Sitting w/ NADA President and CEO Mike Stanton and Liza Borches

June 23, 2022
Paul and Kyle wrap up VADA with a conversation with Mike Stanton and Liza Borches talking all things Franchise Retail Automotive.
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Paul and Kyle wrap up VADA with a conversation with Mike Stanton and Liza Borches talking all things Franchise Retail Automotive.

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Kyle Mountsier, Liza Borches, Paul Daly, Mike Stanton

Paul Daly  01:56

All right. So here we are. We're so fortunate today to have Mike Stanton, President and CEO of NADA. Thank you for joining us. And you already know Liza Borches, who today you just received the the knighting as chairwoman of the Virginia Auto Dealers Association. Let's let's start there. How you feeling about like actually having the mantle now?

Liza Borches  02:17

Well, I've been working pretty closely with Don Hall and va da for a lot of years. So I think technically, the title changes, but I'm not sure that the work changes. And we got a really important year coming up to work with NADA and other state associations, to continue to strengthen the franchise system as the best, most efficient way to deliver the consumer experience around buying and servicing cars. So it's going to be an important year. And I look forward to working with Don, with all the dealers in Virginia and with NADA in other states. Very nice.

Kyle Mountsier  02:46

Yeah, you know, I think that that's a really big thing that we're seeing. And this is kind of our first Paul and my first kind of like, peer into the relationship of the dealer Association, and NADA, the more, you know, the state association and the Federal association of the national, I guess, Association. And so it's been really neat to see and, you know, learn that you're home to Virginia. And so this is a very close relationship. But, you know, not just in what you're doing today and being here with the Virginia Auto Dealers and the Kentucky Auto Dealers. But what is that relationship, currently, and what is the relationship over the next year look like, between the Dealer Associations and the National Association?

Mike Stanton  03:31

Well, I'm one of about 100, association leaders that we work for dealers 100%, and we all have teams, I have a team of 165 people that work for dealers. And as I was listening to you all speak, you know, the customer preferences are changing, they're evolving, and we're evolving with it. And we need to continue to do that we need to make sure that we get our laws, right. And we need to make sure in order to do that, and we speak with one voice as an industry. So in Virginia, at national level, at the local level, and dealer to customer that we're all on the same page on doing the right thing. And the right thing is always to take care of our customer and be able to meet them where they want to be met in the sales process. 

Paul Daly  04:14

What do you think is the biggest the biggest misunderstanding that the public when they look at Franchise Retail Auto? What do you think the biggest misunderstanding is because there is this sentiment that exists that Auto Dealers are somehow not good for people right now? Good for consumers? Right? That exists? Right a lot of people think opposite. But we talked about the sentiment, what do you think is the biggest misunderstanding


I think it's almost like politicians you know, all politicians are bad, except for my politician because they know their policies advocating for me. Yeah, and that's what dealers do. Not only do they advocate for the customer in a warranty situation, but they compete like heck for customers business, customers, not happy with dealer a they can go dealer B or dealer C in a direct model. You don't have that you don't have have that advocate. So I think that there's a perception but it's it's once once you get to get behind that perception in terms of the bigger picture, the one to one, and then the satisfaction scores, and the one to one relationships that dealers have developed with their customers is actually very good. So it gets much more of a myth than than a reality.

Paul Daly  05:20

Liza, you've done a lot to overrun that perception with your work with CMA? What are some practical ways that you actually work to move against the perception? And how do you see that actually playing out in your communities?


I'm just going to share a specific story, not something that has we've intentionally done to change the perception. But when we talk about what we do for consumers every day, and you just ask what that most common misconception might be. Just yesterday morning, I had an email from a customer who had purchased and leased seven vehicles from us, I'm not going to use the OEMs name, but they had leased it through a captive finance company turned in their lease last year, and somehow that captive finance company had never released them from that title and continued to send them personal property tax bills. This has now gone on for nine months, their credit scores dropped 110 points. And they're delinquent status because they haven't paid a personal property tax on a car they turned in almost a year ago. It finally got to my email yesterday, we said without question, we're paying the personal property tax for that customer paid it yesterday, told the customer do not worry about this for one more moment, we will figure it out from here, the harder thing is going to be making sure that we get their credit fixed. But that customer had a relationship with our dealership, as soon as they reached out to us, we were able to advocate on their behalf, take it off their plate, and we'll figure it out. Because that's what we do. He shouldn't have to be dealing with that. But he's been a loyal customer of this brand of the CMA brand. And our job is to advocate and be that relationship that sometimes they can't have with an OEM who is in another state who they've never met, they've never had a conversation with, and we do those sorts of things for customers every day. And we look forward to doing them for many years in the future.


