CarNow NADA Sneak Peek

Brian Pasch0:10Hi, this is Brian Pasch. I'm in the studio with Tim Cox, co-founder of CarNow, and we've recorded this video to give you a little sneak peek what's coming up at the NADA Conference and what's in store for the year ahead. Tim, welcome to the studio.

Tim Cox0:27Thank you for having me, sir.

Brian Pasch0:28So, NADA, there's a lot of noise. Press releases coming out, new features, everyone's trying to get dealers' attention, yet I think we're still trying to chase finding solutions that help dealers, OEMs, and consumers come together and have a great buying experience. What has CarNow been working on to help move that ball closer to get all parties on the same page?

Tim Cox0:59Well, we still believe that the online to in-store experience is paramount. In fact, that's what's going to be moving. A lot of the OEM initiatives are online to in-store, that showroom piece. So, we have greatly enhanced that experience and the seamless connection from online to in-store with our showroom tool and seeing some incredible results as far as closing deals, which at the end of the day, it's that lead to close number that we really focus on. There's a lot of other analytics paint a picture, but it's about selling cars, obviously, and something that we're really excited about. And we wanted to be thoughtful because, obviously, there's a lot of AI products.

Tim Cox1:37We're going to be at the show and there's going to be lots and lots of stuff.

Brian Pasch1:39That's right. It's going to be top of mind.

Tim Cox1:41Top of mind. What are you doing with AI? And we wanted to be thoughtful because we have a fiduciary responsibility to take care of our dealers.

Brian Pasch1:48That's right.

Tim Cox1:49And to make sure that we protect our dealers. So, we're very excited to announce and we're announcing it here first.

Brian Pasch1:55Come on. Let's go. Let's go.

Tim Cox1:56This is the first that we partnered with Amazon and we now have a suite of AI products. And our biggest launch at the show will be a product that we're calling Reconnect. So, we will be able to take all of the leads, not just CarNow leads, that a dealer has, set different campaigns and then automate that response and then get them back into the store.

Brian Pasch2:20And I'm assuming, dealers who are listening, that since you have the ability to know the car they were interested in, you can calculate current payments and offers based on OEM rebates and incentives. When you're reaching out to these people to re-engage them, you could actually present an offer that they can book and buy.

Tim Cox2:43A hundred percent. And I really think, you know, we have looked at the entire AI space a lot like the EV space. And EVs, I use this scenario, if every person in America had to drive an EV today, right, it'd be a problem.

Brian Pasch3:01A huge problem.

Tim Cox3:01It'd be a big problem, not enough charging stations, range anxiety, all the things that we deal with. But everybody today could drive a hybrid. And I really believe that, you know, our tools continue, whether it's our OEM numbers that we're seeing, we're converting at 80% as far as chat to lead. So converting at 80% and then adding AI to push that customer down and then handing them off to a live person is going to truly enhance that closing ratio is why we're so excited.

Brian Pasch3:31You know, one of the things that you and I have talked about is how sometimes people use KPIs in the wrong way. Many years ago, I coined a term form completion rate, FCR, that talked about when someone starts a process, what percentage finish. And yet, the true reason I did that is to show that there was friction in the form process. We were asking for maybe too many things. Not that that was the metric that helped sell cars. And you mentioned your tool and your ability to get deals done. If a tool is converting, let's just say, hey, their form completion rate is 40%, 50%, and you have two tools, the next metric that's so important is, what is my lead to close?

Brian Pasch4:26Let's talk about that, because sometimes dealers focus on leads, and they're not organized to really do a fair comparison on start of a process to a lead and then lead to close. How does CarNow stack up on other retailing solutions on dealers' website on that lead to close metric? Because I think that's extremely important, as long as FCR is in the same range.

Tim Cox4:53100%. In fact, I had the privilege, a lot of dealer groups, the end of last year, the beginning of this year, are forecasting for the year to come. And I had the privilege to speak at multiple dealer groups to kick off their year. And one particular metric that I showed is I've been saying for a long time, facts, not feelings. So I will put up some lead to close metrics. And sometimes people, dealers, marketers, I call get the yeah buts. Yeah, but there's no way that'll work in my PMA. Yeah, but you don't understand. Yeah, but my people, in fact, there was a local dealer here, Kevin Deutch, that's closing at, he was closing at 30%.

Tim Cox5:34And I put that metric up. And I had a few people scoff at it. So I actually called Kevin, and I said, can you look at those numbers just to make sure that that's what you're closing? And he said, Tim, you're wrong. I'm not closing at 30%. In November, I closed at 37%.

Brian Pasch5:50Now, just to set the context, a lot of dealers are happy if their lead to close is 10%, 12%, 15%. So the right balance of making sure the process doesn't create friction. That's the key. Right? FCR. And then with every 100 leads that CarNow generates compared to 100 leads from another solution, how many of those are closing? And then that's that lead to close. I've seen your lead to close rates. They've been amazing. Why do you think they're so high? We can't explain why dealers might pick an inferior solution. I think if they understood their data, they may change their mind. But why are your lead to close rates so far ahead of so many solutions I've seen?

Tim Cox6:43I don't think there's one specific reason. I think it's the customer journey. It's what you and I worked on together six, seven years ago is taking forms off a website.

Brian Pasch6:54Right.

Tim Cox6:54It's pushing that customer down, not just delivering a lead to a customer and everybody patting themselves on the back, name, phone, number, email. Now it's name, phone, number, email. We know what car they were on, on the VDP. We know what trade they're on. They're using, in fact, Shift Digital, Bob Lanham and I were looking at a database earlier in the year. Shift Digital looked at 80 million leads.

