Automotive CRM Dealership Blog for Sales Success

James Maynard of Cox Automotive on Digital Retail & Fixed Ops

Written by Zach Klempf | Oct 27, 2020 12:51:08 AM

 

In this blog post, we have transcribed the UCDP interview with James Maynard in written format. You can listen to the original podcast here.

Used Car Dealer Podcast · Ep #16 - James Maynard, Cox Auto SVP Product & Engineering, discusses Digital Retail and Fixed Ops

 

Zach: Well, hello, Zach here. And it's another episode of the used car dealer podcast. Today we have James Maynard, who is the Senior Vice President of Product and Engineering at Cox Automotive and he leads some of their biggest dealer software brands. Thanks for joining us today. 

James: Thank you, Zach. Appreciate it.

Zach: To get started for those kinds of listening or watching this podcast. James, what does your role entail at Cox Automotive? 

James: So I am responsible for product and engineering. So how we build our products and my scope is for what we call dealer software, which you just mentioned. So that covers our Xtime products for service. It covers our CRM product, VIN Solutions for sales, covers our digital retailing capability, our Dealer.com website offering, as well as our DMS offering. 

Zach: And how many engineers and product managers do you have working under your division? 

James: Uh, that kind of changes. So it's probably right now, somewhere between 700 and 800 just in, in my group overseeing those products.

Zach: And let's start off by talking about digital retail and the kind of rise of digital retail during the pandemic. What has been some of your observations from your lens at Cox Automotive on the digital retail option for auto dealers? 

James: Well, I think it was, uh, you know, I wish there would have been dealers that had adopted it more naturally. Right? But we obviously got a significant acceleration of digital retailing. So I think it, I, you know, I think we were ready from a product. We had a huge backlog of people wanting to get digital, digital retailing enabled. We were in a good position to get them enabled. But I do think that there, there were some dealers that.

It was a trial by fire, for them to have to try to get products installed, to be prepared, to figure out how to work with consumers from a touchless perspective, and learn how to handle the process for digital retailing. So it can be different with how you interact with the consumer.

Especially in situations, I think there were, there were (circumstances) you know, where the consumer doesn't want to come in at all, if they can avoid it. And it was amazing to see how resilient dealers were and how much they adapted really, really quickly, to handle all of those different circumstances. So it was, it was, it was amazing to see the creativity. I wish they would have been there before, but Hey, I mean, it, at least everybody was there and they jumped into it.

Zach: So are you seeing just franchise car dealers adopt digital retail? What about independent dealers? 

James: You know, I think part of that depends on the size, you know, and, and the number of vehicles you have and your reach for consumers.

So it's, it's going to vary a bit, but the larger, you know, franchises, the ones that are very digitally savvy and put themselves out in the market and advertise, are still very interested in digital retail. And it applies just as much to a used car, as it does to a new car. In fact, I mean, a lot of the complexity of new car with incentives and those kinds of things goes away.

When you really are focused on used car, I think you have a better opportunity in that market to focus on the consumer experience. So, you know, if we think about. Yes. Dealers stepped into using digital retailing and more and more of them did as we go forward in time. I think it's going to be more and more important because I think it even makes that smaller used car dealer more scalable, right?

Cause they can engage more consumers and maybe many of those are never going to come onto the lot, but they're still able to get them a car, show them the car, interact with the car, and, and they've never come onto the light. So I think there's an opportunity there for everyone. 

Zach: Great points there. And when you think about kind of the saturation of digital retail tools, you have some of them that are raising large amounts of like venture capital. What are you guys doing at cox and with the dealer.com brand in terms of digital retail that's differentiated or unique?

James: Well, it, I think it goes across the brands too. Right. So if we think about retailing, specifically, we're, we're trying to actually think about digital retailing, not just as a lead generation capability, but how do we actually help dealers retail digitally?

So it just a little bit of reverse the words, but there's still a large portion of consumers that. They come on the lot or they pick up the phone to engage with, with the dealership. And so what we're looking at is how are we enabling our digital tools too, to help that dealer, and that consumer, no matter how they start the process.

So, you know, we thought, I think when we started, did you retail them? I thought of it as an online to in-store experience at start of the experience. Now we see it as a continuation of the experience, maybe starting in the store and continuing, remotely or continuing digitally. We saw a lot of creativity from dealers and that space where they started training BDC agents to answer the phone and sell the car. And they use the digital retailing tools to do that, to key in the information and then send that information to the consumer. So the consumer could pick it up and run with it. Why can't we do the same thing? If the consumers in the store and on a test drive, why can't I start the deal for you and send you the link while we're in the car. And I began that transparent experience and we don't start out on paper. We start out digital, stayed digitally, stayed digital throughout the experience. So I think that's how we're thinking about it as a more broad, you know, expected experience from a consumer expect, uh, perspective.

