Growing Sentiment in top level marketers that OEM programs are now stifling innovation
Carvana allowed to sell again in Illinois
Matt Lasher, Kyle Mountsier
Kyle Mountsier 00:24
Good morning. It is Friday, May 27. Paul is hanging out with his wife for their 20th anniversary. So I brought my good friend Matt Lasher year and we're talking some deep stuff that people really want to know who is and who Id they stopped and stay when they see. All right, Matt Lasher joining us from the car. Got his got his morning coffee. How are you this morning, sir?
Matt Lasher 00:49
Let's go. Let's go a morning Kyle morning. Listen, you're the only guy I think in the industry that could have got me on their podcast and like six hours notice. So
Kyle Mountsier 00:58
I did. I'm texting him late last night like Sorry for the late text. I really apologize. And yeah, thanks for getting up this morning and getting after it. And I know you do shout out
Matt Lasher 01:08
to Paul. Shout out to Paul and Sarah. Great, amazing family. So congrats on the anniversary too. So
Kyle Mountsier 01:14
yeah, really cool. And they've, man, I wish I could tell everyone maybe he will next week. Just everything that he's doing. Also, if for some reason they listened to it and his wife heard and like spilled the story. That would be bad, too. But, you know, the ever creative genius that he is he's he's not skipped on on fun, for sure. So all right. Well, I want to get into it. Just a couple of notes for those listening. We obviously yesterday talked about the volley, families and the victims relief, and we just wanted to make sure that people still got that link, we've got it in the show notes. We're just encouraging people to reach out. And you know, I don't want to get too deep into it. But even like, as far away as where Matt last year is up in the greater northeast, there are, there are other elements of this, like circling the US. And so we don't want to lose sight that of the crap that's happened in, in our in our country recently from a gun violence perspective. So yeah, just wanted to lay that in there. Also, yesterday and Matt, you don't know this yet. But yesterday, we finalized the logo, which, for me, it's like once you have a logo, you have something right, so we logo for a soda con, I know we're super official. So we're gonna flash it up there. If you go to a soda con.com You can actually just stay in the loop. It's a quick type form. The website is nothing but you can see the logo get energized, feel the energy around it, and stay in the loop as we start to announce stuff over the next three or four weeks. Having a lot of great partner conversations around that. The big takeaway is block off September 11. To 13th Because this guy Matt last year, already said he's in so a double locked him down because it's live now.
Matt Lasher 03:05
I gotta book I gotta book a plane ticket still, bro. So I don't know anything's possible.
Kyle Mountsier 03:10
Yeah, right, especially plane tickets these days for sure. All right, I want to get into it. I asked Matt, actually, earlier this week, I made a post on LinkedIn that came actually out of a conversation that happened in the auto genius community that both Matt and I are a part of. And it was the sentiment around the fact that OEM programs so if you understand like the marketing spectrum of of tier three automotive Is there are there OEM programs, so you know, your Ford, your Mazda as your Subarus, you're still antas all of that put in place programs, which either require or heavily recommend based on reimburse funds, exactly what products and services you should use. And and there's this growing sentiment that it's continuing to stifle innovation. And, Matt, he and I have talked about this before. And I've seen you talk about this on in other spaces on LinkedIn on podcasts. And I just I think you'd have a really interesting perspective on exactly what stifling innovation when you when you grow at scale, right, and you connect it back to the dealership a lot. So tell me a little bit about like where you seen that? Start to stifle innovation, these like mandated or locked in technologies or programs.
Matt Lasher 04:27
Well do just like a little bit of a setup. So I worked at Nissan North America for a minute. Five years early in my career, I spent about 15 years in retail at Westar. So I've seen sort of both sides of of the viewpoint in terms of how innovative how fancy how, how customer focused our business entities often it comes from a place of misunderstanding the other side, I think. So I guess I would start with I think OEM initiatives are well intended. I do think that it's sometimes bad Add advice by the people helping them execute, because the people helping them execute have most to gain. So I don't need to call out the intermediaries specifically here. But I think you guys know who I might be talking about. You know, and I think also, it comes from a tendency, as managers, this is a human tendency, as managers, we tend to focus on the negative. So as an OEM, they're looking at their dealer network, right? And if you go back far enough, dealers were like, I don't want a website, I'm good. Like, I don't need one, you know, 99 2000 people like whatever. Like, I don't, what do I need a website for I sell cars, like people are going to come to my dealership. So that was like the prevailing thought, right? And so like, as websites gained momentum, it's a spectrum. Some dealers hop right on, right? And Wester was an early innovator with a self built website. So shout out to Kevin Lee, at auction, simplified, he was in our camp that really made our group site from the beginning, a long time ago, western.com represented 90% of our total traffic. But then the OEMs got really demanding about their own websites, right. And so if here came some of these mandated programs that I think you're referencing, right, and for Western to be a good corporate partner, we have to support these programs, right? In the end, there's good and there's pros and cons, right? Where I think they brought the whole dealer network up to a certain level. Right, so they probably addressed the most underperforming dealers, the dealers,
Kyle Mountsier 06:37
I talked about that a lot. It's it is there's this, like, recognition that there's a wide spectrum of attention to technology, understanding of new processes, new things out there, and adoption curves, right. So I do think that you're right, that there's an element of any programmatic thing that says, hey, we're just gonna like streamline this so that everybody's singing off the same song sheet, which I think is the well intentioned part that you're talking about.
