"The Breach Is Coming!" The Vibe Coding Security Bomb Hidden Inside Your Dealership (& What Every Dealer Building AI Tools Needs to Know) | More Than Cars

It's gonna be massive. And what it does, it's gonna be the wake up call. What? What's going on? It's gonna be a dealer. A breach. Paul Jay Daly and Kyle Mounds here on the CDG podcast. Gentlemen, welcome. It's so good to be here. Thanks for having us. How do we feel about dealership marketing nowadays? You guys are the marketing guys. I want to know how do we feel about it nowadays? What is the state of dealership marketing? It's the most over talked about under resource department in the entire operation. How's going to give you a lot of vague answers. - I think that's pretty cool. - We're not gonna let them off the hook. We're not gonna let them off the hook. - What does that mean, Yukon? - So what's so interesting to me in retail auto is that every conference you go to, every LinkedIn post, every single thing is targeted around the marketing effort. We talk about CDP's marketing automation platforms. What the marketing tools are available? The communication, CRM, everything is, the communications are all around marketing, yet the decision, the hand, the bag is held by someone that's full-time job, most often is not that, right? And so we put so much energy around customer acquisition or customer lifecycle marketing in the communication with the in the industry, but then we put one person in charge of 13 rooftops to handle 100% of customer communications, content creation, managing the internal teams, the internal communication. - I should reset my Facebook password. - And they become like de facto IT a lot of times. - That's what I'm saying, right? - Yeah, we've got 10, 13, 15, 20 salespeople sitting on the floor selling still an average of 10 cars and now there's some great dealers doing more. And we're essentially saying, hey, look, we really actually don't know what's going on in marketing, we're only gonna attribute one person to that when they ask to hire someone to support them. We're gonna say no, that's an expense we can or expense, but we'll go higher two or three more salespeople to try and like hope the making wheelies more out, squeeze more out. - Wait, so you think that it's a marketing issue, meaning when you say under investing in marketing, like I would argue we're investing everything in marketing, all the resources, all the time, all the capital, and like you said, in all this technology. - The capital and technology and paid media. - But not the people. - Google and Facebook are getting rich on our industry and we have pin them. - Well, that's yeah, that's what I'm talking about. - We pin them as like not a third party, not, but like they love our industry because we're overpaying them. Our ads run the worst out of any industry outside of law firms in the world. - We try to say that. - So our cost per acquisition is some of the highest in the world. Our conversion rates are the second lowest in the world of any industry that is looking for a conversion on a site. We like literally pay for Google and Facebook per capita to exist. - There's a saying by like venture capitalists, which is that sometimes they just wonder if they should just take all their capital and then just invest it into Google and Facebook because it's like 30 cents of every dollar that gets invested into the start. - Right, it's the total of the kind of way. - It's the tax. - A bunch of capital allocated into the marketing budget, right? - But it's unstructured capital. It's not well balanced and we don't understand what it's doing because we don't put the people in the places to be able to manage that capital well. And so it gets mismanaged, not by fault of the person or one or two people that's involved in it, but because they're under trained and under resources and under capitalized by person to handle the volume of marketing budget that we're shoving through all of these third parties. - So we have a couple of questions and technical stuff and then let's go back to the thematic. But you mentioned we are spending the most, we pay the most. I could make the argument that's because the customer acquisition costs on a vehicle or like what does NADA say? It's like a 700,000, 300,000. - A third of a year. - Yeah, so that's also higher than most other goods in the market, so it makes sense to spend more. But then the second thing you said is we have the lowest conversion rates. Why is that? - Why is it have to be so expensive, right? Why is it because it is? Well, I think that accepting that number, that's just what the cost of acquisition is high. But cost of acquisition is only high because the investment in retention and brand building is extremely low. This ties back to having a well-rounded strategy because you have the funnel and people come in market and they go on the top of the funnel and no one really pays much attention because our funnel we're thinking like, oh, well, 90 days, right? The consideration matrix. And then when they come out the bottom of the funnel, everyone spends and they're competing and overspending on one another to get the little lead that drops out of the funnel. And that's why I cost so much. People are under investing in the broad sense of what is marketing. We have to tie that in what is brand building, what is a retention strategy. How are we cultivating those relationships before and after and during the life cycle? So the fact that we don't invest in those things because we have enough money as an industry to throw more at the bottom of the funnel. And we do. And it's easy. - I was just telling you guys before this conversation, I think it's relevant to bring up about the conversation I had with a dealer about regarding they said, hey, there are essentially, if I had to distill the question is they're trying to identify their ideal customer profile, right? They're in a new market and like, do I advertise offers? Do I advertise convenience to advertise price like all of the above or whatever it may be or is it a subprime market? Do I advertise financing? How do you guys think about that? Like how do you think about identifying the real ICP ideal customer profile at a dealership? Beyond just like, hey, I've been operating here for five years and like, I'm using my gut feel, you've worked with any dealer thing. Is there like a systematic process or how would you go about doing that process today? - You have to start with who you are. Like what's the persona of the operator, the owner, the vision of the operator, the owner and the people inside, right? Because an ideal customer profile typically comes from a vision or a resource that you have internally, right? So, not interesting. So