Zach: What do you see as some of the biggest misconceptions about digital retail from either the dealer or the consumer standpoint? 

James: I think from a consumer standpoint, they don't really know. I think, you know, I don't think they run around and say, Oh, I wish I had digital retailing. They just want to do a portion of that experience.

So I think there's a misconception to a degree that we think that consumers have a perspective right about what it is they want to do. Different consumers want to do different things. There is no one size fits all, and so we need to make sure as dealers are there to meet these different consumer expectations, there are a lot of consumers that start shopping online.

And then from there, it starts to diverge dramatically as to the percentage of people that, that want that experience to continue online or just to continue on the phone and have someone help me. And so I think there is a misconception that everybody is going to start a digital retailing deal, and everything's going to be done, you know, completely without the consumer coming in and interacting with the car.

Cars are very complex. Dealers are still a big part of helping the consumer learn about those vehicles. And frankly, a lot of what we're seeing from our consumer research is that consumers want the dealer to help them understand the difference between car A and car B or model A and model B. So that's, that's a big role that I think the dealerships don't play.

So let's not forget that, that part of the role, in it. And then I think from a dealer perspective, um, I, I think there, you know, I think we discount the process and the in-store experience a bit. Why wouldn't I, as a dealer, I want to do the same thing for my consumer. If they're in the store, why do I shift to them to a paper-based process where I leave them sitting at the sales desk while I go back to the desk manager or, or we wait on the F&I manager that, that speed and that still, that, that interaction digitally, I think, is still something that consumers want.

I think dealers should be thinking about how they offer that experience going forward. And don't, treat your in-store (experience) and your quote on quote “online”; treat as one retailing experience. And I think if you do that and think about it, you might come out with kind of a different, different processes and different practices that you apply more consistently.

Zach: So what are some of the other exciting innovations you're working on with the brands that you manage at Cox automotive?

James: A lot of those were in the digital space, right? When we started, we were talking about innovation around service and service check-in as an example, and, and being able to interact with video, voice and pictures, from service. So we accelerated a lot of those things as COVID hit and we're able to get a lot of things rolled out.

So we were well-positioned with a lot of our products, as dealers needed these new capabilities. But, if you think about all of those that there's, you know, there are a lot of dealers that were using zoom, just like we're on right now, to interact with consumers. And so there's still a lot of pieces and parts of tools that dealers are having to, you know, glom to gather in order to provide a great experience.

And so when we think about what we're doing in the future: How are we going to help to integrate a video experience, a co-browsing experience, right. In with a selling experience and, and carry that right through to offering a deal.

Why can't we move from a chat? To a co-browse to a text, to an email back to the text and, and completely signed everything digitally. So it's bringing all of those digital capabilities together in a seamless, workflow and a seamless set of capabilities. It's going to take some time, but we're making, you know, progress on key parts of that.

So that's really that digitization of the sales process and the digitization of the service process are big portions of what we're. You know, primarily focused on right now. And that'll go all the way through 21. Probably into 22, we'll continue to evolve with new, new things as things progress.

And then we're also looking at efficiency. There are a lot of dealers having to make, do with. Skeletal crews. They're having to have people deliver vehicles or pickup vehicles for service or those kinds of things. So they're having to make, do with the staff they had. So we need to help them be more efficient.

And so looking both at the sales process and the service process, how we help dealers communicate internally, how we help them communicate with the customer. How we just take some manual tasks out of, being necessary in the future. We're doing a lot with our X time service offering and our DT DMS, as well as working with CDK to improve our service repair order and how we manage parts and add parts into a repair order without having to go.

Into the DMS, you can do it right in X time and then have that integrate automatically every one of those steps that we take creates, at least ideally, right? So what we're striving for efficiencies that, that help make that dealer a better business, a more profitable business and better engage consumers.

Zach: One of the barriers to entry, in my opinion, with software adoption, especially with used car dealerships is integration. Sometimes we'll get a dealer and they'll call us and they'll connect another vendor on the line and they'll say, Hey, can you guys integrate before the end of the day? And from the dealer standpoint, they don't understand the complexity of two different companies.

Let's say, integrating with a sales data API, or that company may not have any  APIs. From your perspective, what are some of the complexities of integration and why is it not something that can just be done overnight? For instance? 

James: Yeah, well, let's just use a simple analogy. Why can't I go to France and just land in France and start ordering and speaking English.