Brian Pasch7:14Pretty big data set.

Tim Cox7:15Right. And website leads were actually down, but digital retailing leads were up. In fact, we talked about this at the CXO.

Brian Pasch7:22That's right.

Tim Cox7:23And they were scoffing there. And it's not necessarily digital retailing, push a button, buy all the way through. It's I work to trade. I calculated payment. But affordability right now is top of mind because people have more negative equity than they've ever had historically. And interest rates are where they are. So they're just trying to figure out how they buy the cars. But to answer your question, it's getting more information to the dealer, having the dealer see that, not start all over. And the dealers that just put a little process, hence the hybrid that we are talking about, are closing at a pretty incredible rate.

Brian Pasch7:56Let's talk about the showroom piece because I know that you weren't first to connect online to showroom, right? Everyone was first rushing to have something online and you had an amazing platform. Then we were trying to reduce that friction online with formless websites and going to conversational commerce. And now we know from other studies when a consumer works a payment online, what they use, if it's the same tool that's in the showroom, right? They have more confidence that the dealer is being transparent. What are you seeing? Because I've seen the aha moment, right, when a consumer comes in and they say, well, let's just pick up where you left off.

Brian Pasch8:42And it's not some desking solution from the 70s. It's not something on a piece of paper. It's, well, it's exactly the look and feel that they started online. Tell me about that evolution with your new showroom product.

Tim Cox8:57Well, it's, it's taking what we had and making it better, enhancing it to that, to that scene. And this is a word that's been thrown around for almost a decade now. That's seamless. But in all sense of the, it, that's the best word that's seamless because people, when someone spends 20, 30, 45 minutes online to figure out what their trades were, to figure out if they can afford payment, to pick the right rebates. And then they don't have to start that. That's what happened in 2020. You know, the, the OEMs and, oh my God, the world's falling and put, and everybody treated digital retailing as the field of dreams.

Tim Cox9:32If you just build it, they will come. And it's not, it's not, it's not the case. But when you understand a customer, you know, there's a reason I've said this for a long time, that people pay $7.50 for a chicken and a pickle. It's about the experience too. When you give a nod or you take the time to acknowledge, acknowledge the work that the customer has already done. And that's what's seamless and that's what flows into the tool. They respond to it. People, you know, the old saying, do unto others as you want done to you. I mean, that's what we're doing. And then with the integrations with Darwin and then directly to RouteOne and Dealertrack, you know, being able to seamlessly just use the tool, you know, with the unfortunate situation that happened with one of the DMSs several months back, being able to use the tool to literally start to finish.

Brian Pasch10:18Yeah, you had some CDK customers that were literally thanking you because they could still work retail deals just using your tool.

Tim Cox10:28Ashley, I'll call her out. Ashley Covenos, who, as a Demontron, that was, I mean, that warmed my heart. Like we were helping dealers stay open.

Brian Pasch10:38Right.

Tim Cox10:38And they were using, they were working around, obviously we're not a CRM, but they were using our tool as a CRM, as the desking tool. And to deliver through pushing either to RouteOne or to Dealertrack, just doing the entire deal right there on the iPad.

Brian Pasch10:53So with all the buzz about AI, I think this year at NADA, CDPs, we're going to get some more attention. Get some love. AI is going to be, I think, bubbling hot. For dealers who are listening to today's podcast, because I'm sure you've heard so many products enhanced with AI, can you give me one example of how your partnership with Amazon and your new suite, a practical example of how the CarNow platform is being enhanced with AI?

Tim Cox11:27Well, again, we wanted to take something that was working pretty good and make it better. You know, even, I mentioned Kevin, that was closing at 37. And guys, look, the dealer group I was just at, that, you know, was closing at 15.2%. So not everybody's closing at almost 40%. There's a lot of things that go on there.

Brian Pasch11:44Process, leadership.

Tim Cox11:46Process, leadership, and so on. But one of the main examples is even Kevin will say, we still miss leads. There's no dealer that's truthful with yourself.

Brian Pasch11:55Right.

Tim Cox11:56That things slip through the cracks.

Brian Pasch11:58Even when you're cranking, like December to remember.

Tim Cox12:00Correct. You know, big month, things fall through the cracks. So what if I could tell you that take all your leads, set your own campaigns, not what our AI wants to tell them, set them exactly the way you want, you know, whether it's three days out, five days out, seven days out, and then allow the AI to send an SMS directly to that customer. And then again, when it reaches that customer and then tags them back in, hence the hybrid back into a live person within the dealership.

Brian Pasch12:27I love it.

Tim Cox12:28Yes.

Brian Pasch12:28Tim, there's a lot of distractions, parties, invitations, demos. I hope dealers take some time to come and see you. Can we just put up the graphics right here and just remind everyone of the booth number?

Tim Cox12:45Yes, you see the booth number right behind us. You are going to want to come and see us. There's a few things that we're going to tease out.

Brian Pasch12:54Oh, okay.

Tim Cox12:55As well that we're not talking about on this podcast. You're going to want to come out and see us as quickly as possible. At least see what's new and where we're going and why CarNow as we continue to innovate in the automotive space.

Brian Pasch13:09Great. Well, hey, thanks for listening in on this pre-NADA podcast. I will be summarizing a lot of the great tech and ideas that I see at the show. So look for my upcoming podcast interviews with people from the show and, well, what I thought was the hottest items of the show. Tim, thanks for coming in the studio.

Tim Cox13:30Thank you.

Brian Pasch13:30Take care. Good luck at the show.

Tim Cox13:32Thank you.

Brian Pasch13:32Thanks for listening. Good luck at the show.