iPhone Turns 15, Initial Quality Takes A Dive, Adults Crave More Mindspace

SPEAKERS

Kyle Mountsier, Paul Daly, Kyle

Paul Daly  00:25

Yo, it is Wednesday, June 29. We're celebrating a birthday today. We'll tell you about that in a second. JD Power is telling us Initial Quality is taking a massive dive. And adults want more mindspace the people really want to know. Well there's there's a gift. There's a gift in my head on the mindspace one you probably know exactly what it is. It's the guy who's like the guy with the glasses. Oh, man. Oh, man. Oh, man. It's a beautiful summer day in so many places in the country. It's hard to get down on a beautiful summer day.

Kyle Mountsier  01:06

Come on.

Paul Daly  01:07

What's your what is gorgeous in Nashville in the summer?

Kyle Mountsier  01:11

Oh, well, I woke up to 63 degree that is weather right now. It's going to be 93 and sunny in the afternoon. But the summer days where we get that like 30 degree swing is just perfect. A lot of our summer days are like a 15 degree swing. So we go like 79 to 9093 or something like that. Yeah. But these days where we get that nice cool morning. Nice cool evening.

Paul Daly  01:36

Part. That's all that's all you need. That's all you need. Yeah, it's It's tough when it's like 80 degrees at nighttime. That's fine. It's like something wrong. Something wrong with that.

Kyle Mountsier  01:45

Fire can't do

Paul Daly  01:46

it. Yeah, it's stuff right. And just like Well, look, iPhone iPhone. A Sony Yukon ticket launch is less than a week away. Oh, July 5. So everyone's coming back from the Fourth of July holiday to a very special treat. And that is a soda con tickets will be for sale. If you haven't got on the pre registered list yet go to a soda con.com Because there's only gonna be 50 industry partner tickets that are released to non collaborators. And we want to make sure you have a chance to get one. So we're going to be picking or randomly drawing 50 names off of that pre reg list that have the opportunity to buy a ticket. If you're a dealer, you can buy a ticket anyway. So we're going to launch the site started announcing speakers and collaborators. And the momentum is really going to pick up from here. So make sure you get to sort of con.com and pre registered

Kyle Mountsier  02:34

going. Let's go.

Paul Daly  02:37

It's about it. It's about to get real, real fast. So we have a birthday today. A very notable birthday. Little Trumpet little because that trombone,

Kyle Mountsier  02:50

trumpet trombone, what are you kind of feel like right, well, the iPhone, the iPhone,

Paul Daly  02:58

turn 15 Today, 15 years ago, today, June 29 2007, the iPhone went on sale that began that pandemonium of people waiting outside camping outside the Apple store to buy the very first LCD touchscreen, device. 15. My son, miles

Kyle Mountsier  03:21

15. I have wow, I remember I was in college when that happened. And I just remember this, like frenzy buzz, right? Because we had all had Facebook. And so there was this, we all kind of knew Facebook early in my college years. And so there was already this intentionality around New Tech, you know, the web two was starting to kind of flow into the college ecosystem. And and then this was coming along and everybody was like, save your summer, summer money standing out, lie outside on the line, all that type of stuff. So 15 years later for it to kind of be this like global phenomenon that has taken over the way that we approach daily life. Literally,

Paul Daly  04:10

great quote, There, we linked up a Wall Street Journal article that actually has a little documentary, I think it's only like probably 10 minutes long. But it traces a family of a kid who's 15 and it kind of goes back to his iPhone usage throughout the it's really cool. It's really cool. This quotes in the article though, it's it's truly we just thought this was going to be a fun, easy to use thing when you want to do a few messages. Tony Fidella former senior Apple executive who worked on the original iPhone, he said we didn't think it was going to become the center of your life. I have a question about his comments. Hmm. I think that Steve Jobs knew he knew it was going to become the center. Yeah, cuz

Kyle Mountsier  04:50

I said this in all my training back when I was at the dealership I said, one of the crazy things that Steve Jobs did and the way that he cast vision for a product was always in this way he would say, I can't wait to share with you. This the next thing that we're doing, it's going to, and he used these words often or some iteration of these words change the way we blank, whatever blank was that that device. So like, his intention was that devices changed behavior. Yeah. Right or changed like attention. And so because they somehow integrated I think he knew to I really think he did. So the original iPhone, this is funny. So at the time, the main competitor was the BlackBerry Curve.

