How Kiosks and Service Advisors Work Together

Greg Uland: All right, Todd Marcel with GoMoto, thank you so much for sit down and talk.

Todd Marcelle: Hey, not a problem, Greg. Thanks for having

Greg Uland: me. Yeah, for sure. So, Todd, it seems like for all of us, we get into the automotive industry and we sort of stay here in one capacity or another. So can you give a little background on your history and just kind of your path in automotive?

Todd Marcelle: Yeah, it's kind of an interesting one. Certainly, I'm not born and raised in automotive. I had an opportunity kind of my earlier career as an investment banker and joined some early growth stage companies and saw that path. I really wanted to be an entrepreneur, and so it built and sold a couple of companies. And about 10 years ago, we had an opportunity with my co-founder to buy our first dealership. His family had come from the wholesale side of the business, and so he wanted to kind of get into a new car dealership world. And so it kind of helped him acquire that dealership. And we kind of got into it and realized that there were some inefficiencies there. And so as an entrepreneur, having just sold my last e-commerce business, I kind of look at some of the problems and said, Hey, could we go build a solution to kind of solve some of our own problems as a as a new dealer? And lo and behold, that's where it kind of GoMoto started, and the formation of the company kind of grew from there. And, you know, we were fortunate enough to really hone in on a couple of pain points that we, as dealers really cared about and sold. And ultimately, that led us to a really nice solution that, you know, has a great opportunity now to help change the way we interact with our customers. And so it's kind of an interesting journey, but we're happy, we're happy we're here now. So yeah, for sure.

Greg Uland: So how long ago was that that you guys bought that dealership

Todd Marcelle: about 10 years ago? And so, you know, we bought it. We were really green, right? We were we were young guys. We had no clue about, you know, frankly, we thought running a store was really easy and we thought, you know, all the software would work seamlessly and anything we deployed, which just instantly solve our problems and we quickly realized, you know, you really got to think about those choices because, you know, I kind of joke I was just having breakfast with the dealer this morning, and he's a new dealer and kind of listening to his challenges of all of a sudden, you know, I went from a GM role to an owner. Now I'm dealing with employee matters. I'm dealing with payroll, I'm dealing with financing, I'm dealing with inventory, I'm dealing with software agreements. And so, you know, we we were overwhelmed by that. And quickly I realized that I'm not very good at running a dealership. When I'm really good at is spotting a problem, figuring out a way to solve it and then, you know, building something to go attack that. And so, you know, we were fortunate that we had that yin and yang with Ben and myself to be able to have somebody focused on the dealership operations and then somebody focus on kind of the problem solving of building software to go do that.

Greg Uland: So yeah, that's great. That's great. So, you know, thinking about the timing of that 10 years ago, the the dealership business, you know, it's changed a lot and 10 years, even five years, and you could think of the service drive and the way that those operate. A lot's changed there, too. And the service advisor themselves, that role has has evolved. So when you think about that, what are the biggest changes you've seen in and how a service advisor operates, what their job is and how would you kind of define the characteristics that make a good service advisor today? Yeah.