you're saying like lean into your strengths. - Right, exactly. - Like, what's your trajectory? - Forget the market, but like, lean into your strengths. I use the example in a passive, you know, like Rick K. Sauter, Rita K. S. where they really lean into the philanthropy and just again, experience and that's, they were always marketers, so they lean into that. It was never like, hey, four lot of day I was a great market for this specific type of experience. It was, hey, this is my personality. I'm going to bring that to the world and, you know, just be great at it. - Yep. - If you try to start from a different position than what Kyle just said, you're constantly going to be fighting the who are we question. - That's right. - Because it's now a variable that depends on who you're trying to go after at the moment. So I think that puts any business in a dangerous place because a brand is, I mean, everyone thinks like, well, what's our brand? It's our vision or mission statement. It's what we believe. I actually think that the brand is actually just a mirror that reflects the your values back at you. - I agree. - So it's if I know who I am and what kind of mirror I want to be, I'm going to attract to repel the ideal customer naturally speaking. So you have to start. - Yeah. The cleanest example of this is wanting to go after a people group that speaks a different language, right? Whether this be a Hispanic people group or anything, right? If you try and set up all your marketing around that and you're like, we are so good at marketing to the Hispanic market in Miami, right? And then 100% of your staff only speaks English. - You're screwed. - Yeah, it's an authentic. - Yeah. And so that maps across a lot of different mediums. So look, if you've hired a whole bunch of moms, right? - Do you think your customers are going to start talking like talking to moms, right? If you've hired a whole bunch of white dudes in their 40s to sell cars, probably going to be great at a bunch of it. Now, you're going to get edge cases, right? But how do you set up everything around like how you can operate as a store? - You know, a great example. This is Mary's, Viltoyota. - Yeah. - Jim Collin. - Why? - Well, because they, their staff across the dealership more than 50% female. They didn't do that intentionally. They try to have a very diverse workforce because they're just like, hey, we have to represent the community. - Okay. - And so they do. But because their dealership is 50% female, across all disciplines, because it is their customer base strangely enough, is majority women. Disproportionate to the other benchmarks, other stores like markets. - That's interesting. - And we're having a conversation about growth. And my suggestion was like, well, why don't you just position yourself as the best place for a woman to buy a car? Because if your sales target is X, you know there are at least that many women, many times over in this market for a car. And if you just own that market, you would have come with your goal. - Wow. So you're saying from like actual advertising. - Do you imagine? - Like, you have clean into that. You have like, you know, you have quarterly events where women come in and, you know, I don't know. - How to keep your car, how to keep your car. - How do we save on the road? How to instead all, has anyone graphed, like has anyone ever graphed the, you know, 50 positioning that a deal should take? - No, because here, so let me take the other side of this, which is I'm listening right. And I just expand into a new market. I just purchased the stores on their performing. I want to grow the store. Maybe it's a, I'm dealing with a brand that is just, you know, heavy, heavy concentration. It's a diamond dozen. We're not talking to you to store. Talking to a more mainstream brand, where there's many competitors. So maybe I want to go heavier used. The question is, my skill set is me, my value. Like I'm, I'm great at logistics. I'm not good at marketing, hypothetically, right? We're like, What do I lean into? Right, you just gave an example of leaning into a demographic or like a person of the people, which I think that's a great authentic way to do it. But it is a question I have. Well, who needs logistics? Right. Who out there needs logistics? Well, I need logistics. I'm a at home business owner that works night and day, all day every day. Convenience. So I need convenience. So I'm gonna go after all buyers that need convenience, 'cause I'm great at all of the logistics that it takes to make them feel like I'm the most convenient option in their life, right? Okay, so here's another. So the dealership group that I came from, when I left the last three years was dedicated to single point of contact, one price. And there were multiple people, especially the people that were like marketing agencies that were around us, they were like, well, aren't you gonna cut out all the people that wanted to go shit? We were like, yeah. Mm-hmm. And that's totally fine, right? Because we need to go from selling 140 cars a month to 200 cars a month. So all I needed to go was find was 60 more people a month. Did it work? That didn't want to be free? For you? Absolutely. 'Cause I know a lot of dealers have to try to buy sold by 200. Yeah, by 200. 200 bucks from like what market was that in? 20s. Just outside of Nashville. What brand? Mazda. Mazda. Interesting. This episode is brought to you by Uber for Business. Currency transportation is no longer a nice to have. It's a need to have. Last year we did a poll on our social channels, asking our followers how they prefer to get home from a dealership after dropping a car off for service or maintenance. 31% of respondents answered that they preferred an Uber ride. Dealers, give your customers what they want. Curticy Uber rides. Using central from Uber for Business, you can request an on-demand ride for your customers, even if they don't have the Uber app. Coordinate one way or round trip Uber rides, monitor trips in real time, set spend caps, and generate reports in one simple dashboard. Uber for Business is an easy way to provide an experience customers love while also reducing the costs associated with maintaining shuttles and limiting loaner liability. To learn how Uber for Business can help you drive customer loyalty one ride out of time, visit uber.com/cdgauto today to learn more or visit the link in the show notes below. I know, yeah, it's very, you know, many dealers have tried over the years. Some have gone back, some have stayed. I know Subaru's really pushing hard for their dealers, but it's a point of contention. But that's a good example of at least one way of positioning could work. - I mean, I like the logistics, like if I'm good at