New research shows loyalty to brands and dealerships continues to slide
Consumer confidence in the housing market drops to 10 year low
Mclaren has gotten into the sneaker game (sort of)
Kyle Mountsier, Paul Daly
Paul Daly 00:25
It's a great day for Tuesday, because it's Tuesday. Why not? Today we're talking about a decline in loyalty and confidence. And the McLaren that most people listening to this can afford. The people really want to act isn't who they love. No need to repeat. I mean, I've never wanted a McLaren. But if I did,
Kyle Mountsier 00:51
I don't even know if I still want a McLaren.
Paul Daly 00:53
Even though somebody, will somebody pulled up in a Lambo in this in this little town that's near our house. And, you know, the guy got out of it. And everyone's looking at it. And I just kept thinking, like, I don't think I'd ever spend my money on that. My judging the people that do I was just like, I just, I guess once you have enough, I don't know, it's just so uncomfortable to drive. But I've also never dry.
Kyle Mountsier 01:14
Because I'm like, I'm gonna get mad just getting in this thing. And that's, I'm over it. At that point.
Paul Daly 01:19
I want to drive one I want to drive on maybe that's why I don't want one because I've never driven one. I don't know. I don't know. But it's Tuesday. And we have a few things to talk about. Number one, our session speaker titled session titles up at all on the website. Some of them are not like,
Kyle Mountsier 01:34
I will call it like 48% to be quite exact.
Paul Daly 01:39
48 point No, I pretty much
Kyle Mountsier 01:42
all of Monday, well, probably 60% of our Monday sessions are up the majority of our main stage sessions are up anything that's like opening or closing. So there's a lot more information about Yeah, just everything that's going on who's going to be speaking with who we've got some of the panels and moderators lined out. So you can check out that at Sonu con.com forward slash agenda, or just had the the main page hit agenda and rock on.
Paul Daly 02:10
I'm going to that link right now because I want to read some of the sessions or some of the sessions Oh, clean on Monday. All right, some of the sessions. We have an opening keynote 70 experience turning data into great customer experience the future of dealer ops technology with steep Greenfield, a new standard for connect data with Andrew right the speed of consolidation and implications on customer experience with Alan Haig. We got just Charlie Chesbro and Kyle mounts here is going to be there. It's amazing. Jason stuff. Jason Stein's gonna be there. I'm just going to look at all the titles then Hadley, Dave Meltzer, Jim McKelvey and on and on and on, if you haven't got your tickets to a soda con yet, get them now. I don't know. Are there any industry partner tickets left? I think last night, we were at like two, literally, hold on, let me click right now. Ooh, there's one. There's one dose
Kyle Mountsier 02:59
remaining for anything. But yes, one remaining industry partner tickets. So in there, if you're
Paul Daly 03:07
an industry partner, and you want to go this is literally there's one ticket left. And if you're listening to the show live, you have a chance. If you're not listening to it live, you can check but it probably isn't there. We hope we see you there though. Let's just say that if you're watching this live stream in this community, we want to see you there. Alright, today we have some news to talk about. There's a thread there, we usually try to make a thread that goes through the news. And you know, these days, there's a lot of like, down kind of news to talk about, right? There's a lot of news that like if you read the headlines, it might be like, Oh my gosh, this is sad. We should all be sad. But if you're in the automotive industry, you know that that is not the truth. And to quote the great David Long, most of us are just choosing to not participate.
Kyle Mountsier 03:52
There you go. All right, here we go with that option. So
Paul Daly 03:56
research from an from a firm I'd never heard of called growth from knowledge or G F n. New research shows that loyalty to brands, automotive brands, and dealerships continues to slide. Basically saying it's declining as paying MSRP or above MSRP is the norm get this 80% of car buyers. They paid at or above the sticker price. 80% I was like, okay, okay, and 31% of the people so almost a third of the people who did said they would specifically tell others not to go to the dealership, they used and 27% of those. So almost a third said they're going to tell their friends not to go to the place they bought their car just now. And about a third of them are also said they're not planning on going back to the store for service. That's a little bit of a problem.
Kyle Mountsier 04:48
This is timely, because yesterday I was talking with with Michael Cirillo, and both of us were posting all over LinkedIn about this thing called Net Promoter Score. And this is exactly what we're talking about. Explain what Net Promoter Score is there, your net promoter score means that that someone would return or refer someone else to your business. Right? So a lot of companies in the late 2000s started moving to net promoter scores as a measure of their business efficiency and retention capacity. And typically, it's just a scale. It's just a yes, no answer, like, would you refer or not. And companies strive for net promoter scores in like the greater than 90% range, because you want to make sure that the people you're doing business with also push others and come back to your business. So as an industry, like, ah, 31%, not a big deal. But to have less than a 70%. Net Promoter Score is a big, that's a huge deal.