The face to face interaction with a customer is so important, you know, getting in a queue for it with an 800 number, and can be an endless loop sometimes in the dealer will will take take that that customers consideration into account. And then in turn, they can advocate they can, there's so many things that dealer can do that an individual customer can't, because of their presence in the marketplace marketplace, the relationship they have with a lender, or a manufacturer, or a government agency, whomever. So it's really on many, many levels that a dealer can can not just take care of the customer but but become their advocate.

Kyle Mountsier  07:41

Yeah, I actually have a lot of friends over the years that I've had that that conversation of like, Ah, I don't like buying a car, you know, all right, I always hate going to the dealership. But then the for some reason the conversation always turns in it goes like, Well, how was your last car? Oh, I loved my car. And the last car purchase that I had that I had. And I I love that dealership, and my salesperson was amazing, right? And it does it once you get to that one to one. And I think that the work that that NADA and Dealer associations, and even just like communicating that on a on a, at least national, if not global level, is taking that one to one relationship and exploding it into a cultural perception of our of our industry, because that's the piece it's, there are so many that just say I do I actually enjoyed my last purchase, I actually enjoyed my last service visit, I actually liked my service advisor or my or the dealer that rescues me from those things. And, and so I do think, you know, exploding that to the national or even state level is really a big play. And so how does, you know, the things that we're doing from a legislation perspective, which are are necessary things to make sure that the ball moves forward and that the standards are in place? You know, we heard Don yesterday in his like, hey, look, there are things from a legislation perspective that protect the consumer, and they just have to be done on the background. Right. But how can we connect to that work that's getting done? That is in an effort to protect that consumer experience? How can we connect that to the end user and actually tell that story better?

Mike Stanton  09:15

Oh, that's That's the million dollar question. It's a very difficult, probably very expensive story to try and tell. I think the way, the best way we can do is control what we can and that's take care of each and every customer one at a time, the way dealers have always done. I think that's really the only approach you may have a better idea of

Liza Borches  09:32

life. You know, I shared this in our board meeting yesterday when COVID hit, and they determine what businesses were essential across the United States. Most in most states car dealerships were considered to be essential. But I asked our team I said, if our consumers had to make a list on that day of what businesses were essential in their lives, I guarantee we would not have made the list. But the moment that they needed us the moment they could didn't get to work because their car broke down, or the moment that they got pregnant with twins and they could no longer fit in their sedan, all of a sudden, we become essential in their lives. So we've got to do a better job of helping customers understand we're essential before they need us. And we are and we know that when we have those one on one relationships, that they recognize it, but it is our job to figure out how to tell that story to make sure that customers understand were essential before they lose it. Because if we don't have the franchise system, and it becomes a direct sales model, or an agency model, consumers aren't going to recognize how important we are in their lives until it's gone. So it is the most important thing that we need to be working on right now.

Kyle Mountsier  10:40

From a from a hyperlocal perspective, do you see any dealers or maybe Liza is you really exercising the leverage that they have with their employees and their staff to tell that story because, you know, it's always there's, there's kind of these layers of story, right? You have the national layer that also is working with the OEM to tell the story. And then you have, you know, the state layer or the regional layer of of storytelling, and then you have the dealer level, and there's always, you know, competition for acquisition of business or keeping that business. And then, you know, we have the, the hyper localized layer that I think maybe we haven't leveraged to our to our fullest capacity, which is the 2.1 million employees that we have in our dealerships, and in our factories, and in our whatever x is that we haven't really leveraged to tell that story. Well, so how do we how do we move that story? Maybe not straight to the consumer. But how do we move the story from, you know, our federal or our our national relationships that were that we're creating all the way down into the store to that, to that Lot Porter that actually gets to tell the story to their 18? Friends? How do we move that story to that level?