logistics, again, positioning convenience, that's a pretty broad stroke. Yeah, because you and I were just talking about all the work that our wives do to manage the logistics of household and a lot of kids. So a logistics person could very easily appeal to a busy mom who is just, you know, hold the kid and like, make him a thing and try, 'cause what do they want? Convenience, I don't wanna have to think about it. I want it to just be done. That'd be nice if one thing in my life was just done for me. - Yeah. - Yeah, but like imagine also you've got a car, like let's say the dealer loves to be in commercials, right? And it's just, - That's not, we've never seen anything like that. - We've never aesthetically imagined there was a deal that life being commercial is hypothetical. - Let's just imagine that, like it might happen one day. But imagine you've got that and like, it's just overly excitable, right? Like just, - You gotta come in, come in. - The story's further and further from the truth. - Right. - We've never seen this before. But then like you hire a whole bunch of people that are just like, you own my car today. - Yeah. - You know? - Yeah, that's the other ethical marketing persona. - Do you feel like there's a disconnect between what you see in advertising and experience, right? It feels like it's, in many times it's very cookie cutter. Some of the dealerships I'll perform are much more creative. By the way, we haven't even spoken about interest graphs for social media, which I'm sure this is, like we'll talk about what that, I'm just talking about like organic. You go on Instagram today, you can have zero followers and get a million views because it's an interest graph. - Right, but it may not drive business. - It may not drive business. But the point I'm trying to make is that we are in a world that has shifted almost entirely to interest graphs. The only social media remaining is actually our like, phones and group chats. Think about it, you make personal. - Yeah, it's very personal. Everything else is, you see anything is served to you. It's like, it's like television. - I don't know that person. I don't even follow that person. And I didn't after I saw the thing either. - Yeah. - Just often to the internet. - Exactly. - So let's start with, let's talk to me about the disconnect that you see from actual advertising to experience, like bridging that gap. I just think that's, you see so much cookie cutter advertising out there still to this day. Just go on 10 websites right now. And look, some dealers, I've heard a lot of just complaints on, you know, all we have restrictions and I have to use this website, which only lets me, you know, use this type of graphic. And there's obviously some friction with the OEMs and mandates, but how do you think about it? There's still some flexibility though. There's a little bit. - You know, plenty of flexibility in this dumb decisions that we make all the time because we bought something new or we didn't understand that that thing doesn't look like the rest of the things on the website, which is not the way that you experience the rest of the world. Reality is, is the $734 cost per car sold on new cars that NADA talks about is it's awesome. That's a symptom. That's a symptom of things like producing bad content, right? Because when I look across the rest of the world, when they look at cost per acquisition, they are constantly balancing content for acquisition mode, right? Landing page efficiency conversion flows. Like you even think of like the whole business of click funnels that we don't even, we don't even consider in our industry, right? But it is simplistic landing page with clear calls to action, clear value propositions without a lot of noise so that I can get someone all the way into my funnel very quickly, right? That's the whole business proposition of click funnels. And we don't think about that. So, and then you think about the creative, right? We overspend on marketing because our creative isn't relevant and personalized for the audience that we're talking to, right? So, you know, you think about these big brands and I get that they're big brands, but their commercials that they run on ESPN are totally different than the commercials that they run on CBS, right? Most of the time or the commercial that they're running in, you know, OTT. Because they know that the cost of acquisition is highly dependent on the content model that they're driving in that resource. The worst the content is the higher the ad, we'll call it an ad tax. Yeah, it's an ad tax. It's more money if you want. That's a great way to frame, yeah. You look, but you think about it from a platform standpoint, right? Like Instagram's job is keeping on the platform. So it has to show you things that you're interested in, right? Even the ads, if it shows you better ads, you have a better experience period. But from there, they're like, hey, if we're gonna run this garbage and waste your time on it, like it's gonna cost you more before you convert because you're just swipe, swipe, swipe, swipe, swipe. So it's in there they want you to spend more because if you're at as bad, if you're at as good, it's good for them, it's good for you, it's good for the consumer because it's like an entertainment experience too. You're talking about website uniformity. It's like freaks, but let me do a little weave here for a second, right? So we talk about this focus, and I think about this a lot 'cause people all the time come to me with like, propose, hey, let's launch a consumer website together and this and that, and I'm like, not interested. Not interested. Like, have my lane, don't wanna deviate from my lane, have had prior experiences in prior businesses where I deviate it from my lane. Did not go well. Staying in my lane. All right, so that's my little anecdote on staying focused on one specific target, you know, no our core audience. Yada, yada, yada. Okay, that's interesting 'cause you started, kind of CDG was like consumer facing. The most mainstream thing in the world. It was, and then like you, the most mainstream, you couldn't be more mainstream than in the beginning. Yeah, it's great. I don't really change. But you found your, you found the target. And the area which felt authentic to me, and interesting to me, 'cause if it's not interesting, I can't do it for many decades. Yes. I'm gonna burn out and I'm gonna be bored, right? Website Uniformity. So now let's go to this. I think it's still, it still plagues websites where you see all these, like you mentioned. Like at the end of the day, a widget from another vendor is gonna compete with another widget, right? They all want, the real estate on your website. They all want usage. I'm gonna want