Jim Fitzpatrick: How’s the NADA Show going for you so far?
Mike Cavanaugh: This is the busiest NADA we’ve ever had. This has been just a tremendous event thus far.
Jim Fitzpatrick: Congratulations to you and your team on that.
Mike Cavanaugh: Yeah, thank you. A lot of hard work, preparation, and it all paid off.
Jim Fitzpatrick: Sure. Last time we talked, you were getting ready to launch MAX BDC. What’s been the early reaction on that?
Mike Cavanaugh: It’s been great so far. So we launched it with some current customers prior to the event here but this is the official launch is literally today, this morning. I couldn’t even tell you how many dealers we had come by the booth and do a demo. It’s been a phenomenal response. We’ve had several people sign up today. It’s been great. So it’s really designed to solve an actual problem that we have in the industry right now.
Jim Fitzpatrick: Let’s drill down and talk a little bit about that. Tell me, it seems that often there’s a tension between BDC and sales teams. How does this product help that?
Mike Cavanaugh: It really helps the BDC, the sales department, and the customer collaborates. We say it’s a three-way collaboration tool. And so there’s bit of a contentious relationship, I’ll call it, between the BDC and the sales department usually because they’re trying to set an appointment, the customer is hoping that everything that they talked about with the BDC agent gets conveyed to the salesperson which, unless they take insanely copious notes, which they don’t, so it doesn’t happen. So then the sales person’s frustrated, the customer, most importantly, is frustrated. It doesn’t work out for anybody.
Mike Cavanaugh: So we’ve designed this tool that allows whoever that first point of contact is, and typically it’s a BDC agent, we’ve allowed them to answer the questions that the customer actually has versus rely on somebody else or rely on a word track to help get them around a tense situation.
Jim Fitzpatrick: Gotcha. So does this help dealerships prepare for the future? Do this work its way into digital retailing so that everybody’s working cohesively together on the customer’s behalf?
Mike Cavanaugh: Yes, definitely. I think one of the interesting things that I like to make a point of is saying that this is not a ‘Buy now’ button on a website. This is not a tool that’s designed to replace your sales people. And I think that’s what we look for sometimes in the industry, we look for the silver bullet that’s going to make it really easy, that if I buy by this software, if I put it on my website, I just sell more cars, it’s great.
Mike Cavanaugh: And some people even sell their tools like that which is unfortunate. It just doesn’t exist. So this is a tool that’s designed to help equip your salespeople, your BDC people with the right information, the right technology that helps provide a better customer experience.
Jim Fitzpatrick: Okay. And that’s what it’s all about today, a good customer experience. You don’t have that, you might as well close the doors you dealership.
Mike Cavanaugh: I’d say that the only thing that separates you from your competition. We all sell cars, we all serve as cars. So if you provide a better experience, that’s your brand.
Jim Fitzpatrick: I think it’s probably one of the things that the industry is learning from companies and disruptors like Carvana and Vroom. That customer says, I can bypass that showroom experience and just buy a car online? I think the takeaway is that we got to be treating our customers a lot better than we’ve done in the past.
Mike Cavanaugh: You’re right because I think we’ve taken the consumer’s feedback that they want to buy a car like they buy something on Amazon and it’s not. It’s that, I don’t want a bad experience so bad that I’m willing to do more myself.
Jim Fitzpatrick: That’s a good point.
Mike Cavanaugh: And so they really just want a better experience. It’s been so bad historically as a whole. There’re some dealers that do a tremendous job providing a phenomenal experience. As a whole, the industry hasn’t done a great job consistently of providing an experience and that’s why there’re some disruptors that have come together.
Jim Fitzpatrick: How do you see the role of the BDC changing as we move forward?
Mike Cavanaugh: I think the BDC is going to become an ever important role. When it comes to marketing, we talk a lot about attribution. But when we talk about sales and actually who gets the most credit for the sale, who participated the most in the transaction, I think historically we’ve given salespeople a ton of credit, we’ve given sales people a ton of pay, and we’ve given BDC people a lot less credit and a lot less pay. And I think when you look at models like Carvana and you see that they are really one big BDC.
Jim Fitzpatrick: I would agree with that.
Mike Cavanaugh: When we look at how do we better equip our first responders so to speak for consumers, which is your BDC, how do we better equip them, they can become a lot larger part of the sale and a lot more important part of the sale.
Jim Fitzpatrick: Yeah. And they have to.
Mike Cavanaugh: Absolutely.
Jim Fitzpatrick: How do you ensure the BDC or the team that is playing that first contact role is doing the job that you want them to be doing?
Mike Cavanaugh: That’s a good question. I think a lot of this has to do with clear expectations and leadership. So you’ve really got to set clear expectations and you’ve got to take the time to inspect what you expect. Its say that all of us have heard industry. And unfortunately it doesn’t get done a lot. Sometimes it gets delegated but if you haven’t taken the time to ‘mystery shop’ your own store, if you’re the owner, you’re the GM, you’re the sales manager, you’re even the BDC manager you need to ‘mystery shop’ your own store. You need to check out your own website to make sure everything’s functioning properly.
Jim Fitzpatrick: I couldn’t agree more.
Mike Cavanaugh: And what I knew, from spending a lot of time in retail, when I got out of the retail environment and I came to work at MAX Digital, I needed to buy two cars in the same year. And when I actually got to go through the experience myself and see how awful and painful it was at probably 10 different dealerships that I shopped at, I realized it was just such a huge industry problem.
Jim Fitzpatrick: And what year was that?
Mike Cavanaugh: This is over the last year I did this.
Jim Fitzpatrick: So last year.
Mike Cavanaugh: So 2018, 2019.
Jim Fitzpatrick: And you would think with all the technology and all that we’ve learned, this kind of stuff is still happening in showrooms.
Mike Cavanaugh: I literally still had a guy tell me when I was trying to get an Expedition for my wife, he said, “The best price and the best payment are still in the store. So if you want to know what they are, we’re going have to have you come in.” And I’m like, “This isn’t 1992, come on.” We have to really be transparent and answer people’s questions. It’s just that simple.
Jim Fitzpatrick: That’s right. We talk about trusting the consumer and transparency, but when push comes to shove, we don’t really trust the customer. If you treat them right, they’re going to come in to you.
Mike Cavanaugh: What’s that fear? We want to control them, we want to put them through the traditional road to the sale.
Jim Fitzpatrick: That’s right.
Mike Cavanaugh: Because we trust our process but it’s proven that consumers don’t like it. Customers don’t like it. And the results are getting worse over time. So we focused a lot of our time, effort, and energy on filling the upper funnel of the pipeline. It’s marketing, driving more traffic, drive more traffic. That’s important.
Jim Fitzpatrick: We always were addicted to it.
Mike Cavanaugh: But we got to focus on, once we get the traffic in the store, what do we do with it? So that middle of the funnel, lower part of the funnel.
Jim Fitzpatrick: Absolutely. No question about it. Mike Cavanaugh, Executive Vice President from MAX Digital. Thank you so much for joining us.
Mike Cavanaugh: Thanks for having me.
Jim Fitzpatrick: Hopefully tomorrow in day two here at NADA is just as successful as day one for you.
Mike Cavanaugh: I know it will be.
Jim Fitzpatrick: Yeah. That’s great.
Mike Cavanaugh: That’s great. Thank you.
Jim Fitzpatrick: Thank you.