Paul Daly 05:50
So net, think of it helps me because it took me a while actually, even as a marketer with a marketing agency, like what Net Promoter Score, Net Promoter Score, think of it this way. It's, it's like a catch all metric. Right? When it all comes down to it. Would you come back? And would you tell your friends to come here? That's it. And 70% is really bad. It's really bad. You can't you can't run a thriving business on 70%. Get this it gets a little deeper. 27% of respondents said they would not buy from the same brand. So think Honda, Toyota, Chevy, whatever, if charged over MSRP and 23% of the people, so almost a quarter of the people said paying over MSRP negatively impact impacted their opinion of that brand. So if I went I bought a Honda and I paid over MSRP, I just start telling the fact like, yeah, you know what, maybe I really don't like Honda, which is a problem if you're an OEM.
Kyle Mountsier 06:43
That's a definite problem. Now, I've got a couple of comments on this before we get to kind of the quote, but because I think there's been a lot of conversation around supply and demand and MSRP. And whether or not that's the price that should be listed or not. And whether or not dealers have the, you know, should have the ability to mark vehicles up. And I honestly, I kind of go back and forth. Like, if I was running a dealership, I probably wouldn't go over MSRP. That's just personally how I would do it. But I don't fault those for charging over MSRP, especially those that might have, you know, sold into their pipeline two and three months down the road, and they're trying to figure out, Hey, am I gonna sell this car in Colorado? Or am I gonna sell it locally? Right? Like, if I'm selling a car in Colorado, I've got to get the value out of that vehicle, you know, more than what Mark?
Paul Daly 07:34
Mark market value? If you're selling it outside your market? It's almost like, like, why wouldn't I
Kyle Mountsier 07:39
think Mark, this is an interesting thing. You know, when I think about the survey, is did they did they only go after local respondents to that dealership? Because I'm right on a dealerships that are selling out of the market more than usual, because of inventory, you know, issues. So I hesitate to like, I hesitate to take this survey at its face value, especially because when you look at like a leading question, like, if you got if the vehicle was priced over MSRP, would you buy somewhere else? I'm like, Well, no, I would say no.
Paul Daly 08:15
Right? And so yeah, but I have to say, I'm pretty confident, that won't work. Because I did look at the site, I went to the growth from knowledge site, and I looked through some of their other stuff. And it seems pretty credible, like so I feel like
Kyle Mountsier 08:30
I don't disagree that it is credible. I just think we want to take it with like a measured approach, but also a realistic approach that says, hey, look, if all it is is that survey companies are needing to ask these questions, we need to have brand awareness enough to know like, if someone's asking the question, there's probably at least a level of issue that we need to be dealing with from a communication perspective, let alone if the questions are asked in such a measured way that the reality of the survey does exist within the culture, then we need to make take an even more more measured approach to waver communicating the way that we're acting as a brand. So that's kind of perspective that I want to take on that.
Paul Daly 09:12
It's easy. You know, like, when you have this conversation, we've had probably 50 times on live streams on podcast and you know, private zoom calls. And there are good good business cases for both sides. And so it's not like, it isn't like to reiterate, it's not the pick a side like I think dealers should have the flexibility to run their business because there's so much as required of them like to be liable for all the investments they need to make like in the real estate and the inventory and the staffing and all that right. If you're liable for that much for that much you should be able to make more of your own business decisions, meaning if you want to sell at MSRP over MSRP market value, whatever approach you take, you should be allowed to have that approach. However, understanding that like you said the survey exists because there's a growing sentiment actually it's a sentiment that is now being placed on top of the existing sentiment. about auto dealers, that isn't beneficial as a whole. And to just be aware of that. So here's a quote from Julie caner, the Senior Vice President at the GFK. She said it's not the brands aren't doing anything to, you know, try to keep pricing at MSRP. A lot of brands communicated with their dealers that they are potentially damaging their long term equity that they build up in the dealership and build up in the brand. But from a legal perspective, there's not a lot of hold up that brands can do. We're hoping that with releasing this research, we will provide brands and dealers with some data points. That is, that is not anecdotal. Right? So these are actually you'll you'll firm data points of how people are feeling. And so our takeaway is this, whether or not you're charging over MSRP or not, I don't know if any, I mean, who is there anybody charging under MSRP?
