The Evolution of eContracting

Greg Uland: Maxine Olson with Volkswagen credit, thanks so much for sitting down and talking. Absolutely. RITS be here now. Maxine, we haven't met before right now. So right, if you don't mind, share a little bit of your background in automotive, automotive, finance and kind of where you are today and how you got there?

Maxine Olson: Sure. Absolutely. So I've been with BCI, which is Volkswagen Credit, Audi Financial Services and De Katie Financial Services for the past 22 plus years. And I am working in the space of E contracting for the last about 10 to 12 years. And basically, that is the responsibility of a couple of different components. One component is the lender integrations with our DSP partners, which is, of course, with Reynolds. Yeah. And also it is the strategy we have in our company of what we want it contracting to look like. And then it goes down to the dealer level of installing the dealers, consulting and training on the process and then the field training. And with our our partners, our brand partners like Audi and Volkswagen,

Greg Uland: it's big, big stuff. That's for sure. It is. All right. So 22 years. Why so long? What's kept you hanging around?

Maxine Olson: Two things, OK. My loyalty to the company and my passion for the dealers, I love our dealers. We have a great body of dealers out there and they are really passionate about what they do and I love our brand. So those are the two things that have kept me around good.

Greg Uland: I mean, it seems like once you're in, it's just too much fun to leave.

Maxine Olson: It is. I enjoy my job. I've always loved my job. So I. That's a big part of it as well, right? You have to love what you do.

Greg Uland: Yeah, absolutely. All right. So Maxine, I got to talk to our dealers a lot about the contracting process from their perspective. I don't get the opportunity, a lot to talk to lenders about the contracting process from your perspective. So why don't get into that with this conversation? So to start, can we talk a little bit about what the traditional contracting process looks like? So from a dealer, write the same paper, they stuff it in a FedEx envelope and ship it off. And then at that point, it comes to your, you know, your team that Volkswagen credit. What happens once it gets there?

Maxine Olson: Well, from that perspective, from the paper perspective, it is sorting through the mail, pulling out all different kinds of paperwork, which can be several different pages, several different folders and then manually entering all that data, looking at it, auditing it and then finding out that there something wrong with a contract and now mailing it back to the dealer and saying, Look, there is a problem, we have to have it fix. The dealer takes time, gets the customer back into the office, then it gets mailed back to us, which of course, is weeks later. Yeah, and then it gets finally funded and it's worked sometimes several different times before it's funded. So obviously it's not sustainable.

Greg Uland: Right, right? And it's people heavy, right? You have somebody physically reviewing the paper. How many deals can a person do in a day? You know how many? It seems like it's got to be very resource intensive

Maxine Olson: when it's paper. Yes, there's not that many deals that you can do in a day. And the problem is is when you have to redo that same deal over and over, it's that's where it becomes difficult. So it's not even so much. How many can you do in a day? But how many times do you have to do the same deal in a day?

Greg Uland: Yeah, yeah, it's tough. So fast forward to today's world and we're we're really pushing into it contracting right? And not just not just digital signing that getting something signed and then, you know, scanning it in racks and reviewing it in an electronic format, but rather e contracting. So maybe to start from from Volkswagen credits and your perspective, can you define your contracting when you say contracting, what do you mean?

Maxine Olson: Sure, that is a really good question because it does have different meaning in the industry. So IT contracting for us is going through what we call the vault. So the vault system so electronically signing all your document, and with BCI, you can sign all of the paperwork through the electronic signatures and then it goes into and sent over to us electronically into the vault and the contract is secured. So that to us is where it's very important. We do understand that there are certain documents for the DMV that need to be printed out for the customer, but for us, none of that has to be. It can all be electronically signed and electronically sent over to us. And if you can think about that versus paper, you can already see where the efficiencies are.

Greg Uland: Yeah, yeah. And for a dealer, obviously a lot of it lies in contracts, in transit, being able to get a funded deal and just get cash in bank quicker when you when you're doing a decent amount of deals, if you have any amount of volume and if you have multiple stores, that that number gets really big, really fast, really big. Yeah. So being able to speed that up and reduce that amount of money, that's just kind of sitting out there because it hasn't been funded yet is a big deal and it could really help with cash flow. But what about for you guys from the lender's perspective, what are the benefits of moving to EA contracting? Where do you, you know, where do you see the benefits?