Todd Marcelle: So let's take that question. Two parts. I think it's really important. I think there's been an evolution in service technology. So 10 years ago, you know, customers would just show up and very few would actually schedule an appointment, right? Then scheduling software came in. And that kind of transitioned our business from a wild wild west to a plan type of business where, you know, we started to see 20 percent, then 30, then 40, then 50. You know, most dealerships now run at, you know, 70 80, some 100 percent capacity on appointments and have very little ability to service kind of the walk in type of customer, right? So that's been a big evolution because it's forced us to change the way we we do business. But more importantly, it's also giving us more intelligence about the customer because when a customer walks in, you don't know what problem they have now. When they set an appointment, you actually have a process by which to understand and decipher kind of what the initial problem is or service. We have a BDC that actually calls and confirms and asks some key questions, and it prepares our advisors and the technology, frankly, that we want to select to be much more curated to the process that we want to have. Yeah, that's fair. And so and then it goes into, OK, what does that mean for the service advisor? Well, you know, 10 years ago, the service advisor was the main conduit by which, you know, we had a relationship with the dealership and that still hasn't changed. What has changed is ultimately the way that we want to treat our customers because, you know, COVID good or bad, right has created a convenience experience for our customers that they expect everything, you know, frankly, on demand when they want it, how they want it, right? And so that's forced us as dealers and as a technology partner to think about what do we need to do to ensure that we offer an omni channel experience to our customers, right? So I break customers into kind of three sets now, right? You have the old school customer right that still wants to come in and have that one-to-one relationship with the advisor. Right. You then have kind of the newer age consumer, right, that is of customer, right, that all of it is technologically leading. Right. So the older said customers about 24. The kind of newer customer, you know, the type of customer that's all about ultra convenience, right, is, you know, 20, 30 percent, and they want to literally not talk to anybody. They want to schedule everything. They want to drop their vehicle. They want to either be picked up. They either want to have that vehicle dropped off, not talk with anybody, phone or text message at the car done, do everything electronically and then pick the car up, you know, at their terms, right? And then you have kind of the middle of the road that are now adopting that kind of mode where they've kind of transitioned into I like convenience. I want to be able to come in. I don't want to wait for 30 minutes, right? I want trust, I want transparency and I want convenience. And that's the majority of our customer base today. And so what's happened with the advisors is that kind of that opening end because life has just gotten busier has moved away from kind of that trust building that used to happen 10 years ago when you walked in and spent 20 minutes. It's now happening post MPI. So what customers want is a fast, convenient experience, but they still want the trusted relationship and the advisor to call them or text them or email ADD. For example, an electronic API where once they've had the opportunity to actually look at the vehicle, inspect it and share those results with me as a consumer. That's where the trust is, Israel, because, you know, I think there's an old school debate about, you know, when that customer walks in, I do that, you know, dedicated walk around and spend 10 minutes straight after that. Customers are still skeptical right about that process. What they're not skeptical about because they've learned the buying habits from kind of e-commerce is that I'm willing to make the investment to come to you as a dealer. Yeah. What I really appreciate is if you could take the time, effort, energy to learn about my vehicle and then share those results with me and feedback. But I think

Greg Uland: that's the key is people are so and it's not just automotive, such as service advisors, but in general, you're open to you're open to listening, but you want to be educated, right? You don't you don't want to be just kind of pitched, you know, if there's something valuable and let's have a conversation. But if it's if it's just, you know, hey, maybe we could get your wife relationship, you know, like that. No, I don't. That's not what I'm here for. Like, tell me what's wrong with my car is making a knocking noise and I need to get it fixed. I want to make sure it's not going to break down. So when you have the answer to that question and you can educate them to your point, that's when that relationship can really, really be built and it becomes more built on trust than on me trying to picture something 100 percent.

Todd Marcelle: And you know what we're trying to focus on, you know, certainly with GoMoto is taking the kind of remedial tasks outright. So when a customer comes in, you know, automating that process just like we do with the scheduling process or so, you know, sometimes a human involved to confirm that process. But what we really want to do is make sure, hey, is it the correct contact information, right? Can we make sure that we offer that customer a trade appraisal? Can we make sure that we offer some basic upsells so that everyone wins because still a service advisor, if I had that customer go through that process, guess what? I still win because I get those up sales, right if those customers ADD them. And what we found is when you give customers the option upon check in to really kind of let them lead their own path, per se, they buy more on the check in process through a mobile or kind of kiosk experience. And then they actually buy more from the advisor because the advisor is now have a quote unquote perception of, Hey, I've taken the time, effort, energy to build that trust and credibility and present you with factual information that I've actually had time to, you know, deem as as as critical.

Greg Uland: Yeah. So and you think about that and it makes sense to me. Right. And and I think it makes sense to a lot of people. But I also think there's a natural perception that whenever you introduce technology, I mean, a kiosk by definition is self-serve. Sure, right? So there's a natural perception that the kiosk is taking over the advisor's job or at least part of the advisor's job, making the advisor less valuable. Why do you think that's that's such a pervasive perception?

Todd Marcelle: Well, I think it's just natural because you've seen it across other industry verticals. And so, you know, as a dealer and what we always say is you want to deploy capital and people to their greatest efficiency and greatest purpose, right? And so I ask the question, you know, if I know 80 percent of my customers prefer to have an experience that's self led, I want to make sure I'm offering that experience. That just means that I need to now train and educate my advisors to be able to handle the secondary conversation. Because what I hear from advisors all the time is, yes, there's fear of, Hey, it takes my job. My response is it doesn't take your job. It actually makes your job more valuable because now you have the time, effort and energy to actually spend with each customer walking through the NPI experience, right? Because that's ultimately where you're going to get the greatest value to extend the lifetime value that customer, right? Because you're going to be able to educate them, you have more time to do that. So if I can save you two hours on kind of remedial work up front but give you that time back and allocate that towards really building trust and building those long lasting relationships with your customer, would you do that? And the answer I get back unequivocally is yes. Right? And so that's a really important element. But there is the fear, right? We've seen it in the airline industry. The airline industry hasn't, you know, reduced headcount. What they've done is made the experience easier, right from a in experience. And they've invested that money in better gate agency, better technology, better flight attendants, better. Highlights expanded their business, so there's a bigger pie now for those employees to participate. It's no different in automotive retail.