Mike Stanton  11:54

You made me think of something I heard years and years ago, I think there's there's been a general, I mean, it's ridiculous to think that anybody would be in business and not want to take care of their customers,

Paul Daly  12:03

right? You think it's a table stakes? Right? Yeah. That's the only way you stay in business, how

Mike Stanton  12:07

you stay in business. But we've been measured this way that way, the other way. And I think that there's a spotlight that, but I remember talking to a dealer again, years and years ago, he said, Mike, it's why how can I survive without taking care of the customer just, I'm gonna see this person at church on Sunday, you know, and I need to have a good relationship in my community with everyone. And my reputation is everything. My name is on the building. So it's just common sense. And for some reason, it's all gotten twisted up over the years. But I think it really comes back to that common sense. I mean, that's what we want to do. So we have to do,

Liza Borches  12:47

Kyle, when you talk about taking it to every level within the dealership and sharing that story across, not just from a dealer and general manager perspective, you know, we talk about customer experience in our dealerships. And I'll give you an example our new hire orientation, I walked them through all of our expectations around customer experience, I share stories. And then I asked them, I said, but there's one thing that you have to have, that is the most important thing to create the best customer experience. And they all kind of stare at me. So we have to have the best associate experience, we have to make sure that every single associate within Carter Meyers Automotive is proud to come to work at our dealerships every day. They believe their morals, their ethics, and their dreams are aligned with our company, they have to feel that they can have a financial future that they can support everyone who counts on them, and that they can have a second phase in life with retirement. So if we don't have a great associate experience, and they're out telling their 18 friends or the 10. Friends, I think that you said is the average. If we don't create that, there's no way we can have a great customer experience. So I think you're spot on when we talk about the 2.1 million people that are employed by dealerships across our country. I think first we have to do a great job of making sure our dealerships are a place that people are proud to come to work with every day. And then they're out there sharing our story.

Paul Daly  14:04

So people people read this shirt, and I've had several compliments. It says love people more than you love cars. And I say I'm a pretty fancy dresser as you can tell. But I was like today I'm wearing Liza right there. I was like, Who are you wearing? Well, this Liza said this love people more than love cars. And it does start with the associates. And you your organization exemplifies that and then it trickles down. When we're talking. You know, Mike, you said, that sounds like a really expensive story to tell. Right? When you say how do we you know, how do we crack this nut from the top down? Right? I mean, I can tell you from my advertising experience and creative experience, like that's 10s of not 100 million dollars to actually start to get that message through on a national level. However, we do have the advantage of being in every corner, right of every county of every community in the country. And I disagree a little bit with what you said on saying like, it's common sense, right? It is business common business sense, but I think the p&l is common sense. I don't know if the deployment to people like the human element is common sense. But it has to be more than it's ever been before. And I think adjusting to that mentality that like, oh, the consumer has a louder voice because of social media than they've ever had. They vote with their dollars. They sometimes vote with their votes, right as they're electing legislators. And so my thought is, as we're talking about this, we have store level right in your communities, you're in that and then being around the the Dealership Association, all the Virginia dealers together, I see this a lot. I live in New York State and you know, you see a lot of like, Hey, you should drink a lot of milk. Why? Because the New York Association of dairy farmers said, so a lot at fairs and on media, right? And so like, dairy farmers are great people, right? And they we need this product, my kids need to drink milk. So I'm almost seeing like, ground level state association level, I think NADA level is almost like the final stop and not the first stop. Because like all the groundwork needs to be done, you can possibly come in at NADA level and spend enough money

Mike Stanton  16:06

to do it spend the frustration, you know, they did spend so many unfair shots taking taken a dealer's from from the competition, very well funded, not that not making a lot of money, but very well funded competition. And it just irritates dealers, because it's not true. And the question is, how do you combat to combat that? And it's, it's gotta be one on one, because as you mentioned, it's it would probably cost hundreds of millions of dollars. And you still and you're still Will

Paul Daly  16:36

you really move the needle? Right. Right. Like even so even if you do for a season, will it stick if it's not at the ground level? 

Mike Stanton  16:41

 Exactly. And we struggle with that. Yeah. Well,

Paul Daly  16:44

I think that's any any large organization, Legacy organization struggles with those types of things. We got time for one more, I think,

Kyle Mountsier  16:54

one more question. I've got a lot more.

Paul Daly  16:56

I think we have time for one more? Well, I,

Kyle Mountsier  16:59

You know, I, what I'm really interested in at this point is, you know, from NADA perspective, a lot of the like, the visible thing that we see is, you know, the NADA convention, and if you know that your stores are involved in in NADA, 20 group, and then, you know, a lot, there's been a lot more, especially over the last couple of years uncovered about the work that NADA is doing in the legislative perspective. You know, but but what, what more does NADA specifically need out of the dealer body right now? What like, like, the dealer body asks a lot of NADA, I think but what does the What does NADA need out of the dealer body? And, you know, we have people that will listen to this podcast, that that are everything from a salesperson to a general manager to an owner and all that. And so what what can each of those types of people give back to this dealer association that is doing so much?