it to be bigger, bolder colors. And, you know, I'm gonna want my widget ultimately delivering value to you in some way. Right. Didn't keep it. It's going to hurt the aesthetic of your website, eventually, right? When there's enough of these things. So how do you think about Uniformity? Where's the balance of, hey, let me add another widget. This will add this to Swadda, but it's not fully tailored to me. It's not gonna be perfectly my color necessarily. Like it's gonna break some of that Uniformity. Like how much does that really impact conversion? What do you think about that? Oh, it massively impacts conversion. At its simplest, I go always back, I bring up and you can pull it up and it's a brain games episode. Wow. So back in, I don't know if you ever watch brain games. Like early 2000s, 2010ish, and they did an episode where basically they hooked up a bunch of people to like an anxiety monitor, heart monitor, and gave them two options. Like you can pick the store with like 22 different ice creams or you can pick this ice cream shop with chocolate, vanilla, and strawberry. That's your first option. Everybody was able to choose very, very quickly. It was like, you know, there were people that went with the many options or because there's two options, right? Immediately, they then zoom you in and go, all right, now pick which ice cream you want, right? And the anxiety and stress level of the users that were given the 22 options was significantly higher than the ones with three, right? So when you start like creating anxiety out of pop ups or color variance, or button variants, or the inability to understand the context that which you're making a decision with. I see SRPs on dealer websites all the time. We're like, you scroll and you have a block of call to action buttons and you can't even see the car anymore. So what's the context by which you're making a decision to say I want to take an action on that right now? All of those types of things, the speed at which the website loads, the cleanliness, the on brand. We talk about attacks on brand. Attacks on brand is, I don't even know where I'm at anymore, which is the reality of so many of these websites is, which am I on a Mazda website? Am I on a Nissan website? Where am I even at? Because I can't focus as a user. So what have you seen? Like the best dealers, what have they, what are they doing? Because obviously there's dealers out there. 50% of dealers are outperforming the other 50%. And so they might say, I think I'm pretty good shape. It's working. And inevitably, what do they do? Do you call your website company and, hey, remove that? Got a test or-- It's not a simple answer, right? Because it is multifaceted. You've got to look all the way through. Add channels all the way down to where the cheese is, where the mouse trap is. But at its simplest, everybody on there forget. Carvano website came out. Everybody called their web vendor. I was like, I want a Carvano website. Everybody did it. I was just thinking about Carvano, right? But you go on Carvano. You got any buttons on the search results page? Nope. How many buttons are on the VDP? Two. How easy it is to understand what's going on, how clean the layout is. It's all flat on the page. There's not like chat popping up at you every, every two seconds on the-- actually, this is the most crazy part. If you go to Carvano's homepage, you can get to NewCars now, right? Even on their NewCars sites, which have-- You are a client, yeah. It's a logo and three single click buttons in the header. Not like drop downs to the 18 different things that you could possibly try and figure out whether it's shop, service, finance, or trade. I think is the third one. I just looked at it two days ago. So if you want that level of conversion, that level of convenience, that level of market adoption increase-- What you're saying is, give me the Carvano UI and I'm good. Very similar. I bet if you tested that-- Right, you said should you be testing? If you tested that, I think it'd be very quickly clear. Which one was-- How many times have website vendors heard that line? Give me the Carvano UI. And do they have already that-- And then like three months later-- Three months later-- Can you put this widget on my site? Thank you. But arguably, that widget is going to help my conversion. Right. In a short term? Well, in the end-- Well, you have a conflict of opinions, usually, what should be on there. Because you have different people fighting for different interests. So it ends up like, let's put them all on there. But I also think the industry is usually driven by a 30-day cycle. What a-- How do we-- How do we feel this week? Right? So true. And that you can never execute a broad plan or even execute broad testing if it's how do we feel this week? Leads are down, foot traffic's down. Let's-- some salesman was just in here saying, like, here you go. This widget actually did this for that dealer. So you're like, let's try it. Hey, remember that Carvano thing? Put this widget there too. And now this widget. And that's where we get-- I've talked to all the website providers. They've run the tests. They know that if you use-- If you were on board-- Fewer options. They have the data studies on it. I mean, long term thinking-- With conviction. Yeah. Not like it has to-- everyone has to know there's follow-through going-- going to happen as well. It has to come from the top. And you said the 50 and the 50%. Everyone has to decide what level you-- they want to be on. And if they want to be in the top 10%, that's a vastly different level of commitment. Then I'm happy with the top 50% title. Because that's when you start talking about, are we willing to make very hard decisions that are going to disrupt the norm that are going to make people upset? May even mean I have to replace some people on the team who can't get on board with it. So I think that's-- it's a measured conversation. I think the top-- Comes out of the-- To the leadership, to the people. And their ability to cast the vision for it and see it through to results. They have to get the people to the promised land enough. So people are like, I see this. I mean, I watched this happen. You and I mutual friend Todd Caputo. I was a part front row seat. A hand in switching him from a legacy negotiation heavy model to a one-price model. What happened there? I lost 50% of his staff. What happened to sales? They went up a lot. And his cost of marketing went down. Over what time period did they go up? I'm going to say it was very obvious within 90 days. What happened to his margins? I went through the roof. His cost of marketing per car went down from like 500 to like 200. So why did his margins go up? Because CPM went down? Or-- Because