, they may not be as smart. They may not be as good looking. They may not have as good of a sales team or as good of an inventory, good of a marketing team. But they have similar problems to the ones that you have in terms of audience strategy. And if they are spending 80% of their marketing dollars talking to people that aren't shopping, how much more of a competitive advantage could you have? You could spend half the money they spend and talk to more shoppers.

Brian Pasch19:59You know, Jonathan, it's so interesting you brought that up because I've been working on investigating all the tags that are on dealers' websites to help with speed, GTM container audits. I'm coming out to Colorado this weekend for our Automotive CXO Summit. I'm going to be sharing some of my research. And something hit me this week. Let's just say you're a Chrysler dealer. Stellantis has their retargeting pixel on every Stellantis website. And they have audiences that they can offer to local marketing agencies of consumers who are shopping in that area. Mazda, same thing. They have a pixel on every Mazda dealer's website. And, you know, in competitive market, those audiences overlap.

Brian Pasch20:54And if you really think about it, if the OEMs are marketing or doing some Tier 1 marketing, if Tier 3 is fighting over these same people, and who knows who else has these retargeting lists? And we don't know if they're being fed into Google or Meta to, you know, build these modeled in-market shopping audiences that they sell. But it's clear that you're not the only one who's tracking it, meaning not Client Command, the dealer. I'm talking to the dealer now. And you wonder why, hey, why is my message not getting through? If everyone's using Google in-market, if you're part of an OEM that's retargeting people in your condensed market because they're all Stellantis dealers,

Brian Pasch21:51you need really to be talking to other people than everyone else. And I think, Jonathan, that makes the Active Shopper Network even more important. If these audiences that dealers are spinning their wheels on are 20% really active shoppers, they could do a few things. They could take a few grand out of the marketing budget, put it to campaigns run by the Active Shopper Network. They can keep their budgets just the way it is and add additional funding. They will see a change in lead and turn rate. Now, the question is, do they have all the metrics in place to measure, right? Are their analytics set up properly?

Brian Pasch22:37Are their attribution models set up properly? I know companies like Clarivoy and others do a pretty good job of trying to show all the touch points of people before a sale. But I want to encourage dealers who maybe had a slow June, maybe struggling here in July, I have some good news. The good news is you're not alone. According to the Active Shopper Network, we are not at normal levels. Now, we can predict, right? You know, is it, you know, waiting for rates to come down? Is it uncertainty in the marketplace? Is it, man, I wouldn't want to be selling cars in the Virginia area, Jonathan, with all the layoffs.

Brian Pasch23:21I mean, I think Virginia was number one maybe for the last two years in the best states, you know, for business. This year, they dropped, I think, the number five or worse. And one of the reasons is because the thousands of layoffs, you know, at the government wouldn't want to be a dealer in that marketplace, especially with so many people losing their jobs. But overall, market is down and we need to do a better job with their advertising dollars. Jonathan, as we close this up, do you feel that right now for the auto shoppers, the tariff impact right now, since we're not seeing a lot of OEMs raise prices,

Brian Pasch24:07is kind of now just a background noise for the auto shopper, or do you still think it's top of mind?

Jonathan Lucenay24:16Yeah, that's a great question. We still see the consumer shopping activity going up and down weekly, although the trend line is that it's going up. So I think it's less, it's more becoming noise, but it's, we're not to the point that they've completely tuned it out. The consumers are still concerned about it. And there, there is a general concern about the overall economy that is evident in shopping behavior. So I, I think we've still got to fight for every single deal as, you know, if I'm a dealer, I got to win every deal I can win. And whether I'm in Virginia, that's, that's struggling a little bit, or maybe a Texas that's not struggling quite so much.

Jonathan Lucenay25:04Talking to people that are shopping, getting nose to nose and selling a car, I realize it's 2025, but it's not that much different than 1995. Like person's going to make a buying decision.

Brian Pasch25:18And, and Jonathan, one stat, I remember you and I were on a panel and you brought this up, dealers who are first to get to a consumer. You had an interesting stat that the Active Shopper Network provides the opportunity for dealers to be the first to reach that shopper when they go in market. What was the stat about the profitability of deals when the dealer's the first to connect?

