ASOTU was on the ground with Alan Krutsch during the 2022 Modern Retailing Conference.
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Kyle Mountsier: 0:00This is In The Dirt with ASOTU.
Paul Daly: 0:04
Alan Krutsch. Good morning down and talking in front of a microphone. We do a lot of talking. Not always in front of a microphone. That's right. Thanks for spending a few minutes with us today. All right, so we've talked about a lot of things.
Kyle Mountsier: 0:17
Look, here's the this is what I want to ask. Because I know I've got a question because what I appreciate you is there's no there's there's none of the BS, you always kind of level set the industry. And it's like, we walk through conferences or conversations or kind of modes and changes in the industry or, you know, you're talking about, you know, someone asks you about digital retailing marketing, you're like, look, here's the thing. So we've gone through modern retail conference, we've got you know, GA4 happening CDP's, connected, retailing online to offline, where's the level set for the industry? Like, where? Where do we kind of like look at it and go, Okay, just calm down just a minute. Here's the level set as we head into 2023. And in not getting too anxious about all of this.
Alan Krutsch: 1:07
Yeah, the so this is the time when I wish I was a little more clever, because that is a big question. Here's what's on my mind right now is we're in a period of really remarkable change. And I think that starts at the OEM level, in terms of the retail models that they want to see. And I get it, I understand, when you're the CEO of an OEM, and you're looking at Tesla's multiple, they may see something right versus 445678. Good day for a legacy manufacturer. These CEOs report to a board and report to shareholders, and that's on their mind only about 24 hours a day. Now, they look at the experience that Tesla delivers. You know, there's only one website, it looks the same in all 50 states to all of their customers. And so they have this legacy franchise system that has served them really well, and does a whole bunch of things really well, particularly servicing cars, particularly taking care of customers that may not have the credit profile, that a Tesla customer,
Paul Daly: 2:21
right. No one ever talks about that. No,
Alan Krutsch: 2:24
I mean, it's I mean, Tesla, of course, is a remarkable success story. But when you look at the nuts and bolts of selling a car, if all of your customers are rich, and the car they're buying is their second or third,
Paul Daly: 2:39
and they don't really need to work all the time, or be available all the time, and
need a car need financing that fits into their monthly budget. So we've got all that going on. We've got the transition to digital retail. And here's something that struck me, you know, Kevin Frye at the Wyler group. They did some interesting research. And Kevin admits this isn't science. Yeah.
Paul Daly: 3:12
Right. But we actually had him on talked about it a little bit. And I
Alan Krutsch: 3:16
think that that's awesome. And it said that, you know, a lot of their customers aren't that interested in buying online. But I, I always go back to how do we create the survey? Because if we go back 17 years, and let's look at the imaginary survey that says, Would you like to buy a cell phone without buttons? Ah, yeah,
Kyle Mountsier: 3:40
no. No, that's crazy. What am I gonna, how am I gonna operate with that?
I'm gonna go first. I'm gonna go far afield here. And I'm eventually going to ask you answer your question, but here's something that's interesting. Look at link and Company. l why Lincoln Co. Yeah, Lincoln, co look at a link Oh, one for sale in Europe. Kind of no options. It's just kind of a cool midsize SUV. 500 euros a month for a subscription. Yep. Car Insurance. Maintenance. Yeah, turn it back when you want or finance it and buy it, or borrow it. Rent it. Yep. Now, what's interesting to me about this model is the trouble with subscriptions is what do you do with the used car? Absolutely. Okay, now see inventory. How do you manage Now let's bring it in another thought which is cars are rolling computers computers on four tires. What if Link is managing that like Apple manages trade in iPhone? So let's say so let's say I've got this $500 A month subscription. And in six months, I turn it in I want to do something else. Lincoln CO has that car back Instead of taking it to an auction and taking it in for getting a real weapon at the auction, they do a little reconditioning. And that's now a 389 per month. It's not brand new, not brand new,
Paul Daly: 5:13
but what the heck? It's like It's like leasing a certified vehicle almost. Right, exactly. So
Alan Krutsch: 5:19
all of these models kind of roll up to the manufacturer, I think the dealers are kind of ready to go. But we need to simplify the product line. We need to simplify the communication. And then the future that we've all been talking about digital retail, faster transactions in store
Paul Daly: 5:40
are going to, you're saying complexity is the what we're really fighting right now.
Alan Krutsch: 5:44
Yeah. And I think, you know, I'm just kind of inspired by this idea. And I think Mary Barra, among others are talking about it that, you know, not a car anymore. It's a platform, it's a computer on wheels, et cetera, et cetera. Those are really simple. Now, you know, when we look at a Apple iPhone or something, you don't have 42 different options.
Paul Daly: 6:04
I don't I still don't, it's a computer on wheels. I still, it's not?
Kyle Mountsier: 6:08
Well, because all of its Nazakat being computers on wheels,
Paul Daly: 6:12
even so it's a computer doesn't whisk you through reality, at 80 miles an hour, right? It doesn't smell if your kid pukes in it right. There's just it's just,
Alan Krutsch: 6:24
you can't you can't haul lumber in your computers or get it
Paul Daly: 6:28
at home. Right. So like, I understand the principle, but still, every time I hear that, I'm like, No, it's not really I mean, the cell phone example. And you're like, Who wants a cell phone without buttons? You remember when you had to go into a store and deal with the salesperson to buy a cell phone? It sucks so bad?