those growths-- So one of his staff went up or-- One of his GM said this to me, he's like, I've never seen what happened on Saturday happen before. Because their leads actually went down. But their conversion went up. Floor traffic was through the roof. He goes, I've never seen people just show up like this. When it was one price for his one price and they focused on brand marketing, it was an auto group, simple, upfront, nice. And so the whole brand messaging was around, how do we make this simple? You come in, right? We have a process we follow is all upfront. It's all in front of you. It's upfront. Here's the price of the car. There's no negotiation. Here's what we did the car. Here's the reconditioning. Here are the guarantees. And nice, he focused on his facilities, training his people to be hospitality mind on that value proposition. They weren't-- they come by all these cars. Because Todd is the excited dealer. And I like watch 10 years worth of Todd Caputo and for Marshalls, him and Kaylee, marching cars by every morning. Bobby, like, oh, we have-- And his strategy was like, we have 100-- the other dealers in the area would call him the rental car king, not the use car king. Because he would just-- we have 120 in palace. Remember those? 120 in palace. They have between 28,000 miles and 45,000 miles on it. You can pick anyone you want, 1499. And that was Todd. He decided to stop-- and then they wouldn't negotiate. They would upsell the dualist stuff. And he said we're going to sell one price. That's what people want. They want to know what they're getting. And he was ahead of the current big time. This episode is brought to you by AutoVision. How many steps, teams, days, and dollars as your reconditioning process currently take? For many dealerships, Recon Delays slow down inventory turn and eat into used vehicle profits. Reduce your cycle time with ReconVision and automated reconditioning workflow that tracks vehicles from start to finish, giving you a clear view of your entire Recon process while reducing cycle time. Because when Recon moves faster, your inventory and your profits move faster too, visit AutoVision.com/ReconVision to learn how you can maximize your used vehicle profits. That's AutoVision.com/ReconVision or click the link in the show notes. Yeah, and it doesn't have to be one price. You're giving one example of one price. It does not have to be one price. Yeah, yeah. It's in the Syracuse New York. It worked for his market. But negotiation can work too. Because maybe you look at Patrick A. Badden, Beaver Toyota of Coming. Yeah. They negotiate. And you've never seen people happier to do business with a business. I mean, drinking a beer on the showroom floor sign of paperwork. It's unbelievable. Brother? Yeah. Oh, yeah. Not even a joke. Wow. I believe it. I wrote this other phrase down that you said, this was before record, but you spoke about like knowledge graphs for the dealership. I was dying to ask you what that means, but I ask you now, like, what does that mean? OK, so like-- And you understand this, because I know some of the stuff that you're doing with AI internally. But the reality is, is right now, whether it be AI or any company that's trying to do business on behalf of your business, so anyone that's communicating with your customers needs context as to how you communicate. And the greater the use of AI, the faster we can consume context. The problem is, I don't care if you're like doing AI chat, phone calls, trying to figure out segments in your CDP, communicating via marketing, building content with any of it. You have to understand the entirety of the dealership. And that's not just like, what hours are you open and what vehicles are available? Because that's easy. AI does or-- Yeah, the AI needs to. It needs to understand how you answer questions on the showroom floor, how your back office works when the titling process happens. It needs to understand how you evaluate trades. It needs to understand that your hierarchical structure of your dealership, so that if it's recommending the best pass for escalation, it knows all of that. And so my contention right now is that every single dealership should be building a very resilient, documented knowledge graph of their entire dealership. That means standard operating procedures, job descriptions, roll hierarchies across the entire pipeline of the dealership and putting it into the database. That's easily accessible. Leadership thesis. OK. So-- Mission vision values. Yes. First of all, you mentioned-- so what we've done-- and I'll show how this can kind of port over to the dealership. But what we've been doing now is we have been-- we started by doing this initially, right? OK, let's document. But then we said, wait, we're already documenting. Why don't we just throw a little user interface on this? And before we knew it, certain things that we do on a daily basis, we had actual dashboards for them, all done using AI, like Cloud Code and all these things. And one engineer, like this isn't-- a crazy big investment or anything. And now what we're doing is we're essentially we're building what's called CDG Hub, which is where we've said, wait, so if the editorial team has this tool, the sales team has that tool, the content team has this tool, why don't we just put it all together in one place so that it has staying power, it lives beyond, you know, just one person using it. And by the way, we can now share the information across departments so that if, you know, if the content knows this outperformed, it talks with editorial and editorial knows, hey, we need to do a follow-up piece on this. Like, you get the point. So when I think about a dealership doing this and starting to work with the different people in different departments, I wonder, like, if isn't, wouldn't creating, like, creating that knowledge graph that you talk about, how does that actually work? Is that, is that a companion to my DMS? Or, like, what actually happens here? Are we talking about this? Am I building another tool? Am I replacing a vendor? Like, where does the world go from here? Because listen, every, you know this, every cutting edge dealer we know, every, like, the smartest ones in the industry are doing stuff that the average dealers will do in three to five years, if not less. And you know what they're doing today? They're all building their own stuff in-house. Not in replacement of the vendors. I'm saying, in addition, right now. Something tightly-suffered. At least right now. Yes. They're building their own stuff because it's tailored to them. Yes. It's tailored to them. Yeah. So to that point, for sure, the DMS, the CRM, your marketing automation platform, your CDP, if you've gotten that far and built that, already has structured data. There might be arguments like, oh, the DMS is messy, the CRM is messy. Yeah, it's messy. But like, there's already great structured data in there, your service drive, all of your transaction data. It can be structured, destruct, put piece back together. What we don't have is everything that's offline, right? Everything that you can't consume just by the structured data that we already have, right? This person reports to this person, and this is their daily activities, these are their daily activities that happen offline, right? And, or that happen in the interpersonal relationship of working in a retail environment, right? The beauty of what you do, what we do even, is like 90% of our activity online is online, right? 