Matt Lasher 07:06
And they have brand standards that they're trying to protect against you go even further back 3040 years, manufacturers had a problem with dealers not updating their signage, right. And so you would see like, a super old like Ford logo or Chevy logo or Nissan logo or something. And the manufacturer that would like drive the manufacturers nuts, because they're trying to like, innovate themselves, right. So they're trying to like, push the image forward. So I think a lot of the the standards came from, you know, these brand standards, advertising desires, as well as bringing up the bottom, you know, but I think there's an interesting, so we were talking about this before, Kyle, but we were saying the larger than, or an organization or a tribe gets I think the harder it becomes to innovate. And often at the top of the leadership food chain, we come up with these ideas were like, this is the thing, right? And the more central the idea, the more the more focused, it is, the actually worse it sort of spills out into the network. I think the more unintended consequence there is, right? So so what we're seeing a little bit just fast forwarding to like audio, OEM websites today, I think, is this constriction of vendors, right. So you have just take Western, for example, we have 35 stores, we have 22 brands, or something that we represent. If you look at all the brands that we represent, and then compare it to all the required web website providers that we're allowed to use for our websites, there's really only about two or three companies in the whole country that can service all of our child site websites. Okay, so obviously, Western dot coms a free agent could be on whatever platform that it decides to be. But all of our other store, we have, like 40 websites, right. And they have to be managed within just a handful of companies. Now what that creates, especially in this industry, with regional consolidation of websites and dealer groups as a whole, dealership groups are getting bigger and more dense, like Westar is, and as a result, you have this desire to have a centralized customer experience or a consistent customer experience. And so like, that's where some of I think the innovation that like dealerships, maybe seek, you know, I don't care what website they're on with West hurt, necessarily, I would love for whatever vehicles Kyle's looking at on all of my websites to be, you know, in sync and, you know, similar customer experience, similar conversion flow. How in the world is a dealership supposed to AB test? 1015 20 different variants of websites, when the manufacturers themselves have trouble just a being a B testing one website? Right? Yeah. So it's fascinating, but I think the unintended consequence to these mandated OEM programs is this. vendors have a scale problem. So vendors want business, right, but then they bolt on 700 for dealers or whatever, and then now they like are overwhelmed by questions or like, how do I update this thing or like
Kyle Mountsier 10:07
somebody and so you come into you come into two issues, you come into support issues, right? So it's harder to support. And then the other issue is you come into, it's harder to innovate, because you have a fixed program that's in so many places, that you can't actually become change agents for all of those places. So and then you took this to that I really want to get to the place where it's like West, her experience is this, when you change a process, or a technology or anything that's implemented group wide, where actually,
Matt Lasher 10:39
we need empathy, right, like so in our industry, it is happening all the time with all the fancy marketers in our world, right? Like we got to deploy empathy in terms of what's really happening. Sometimes change is as a result of organizational structure limitations, or whatever. So Westar, I have two really quick examples. One is about used car photos. So our leadership team wanted to get a centralized look to how the first photo on the website is, okay, that led us down the path of photo booths. Now, I was the one executive in the team that was like, we shouldn't do photo booths, because it's going to generic everything and like, cars are outside. Like, let's make them lovely, and realistic and emotive and whatever. Right. So I was coming at it from an art side. But you know, our team decided collectively, and I got on board with this that we wanted the first photo to be the same. Okay, so we invested hundreds of 1000s of dollars in 10, photo 360, photo booths, shout out to Jay whatever, the products pretty good. Yeah. We did. Yeah, yeah, we brought the bottom up. But we brought the top down. So we got we got less innovative and photos by our attempt to manage consistency. Right. So if you go to western.com. Now today, and I encourage you guys, to do that, shout out dealer Inspire. Thank you for helping us with our website. But our Top Most Expensive cars, we've deployed a very talented artist, his name's Colin gray. He's, he takes super, super cool, and very unique pictures of every car over well, we're aspiring to every car over $100,000. Now, we have maybe 30 or 40 cars, right now in that bucket. But you know, look, you're looking at a $700,000 car, I don't want that to get the same treatment as like the $20,000 Corolla. Right? So yeah, we've deployed some art into our process. So we brought looking at
Kyle Mountsier 12:41