Maxine Olson: Well, there are so many benefits on our end as well. If you think about what I talked about for the paper process versus electronic process, so now it comes into us and it is all on a screen and it is all actually input already. So we don't have that mail process of sorting. We do not have the scanning of the documents. We do not have the manual entry. So it actually takes us about a third of the time to process one document or one funding package, as it would for paper. It's already in there and most of the time to fund it right. The first time is a lot higher, up to 23 percent higher. So now we've cut and twenty three percent of our reworks out. So the other part that's extremely important, especially since the pandemic, is our funders can fund from anywhere they do not have to physically be in the office because it comes directly to their computer and they can fund from home. So it is extremely important to us to keep our pro. Activity as as we go forward and move forward to be very process driven, we have to have a high productivity and not have to hire other people, especially when you have this seasons where sometimes it can be very manual intensive during your hot selling season. Yeah, and that's when it gets bad is we can't fund those deals, so it does make a huge difference for us.

Greg Uland: Yeah. So are you able to then, you know, maybe take some of those resources and people right and and expand them and either do more deals or or help them do other things to make an impact for your company or for the dealers. You mentioned your organization is a very wide ranging organization and field training and all kinds of things that you're doing in the black community, too. What does that meant to be able to be more productive when it comes to funding the actual deal and employing those resources to accomplish other things?

Maxine Olson: Sure. Which is a really good question because we are we're not looking to make our funding staff smaller, right? What we're doing is we're trying to be more efficient so we can help the dealers in those areas where they need help. So that problem deals where they really do need our assistance and we can help them. We are available for them now versus, Hey, you know what? We have 100 deals that we have to get through and we don't have time for our dealers. So it's really about servicing our dealers and making sure that when we process their paperwork, it's efficient. It's done right and we can help.

Greg Uland: It's good. So if you don't mind, let's go down that path a little bit. How are you ADD Volkswagen credit really trying to help dealers along and and pull them into this sea contracting world? What types of tools and programs, what? What are you guys doing? I mean, is there a lot of training you're doing? Is there what? What are the things that are involved in that?

Maxine Olson: Yeah. So we are making sure that our dealers get funded faster. So obviously, the funding time for IT contracting is a lot less and the city is a lot better. That in itself for our dealers is a huge benefit. We do make sure that we fund those deals first. And if anything is going to be put into the back burner, it's going to be those paper deals. So it's it's helps our dealers to keep their cash flow going. And also it keeps our finance managers from having to do a lot of rework. So now their time is open for selling. They can spend more time selling versus trying to contact a customer, upset a customer, bring them back in for a signing and things like that. So it's really important for our dealers and there's a lot of benefits for them as well. And we just we also do a lot of consulting for our dealers in their process, so we help them understand why it's important, how they can use it and how it benefits them.

Greg Uland: Yeah, that's good. That's very good. All right. So let's shift gears a little bit and talk about kind of where things are headed and what's what's possible. Right. We're getting into this world where E contracting is really a reality and it's opening up even even greater possibilities. So where do you see things go and where are you guys headed specifically at ADD Volkswagen credit? What are you excited about?

Maxine Olson: I am super excited about this whole new world of selling. We all know that, especially in the finance office, that is not a pleasant experience and we need to, in this industry, change the way that we do business and meet the customers where they are. So where we are going is with that whole omni channel selling point so a customer can purchase a car in their home and in the coffee shop and in the dealer wherever they want, whatever part that they want, and they can do it at their own time. What we are finding is when the customer is more relaxed and has the opportunity to purchase a vehicle anywhere they actually buy more products, they're happier. And the time they feel, whether it's more or less from their perspective, is much better than being in a finance office where they're beaten down, in their words, beaten down and feel like, OK, I just want to get out of here, so I'm not going to listen to your sales pitch.

Greg Uland: Yeah. And you know, we've been doing a lot of studies and surveys of consumers lately. And and what we've learned, especially in F9 specifically, is they're not opposed to buying. No. They just want to be educated, right? They want to understand because for a vast majority of consumers, they just don't know what products are available or correct. If they know what's available, they don't know what they are correct and they don't want to be taken advantage of. So the easy answer is no. So if you can, as a dealer, help guide that process to allow them to do it from anywhere, but help guide that process where they feel safe and they feel educated like you're adding value, they do it. We've seen that too. They do have a tendency to buy more than just sitting there, having that wall up and being defensive.