90% of the dealers' activity is offline because it's in- - Excellent. - And combat. That's why you have to document. You have to, you need to put someone in place that is like, rabbit about documenting every aspect of your business in the structured document format. - Okay, let's see you did that. - Let's see you did that. - Yeah. - Then what? - I have it all documented, not what. - So hire a developer to wrap all of that knowledge graph. If, well, you could very simply put it in like a server, like a notion or a, or a slight, or there's a few others that are like that, and a lot of SaaS companies use them, right? And they wrap them in what's called MCPN points out of the box. So then you could tell your 10 billion communication platforms that are all doing AI communication for your service, sales department, all of that. To go hit those MCPN points, oh, you wanna know about my, we're doing service communication. Here's the five service end points that tell you exactly what my, my, my standard operating procedures and my user hierarchies are in my dealership so that you can clearly communicate that when you're on the phone with these people. So that the communications are crafted not just around like the way that they built their little AI thing to understand generally dealership service, but it's unique to you, right? So wrap that in MCPN points and give authorization to those MCPN points based on the type of provider that's coming because I love the dealers that are building their own stuff. I think it's really cool. I am also very, very afraid of it. - Really? - Extremely afraid. - Of what, like technical debt? - Security. - Security. Say more. - I said that to you. - I didn't expect you, I didn't expect that you would say security risk. I'm curious what specifically comes to mind. - Yeah. - It seems like both of you guys were all lying on that too. Did something happen in the industry or, like why is that top of mind? - I think everybody who is paying attention to this level is waiting for the first thing to happen. - It's gonna be massive. - And when it does, it's gonna be the wake up call. - What, what's going on? - What's going on? - What's going on to be a dealer, a breach somebody. - Into a vibe-coded tool that a dealer's using? - Absolutely. - Which could be a gateway into everything. If you expose the API keys or the service accounts that you're logging into your rentaled state or with, right? Like, I know dealers that are creating like service accounts to log into their DMSs or CRMs so that they can go scrape the data and pull it into their vibe-coded thing. Well, if they don't understand how exposure leaks when monauthenticated users get at that system, all they have to go do is look at the browser and if they're doing that in an unauthenticated or in a client side code, all of the sudden, all of Reynolds is open. - Wow. - Just like that. - Wow. - And Reynolds isn't responsible for it. - I didn't even think about that. - Yeah. - Oh, it is, - Like I've thought about it. - It's like a high level. - I almost hate saying it on such a big podcast 'cause I like some-- - Somebody's like, that's a great idea. - You mean dealers or vibe-coding stuff? Great. - Next. - Yeah. - Because like it's all ever, everyone's on Superbase. Everyone's using VO, Lovable or Cloud Code. They're all building on Versel or in Lovable. They're exactly the stack. - Yeah, and everyone's on Superbase because it's the only thing that has auth built in. But you, but-- - You know those memes where like something is like holding up everything? It's like Superbase is like here. It's like Superbase is like this. And then like the world is like standing. - It's insane. - Yeah. And a dealer is uniquely at Ricks because of the level of fidelity at which they have PII. - Okay, so let's talk, picks and shovels here then. Where's the like what's the gangster play here? Like is it to launch like a security vibe-coding firm for dealers? Like is that the billion dollar opportunity here? - Dang. - I think, I mean think about it. It's either that or like some like McKinsey for like dealers for vibe-coding. Because either you need to help dealers do this or you need to help them do it securely. - Yeah. - Is there something unique about the dealer's data or processes, traditional cyber security firm could not serve? Or whereas like a vertically specific back to under-resource marketing department under under-resource engineering department. Should be hiring real engineers that understand this engineering department. - Yeah, that's nice. - But like, - Let's see, I don't anybody. - The problem is is be a lot of these vibe-coded solutions that are coming out of like especially smaller - Get a nice deal. - You get a savvy, a sali dealer-crented person. - Yeah. - A sali-principle. Could be a marketing person, could be a service person. Right, this is one of those things. - And there it was in their loan ranger in this thing. - Absolutely. And like, it's so tempting when you see the result right there. Like the carrot is like. - So tempting. - Oh my gosh, yes. You can do that. It's like, I just don't wanna think about the other risk. 'Cause it's right there. It's my data, right? If you don't know about tech, you're like, "Oh, okay." It's mine. Yes, do that. Oh, I can now have this. I have control of this. - I think the biggest thing with the engineering department. - Yeah. - Is it like social security numbers. - Yeah. That's like data birth. - Yeah, data birth. There's a lot of-- - Driversized, cease number. - Yeah. - On a physical copy that got scanned into your tier. - By the way, there you're registered. - By the way, there's the signature. - Yeah. - And non-rotated passwords on company and computers sitting on the showroom floor. - Yeah. - That are like password 123. 