Kyle Mountsier 10:49
I don't know about that dealer the other day, that is somewhere in Texas, I was always one, there's always one.
Paul Daly 10:55
So whether you're charging over MSRP, or not, being proactive about over delivering on experience is the safe place to be because you know what it's like when you pay a premium, but you have such an amazing experience that the premium doesn't matter anymore, right? That potential exists in every dealership across the country to effect this, whether you're charging MSRP or over MSRP, or whatever you're doing. If you over deliver on experience, every one of us knows how that feels when we buy something and maybe it's expensive, but the experience is so great, where like it was worth it. Right. Yeah. And then
Kyle Mountsier 11:30
I would say that if you're charging above MSRP, and you have zero difference in the way that you are approaching car experience, when you were charging at or below then you are making a major mistake when the in the opportunity to both adjust your processes to make sure that in the future, you have even better processes, but even just currently is you should be doing something above and beyond Period End of story. If you are charging above MSRP like give a hat away at minimum
Paul Daly 12:00
give him somebody a hat or something and not that has the dealer's face on it just start snares now, they actually want Speaking of things that people actually want. You think Wait a second, consumer confidence in the housing market has actually dropped to a 10 year low. So So consumer confidence dropped to the lowest level since 2011. As both prospective buyers and sellers have become more pessimistic. I wonder why? Well, just 17% of those surveyed in July, said that now is a good time to buy a home down from 20%. In June, according to a survey by Fannie Mae, you know from the article that we cited even more telling is the share of sellers who think it's a good time to list their homes that dropped from 67% From 76%. So people saying like, maybe it's not the best time to list my home. So in this index, they asked a question from six areas. They surveyed buying conditions, selling conditions, Home Price, Outlook, mortgage rate, Outlook, job loss, concern, and change in household income. So here's the main point from this, I think are not the main point. But the key data point, pre pandemic, right going into the pandemic, if you couldn't even remember back that far. The economy was roaring, everyone seemed very, very stable, happy growth trajectory, a lot of people were feeling like it's never been better than this. And 93.7% was the this index was 93.7% that means consumer confidence in the housing market was like things are good, I can get the house I want, I can get a good price for my house. It was interesting, that balance. And now it's 62%.
Kyle Mountsier 13:49
So easy, just like personal research. And Nashville has been a booming market since literally 2009 Right? When I go in, and I'm this kind of weird guy that just checks Zillow because it's fun for me. And when I check out on your own home value and seeing like home value, like houses that are for sale around me and things like that, and and all the houses that are for sale around me like the closest 10 houses all have price reductions in the last 10 days, right Whoa, they're nuts thing because the majority of the Nashville market sells for for a premium over list price within seven days typically. And we're seeing houses sit on the market for longer than a week for the first time in a long time and seeing price reduction on those on those houses. So I think that there is a little bit of market correction potentially happening. I still I mean there's still very little inventory, at least in Nashville and I think nationwide, so I think it's just kind of like, in my opinion, this is still just like a market adjustment point. But they're still in uncertainty approaching large purchases from from market as a whole.