Paul Daly  05:34

Did you have one of those?

Kyle Mountsier  05:36

I didn't have a Blackberry.

Paul Daly  05:37

I did. Well, if you were in college, if you were in college, that makes that makes sense, right? Because it was kind of like a business tool, right? For emails. And there was a great thing about it is that it didn't have the keyboard. So you could totally text without looking because your thumbs knew where the buttons were, it was really easy. But the BlackBerry Curve is

Kyle Mountsier  05:55

back there. Like why do you need two thumbs on this thing? I got it in my pocket sending 18 word. Triple tapping.

Paul Daly  06:05

Exactly, exactly. But at the time I had, I was in the middle of like, some two year Verizon contract. And if you remember, iPhone didn't come out of Verizon till I think it was the three of the four. So I didn't get one. And but 6.1 million units sold. It was discontinued Just a year later, when they released the iPhone to 6.1 million units, you know how many were sold last year 220 233 million units. Last year, the original model had get this 128 megabytes of memory with with a whopping four gigabytes of storage juxtaposed to now where you get

Kyle Mountsier  06:47

I take single videos that are like four gigs.

Paul Daly  06:54

Now, you know obviously we know four gigabytes of memory a minimum of 128 gigabytes of storage. The original iPhone had a two megapixel real rear camera and no front facing camera.

Kyle Mountsier  07:05

Not at all. Yeah, there was no need to do FaceTiming that wasn't selfies.

Paul Daly  07:09

The word selfie wasn't even in the vernacular, it didn't exist. How weird is that? Because I mean to do a selfie that I guess you'd have to turn the camera backwards, figure out how to trigger the camera figure out if you were in the shot. I mean, look, people took selfies back in the day with like point shoots, they weren't called selfies, because there were a lot fewer of them. So I mean, for real man feel a little bit old this morning. 15

Kyle Mountsier  07:34

feeling that I'm feeling that without a doubt. I didn't

Paul Daly  07:37

realize now it'll be easy. My son Miles is 15. So now I'll always remember that's

Kyle Mountsier  07:41

the I know when Yes, exactly. Yeah. Go ahead. You know what this is? This is what's interesting to me is like if I would have thought early on in business, to utilize that device as a tool, right? I just I think that my trajectory as a salesperson, as a manager as all that type of stuff. Like it wasn't thought of as a tool early on in its use. And if I would have been, like, if I would have thought, let's use that as a tool for business efficiency or any any level of like, just the ahead of the curve. And so I think, you know, the takeaway for me is what today are some people going, Oh, it's just kind of a nice hobby that you could slide into utilizing as a tool and be so far

Paul Daly  08:32

ahead of the curve. Right. Not just energy, not an entertainment device. Right, right. Interesting. Interesting. Interesting. Well, JD Power moving on JD Power, released their annual Initial Quality Report, and it didn't look too good.

Kyle Mountsier  08:50

dicey. It was,

Paul Daly  08:52

it was dicey.

Kyle Mountsier  08:53

Yeah, that's all this Yeah, I saw this yesterday. And and it's interesting, because you know, that the all of the all of the kind of things that happened through the pandemic that have accelerated retail accelerated, you know, inflation and purchasing and consumer behavior, have put a real like damper on the ability to produce a high quality product. I mean, even early on, if you think about just something as simple as not having heated seats in a luxury vehicle, that's a reality. And so what's the trickle down effect of that that like customer facing thing as far as a quality perspective, all the way down the line, right? hiring more new employees, trying to find a workforce that's willing to work, all of that type of stuff throughout the pandemic, I think, definitely leaned into this lack of quality over the last couple of years.

