Connected Podcast Episode 193: The Future of Automotive Marketing with Brian Pasch

NADA2026_ConnectedInterview_BrianPasch.mp4

 

Greg Uland: [00:00:04] Hi, I'm Greg Uland with Reynolds and Reynolds, and this is Connected live at the NADA show. Day two today, and everything is just as busy as it was yesterday. This conversation, I get to sit down with Brian Pasch. If you don't know who Brian is, you've been hiding under a rock, but Brian is the founder of Pasch Group. Brian, thanks so much for joining me.

 

Brian Pasch: [00:00:19] It is great to be here and the exhibit hall is buzzing with activity.

 

GU: [00:00:25] It is. And it's so positive, so optimistic. You just, you feel it. Everybody's in a good mood.

 

BP: [00:00:29] Yeah, they didn't get stuck in an airport, had to drive through a snow and ice storm. So everyone's feeling pretty good.

 

GU: [00:00:36] I agree. I love being here in Vegas. It's a perfect spot for this convention and the convention hall is great. Everything's going smoothly. NADA’s put on a great show as always, so we're lucky to...

 

BP: [00:00:47] Yeah, and I think record attendance. I'm seeing people two and three deep at booths, and as compared to last year, it's night and day.

 

GU: [00:00:58] So we were looking at numbers last night and this morning and announced to the team, for our booths, we blew away our record visits to our booth in a day by 50%. I mean, it was crazy, the volume yesterday. And we're seeing it again today, which is fantastic. So, how busy have you been? You've been running around like crazy.

 

BP: [00:01:20] Yeah, because there's so many new players and new applications of AI, even the robotics here at the Reynolds booth is just really cool. And so I think there's a fresh energy to get out, see things that could transform dealership operations. So that's why I think we're seeing record attendance.

 

GU: [00:01:47] Yeah, no, it's great. Well, Brian, the first thing I wanted to get into with you, you just released a CRM report. So it's a big study. You got a ton of dealers responding to it and you're able to kind of analyze all those responses, analyze that data and put out this great report. I think it's what's the website to download it on?

 

BP: [00:02:04] Yeah, paschgroup.com.

 

GU: [00:02:06] Perfect. So talk a little bit about the report, like maybe start with, what are some of the trends that you saw in the dealer responses?

 

BP: [00:02:13] Well, one of the reasons why I did it is that, I think that for the past three years, I've been writing about CDPs, and we'll talk about that later, but what I found out was the CRMs needed, well, let's just say, a shift in mindset to deliver a different customer experience instead of focused on get a lead, work it, oh, did they buy or not buy, let it die, move on. I really felt that we were at the precipice of changing from lead handling to customer engagement, from work it and leave it to life cycle marketing. And the reason why I wanted to do the research report is because I think dealers are saying, “Who is leading the charge, who should I partner with, and who will help me,” and I think that's the key, “understand how to use AI properly, safely in my retail operations?”

 

GU: [00:03:09] Yeah. That makes a lot of sense. And you were telling me before we started recording, it's the most downloaded report that you've had.

 

BP: [00:03:14] Yes, and even people from the investment community, venture capital companies said this was one of the best kind of independent research in a technology segment. And what did we find out? Overall, dealers were saying they wanted to simplify their tech stack. They wanted it to be easier for their sales associates to use. And the third thing is clarity on AI and the integration of that AI to improve sales enablement. And those three trends came out very clearly. And what was surprising for some people is how high Reynolds ranked in the CRM report because it's clear from the customer satisfaction scores, some of the incumbents have rested on their laurels. And Reynolds scored so high that people would say to me in chat conversations, “Hey, Brian, is it time for me to check out FOCUS CRM?” And I'm like, “Yeah, you should see what they're doing.” And of course, here at the show, we're seeing the full vision of an integrated AI layer, Spark AI, across all of the Reynolds ecosystem and how unified data, which we once associated only with CDPs is really now part of a future vision and current activation within Reynolds FOCUS.

 

GU: [00:04:48] Yeah, that's great. I want to circle back to that. So I want to put a pin in that real quick. But I'm curious. So you mentioned kind of the takeaways from dealers, right? And what they're looking for and where they want to go. And I have this mental model and I’m trying to make it work. So maybe it's--we're going down a path that doesn't work. But just see if we can go here. So if you think about those things that dealers want, you put that in one circle, right, and you think about what vendors are focused on, and you put that in another circle, and then you have your Venn diagram. What's kind of the, maybe the three buckets, right? What are dealers wanting that maybe isn't being addressed? What are vendors focused on that maybe dealers aren't asking for? And then what's the sweet spot? What's in the middle where we're hitting it out of the park?