Greg Uland: That's fair. So when dealers are able to kind of buy into this idea and it really service advisor, not just dealer, because I think it's the end user that has to buy in, right? If they don't buy anything, it doesn't matter. So in the service advisor buys, in what types of results are you seeing, if any, you know, positive or negative? Honestly, when they say, OK, this this kiosk, this self-service kiosk can actually enhance what I do and, you know, make us more successful. What does that translate to?

Todd Marcelle: Yeah, so so a couple of things. So I think one is when you think about the experience, there's kind of a bunch of different factors that we look at. We're always trying to solve a couple of pain points. You know, the first and foremost is that we're offering the consumer the experience they want. Right. So 85 percent of customers that come through the self-service experience say that they would prefer to do this than go through the traditional advisor led process, right? So that that to me, is confidence enough, right? That, hey, the technology works. But more importantly, the customers want that. Okay, so then let's transition into OK, what within that check-in experience or checkout experience? Really, we as dealers benefit from the consumer benefit from it ultimately raises, you know, everybody's success at the dealership. Well, number one is contact information. Very simple thing that we all think is is, you know, we take for granted. Yeah, but the most important thing because most customers now prefer text, you know, we have a 90 plus percent positivity rate. When customers come in, they update and choose cell phone, and they put the updated cell phone number in lots of wildly, you know, valuable to me as a dealer, because now I can communicate various service updates. I can send, you know, my mpi and then I can communicate them when they become kind of prospects in the sales process. I have a direct communication center. Number two, we all know about the inventory shortages right now. Your best customers are the ones that are sitting in your service line, right? Because you can buy the car from them and you can flip them into something else. So we've seen, you know, now undertaking Jones, we offer an appraisal for basically every customer. You set the parameters, but we're not doing for somebody that just came in at least a car. But you know, after your your set parameter, maybe two years, three years, we have customers and we're seeing, you know, 11, 12, we have some stores that do 22 percent of customers raise their hands. ADD like to trade my car in and buy a new car from you. Well, there are most profitable customers. December three is upsells. You know, we see, you know, on average, anywhere from 13 to 25 percent of customers will actually raise their hand and buy something additional, just a punch.

Greg Uland: So what type of stuff's getting bought on track? And so I'm just thinking about the check in process. We talked earlier, you mentioned, you know, people want to go through the easy stuff, kind of get the check in done and then the adviser can can recommend what's actually needed on the car. So ADD check in and what types of things are people buying? I mean, is it those wiper blades and that kind of stuff? Or like what? What types of pieces you're thinking about the right way, right? Wiper blades are most profitable, you know, sale? Yeah, wiper blades upgrades on the actual oil change, you know that they were currently looking at. So I'm going to go into synthetic or something like that.

Todd Marcelle: Yeah, synthetic or actually adding in maybe a couple additional things that maybe they're there for a twenty nine, ninety five, you know, oil change, but for forty nine, we'll change. A filter wheel may do an interior deodorizer, things like that that, you know, ultimately allow the customer some comfort and trust, right? But again, it's no different than when you're on Amazon. They say, you know, other customers have bought or used me, and customers are naturally trained to do that. So they automatically kind of have, you know, add to that bucket. And so, you know, if I can go grab 30, 40, 50 dollars of additional upsell revenue, that's wildly profitable not only for me as a dealer, but also for the adviser, right? Because I need commission on that and I now have another opportunity to sell them post NPI and work that they actually truly need to have done. That's critical and safety worthy on that vehicle.

Greg Uland: All right, that's fair. All right. So, so Todd, we are we're at NADA, right? And there's thousands of dealers here, but he's excited to be back in person, for sure. So let's say you're at the GoMoto booth and dealer walks by and somebody who's a little hesitant about Kjos. Yeah, give me the pitch. What do you? What do you what are you?