And somebody's going to understand me, but there are going to be some gaps in that because we speak two different languages. Essentially. Every one of these systems has been built over a long period of time. And there, there were no standards when they started. And even if there are standards, I mean, we hear about something called star, uh, which is an automotive standard.

But that's really a layout of data. It isn't a standard of what you put into each things and there's, there's some level of interpretation that can occur. Take something that we might think of as, as relatively simple as a customer, and the customer record, some systems may have only two phone numbers while some other systems that can support up to four or five phone numbers or four or five emails.

Well, what do you do when those kinds of things occur? So there's just kind of fundamental difference of different systems have different requirements, different capabilities, different definitions of what, uh, what those things are. So that becomes the first barrier. The second one is to your point in technology, right?

We have different sets of technology. So we have to, we have to think about it and expose things in a standard way as a, as we do with our DMS or with our CRM, or with Xtime, we have to put out some standards that allow. Another partner or vendor to integrate with those, then they have to develop. It takes time for them to understand it.

They may have a use case that they want to execute on that if they use our API in a certain way, it might work, but we might not accommodate exactly what they're trying to do, right? So it gets down to kind of sometimes into very specific things about why a dealer might want something to work.

And I've seen time after time when there's a really high expectation of a very specific process where that third-party trying to come in and use like our  APIs as an example, breaks down a bit. So it's really important that we get back to the problem that we're trying to solve, have a conversation about what's the core problem, and then allow the partners.

To work together to figure out how to solve that problem and understand that, unless it's right there out of the box, it's going to take some time, even if it's out of the box and it's a new partnership, we have to come up with a contractual agreement. We have to get those things signed. So it's not going to happen by the end of the day.

Um, there are occasions where we've done things pretty rapidly though, and it just happened to be where we were solving thing we already have. Our API is published. You can actually go to our developer site for VIN solutions, as an example or for dealer.com. Excuse me for DT DMS and you'll see the specifications to integrate with us.

And those are laid out and dealer and other partners could start using those and, they're specified in a pretty, pretty significant or in a way that allows them to start working on a very quickly. 

Zach: So you mentioned, Xtime earlier in the service drive, of course service is one of the most profitable parts of a dealership operation. What are you guys doing that's new and innovative on the service drive front? 

James: Well, literally this time last year, even if we go back to January of last year, the experience that a dealer can have right now, with the consumer is completely different. Nine months ago. If you came into my service bay / service drive, you could have scheduled your appointment online, but when you arrive, I'm going to greet you as an advisor.

Um, we're going to, you know, we're going to do our work with the two of us are going to interact. You're going to sign a piece of paper at some point. I'm probably going to, if I find a problem, I'm going to walk all the way up and find you in or call you. That was nine months ago. Today you could schedule that appointment,  you'll be given a reminder to check in for yourself. If you want to, you'll be able to, when you arrive with your vehicle, you can, you can check in yourself on your phone, not even walk into the dealership. The advisor can take that. They send the information back to the technician. The technician takes your car.

If they see a problem, they can video it. They can, video the entire inspection, identify the areas that are of issue. You'll see that on a, basically a status tracker, a page, not an application. It's just a simple page that you can see and track the status of your vehicle through its repairs. You can be at a coffee shop down the street, or you could be in our lobby.

It makes no difference or at home. And so, if there is a repair needed, I can tell you that I can show it to you in the video, you can approve it. And then you'll be able to make a payment, electronically from your device without having to, again, sign a piece of paper or hand us your credit card or shake the person's hand if you don't want to.

So it leaves a lot of choice from a consumer's perspective. So that full digital interaction is something we can do today that we couldn't do nine months ago. Now. Is it perfect? No, we have some opportunity to improve it and we're working on that. But it is, it is way ahead of where it was so really happy with that progress.

Zach: What are some of the challenges of running product and engineering that a dealer might not understand, but impacts for instance, putting out updates or integrations from your standpoint? 

James: Um, well, first of all, you have your competitive landscape, so you have constant, right? We have, you know, some of the leading brands in each of our areas.

And so we have a, you know, a lot of functionality that we provide dealers kind of see the surface of that functionality. Most dealers, as you mentioned a minute ago with integration, don't really think about all the integration that has to happen on the back end of a lot of these systems. Um, and so there's. First of all, something they think is simple is oftentimes more complex. A big challenge when you have a large number of dealers that are using something. If I didn't have a lot of dealers on a platform, then I can make a change and I might impact a few people. If I have an issue or if I make the wrong change, When you have six or 7,000 dealers that you're going to potentially impact.