 

BP: [00:05:28] Yeah, so this is a little easier than you might think. From the vendors, there's too many vendors rushing in with the AI products as bolt-ons and dealers are trying to simplify their tech stack. And so in the Venn diagram on the vendor side where they're erring is they're building AI that's pulling data only from the CRM or pulling data only from the DMS. They're not pulling data from a clean unified source. So that's the vendor part that's a little broken. On the dealer side that I don't think dealers realize is they really can't wait any longer to unify their data. They're like, “Oh, you know, everything is good.” And I think that they're delaying the real activation that's possible with AI. Every dealer says, “I wish my people would follow up with leads better. I wish my people would make more phone calls. I wish their emails and text messages were more professional.” Okay, that's possible today. But they got to make sure that the AI is learning from clean, unified data. Where everyone's meeting is that transformation. We're on the cusp of innovation and transformation in a big way. For the first time, we're seeing here at the show tools that are filling sales process gaps that have existed for years. When dealers listen to phone calls, they get sick to their stomach. When dealers look at lead follow-up, they get sick to their stomach. When they see dropped balls, missed commitments, they get sick to their stomach. And today with the technology that's here, we can really say, if a dealer wants to close the gaps in their sales process, it's possible. They just have to find the right partners that are thinking the bigger picture. This isn't a sprint, this is a marathon. Changing culture to think of the customer life cycle to really talk about retention, not just always spending money on acquisition, is a cultural shift.

 

GU: [00:07:58] Yeah. Well, and I think one of the interesting things, you mentioned balls being dropped, right? And yes, it is irritating when--so you're a sales manager or you're a GM and let's say over the course of a month, you had 15 opportunities missed, right. Or maybe it's more than that. Let's just use 15. So you had 15 opportunities missed and you're going through all these and man, that's frustrating. But if you have 10 salespeople, so, a couple of them had two missed opportunities and the rest had one missed opportunity or maybe it dispersed otherwise. For that salesperson, it doesn't feel like a big deal, right? I only missed one, yeah, I mean, my bad, but it was one email I forgot to follow up on or I waited an extra day. But when it bubbles up, right, and that sales manager's looking at it, they're going, we missed 15.

 

BP: [00:08:43] And for a good store, that's $50,000 to $60,000 of gross profit.

 

GU: [00:08:49] Right. No, exactly.

 

BP: [00:08:50] Over a year, three quarters of a million dollars. And that's with a very conservative number of 15 sales opportunities. Now with identity resolution, right? What we're seeing with Curator and knowing when customers are back on the website. Before they even submit a lead, a data up as they're being called. Dealers have more opportunities to capture active shoppers yet they didn't have the technology infrastructure to manage them. And I think that's why so many people are excited about the future of retail, because if I go to one more “how to answer a lead” or “stop the clock” or “hey, log that call into the CRM.” There's workshops on this. We shouldn't be stumbling over those easy things that can be now addressed with AI. Yet, dealers are still struggling.

 

GU: [00:09:54] Yeah. And just kind of going back to your point about changing the culture. It's one lead at a time, right? And you can fill those gaps to your point. So yes, you only missed one, Jimmy, but let's miss zero, right. And we can use AI to help us do that. And it’s those little things, right, it’s those little gaps that immediate follow-up, that consistent communication to just work them through the funnel. And it’s just leverage the technology to enhance what you have and not miss any of those opportunities.

 

BP: [00:10:22] Yeah, and I think the vision is that there have been enough case studies of smaller companies doing one-off AI solutions that have bubbled up this idea. I think dealers are realizing, I can't have four AI companies pounding away at my customers without coordination. I call this controlling the cadence of communication. If dealers really understand, it's not a sprint to bolt on as many tools as possible but is who am I going to trust to curate my first-party data and unify it? And then who am I gonna trust to activate on that data? And if the right hand communicates with the customer and they say, “Please stop texting me,” the left hand knows, stop texting. We don't see that today if you have four different bolt-on products, right? They're not working in unison. And that's gonna be the realization at this show. Unified data with a trusted communication stack is really the safe way to move forward.

 

GU: [00:11:33] Yeah, and to just put, to make it tangible, I was talking with a dealer just last week and it was a large dealer group, so this is bigger than probably what most will, but they looked at it. They took a step back, and they took a month, and they looked at all the different communications going to their customers across all of their stores, across all the channels, right? Whether it's a phone call, an email, a text message, and across all their OEMs because all the OEMs have programs. They have 36 different vendors reaching out to a customer in some way, shape or form. How do you manage that? Like you mentioned, who are you gonna trust? And at the end of the day, you gotta rein it in, right? You have to figure out how to manage that.

