Big Group Back Up, Tesla’s Quality Fade, Consumer Experience Stumbles

Paul J Daly: 0:14

Good morning. We just watched a full new trailer countdown into the show. If you don't know we live stream every day today we're talking about a big group back up, testers quality fade and consumer experience stumbling overall, stumbling over everything. They stopped.

‍Kyle Mountsier: 0:33

It's like the Golden One rainbow in the sky. You know that nobody can ever get to the pot of gold on.

Paul J Daly: 0:39

I know, but you got to try. But you got to keep trying. What a week it has been like we're coming into a real hot weekend. Kind of like Temperature wise, but just like a lot of things converging.

Kyle Mountsier: 0:50

Everybody's like, please get me to July. That's all I want. I love to it's my birthday on Monday. You know? So, right?

Paul J Daly: 0:58

You got some special birthday festivities going to see a soccer oh man, you got you got the thing going on. Yes, it's good stuff. We spend a lot of time yesterday looking at our travel schedule. And it gets dicey. I'm just I'm just gonna say we're gonna be be out and about, we've had this little like, inhale moment after. So to kind of where we haven't done a lot. But uh, I mean, there's gonna fire up like real quick. Within the next couple of weeks. We're going to be in states you and I both all across the country. We have visits to Atlanta, Idaho, la DC, Florida, Miami. Oh, cannabis, cannabis, St. Louis.

Kyle Mountsier: 1:37

Just every single place. Yeah, I'm excited about it, it just means that we get to connect with people across the industry. And, you know, travel is tough on on the family sometimes. But it's, it's a wonderful part of what we get to do. Because we just get to be in the homes and the in the dealerships and and the tech companies and all those places that, that everybody's having the community conversations that we love.

Paul J Daly: 1:59

So good. We had a great conversation earlier this week, we had a webinar with our friends at activate, it was really great. We heard some we saw some data, we saw a bunch of great service service ideas and how to get profitability up in the service department, which is I think just the timing about building customer trust, getting people back in very, very timely, very, very relevant. It's always great when we see actual results for an actual dealer who's actually on the webinar talking about it. So I think I think it's kind of like got the got the total package here. You can see it by going to so to.com Just scroll if you have to even it's an associate edge webinar, you can register get the recording and make more money. I think that's a good value proposition

Kyle Mountsier: 2:40

more money.

Paul J Daly: 2:41

There we go. And have a good time. It's a very fast webinar. We were done. They were like It's over already. It's over. What was the last time you were on a webinar and you were like, It's over already. It's so

Kyle Mountsier: 2:51

refreshing. You know, like from a from an attendee and a participant perspective. It's like, okay, I think I can do that.

Paul J Daly: 2:58

i That was fun. We should do that. Again.

Kyle Mountsier: 3:00

We laughed a lot.

Paul J Daly: 3:01

We can we always laugh a lot. Hey, yeah, we just we're about to release. Maybe today, our NADA show prospectus where, you know, a lot of people who have have our industry partners have been a part of our NADA coverage, which is always so fun. And the prospectus is just full of photos of last year. And let me just tell you, there is an element of like, when you're at NADA, you want to like you multiply your investment you're there you have a booth, you have your people there, right? How can we really put a force multiplier on that. So that's what we try to do with the coverage and produce by producing content that reflects the energy of the business by producing content that gets the message out. And when you look at the photos, it's very obvious that when tema Soto shows up, we're really working hard to bring out the best in people

Kyle Mountsier: 3:48

and smiles like that. And the vibe around those like it makes me smile, thinking about just the photography. And you know, you said picture a picture's worth 1000 words like yeah, it's worth a lot of those.

Paul J Daly: 4:01

So if you're an industry partner, and you want to get in on the NADA thing, we're so proud that we're six months before the show, usually it's like six weeks before the show, but we're real dialed in this year, got the whole thing? Let us know, reach out to crew CR ew at a soda.com or actually you can just email if you're an industry partner. You've been a partner with us before you know a MJ just email a MJ at ASOTU.com. We'll get that to you we get a first pick because some of the stuff can't announce yet. It's gonna go quick. All right, sorry about some news.

Kyle Mountsier: 4:29

Let's get into it.

Paul J Daly: 4:30

All right. All right. CDK. Global is gradually restoring dealerships. This is great news and even a public company. After the recent cyber attacks group one was confirmed by Automotive News. Our friends over there are now back on line that is so encouraging to hear. That's right. Roll the applause. Basically, they bought yesterday after they brought that first set of dealers on they brought another set of customers back online yesterday, including group one so it's a kind of a big step forward. I wonder how they got to pick who that was. I was like, is it alphabetical order? It's kind of what in the name? I don't know it's not because

Kyle Mountsier: 5:03

automation on 150 rooftops?

Paul J Daly: 5:07

Yeah, let's go volumes. And I'm pretty sure and I'm pretty savvy tech team, right? Like they have a good support team. They're like T team yet. The company is going to continue their Phase Restoration. Focus first on the core DMS. They also are working on getting their other applications, right CRM one at all the service stuff. So experts wait on experts. I'm sorry, expect I can't read this morning. Sometimes I make the notes. And I can't read my own notes. They expect Customer Care channels to be active by June 28. So that would be today, everybody. Meanwhile, major publications like Wall Street Journal, are warning consumers to bring a pen and patients that's the literal word from the headline in the article today, if they're going car shopping this weekend, adding to the mounting losses for dealerships. So I can think of as automotive news somebody, somebody like estimated like a bike approaching a billion dollars in losses. And yeah, Stabenow helping