Jonathan Lucenay25:43Yeah, we ask ourselves, does it even matter if you're the first one to know they're in the market? And does it even matter if you act on that quickly versus waiting till they're a little further down funnel? And so we studied it. And what we found is the gross profit increase is 36%. If you contact the consumer as soon as they start shopping. 36%. That's gross profit. And it's, and that's compared to deals done in the same month with consumers that weren't contacted. So you are, it is as much of an A-B test as you could run.

Brian Pasch26:21You know, Jonathan, my son just bought a car. I actually posted something on LinkedIn asking my network for help.

Jonathan Lucenay26:27Yeah, you found one?

Brian Pasch26:28Yes.

Jonathan Lucenay26:29Yeah.

Brian Pasch26:30His fiancee is getting married in September. They bought a Mazda CX-5. And it was very interesting. I'm going to add something to your research. I think being first to market, to get your message in front of consumer, obviously the profitability is huge. But I'm going to put a little caveat with a market competitive offer. And, you know, when they were going into market and they decided Mazda, they went to a local Mazda dealer. And unfortunately, they really undervalued the trade. It wasn't a great car, but they undervalued the trade. They didn't want to discount the vehicle. And they had an opportunity to close that. But they didn't.

Brian Pasch27:27And so when one of my colleagues reached out and we were able to get an employee price on a Mazda, which was basically a small discount, but every discount counts. But he said, go to this dealer. And this dealer gave them 25% more on their trade and took a total of, I think it was $3,500 off the MSRP. I mean, that's a huge difference. Now, I think that dealers who want to grow their market share know that affordability is an important concern, right? Service, maintenance costs, all those things are important. If they're just fair with the consumer, it can be first to offer, make them feel comfortable, make them feel that they're getting a good deal, be proactive.

Brian Pasch28:24I think that's the one-two punch, especially in these challenging economic times. They're super happy. The dealer did everything they said they were going to do. And it could have been the first dealer, but that first dealer was looking to make a killing on, you know, folks in their 20s who weren't, you know, the most competent or confident car buyers. Jonathan, one more time, if dealers would like to punch in their zip codes or their PMA to see how many people are shopping for a Ford or how many people are shopping for a Hyundai in their market, what's the website they go to and what do they need to ask for?

Jonathan Lucenay29:08Clientcommand.com, C-L-I-E-N-T-C-O-M-M-A-N-D, as in Delta, clientcommand.com, and ask for a mini demo.

Brian Pasch29:23Great.

Jonathan Lucenay29:24You'll get exactly what you want.

Brian Pasch29:26Love it. Jonathan, thank you for sitting down with me and sharing your insights. I just want to give some encouragement to dealers that if they had a slow June or even a slow July, we're under normal levels of active shoppers. So it's time to consider pivoting and testing a more strategic approach to your marketing advertising. Jonathan, I also am looking forward to hosting you and your team at the Modern Retailing Conference coming up in November 16th, 17th, 18th at the beautiful Eau Resort in Palm Beach, Florida. It's a place where dealers can really refine their modern retailing strategy to be smarter about how they acquire, how they process and handle leads,

Brian Pasch30:09and how they're using technology like AI to, well, fill some of the gaps that are normally due to human error or lapse of following process. All these things will be discussed at the MRC. I want to encourage dealers to get their tickets early. It's modernretailingconference.com. And it's the best investment for your time if you really want to, well, raise up your level of competitiveness in your local market. And if this is the first time you listen to a podcast, there are hundreds of interviews that are available. Just search for the Brian Pasch podcast and you'll see a lot of great interviews. Jonathan, thanks for your time today.

Brian Pasch30:53And thank you for just being willing to educate dealers on, well, alternatives to spray and pray and being more strategic.

Jonathan Lucenay31:02Hey, thank you for having me. Hope to see you guys at MRC. It really is an incredible conference. Some of the sharpest dealers in the country show up every year.

Brian Pasch31:12Yeah, they sure do. And they're willing to share. Jonathan, thank you. Everyone who's been listening in, thank you. And I look forward to seeing you again on an upcoming podcast interview.