Alan Krutsch: 6:46
No, it's horrible. You go even today, you go into a Verizon store.
Paul Daly: 6:50
I bet it hasn't gotten much better. No. And especially like when back in the beginning. We didn't know a lot about them. They were very complex. The plans were complex, right? You get this plan or this point, this is free minutes. And this is paid minute, you know what's
Kyle Mountsier: 7:01
crazy, it actually takes about as long to buy a cell phone in a store as it takes to buy a car at many if you
Paul Daly: 7:08
go in a store. Yeah, not miserable. It is miserable. But I can buy
Kyle Mountsier: 7:12
an iPhone in three and a half minutes. Yeah,
Alan Krutsch: 7:16
we can buy pretty fast in the store. Even if it's not a nice storage, not too much storage, a good camera or a great
Paul Daly: 7:22
level of simplicity. Yeah, because even if it's not an iPhone, I've haven't bought not an iPhone in a really long time. But you know, when you're scrolling through like the the non iPhone options, like I just want to get to the iPhones. But it's still way faster and way more clear, because the plans have gotten simpler, the financing has gotten simpler. And still that process online still by far beats and in store experience. Yeah.
Kyle Mountsier: 7:43
And so Simplicity is key. And that comes to the customer experience, the product line, the all of those type of things, just getting the riffraff out of the thing is really important in your opinion. And
Alan Krutsch: 7:54
I think it goes to the marketing too, which is a lot of what we're talking about at this conference is that, you know, if we want to oversimplify we've got two kinds of marketing, you got item price, I have this car, it's red, it sells for x or it has a payment of y. And then you have brand marketing, and brand marketing, although isn't getting any easier. It's getting in some ways a little simpler. And it's about really inbound marketing, and creating content and attracting people to your web properties, attracting people to your social properties. And so it's kind of the way I've, I've been thinking about it as we're all everything is brand, your content, your look and feel your attitude. And then you have some sort of item price advertising, which is now moved into the database marketing is understanding your segments and putting the right offer at the right time in front of them. All right, there we go. We've
oversimplified very complex business, just a couple of things. Not a big deal. Don't worry. Only do
Paul Daly: 9:01
that. If we could just do that.
Alan Krutsch: 9:04
My way of thinking is, you know, we start with the high level and simplify. Yeah, there's some details here in terms of running a customer data experience platform, there's some details and running that but you know, as as a dealer starts to look at their budgeting they go okay, let's take a model like Target, Target spend 30% on brand 70% on the item price. Yeah, we're gonna sell Kleenex, six boxes for two bucks or whatever they're doing. And then the rest is cute dogs with little smiles around their eyes. And it's fine. Yeah. So we start with that a big budget, then we start with how are we going to create that brand that content? How are we going to make that consistent? And then after that, we put a good offer in front of the right customer at the right time, not easy, but the concept is simple.
Paul Daly: 9:51
And it works work and it's proven to work in just about every industry that's tried
Alan Krutsch: 9:56
it That's right. And so you know The always the other thing that I would say is that besides the urgency to get work done, what we also have to think about is consistency, the best marketers find a message, find a method, and they do it over and over and over. And as marketers as people that are creative. I know, I always want to go to the next thing, I did something yesterday. Now, I was excited yesterday, I'm bored today, let's do something different.
Paul Daly: 10:31
And we relate to that. Many podcasts like that,
Alan Krutsch: 10:37
and we all have to remember that, you know, with the 10s of 1000s of messages hitting a consumer. They haven't digested what you did yesterday. Yeah. Do it for some moment.
Kyle Mountsier: 10:51
URIs. Yeah. So Alright, so last question heading kind of into 2023 will like, I know that you have just a broad scope of the way that you look, I want to know, especially with Fuse, and what what you all are doing and how you're interacting with dealers and encouraging dealers like what's the what's the move in 2023, and the encouragement or the or the next steps for you all.
Alan Krutsch: 11:12
So for us, what we're really focused on is this anomaly in the anomaly is that retail Automotive is the last major vertical, retail vertical, that does not have a point of sale system. And so point of sale systems, whether we start with something as simple as buying a coffee and a doughnut, this is where efficiency starts in the transaction. When I buy the coffee, when I order the donut, I don't want somebody goofing around walking back somewhere to the cash register, trying to figure it out, it pops up on the screen. Okay, I get it much simpler transaction by car. But there's a model there that says we can put this on one screen. And we can make this a really efficient transaction. The other thing that happens with a point of sale system and I believe it happens, coffee and a doughnut buying an iPhone or buying a car with Fuse, is that this is where trust begins. When you start with that point of sale system and the computers telling you, that's the car that's the payment. That's the rate. That's a much different
Paul Daly: 12:23
appearance on the back of a sell sheet
Alan Krutsch: 12:26
for 39. On approved credit today exclamation mark,
Paul Daly: 12:30
Asterix, right, I think just by calling it a point of sale system, I think you clear so much up because we all know exactly what that means. Yep, a point of sale system for automotive Alan. Always generous with your time. Thanks for spending a few minutes with us today and getting us to laugh a little bit as well.
Kyle Mountsier: 12:46
But you guys, thank you for listening to In The Dirt with ASOTU. We love the automotive industry and the people who make it run day in and day out. We would love to connect with you more through our daily dose of fun, a free email that you can sign up for at a soda.com That's a s o t u.com. We put our heart and soul into it every day. Thanks again for listening. Join us next time for more Conversations In The Dirt with ASOTU