Connected Episode 26: Dealer Resiliency is Paying off

Greg Uland Hello, I'm Greg Uland, marketing director at Reynolds and Reynolds, and this is Connected, the podcast with best practices and ideas to help navigate what is happening in the automotive retail industry and the world today. As the COVID-19 virus continues to change our world and how we live and work daily, this podcast discusses ways to continue operating in this unprecedented social environment. On today's episode we have with us, Lance Alverson. Lance is the sales vice president in the midwest at Reynolds and Reynolds. Lance, thanks so much for joining.

Lance Alverson Thanks for having me, Greg. Really happy to be here. I've seen a lot of your podcasts and it's great to see our Reynolds team out there talking. It's good to see you guys in person.

GU It's great to see you, too. I do appreciate you hopping on. Before we dive in today, Lance, I did want to let everybody know that this is our first episode of our new weekly cadence with Connected. These will be released this Wednesday and every Wednesday following. If you want to keep receiving email updates as new episodes are released, please visit reyrey.com/connected. You can see all past episodes there and also sign up to receive new ones going forward. Lance, thanks for letting me get that out of the way. But to dive in, I'm hoping to talk today about dealer sentiment. You're in the Midwest and you're working actively with dealers every day. How are dealers doing right now?

LA Greg, in my career at the Reynolds, I've worked on different areas of country. On the east coast, west coast, and here in the Midwest. Every city, every dealership, they're all different. No two stores are alike. They all have different customers, as well. Speaking from what we're seeing in the Midwest, it's going in a positive direction. We're starting to see a little bit of light at the end of the tunnel. The fear of the unknown drives certain behavior or certain circumstances. The end of March, and really most of April, customers were sheltering in place, not going anywhere, not doing much. That's continuing as we get into May, for obvious reasons - for public safety and health. We are seeing a little bit of an uptick in confidence in the future though. One of the things about dealers, they are being considered essential businesses. We've seen there’s absolutely no doubt they should be labeled as such. As we come out of this, people having a personal vehicle has never been more important. You see people in metro areas rethinking, “Should I take that metro transit or mass transportation or should I get in my own vehicle?” You have this new set of buyers coming into the market. There's also a huge set of leases coming to term. We're talking to dealers and there's a lot of pent up demand for service and repairs. We're seeing customers need their vehicles and they need car dealerships to keep them on the road. Now, more than ever, they've really been essential to getting us out of this.

GU I definitely agree, Lance. Are you and are dealerships starting to see demand, specifically on the sales side, tick back up? And on the service side if you can get into it?

LA It is certainly not where it was and it's not where we want it to be, but we're seeing an uptick each week as we come out of this. Dealers are hiring more sales people back and starting to get people in the store. The clientele has shifted a little bit, but there's still demand there. I believed we would see a real uptick in leasing, but when we're talking to dealers, it's really the same as it was. It has a lot to do with the captive finance offers that they've been pushing to consumers. They’re doing a good job of advertising those deals. The 0 for 72 months, the 0 for 84 months deals are getting consumers back to thinking they’re able to afford some deals, and getting them talking to the dealers. Another factor that’s arisen over the last week - people are realizing it's not going to be the way it was. There’s going to be a new normal as we come out of this. There are new expectations consumers have going to a dealership.

GU Absolutely. Do you mind digging into what those are? What do you mean by new expectations?

LA I think for all of us, there's a broader acceptance and understanding of social distancing. Communicating with people without being in their space and actually being quite a bit away from them. Dealerships and employees at dealerships understand that when consumers come in, they're going to respect that social distancing space. Face coverings is another thing. My wife and I go to the grocery store and we wear our face masks and we see others wearing them. You're starting to get accustomed to it. That fear of, “Maybe something is wrong with them,” or, “What's going on?” is dissipating. I think as people come into dealerships they're recognizing that new normal and how to communicate with the face masks and things like that. They feel comfortable because you're respecting their safety. With dealers, we've been talking a lot about making the buying process more electronic. You can wipe down every device as much as possible, but you can't wipe down paper. A lot of the conversations I've had with dealers are about how can we reduce that paper and go as electronic as possible.

GU That's great and it's a really good point. You can touch a screen and you can wipe it down and there's all kinds of disinfectants, but you can't get paper wet, right? So that's a good point.

LA Right.

GU Lance, I definitely appreciate you taking time out of your schedule today and hopping on to talk through some of this stuff. It's good to hear that you're seeing at least some positivity in the marketplace. While we're here and while we have the audience, is there anything else that you want to touch on or anything you want to say?

LA I think I told you this before we even started. I'm really proud to work with Reynolds and really proud to work for this industry and the dealers. These dealers are so resilient. They're entrepreneurs that figure out ways to maximize whatever opportunity they're in. When you have a positive attitude in a situation like this, it's contagious. There's hope that we're all going to come out of this. At Reynolds and with the people I work with internally, we are really trying to help our dealers survive as we come out of this. Now, there's more focus on how we thrive. There's new ways and there's new opportunities. I think all of us can really take advantage of as we continue to come out of this. I think dealers, just like Reynolds, put their community and their employees first, which is nice to see. They really are a family community just like Reynolds is and I'm really excited about the future.

GU Great. Well, Lance, I definitely do appreciate you taking some time and coming on today. It was really nice to talk to you.

LA You too, Greg. Look forward to seeing you in person soon.

GU Absolutely. This has been Connected. Stay safe and we'll see you on the next episode.