 

BP: [00:12:10] Well, that's why customer defection is so high. And it's the little things. So when I call Delta, they say, “Thank you for being a Diamond Medallion member.” And you say, ‘Well, that’s not important.” Well, that’s because they have unified data. And it does make me feel well. When I check in at Marriott, thank you being Ambassador Elite. When you service the car at a local dealer, and two weeks later, they get a mailer, “Hey, we haven't seen you in for service in a while, here's a coupon.” What it really says, like they don't really appreciate my business. If someone traded in their car a year ago, and then they send you a letter, “Hey Brian, as a trusted customer, we want to buy your car.” And you're like…So I think dealers are realizing this is the downside of silos. They never had though, to their credit, they never had a centralized data platform. They never could coordinate all that activity. Today they can, which means we're catching up to Fortune 1000 companies that have a billion dollar business or a multi-million dollar business. They're doing it. It's time automotive got serious about it.

 

GU: [00:13:26] Yeah, I agree. And you've been in this CDP world for a long time. So what is kind of the landscape right now? And where's everything heading from your perspective?

 

BP: [00:13:36] Yeah. So three years ago, I started writing about CDPs before most people were talking about it.

 

GU: [00:13:41] You actually came to Amplify and it was one of the first times that you were talking publicly and on camera and it was a lot of fun.

 

BP: [00:13:49] Believe it or not, in three years we have some dealers now that are on their second CDP vendor. They jumped in maybe not knowing how to evaluate the effectiveness of any one solution. So we're starting to get muscle memory why a CDP is important. I think people are not, “Oh, Pasch is writing about another shiny object.” No, it's not a shiny object. I said back then that I believe that there will be three core software tools. So CRM, DMS, CDP. And for the most part, that story is intact. I do believe that technology is going to start--the lines, the hard lines will start to blur. So people won't see as the DMS as a place of transactional dirty data. They won't see the CRM as just what's in it for me today, right? Unification is going to make these tools even richer. So what do we have today? We have some new vendors still coming in. Here at the show, there are two or three new CDP platforms. We're getting some clarity on data hygiene. I think that some of the CDP says we do data hygiene, but there was no, well, tell me how you do it. Well, that's our secret sauce. I think dealers are saying, okay, that’s stupid. I'm not giving you my first party data if you're not going to explain what that data hygiene process looked like. And I think the other aspect is we're starting to ask the right questions about ROI. And this is important. So yes, if have a CDP, yes, you can create audiences and push them into media channels. So the average dealer was probably through their--prior to CDPs-they were running five to 10 campaigns. A new car, a used car, a service, and some variations, a retargeting campaign. Dealers today have 20, 30, 40 different audiences because they can. It doesn't mean that they should, but they can, and I think where we are in the CDP is, dealers are saying, we demand dashboards to show how these audiences are performing so that we're not wasting our time or under some false impression that, man, we're so smart because we can create a list. If the list is too small, I can't go to Google and Facebook. So where is it going to go? Is it going the email, direct mail, or a BDC? These are the questions my more mature CDP consulting clients, now they're at the point, okay, we understand that the investment is worth it, but how do we measure it?

 

GU: [00:16:41] How do I use it? How do I measure it?

 

BP: [00:16:41] And I think that's where we are today, measuring the financial impact or the retention impact to CDPs.

 

GU: [00:16:48] So what are some metrics to look at then in your experience where, okay, let's look at these three or these five or whatever the list is. What are the big ones to look at if you just want to get a quick glimpse of, you know what, this is working or you know what this isn't working and I need to dig a little deeper.

 