Paul Daly  09:43

Yeah, and just to be clear, initial quality doesn't mean like things in the car are breaking a lot right. It means that there are some problems that consumers perceive with the vehicle when they get it the initial quality perception of the consumer basically is what this measure how many problems are there so So this is the first year ever, that the Initial Quality Index has dropped. And it didn't just drop like a pointer to a drop 11%. But ever since JD Power have have been doing this report, Initial Quality has been getting better and better and better. You know, this year on average, they were 100. They measure quality by problems per 100 vehicles. So there are 180 problems on average, per 100 vehicles. So that means consumers perceived almost two problems per new vehicle. The lowest surprise the heck out of me. Maybe not actually.

Kyle Mountsier  10:33

But what if you were in 1998? It would have surprised you

Paul Daly  10:42

that Buick had the initial lowest, I mean, they had the best quality score.

Kyle Mountsier  10:48

Wait, they Oh, they had the lowest Oh, okay.

Paul Daly  10:51

Yeah, Buick. That is the problems per vehicle at 139. So 139 Problems per 100 vehicles, so 1.39 Problems per vehicle with Pollstar at the top of the list at 328 Problems per 100 vehicles.

Kyle Mountsier  11:07

So don't you think that that some of that is due to like, being so ahead of the curve, like if you're trying to be so ahead of the curve? Yes. It's, it's almost like, like, There's this quote that sometimes early looks wrong, right. And sometimes early could be wrong, because people aren't ready for it or it's not or the technology isn't ready for people or anything like that. So

Paul Daly  11:31

well, I don't have the list in front of me. But But Tesla also had 228 Problems per car. You know, some of the some of the CES, the problems reported. So if you think of it this way, like you said, Kyle, you know, a vehicle shows up and it doesn't have heated seats. And the consumer was expecting heated seats, and they didn't really, you know, they didn't realize it. So now that's a problem. You know, one of the one of the Big Jim Elliot says Buicks been going strong on yours on this metric. Wow. I wonder if they've already always been low on or? Yeah, they've always been. So that's good to know. Thanks, Jim. You know, you also think a lot of the problems were infotainment related. So people hooking up CarPlay or Android. So you think about like, okay, that could be a problem, and integration. And yep. When I hear that, my mind always goes like, Hey, this is actually something that dealers can control a lot more than you would think. Right? Because you think initial quality from the manufacturer? Well, that's a manufacturer issue. But this actually seems more like a communication and delivery issue to me, right? Well, I

Kyle Mountsier  12:31

more at least have to own it like it's one or at least you could own it. Like

Paul Daly  12:34

you have to own it like it's one you have to write what are you going to say? Well, the manufactured design the system this way, what are you going to do, there's really an opportunity to lean into the delivery process or lean into, you know, the communication about what the car is, and isn't going to have to make it super clear. Because if they didn't hear it, it doesn't matter if you said it or not, it just meant that they didn't hear it, right, the burden of communication is always on the communicator. So I think it's a good a good little takeaway to be aware of this. And to like, just make some adjustments even like right now today, I love it, because it's implementable information, right, you're gonna deliver cars today type