'Cause five people have to log into it. Everybody's like, "Change our password immediately." It's like that space ball. - That's password 123. - Yeah, like-- - I mean, I love it. Like, this guy just came out with an article about like cloud enterprise and everybody's going, "Oh, if we get cloud enterprise, we're fine." Because it's secured, right? But if it's not running locally in your environment and it's hitting cloud servers, like all of that stuff is still going to cloud now. - It's a challenge. - It's a challenge to secure it, but like so much risk. - It's wild. - You're both wearing shirts, I'd say, or you're wearing shirts that love people more than cars. - We coordinate. We're like, we can't match. Well, I want to ask you so. We spoke a little bit about people. I know that's a really important theme for you in your business. I'm in automotive media as well. And you do, you do, if you have an agency, you do several things. But I'm curious, I mentioned you guys my prior podcast. I spoke about just this belief of like barbell, where either dealership of frankly the present, but definitely the future is you have to either be great at the human, the people's aside, or like, concierge style almost, or you have to be like, don't talk to me, don't, nothing, just carve on a style more or less, where it's like fully remote, you know, I don't have to deal with anyone. Do you do subscribe to that? Do you think that is the world we're going to? Like, will there still be the middle ground? Where I give you like both options, or like, I can tell you, I bought, I mentioned this on a prior podcast, but I recently purchased my car. I went for like the very like human concierge style, because that was what I wanted and it worked great for me. Like I had, you know, my local guy, you know, I already, I shouted them out, but I'll do it again, Lehigh Valley Lexus. Like they were great. And you told me, yeah, he told me like this isn't like, this wasn't like a super bespoke Yo-Si love experience. It was a great experience, but it was kind of like, hey, like we, this is how we operate. He's been focused on that for years. He has been. So my question to you is, is that the barbells or like, is this, you know, hogwash and, you know, it's just we're going to stay in this middle lane and slowly with our way, initial. continue consolidating what do you think I think I think you have to be both unless you have a very specific plan to just be one. I take and the larger groups get and the more consolidation happens the more you have to be both because it's still a concept of a local car dealership and if you want to be a local car dealership you have to be involved in local things which means you have to be involved in the lives of the people it's one of the things we talk about how do you be involved in the lives of people in a way that inspires them motivates them makes them trust you makes them want to do business with you and like I have to actually take that a step further back one of your last one of your previous guests Vic Keller in the last five minutes of your episode with him he talked about you asked him something about like what's the biggest opportunity in business in general and he said it's in the retail automotive and it's understanding that if being the ability to communicate the fact that in the retail auto industry you can build a career that can do anything you want we have the money to reach to attract better great people to attract great people and by the way the guy sold like three companies to Berkshire multi billionaire and I think he even further say if I was a publicly traded company what I would invest my time energy money and how do I do that because I think whatever whichever way you go I do think you have to be both but giving people a reason to believe in care about what they do whether that is a carbon experience carbon is full of people who believe in care a lot about what they do and how they do it but so is the dealership who takes you know so as Lexus Lee Hi Valley and I bet if you ask carbonic customers if they felt like the carbon experience was personal and human I bet they would say yes all right real quick before we get back to the episode I want to share with you something special we've been working on for months the CDG dealer platform it's built to give your dealership a competitive edge benchmark your performance against thousands of rooftops get honest vendor feedback from other dealers and see what's working across the industry right now check it out at CDG app dot AI that's CDG app dot AI or click the link in the show notes yeah that's it that's it that's a good take and I bet that they enjoyed it also they liked that experience most of the people that I talked to the bottle car from Carvana or sold a car to Carvana yeah I have followed that up with that's the only way I'm doing it from now on and I can and this is just anecdotally right in a poll of my friends but I will tell you that Kyle and I travel all over the country and we have so much opportunity to just like walk up to someone man on the street style and every single time we ask them about their last car buying experience what they liked what they didn't like we always ask them what was your favorite part every single person said my salesperson they had a good person no one was like they had an awesome tech stack yeah not as person mentioned the website I think that the industry's moat is the retail industries moat is actually being great at both the reason why the OEM can be and the customer needs us to be great at both is because that's the only way we stay in business wow right because if if it needs to just be like only remote there's a little pickup and delivery shop somewhere right where all you do is you pick up your car and maybe you test drive it at the mall like the OEM has tried to handle that right but then on the flip side is if if the only thing that we do is like hope that people come in and don't hate our online experience companies like Carvana or or really anyone else that can be some level of tech savvy just comes in and sales market share right off the right away right and so the moat is have an incredibly hospitable concierge style experience that's met with a beautiful digital experience which with the tech and the tools that are available today it's so it's very hospitality actually like your marioch marioch guy yeah okay but I think this is a great example I never thought about this before but one of the reasons I like staying at marioch is because the tech is good oh really and the booking is good and I don't have to talk to somebody when I walk in most times I just go right it's convenient and quick however when I do have to do on the person I like marioch because like they're good at it so it is both and sometimes I don't talk to anybody and sometimes I want to talk somebody do you know Todd blue so Todd blue is he's a