BP: [00:17:03] Yeah, I'm going through this process with one of my larger clients. It's important to understand cost savings initial and then ongoing. So when you unify your data, over 40% of the DMS data is out to date. So if you were doing any direct mail or email marketing, you were missing emails or missing mobile phones. Okay, so there's an initial cost savings. And an increase of communication at the beginning. Okay, so that's table stakes. Everyone understands that. But how do we measure it going forward? Number one is the identification of data ups when your customers are back on the website or using identity resolution to de-anonymize a percentage. Let's just use a safe number, 25 to 30%. Dealers with a CDP can start to deanonymize. Those are extra sales opportunities that they never had. So number one, if a dealer could sell an extra 10 or 15, single store, cars because of data ups, I mean, that's a huge win, okay? So the question is how well are they closing those data ups? That's a whole new line of thinking in CRM. We need to separate leads from data ups, and we need to do the closing ratio of leads and data ups separately. Okay, that's where the most money comes from. The second is comparing blind audiences to CDP audiences. For example, prior to CDPs, Reynolds, through Naked Lime back in the day, or PCG back in a day, we would put a pixel on the website. We do Google retargeting. And Facebook retargeting or campaigns based on what vehicle. What we did and said that was the best we can do. With the CDP, we can not just know, hey, this person was looking at a truck. We can know what's in their garage. We can know their propensity to buy. So the CDP audiences should have a lower cost for acquisition and a higher lead to sale. So we have to measure that.

 

GU: [00:19:24] No, I mean, that's really good. I mean I think they're basic things. It's just logically thinking through, okay, how do you get there? And there's a lot of sense to the way that you broke it down. All right, so Brian, you've been around this industry. You know this industry as well as anybody, especially CRM, CDP space, but broadly also. So, what maybe at this show or this year recently, what’s surprised you the most? Because you've seen a lot. So is there anything. Maybe nothing’s surprising and we're consistent, but--

 

BP: [00:19:57] Yeah, I think dealers are starting to understand the concept of audiences, okay, that they can start to be smarter with using third party data, audiences, their own, to stop spraying and praying and to be more strategic. So for example, there are third party identity graphs that can supplement the dealer's own first party data. And dealers are starting to ask those questions. They never talked about like, “Oh, what type of identity graph do you have installed?” So they're realizing, hey, anonymous shoppers can be turned into customers. I think that's number one. Number two, I'm just surprised with the revelation, it's happening in most conversations, I got to simplify the number of vendors that I use in my dealership. I joke around. You know, Joseph's Technicolor dreamcoat. I think dealers over the years go to 20 group and let's just say they're building a jacket and it's like, “Hey that dealer’s using this.” “This dealer, he's the best in our group. He's using this.” And what they ended up doing is creating a data mess. I Think dealers are starting to realize, “Man, that’s gotta stop.” So they're talking about it. And what AI is doing is forcing the conversation.

 

GU: [00:21:38] No, that's spot on. I mean, you think about the problems that that causes in a software world. And at the end of the day, it slows things down. That's what it does. It creates inefficiencies, right? You think about all the tabs you have to have open to sell a car. You think of all the tools you have use to take care of a customer in service. It slows the people down. It slows the process down. But in an AI world, it doesn't slow down. It goes faster, actually. And it goes faster and then it does the wrong thing if you have all this disparate information, this disparate data that's inaccurate or it's missing or it’s duplicated. So you have to have this clean unified data set in order to have these tools work at all.

 

BP: [00:22:14] Yeah, and I think that's what I'm seeing. Dealers who I didn't think understood that dealer choice is great until it doesn't work. And dealer choice has been working. We just finished 20 years of being in business.

 

GU: [00:22:32] Congratulations, by the way. That's fantastic.

 

BP: [00:22:32] Thank you. I think for the last 20 years, dealer choice had no really big downside. Okay, in the last two or three years, as CDPs started to come, this idea of unifying data, “Oh, I need to connect the data from this tool.” No, they don't have an API. “Oh, I need to bring this data in.” No, they're like, hmm, that's a pain. And now, with AI, it's like, well, AI only really works if it has contextual relevant data to frame its conversation, dealer's like, “Oh, I guess now I got to get serious.” So I think overall, that's the biggest mindset shift: that dealer choice worked and now it's not. And so now what I'm kind of calling the race to integration or consolidation, I'm not sure how it's all going to work out. But this idea of interconnectivity to support AI is going to be table stakes. So we have to figure out how it works.

 

GU: [00:23:46] That's great. And that's a great place to kind of land the plane. This has been a really fun conversation. I appreciate you sharing so much time and knowledge. And thank you again for putting together the CRM report. I do think it's a really powerful one. As a reminder, everybody can download it at paschgroup.com and keep those numbers going up. But it's a valuable report for sure. So, Brian, it's always fun. Hopefully we can sit down and chat again soon sometime.

 

BP: [00:24:06] Yes. What we're seeing here today at the show and specifically at the Reynolds pavilion, it's really night and day. If you look at the tech stack two or three years ago, and what I'm seeing today here at the show and visiting all the products at the Reynolds pavilion, it's exciting times ahead. Thanks for your time.

 

GU: [00:24:27] All right. Thanks, Brian.