If you make a change, you have to really pay attention to what it is and how it's impacted and, and, and those types of things. So you have to be very careful with the changes in order to keep quality.  The competitors, as I mentioned earlier, they're constantly adding new features. So when we're trying to, keep up with the Jonases, so to speak, you have to be very careful about trying to do that because suddenly you're chasing, you know, five or six products, and they may not have a lot of your features, but they may come up with a given feature that is unique to them.

And they're going to use that to market. You have to be careful about reacting too quickly to those kinds of things, and really look for the value that you're providing, to your particular customer. In our case, our dealers, and as long as we stay focused on the value and stay focused on having good conversations about what we're trying to do, then I feel like we, we do make good decisions.

And generally speaking, we continue to evolve. If that's the big thing is we evolve our products. We're, we're not going to go completely radically change our products in big, you know, the mass moves, so to speak because we have such a large customer base. 

Zach: Interesting. And what are your thoughts on the rise of the online used car dealer? For example, Carvana, Vroom, Shift. 

James: You know, I think we all have to be open to competitors, and it makes us better. And I think that's the challenge that I think we, as, as dealers, you know, used car dealers, smaller used car dealers that don't have that kind of capital or that kind of them, and that kind of, I guess, expand so to speak.

I'm still not sure any of them are making money yet. By the way. So, you know, I think a lot of, lot of your dealers that are probably listening are actually wanting to make money. 

Zach: Right.

James: And so, you know, I think you have to kind of factor that in, you know, it's, it's interesting concepts. My goal is with our products is to provide.

Your dealers, my dealers, the same type of capabilities, Carvana talks about, Vroom talks about right, that touchless experience. They talk about, you know, by buying the car from their couch. There's really no real reason we couldn't provide the same thing so that every dealer can do that. If we take it seriously as independent dealers, small independent dealers and franchise dealers.

If we take what they're doing seriously and treat it as true competition, and we look to do, the same things or provide the same service who are our consumers, our customers. Then I think we will continue to be, be competitive. And I think it will be hard for them to acquire inventory. I think it will be hard for them to acquire customers if we're there and providing a better experience.

So I think they're going to continue to, to be there, but again, are they gonna make money? When are they going to make money? We have to keep watching them. So.

Zach: Right. And, um, Cox automotive, they acquired a company called Clutch, which is in the car subscription arena to any of the brands that you manage, touch Clutch. And then curious what are your thoughts on car subscription models? 

James: Okay, so first I'll give you my thought on the car subscription model. 

Zach: Sure.

James: It's I mean, it's certainly a potential in the future and it's, you know, if we really think about it, it's flexibility and ease, but, and it's everything bundled in.

It's still at this moment, a relatively, you know, high priced item. So it'll be interesting to see if that can come down and be competitive for the average consumer. So, so that's the question is, is that convenience and vehicle changing over? Is that going to that level of, of change and convenience enough that justifies that additional payment.

Maybe it is, with Clutch, that's not the only play and that's not the only way we're using a Clutch. So yeah, with Xtime, as an example, Clutch is playing a role, as the, the method by which we can. When you schedule an appointment, you can also schedule a loaner vehicle. So taking Clutch as an example, integrating with Volvo, for their, service, or integrating with TSD for loaner vehicles to make them available.

So putting them into that loner. Then Clutch can then use the existing dealers inventory and actually make it available to be rented. So it might not be a subscription. It might be a rental kind of program as well. So subscription is a long-term rental, but if you can do subscription as a dealer and you want to be in that place for those particular consumers also think about some of your vehicles, just being a rental for a weekend, if I need a pickup, and there might be a mechanism by which you can do that.

So as you think about your inventory as a potential fleet to be used instead of just sitting on a lot and sitting there idle, how do you use your loaner fleet, how to use your entire lot inventory? As potentially another revenue source, then I think we can start thinking about it. Maybe get more competitive with the subscription model.

So, I think it's got a play it's still going to be, it's got a lot of, you know, a lot of room to grow and it's got a lot of work to get that growth. 

Zach: So my last future's question is going to be around the growing EV market companies like Rivian or Nicola, they're challenging Tesla. What are your thoughts on the EV market as well as the service opportunity? Because of course, they're not going to have oil changes, things like that. So curious what your thoughts are on the growing EV market?

James: So. Nicola, I don't know what's going to happen with them. That's a very interesting one because they are, they're in a little bit of turmoil right now. So we'll, we'll see what happens with Nicola.