Todd Marcelle: Very simple question, right? Are you? Are you the customer, right? When you go into a grocery store and there's eight potential lines five or self-service three are, you know, led by human and the line is 15 to 20 minutes. Are you the person that's going to wait in line for the 15 or 20 minutes? Are you the person that would rather check in and go through and check out in a minute or less, right? I say that question number two is, are you the customer that goes in and actually talks to a bank teller? Or do you use an ATM, right? Or last time I checked and you filled up gas at seven dollars a gallon? Are you the customer goes to full service or do you do it yourself right and are in and out? And so what we have to realize is that the customer has spoken and that they kind of demand that we offer this omni channel experience, right? And the easiest one I would say is Starbucks for myself, right? I've got two young kids. My schedule is crazy packed on a Saturday Sunday with all different sporting events. The easiest thing for me right now, you know? No, no, nothing against Starbucks. I like their coffee, but it's not the best coffee, you know, in my area. I prefer to go support a local coffee shop that I've gone to for 10 years that I love their coffee. But, you know, they don't have they don't have mobile ordering. And so for me, it's 7:00 a.m. with two kids that are hungry and have a full day of sports. I can literally get in the car and I can look and say, OK, there's a four minute wait at the Starbucks that's five minutes away on the way to practice. Henry Lucey, what would you like? Normal order pumpkin bread, you know and a bagel? Yes. And chocolate milk. OK. Boom. Boom, boom. It's ready. In five minutes, I pull out my wife runs and grabs it, and we're done right. That, to me, is convenient. That's what I expect as a consumer. And so, you know, as a as a dealer, we have to take away our perception that our customers are unique or different. The same customer that comes into our store to service their vehicle or buy their vehicle know there's a reason e-commerce has exploded during COVID four for cars. No different on the server side. They expect a concierge service. They expect kiosks. They expect a fast, transparent and efficient experience. If you cannot offer that, there's a reason why you know other avenues exist to serve as your vehicle.

Greg Uland: Yeah, that's good. That's good. All right. So very important question. Then what? What sports are the kids in? Yeah.

Todd Marcelle: So my daughter Lucy, 10, is big into lacrosse. OK, so she's kind of made the transition and kind of declare that's her sport. My son Henry, six, he likes to try everything. He's a big football player, loves soccer. I just tried wrestling this year in the winter basketball, and they're both big skiers as well. So we had about 12 days on the mountain this winter with both of them, so they really enjoyed that good stuff.

Greg Uland: All right. Well, Tom Marcel GoMoto, Thanks so much for talking and have a great show.

Todd Marcelle: Thank you so much.

Greg Uland: Cheers, Isaiah Todd Marcelo from GoMoto. Thanks so much for sitting out and talking with me.

Todd Marcelle: No problem, Greg. Thank you so much for having me.

Greg Uland: Yep, absolutely. So, Todd, let's let's start with your background in automotive, it seems like all of us, once we're in, we were in in some capacity or another. So what's your what's your story?

Todd Marcelle: Yeah. So certainly did not come and grow up in the business was a former investment banker and then transitioned into kind of high growth startups and kind of got my juices flowing. And from that, I realized that my real passion was to be an entrepreneur and built and sold a couple of companies successfully across e-commerce and technology. And about 10 years ago, after my latest e-commerce exit had an opportunity with my business partner, who did come from automotive owned a wholesale business. We wanted to become new car dealers, right? And so we made that plunge and ended up buying a Volkswagen dealership in southern New Jersey and realized once we got into it, we weren't very good operators, right? And we realized that we needed to learn a lot. And so we spent a lot of time understanding that a one I was not a good operator and my my biggest skill set was identifying problems, building solutions to solve them and then figuring out how to operationalize of ADD. My partner was much better at running the day to day, you know, aspects of the dealership. And so hence how GoMoto was formed was a business problem that we had identified within our own dealership to solve kind of what I call customer experience, which is kind of become the new platform of how we need to think about operating our dealerships. And we were fortunate enough with GoMoto to have great partners and great feedback from our dealer partners to build a successful business that ultimately solved that very important pain point for them. And, you know, helped customers get a better experience and helped dealerships, you know, maintain better process and better profitability.

Greg Uland: All right, Todd, Marcella IT GoMoto, thank you so much for sitting down and talking and have a great show.

Todd Marcelle: Thank you so much, drag. Cheers. Yeah.