Kyle Mountsier: 6:06

7.2% reduction is kind of the number that everybody's putting on June in overall sales for the industry. So you know, I don't know if that's exactly exactly right. But I'm just excited that we're, you know, before the 30th Seeing people rolled back on, that means probably the pace is going to pick up over the next week, and then everybody will be back inactive. You know, obviously, like probably more people in the dealership interested in the CRM, you know, just from like a pure volume perspective. So we'll see how quickly Eliades gets back up and running. And then, you know, the thing that I think is, is probably bigger at this point, is connected services, because a lot of third parties outside of CDK actually just like pulled their integrations just stopped the data flow. And so how do you get that data flow back online is is the next piece, it's not just about the core systems, it's about the data flow between a bunch of different stuff. So still a lot to be worked out. There's still going to be some some recovery efforts on there. But kudos to CDK for getting back up and running with some of these larger groups in the test pilots. Indeed,

Unknown: 7:14

indeed, you know, and when we talk about losses, I mean, I understand like some of the some of the losses like inventory floorplan right, when you're holding cars longer than not moving those those are unrecoverable expenses. However, sales numbers, you know, there's pent up demand and we've seen this every time there have been like, people just saying that you know what, maybe I'm not gonna go out and look for I'll wait until next year.

Kyle Mountsier: 7:36

Watch July 4 weekend just rage Right?

Paul J Daly: 7:39

Exactly. Exactly. Speaking of I was gonna say we're aging but it's not Sega raging. So I don't know. Can we talk about Elon Musk and ratio

Kyle Mountsier: 7:46

in the same sense pretty much every time I think that's pretty much always

Paul J Daly: 7:49

that's a fair segue Tesla's edge and Evie quality is fading as repair issues persist according to JD Power study. As the initial the 2024 US Initial Quality Report shows the Tesla's now match legacy automakers EVs and quality with 266 problems per 100 vehicles, if you have your 10 key out right now, that's 2.6 problems. However, customer dissatisfaction is growing due to Tesla removing traditional feature controls like turn signals and wiper stocks. So basically this year, Tesla, they have the gap has closed. Last year they outperformed everybody with 257 problems per 100 vehicles this year, all the manufacturers are kind of even at 260 266 per 100. So Tesla got worse. Everyone else got a little better. And so now they're even the broader industry shows that EVs battery V's plug in hybrids have more issues across the board than gas powered vehicles averaging 266 Problems per 100 vehicle versus only 180. For gas vehicles, JD Powers Frank Hanley notes Evie owners visit dealerships get this three times more often than gas vehicle. Due to severe problems. He said it's not surprising the introduction of new technology has challenged manufacturers to maintain vehicle quality. Yeah,

Kyle Mountsier: 9:13

I mean, this is, again, with any early adopter, you accept the risk of having quality questions, right, whether that come from software or hardware or actual build, and we're still in that phase. So it's it doesn't surprise me that this is the case. But it is a pretty wide gap like 1.8 to 2.6 times visited in that first year. Like that's basically or problems per per first year. That's a that's a pretty big gap. My guess is that it also just comes down to like technology problems like raw live and our software problems that maybe aren't able to be updated over the air at this point. And that's That's something that you and I have been talking about for a long time that these automakers are trying, trying to solve on their own. Instead of like, basically subcontracting out the better technology providers out there in the world. Yeah,

Paul J Daly: 10:12

I mean, without a doubt, you know, Tesla's Tesla is, everyone else is now kind of stuck in Tesla's oxygen out of the room. And they found themselves right in the middle of the scrum now instead of ahead of the pack, so and getting getting sporty out there. Speaking of getting sporty out, though, segue.

Kyle Mountsier: 10:32

Oh man, customer experience scores in the US have declined for the third consecutive year with an average rating, hitting a new low due to inflation, and ineffective customer service chatbots. According to foresters latest report, their study shows an average customer experience score of 69.3 out of 100, the lowest since 2016. And it's fallen from a peak in 2021, which is interesting or 72, ever, how many customers are frustrated by higher costs? Right. So that is impacting their experience score. So cost impacting experience, as well as and this one's wild, ineffective AI chatbots kind of taking over? So the ones that score the highest Chewie, they always great those Navy Federal Credit Union, I will say I know a little bit about that. And they are always tight and USAA. They just they got humans everywhere. They Wow, no surprise, IRS and USA Jobs alike have scored the lowest. Well, kinda to be expected. It's

Paul J Daly: 11:39

good to have people below you on the list. Always you need some, but somebody's got to bring up the rear. So I don't think anyone's fighting for it over there. So I don't think I don't even think they know. They don't care. Customer Experience department is what, what I when I hear this story, and you go through, I think of one word, and that is opportunity. When expectations are low for customer experience, that means it's that much easier to wow, somebody, it's that much easier to give somebody something they didn't expect. And so I think leaning into this with a little bit more intentionality, we really have a chance in the retail auto industry, to have people be like, Oh, that was way better than I thought it was going to be. Yep. Right. Because the expectation is low. Expectations are low everywhere, people are obviously failing to deliver. So I think this is a great opportunity for retail auto to step in, fill the gap. And just surprise people by how good the experience actually was. It takes a lot of work. Just

Kyle Mountsier: 12:38

it takes a lot of work and a little work all at the same time. It just takes paying attention to people being aware of how they're feeling, how they're experiencing, being present with them. And like you can overcome so much with just that alone, just being aware of the human on the other side of the table.

Paul J Daly: 12:56

So good. So good. I mean, it's exciting. Look, without a doubt exciting times here on Friday, June 28. You got a weekend to go to it's a weekend slingshotting into a holiday weekend. So I think there's a lot to be excited about go out there and show people what the industry is all about.

‍