Well, a lot of what we do first off, I answer your question in just a minute. It goes on behind the scenes when our team of of our legislative team and our regulatory team, they're working with the agencies, they're working with the lawmakers. And when we have that influence, we don't tout it, because we're, we're educating people, we don't want to tell them, hey, we were right, they were wrong. same holds true with the manufacturers, we rarely go public. We influence through the dealer Attitudes Survey, and we're meeting with the top levels twice, at least twice a year, sharing dealer opinion. So I think we've been a very effective organization, you mentioned 20 Group Academy, the show, but what we need more than ever, right now, is Dealer Engagement. We need dealers to get involved not just with NADA, but with VADA with their states, to make sure that that their voices heard and that we're doing you know that our priorities are set the right way. And that when we're ready to go out and deploy that strategy, that they're on the team, because it's the dealers that that move the needle, they've got the relationships with the lawmakers, and they've got the juice, you know, they provide the jobs, the taxes, all of those things are what move the needle politically in, in Washington and around the country. So we just need them to be involved. Help us help you as they say,

Kyle Mountsier  19:15

yeah, actually, early, actually, in December, we had Paul Walser on a live stream, and he was talking about LIFO. And we and you know, Paul, and I got an education and we did,

Paul Daly  19:27

like I've heard him super exciting. I've heard about this way like, okay, so we made it fun, though. He had a big life size Grinch behind Christmas time. It

Kyle Mountsier  19:36

was it was so good. But what was really interesting about what we want to communicate and what our desire as Automotive State of the Union,  ASOTU, is is to draw straight line or as straight as possible that we can to every person in the dealership and so I think that the call would be, hey, no matter what, where you are in the dealership, or what role you're at, is go ask your General Manager your Owner, what are they doing? And maybe even how can you take part maybe it's hard for them to go to the association meeting. And they could send you because of timing, right, and you can relay that back to the dealership. And so there's multiple people working within the store to make sure that those communication lines are open and available. I think that's what everybody in the dealership has the capacity to do. It doesn't just have to come from the owner and the general manager, it can come from anybody. So go ask those questions dive in. And hey, you know, that someone might, you know, lean in when you ask those questions, wondering where it came from,

Mike Stanton  20:33

I promise I won't talk too much about LIFO. But it's a great, it's a great example, of of a misperception out there that dealers are asking for a handout they're not, it's just let's get back into the tax deferral situation that we were in before the pandemic. Again, not to talk too much about LIFO. But you've got a relentless team of dealer advocates that dealers do that are working with Treasury that are working with lawmakers. But we need more co sponsors on on this legislation that's out there, there's two bills, we'll find a vehicle to attach those bills to our team is increasingly hopeful that this is going to happen, but we need your your continue to amp up the requests for your lawmaker. So again, that's just an example of the dealer engagement that's necessary. And that's how things get done.


And Mike, anybody in our dealerships can write a letter to their legislator, on behalf of NADA, the dealerships of themselves to say this, this will help me and my dealership continue to serve our customers better.

Paul Daly  21:33

Liza, unless you have the final word. So from dealer to dealer, you're someone who involves a lot of your staff across multiple levels in industry wide events, you expose them to industry level content. What would you say to other dealers in order to encourage them to do the same? Like why does that work for you as a dealer?


I love that question. We have a huge group of CMA associates here at VADA. We try to encourage other dealer groups to the to do the same. Because I think it is really important we talk about every level in our dealerships, understanding the importance of what they do, how much our industry impacts the United States, everybody in this country, transportation is vital. And what we do matters, whether it's our Controller, our Lot Attendant, our Sales Associate, our Technician, our General Managers, we offer the opportunity for a lot of people to come to VADA, because we want them to understand more than just what they do every day. We want them to be able to connect dots from what they do to how it impacts lives. So I would encourage dealers everywhere to make sure that you let them see behind the curtain, understand every aspect of what dealerships do in our communities, how important we are to the economy of this country, and continue to educate our team. So bring them to your state associations, that conventions bring them to NADA let them participate in different educational opportunities that NADA and others put out there. The more they learn, the better we can be together.

Kyle Mountsier  22:59

Awesome. Well, Mike, Liza, thank you so much for joining us for taking a little bit of time for the encouragement that we got to hear you over the last couple of days. You know, for Paul and I this is just just a part of the work that we want to support you all in communicating and support anyone that's listening or watching in understanding and learning about this great industry. And likewise, I said the best most efficient way to sell and service vehicles in our country. And we really believe that if we do band together if we do draw a big circle around our whole industry, that that is both a culture and perception that we can shift. So I can't wait to talk to you all again. And thank you. Thanks, guys.