Maxine Olson: Not only do they buy more products, but also the value of the cars more for them, they're willing to pay for the car. They just do what they don't want the dealers to tell them how much to pay. They want to make the choice themselves. And if they're online and they have the ability to look at it themselves, they will make those purchases and they do feel better about it. We have some great products out there. Yeah. And and they're benefiting our customers. So it doesn't mean that, oh, I have to buy a product and now I'm stuck with this extra large contract. It's not that way, and customers know that they just want to make those choices. And that's what this world is coming to for the online selling the omni channel selling, hey, look, it doesn't mean that the dealers are not involved. It doesn't mean that the dealers cannot have a big, huge part in it. It just means that the way they do business needs to change to meet the customers where they're at today.

Greg Uland: Yeah, you're right. So in that vein? Talk to me a little bit about remote e contracting. So you find your contracting earlier. You know, we're talking about selling remotely right now. So blend those two together. What what is a remote e contracting process look like? Because there is a lot out there. Signing any contract and you're signing digitally. But then you're printing the paper out and mailing it in. So where are you? Where are you? ADD Volkswagen credit? You know what's possible today? And then what's kind of the end goal?

Maxine Olson: That is a great question, because I remember when the pandemic first started, we did not have nobody had remote signing, and it was in March of 2020 when everything had shut down and our dealers were in a position where they said, Hey, look, we still need to sell cars. And so we took a leap of faith ADD VCI and we said we are going to allow remote signing. We were the first in the industry to allow it. So the very beginning of April, we started allowing remote signing. So what that means is the dealer can email the customer. The all the funding documents everything for us. They can sign them electronically at home. It still goes through the vault. It goes right back to the dealers DMs, which is very important, really important that we have it all in flow of a system of what the dealers use. And then from there, they can send it electronically over to us. So nothing needs to be printed. Nothing needs to be sent to the customer. Mail to the customer or mailed back mailed to us. It can all go electronically. It's very, very important during this time that customers were not allowed to enter the dealerships and it really changed the future. So it worked for us. We took a leap of faith and we're glad we did because our dealers have benefited and our customers have benefited from it.

Greg Uland: Good, good headsets and it just opens up so many more doors. It does. Going forward, it really does.

Maxine Olson: And why print paperwork anymore? Why? Why? Why go out and mail something to our customer? Why do you have to do that? It's not necessary anymore. So we just have to get our minds around that. And the other thing I want to say is, too, we have a very high percentage of all of our deals coming in through IT contracting. So we really only have a very small percentage left that has to change. And we expect by next year, 2023, we're going to be 100 percent good.

Greg Uland: Good. So what are you telling dealers who are hesitant? How do you how do you get them to kind of take that plunge in a lot of ways, they're taking a leap of faith to, I mean, once you're once you're there and on the other side, you go, why are we doing it that way? Yes. Everybody's got to take the leap of faith. So. So how do you approach dealers who aren't quite there? They're not quite comfortable. They're a little hesitant to move into the contracting world.

Maxine Olson: That's a great question, because that has really that last 30 percent that we have is really the hardest because those are going to be your smaller dealers or your dealers that are not in a group. And so it's it's harder for them to make those changes. It's it's more of a big deal for them to make those changes. So that's where we show them, especially the city, how they can get their money faster. But we also have to consult them. We have to work with them. We have to be their partners. So we have to go into the dealerships and we have to show them how it'll work for them, where the benefits are for the dealer and how they can help their customers. That's where we see the biggest change and then we can shift them over again. Those are going to be your smaller dealerships that are going to have the harder time because cash flow is hard. But when you can offset that by their contracts and transit being way down and we can show them that right, there is a huge benefit. And we just have to give them options, so that's what we're doing.

Greg Uland: That's great, good stuff. Well, Maxine, anything we haven't talked about that you wanted to dig into any further at all or

Maxine Olson: I would just say our strategy at VSI is to have it contracting in the DMs. That's what is very important to us. What we chose to do as an OEM is to help our dealers stay inside their DMs so that direct connection between the dealers and BCI is what's very important. We don't need them or want them to have to go to another website to have to go somewhere else, to have one place for their documents, another place for their deals. Everything should flow through the DMs to make it easier on our dealers. That's important to us, and that's our strategy now.

Greg Uland: Good stuff. Well, Maxine Olson with Volkswagen credit. Thank you so much for I. It was a really good conversation.

Maxine Olson: Absolutely. Thank you for having me. All right.