it right now. And if you're not near a computer, and it's it takes and puts these cars actually in innovative spaces across the city, it looks like, right, so it's like, it's it's not just it's not just art, it's also connection to community. So that's really interesting that you've taken this approach of and I think that, you know, we've had conversations in this market or community of what if the approach was taking that top tier, especially in marketing and technology, the ones that really understand it, maybe the consolidated groups or the really innovated single roof innovative single rooftops, and gave them some freedom to go, oh, you really understand what's up next, you really are looking over the horizon, maybe there's some freedom for you that you can like push the boundaries, right. And I think that actually utilizing the approach that you've done just on something that seems simple on photos, and going, hey, there is a top percent that need to be given freedom to actually push the OEMs push the industry forward, right? Because, or else we're all just going to be kind of sitting in five years ago. And I think that that could be a really interesting approach to the OEMs, to say, hey, look, we realized we got to bring the bottom up, there needs to be some consistency and branding. But there may be some level of access for the most innovative, the most technological savvy, the most forward thinking that puts us actually like five years in the future. And that that that that level of empathy, I want to get to one more story only because I heard you say this word empathy. And I think it's really clear to me right now that there's not a lot of empathy for some of the conglomerates, one being Carvana you know, recently and I'd love to get your take on this. But recently Carvana was kind of pulled out of Illinois. Well, it was just announced that they get to go back into Illinois with a bunch of stipulations. But the main thing that they were dealing with was titles and registrations. Now I don't know how Westar is doing. But I've heard multiple stories across the industry that because of shortages and departments of Transportations accelerated vehicle sales, you know movement of vehicles from Wholesale purchases and private purchases, that titles and registrations are issues not just for the large companies but also for the to local companies, and I think a bit of empathy around that is probably necessary. I don't know what your experience is with that.
Matt Lasher 15:07
So first off, this is a human condition, we like to see our heroes fall and then right. And so like, I think there was some jealousy of Carvana success amongst many in the industry, right, and so when their stock price collapses, and they get pulled out of Illinois or whatever, like, that people are like celebrating the fallen hero, right. And, you know, hopefully we can celebrate their rise from their struggles, but no doubt, and we only operate in New York state. So I can't comment to like any of the other states, I have no idea about titling and paperwork there. We use Jupiter tag and title for like out of state sales. But in New York state, there is a electronic process that's been reasonably well adopted, I think, by most of our title teams. So in that sense, you know, I don't really have enough perspective on on the Illinois thing specifically, but But you're right, dude, like, like, lots of things take take time, I remodeled my bathroom in my house, and I'm still waiting on the shower glass. I did this three months ago. Things are things are different. Right now supply chains got impacted, people's lives got impacted. So you know, I think we should never judge, right, we should seek to understand, we can disagree. And I think we should try to find healthy ways to disagree, because that's going to move us all forward. You know, but this idea of innovating, right? There's no one size fits all. There's no like unified answer. There's no exact way. I love your idea of like trying to tap into some trusted dealers to like, innovate and try. You know, and there's a executional problem of like, okay, cool. We came up with this good idea for this dealer. How do like more dealers in the network, take advantage? Right. Which is, you know, there's a lot of challenge and all of that. But but you know, we're so blessed to be in the industry, you know, and be a part of it. It's such a big industry with a lot of really intelligent people on every side, tech side, dealer side, OEM side. So I think it's really just about us enjoying the ride and trying to piece it together. And by the way, dealers get a lot of s**t for not being that innovative. But my experience with other businesses and other verticals, dealerships are pretty damn innovative. We are
Kyle Mountsier 17:17
Matt Lasher 17:21
To leads, we're pretty good at being customer service oriented servant leaders, philanthropic businesses in the community, like dealerships do a ton of ton of ton of good. And sometimes I think we like to hate on him a little bit, just because, you know, we're doing all the marketing things, you know, we're doing the fancy retargeting, we're doing that, you know, all this stuff. And could it be better, of course, but every business could be better every person a human being could be better.
Kyle Mountsier 17:47
Yeah, no, I completely agree. I think actually, over the last two years, we've seen dealerships being in being the most innovative, the most forward thinking the most groundbreaking in retail in a lot of spaces, just because we were always open, we had no choice we had to figure things out. And so like Don't skip on, on sales people and and variable ops and fixed ops and accounting teams that have completely flexed and made new processes innovated in technology alongside industry partners in the last two years. I'm not counting dealers out for sure. Over the next five to seven years,
Matt Lasher 18:25
bro, I gotta say this related to innovation, it's often equated to technology, okay? I'm a believer in the people. Okay, and I'm never going to change that tune. All the people the 2600 employees that we have at Westar are team Wester shout out, let's go. It's not about the technology, technology can help the people do things better. But people are the true innovation. People are the ones that are going to continue to go. If dealers fail to recognize that point. They will be replaced with direct to consumer sales processes and kiosks. Okay, so dealers need to embrace the idea that the people that they employ and work within the building are their most valuable asset and always will be. That's what we do. We're a people business.
Kyle Mountsier 19:09
Look, I couldn't have said it any better myself. The technology and the process is so should serve the people not the other way around. Matt, thank you for joining us today. It's been an absolute pleasure. Enjoy your Memorial Day weekend.