Paul Daly 15:05
You know, the the index overall showed that large scale across the country, I'm obviously what you just shared shows that this isn't true in your neighborhood that prices aren't dropping at this point like large scale. But they say both supply is increasing, as well as time on market are increasing, which are big indicators, right? When you have oversupply and things aren't selling fast, people start doing what they're doing in your neighborhood, which is dropping the price a little bit trying to get people to pay attention. So look, this, these last two stories, here's the thread, people are feeling a little uncertain about houses and cars, right? So they're feeling maybe a little bit put out a little bit discouraged. So anything you can do to sow some certainty, into your process into your marketing into your brand, right? It really is just a counterpoint. These stories are telling us people are learning to learn about houses and cars, and empathy,
Kyle Mountsier 16:00
if you are if you are communicating some level of certainty and some level of empathy at the same time. Like, that's all people want. They just want a smile and a smile. All right,
Paul Daly 16:14
and some friendliness. I mean, think about it's like the David Long effect, we'll call it when you spend time around David Long. He didn't do anything to change the macro economic outlook, right? He didn't do anything to change it but being around him and just understanding his mentality going through it, and keeping an attitude of positivity, but not blind positivity, saying, Hey, we're not participating in that. We're going to focus on these things we can change and try to make people's lives better as they interact with us that actually the David Long effect takes hold and you know what, you feel a little more certain, and you feel a little more upbeat, and you feel a little bit more like oh, we can get through this we can find something that works. And if you can manage to find a way that makes your customers consumers or customers or potential customers or service customers feel like that and provide them certainty Guess what? Your Net Promoter Score, I would guess is gonna go up. Thanks. So straight up. Looking for a segue. Looking for a segue. I can't find one. Okay, we're gonna tie back we're gonna tie back to the very beginning of this episode where we talked about we're gonna tie back to the speaking of tying things segue some acrobatics we just did long enough, we had to wait long enough and talk long enough. You can get there so we said there's a McLaren that just about everyone listening to this podcast can afford or you know make happen. McLaren has gotten into the sneaker game. Kyle, I know you're a big sneaker head especially when it comes to supercars. So through collaboration,
Kyle Mountsier 17:50
all my shoes are supercar related, like I got. I'm just kidding. That's not even true. You go, there's not. It's actually a really cool collab. So McLaren partnered up with APL athletic Propulsion Labs to unveil a new set of athletic shoes. They as as you would expect, in true McLaren fashion, made sure that all of the materials being used were made out of very high class world class materials. So the midsole is made out of what they're calling future foam connected to a carbon fiber plate that runs the length of the shoe. And the midsole gets infused with nitrogen. So literally, you got nitrogen because
Paul Daly 18:36
it's lighter than air, right? Nike has Nike alias air, just all over the shoe. These have nitrogen.
Kyle Mountsier 18:44
There you go. You got got nitrogen in your tires over here, you got a carbon fiber plate for your hood. And, and you've got some nice foam cushion seats. So they just took the car, slid it in the shoe. And you've got some color selections that are that are associated with the colors that you would see in a McLaren. So they're very, like there's almost a unique gradient and feel to them that has that. Like when you look at a McLaren and you look at it, you've got it looks like it's like nine different colors at the same time. And so if you see the shoes, that's what, that's what it looks like.
Paul Daly 19:19
That's nice. Do we have a picture of the shoes? We have a picture of the shoes to put up? Ah, no picture the shoes. Someone
Kyle Mountsier 19:25
get a picture of the shoes. Yeah. But I got I think they're, I think they're cool looking at, you know, to have McLaren on your shoe for 450 bucks. I mean, I know that there's gonna be some people that are in for that. But I do think that that the cool thing that we're seeing is we're seeing brands cross verticals, which just makes your brand more sticky. And we're seeing more brands do this now than ever before. I mean, I actually think of like, the Ferrari Pumas as like a very early adopter of this and like oh, yeah, I want to issue right. So this is just this
Paul Daly 20:03
is like learning the Ferrari Pumas. There's like a requisite gold chain that goes with that outfit.
Kyle Mountsier 20:10
Paul Daly 20:12
Absolutely. There's a jumpsuit a gold shade that goes along with the Ferrari shoes, I think yeah, exactly. But there's these McLaren's, there's gonna be they're gonna be a limited edition. So you know, I'm sure a lot of people will buy them, the whole them, buy them the flip them. And if you're real baller, you probably buy them to wear them while you're driving your McLaren, which will give you depths if we see you. But look, we think that keeping your brand fresh, and somewhat accessible. Even though most of the people listening to the show, or even seeing the sneakers or buying the sneakers won't be able to afford or drive a McLaren. There's something that just builds the brand of McLaren and builds the exclusivity and elevates the Ara there they are.
Kyle Mountsier 20:52
Look at those things.
Paul Daly 20:53
That's very hot, actually. Yeah, it looked pretty cool. I mean, not
Kyle Mountsier 20:56
I don't wear graceful like I you know what that's used to go that way?
Paul Daly 21:01
I think my wife would like that, that that earthy, kind of what color would you call that? To earthy Pink
Kyle Mountsier 21:06
Salmon, earthy salmon earthy.
Paul Daly 21:10
But, but doing things around your brand, right, we've talked about logo, maybe Porsche would make headphones or you know that what it does is actually elevates the exclusivity your brand and just the perception because even for the people that can't buy it, they can still be fans of it, they can still increase the equity of your brand to make it exclusive because nobody wants something that nobody else wants. I mean, that's just kind of how it goes. Nobody wants something nobody else wants. Well, we very much want you to be part of this community still and get your friends in here too. Because this is a community where you can find that confidence. Find that forward motion and find most importantly, each other. Right