dealer from the west coast and when I first met him and I saw his company name it's Lapis like LAPIS I actually forget exactly what I think it's like a I probably broke your inner side I think it was like a diamond or something I don't even remember but it got me thinking that Vic Keller you just mentioned we're talking about all about like attracting the best talent so then my brain goes to say okay how do I attract the best talent and then I was thinking I said well you attract the best talent by rebranding from what a traditional dealership used to be like I think that if you just put two ads right now online for a salesperson and one of them says you know Yossi's used car lot or Yossi's auto sales fair I might have great ratings but Yossi's also uses cars as a bad ring but then the other one says YJL hospitality which operates three different revenue streams and one of those revenue streams happens to be automobiles well the second one sounds like a career yeah that to me is the winning ticket right if we're going to lean into hospitality but you have to back it up because you show up by JL enterprise you're not going to talk about but you're like no no I'm just car guiding me right you're right it needs to actually live up to the experience because you're not going to convert no one's going to sound of her but think about that it feels like a career so when Vic said that I'm like thinking I'm like okay okay and I mentioned Lapis because again he felt like a very prestigious brand felt like a career just saying Lapis is like Lapis I might want to work here yeah it doesn't look like a dealership I hear that and by the way he runs a really you know tight shop you know high-end you know luxury brands you know for all he Mercedes fits so the point I'm trying to make is like you're going to lean into hospitality like go all the way like rebrand the dealership the best rebrand for a dealership is as a hospitality business yes which happens to sell cars as one of those revenue streams that's the best rebrand in my opinion I like that yeah well there there's no OEM regulation we were talking about that earlier there's that stops you from doing that yeah there's no there's no stop company name I also think that there's a major opportunity in in a dealership understanding how media works right like we're in the media business so we understand it I don't know why a dealership shouldn't be the center point of a community with a newsletter and with organic social content and with content that just highlights in features the community around them I think almost like a community hub which happens to sell cars absolutely because everyone's already in there yeah and like you can name it whatever you want you can stand up the site the tech exists to stand the site up and generate and talk about attracting talent well I mean that's kind of the reed case model though like again the free car washes for the community yes um the DMV no longer Toyota DMV on site Starbucks again that's we're going to do it in the culture of Mohawk Chevrolet ran this playbook too for the last several years in standing up taking all this paid advertising out of the equation and standing up in organic content tomorrow meant that focused on the community and he's the incurable entrepreneur right there's down all those in the room right now um so he used it to actually help stand up other businesses and what kind um all types of cupcake shop cupcake shop uh a rap company oh like completely unrelated business all right yeah so he just leveraged his marketing and organic costs a lot of department to like create content around the co-branding of those wow you know ziggler automotive also has they have like a restaurant that is like renowned yeah they have a restaurant it's like I ate their with those are which is just up the coast from here they have a four garage I don't know how renowned that is but it was really good yeah but I like the idea of a restaurant I mean I think we could all look back and like Michelin stars where did they start a Michelin tire company um they want to people to drive more money drive more miles so we're like hey let's give them a map of all the restaurants rate the restaurants they'll have to drive around and buy more tires but I think that that same principle it's like a dealership has evict said this in that episode we have a differentiator than all these other industries that he's in he's like we have the money we have the revenue that we can trade people better than anybody else and we can stand up brands and we have the entrepreneurial mentality dealers are just and we're just an honorable in Facebook come on to bring you the Google Facebook I'm sure the big fans love you guys yeah big guys I'm sure I know meta sorry um Jen says wow it's such a good conversation as we're wrapping up what's what's in your mind here for this uh you know next three six nine months I mean what's what's exciting to you like what do you think about nowadays I think the narrative and automotive is because of AI and because of the moment we're in technologically for a split second it felt like we were going full robot and everyone was afraid and there's all this panic and I think maybe maybe it's not clear to everybody yet it's clear to me is that we are going to flip so hard back to focusing on the human so and so like that is right at the heart of why we'd love people more than you love cars is like if we can get everyone to believe that what we do is not why we do it and it can be about so much more than cars and I think that we're about to hit the renaissance for why people matter so much and AI is just proving it's on pumped about that amazing Kyle and closing thoughts the compression of the capability to do anything that you want and I'll go back on like the vibe coding thing is super exciting right but but also like the compression of just being able to execute quickly is gonna allow us to do things that we maybe never even dream possible in the experiential side of the business four or five years ago and that's gonna open up doors to allow our people to really just be people and humans carrying inside of the dealership and so they're having to figure out like did I text that guy yesterday yeah the TV - Yeah, really focused on the experience. Amazingly said, fellas, this was really incredible conversation. Kyle Munce here, Paul J. Daley, thanks so much for coming on the pod. - Thanks for having me. - All right, hope you enjoyed that episode. Please give the podcast a rating, consider subscribing to the show, and check the show notes for links to the sponsors of today's episode, Uber for Business, Reynolds and Reynolds and CDG platform. Thanks for tuning in, and I'll see you guys next time.