You know, I can't comment on it, at all. Cause I don't have a lot of context there about what's going on. I did have their stock and, and just looked at it, but, decided not to do that. And I'm kind of glad I didn't. So, you know, I, I think EV is gonna, I mean, it's absolute here to stay. So it's just a portion, of, I mean, it's going to be a growing portion of, of what we sell.

As far as, yeah. It's not going to fluids, but it's still, these are very, very advanced vehicles. And so, you know, if we think about, I don't know if it's, if it's EV part, that's going to get simpler, but the other elements of the vehicle are getting more complex. Right. So, where do you, are you just going to go to Jiffy lube to get, you know, your LIDAR checked?

And I, I don't think that's going to be the case. So I think there's opportunity and maintenance as we shift from fluid based maintenance and services. The repairs. I mean, you bump one of these vehicles and you knock some electronics out of whack. I mean, there's going to be some, there's going to be a cost associated with that.

You rip a bumper off, that's got, you know, 10, 15 sensors sitting in it. It's a much more expensive bumper. So those are the opportunities. I think we all should look at. It's kind of moving away from fluids and moving into another area. So are we as dealers preparing our service drives and our service experiences for this high tech, area, our technicians, I mean, are they software technicians in the future and maybe they are, as a, as a, you know, for franchise dealers is an OEM going to keep their warranty, you know, continue with their warranty.

If someone's bumped that bumper again, and it's gone out of whack and they just, you know, where are they going to go to get it maintained so that the liability associated with that, how that LIDAR performs. Is it handled properly. So those are the kinds of things I think we need to think about. We are seeing that service, we believe service in the future will continue to expand and we believe dealerships have an opportunity to continue to take a bigger part of that service versus your independence.

And when I say independent here, I mean, independent service shop that is only doing primarily oil changes and those kinds of things, 

Zach: Right. 

James: They're going to have to shift. But if we as dealers where we might have a bigger. You know, bigger service drives and more technicians where we could advance that, um, and take a bigger share of that future maintenance and repair, uh, capability.

Zach: So finally, James, talk about the Cox Automotive Forward Focus conference and what came out of that recent conference? 

James: first thing I'll say is, I was on vacation. So I'll give  you that. Because, my daughter was getting married, so, I was not able to attend a couple of the events.

But, what we had, it was all done virtually. So this particular conference was done virtually. I think we had somewhere over 3000 people signed up for each one, which is our largest, conference we've ever done. And then, the show rate. Was incredibly high, for people. And so the interest and what we're doing, we were very, we were helping dealers think about things from a Ford perspective, making sure they were all aware of everything thing that is available.

So high engagement, high interest, and you know, I, I think the great thing is dealers are looking forward. They are paying attention to what's. What's happening and what's going to happen. And I think they're, I think they're absolutely going to be in a, in a good position going forward.

Zach: And was there anything that I didn't mention on the podcast today that you'd like to discuss? 

James: You know, I'll, I'll just let you know about one thing. We know what we're thinking. We have we're shifting from our product silos Xtime, DT DMS, VIN solutions. 

We have operated in those silos and my organization, the product and engineering organization is starting to operate more at a capability. And if you think about capability, communication. So instead of having. Email in Xtime and email in VIN and email in DT DMS. We're, we're looking at communication, email, text, and the things across the board, so that we're looking at things more holistically as a part of that.

We're also looking at our dealerships and we're trying to solve our problems differently. So instead of looking at our dealerships through our lens of our products, right, our go to market brands, we're actually lifting out of that and saying, How do, dealers need us to look at them? And so we think about it.

I think about the general manager, I'm the dealer principal, I think about the sales manager, but I think about the sales manager differently than the service manager. And I think about the service manager different than the parts manager. And I think about the sales and service parts differently than I do the marketing manager and the controller.

So we're looking at the roles and how we're building product, to deliver for those roles. A big shift, as an example, would be marketing, instead of Xtime marketing and being focused on service and then sales marketing being focused on VIN solutions. We're looking at how do we help the marketing manager?

Stand up above and have simpler tools to look across sales, service, parts, loyalty, so that they have a marketing solution, not a set of 20 different products that they're trying to manage their advertising and marketing budget, where we're advancing our advertising capabilities with things like connected TV, as an example where you can now advertise and instead of going to traditional TV, we can actually target mlb.com. If we were, you know, if people are watching a baseball game and someone had been browsing in the household, Autotrader, then we can pop an advertisement.

That's very specific to your dealership. Those are the kinds of things we're thinking about. When we start to shift our focus, from our brands to look at the dealers and the users in the dealership and look at it from their perspective. 

Zach: Awesome. Well, James, thank you so much for taking the time out of your busy day to join us on the used car dealer podcast today.

James: Great. Thank you Zach.