Kyle Mountsier  13:13

of Yeah, the type of delivery the type of even just like sales process to make sure if it is like that those things are being talked about throughout the sales process throughout the delivery journey, all of that type of stuff, without a doubt. You know, alongside of that is, when when you do have a vehicle that has more innovative pieces in it or more technology or anything like that. It's it's this thing, I tell this to dealerships all the time. It's like, once you promise something, the minute you stop delivering at it on it at a very, very high level. Like you're actually held more accountable than someone that never promised that oh, yeah, right, man, that's so true. So So for instance, in a dealership world, right, I use this all the time, because everybody started like pickup and delivery in the pandemic. And if if you have someone that started pickup and delivery and started communicating or never started pickup and delivery and never started communicating it if the person that started it now no longer can do that can't do it as efficient efficiently or they stop adding value to that level of service. They actually are held more accountable in reviews and surveys and on consumer you know, like consumer you know, response or engagement to it, then the person that never announced it or never started it absolutely like too much too much is communicated much as required and pollster and other like Tesla they are communicating this extremely innovative approach. And so the requirement of communication or excellence is that much higher. And so if you do have those brands or you know or those types of vehicles in or, you know, in your vehicle set in your model set the requirement for you and your staff outside of the OEM to over communicate the expectations is that much more than, you know, so universal, you know, and that's such

Paul Daly  15:15

a universal, that is such a universal principle. Like if you're, I mean, even think about if you have like amazing branding and amazing marketing. And when people walk in, like you do all this great job telling about the expectation is just higher, the higher quality of the marketing, like when I walk in, you're gonna get more people to walk in, but you also have to deliver now and everything you just said out of doubt, or I mean, it just put the hate that's what excellence is about. Excellence is about. Well, speaking of marketing. Kyle, you looked at this article, and you said, we could spend an hour on this last topic,

Kyle Mountsier  15:52

literally, I mean, you know, you know, a friend of mine, and, and, and his name is Kevin. And Kevin always talks about how through the pandemic, we have specifically seen millennials and Gen Z adults having the most anxious, most stressful response to the current, you know, environment, whether that be the social environment, or the media environment, or the way that they engage in everyday decisions. And like the the rate of increase in psychotherapy has gone way up over the last couple of years. And so, you know, the APA that the story is this is that, that more people want more mindspace and less noise. So they they're recognizing that things are coming at them so fast. And with like, so much information, so much news, so many stories, so many social media things, that it's becoming hard to focus or concentrate or make decisions, because of the anxiety that it induces on a given day.

Paul Daly  16:59

Yeah, the report, the report from the APA shows that 48% of adults are actually 32% of all adults. And this benchmark is differently across generations. So 48% of millennials 37% Gen Z 32% of Gen X, only 14% of boomers and 3% of the older folks are so stressed that they're having a hard time making basic decisions like What should I wear tomorrow? Because the mindspace like you said, Kyle, all these things have been piling up and piling up, you know, and it's it's not stopping. And so basically, that is happening I have

Kyle Mountsier  17:37

the solution for what to wear tomorrow. Just wear black shirts really easy. And

Paul Daly  17:41

that's we were we were struggling with this Kyle is a millennial means a Gen X or we were like, how can we solve this? We need more mindspace? Yes, like, I switched the game yesterday, I wore a gray sweater and no one recognized me. I walk in and someone said Sir, can I help you? Not that. But look, historically, to kind of twisting this a little bit to put your marketing hat on for a second. Brand Marketing has always been about dominating headspace, right? It's the thing that's, you know, maximizing that the headspace that my brand occupies with you was always the goal. And this study is showing us like the mind space is full, right? And if you're trying to cram more in can actually have the opposite effect for your brand. So we're seeing a lot of retail brands understand this and pivot, right like Nike has started highlighting the benefit and like kind of the coolness right now. He's a fashion brand, the Fashionable, fashionable Miss of mental mental health and not just you know, physical accomplishment leaving some space one UK retailer called Selfridges, they actually have an hour of shopping every day at 10 o'clock, 10 to 11, where there's no music, they turn all the screens in the place off. And that

Kyle Mountsier  18:52

sounds like magic to me.

Paul Daly  18:53

It's like quiet time. I probably fall asleep. Yeah, you're like, let me curl up over here real quick. Yeah, about that. Because you go in and it's like, right, and you got the screens and everything.

Kyle  19:06

And then you're doing this. I mean, I see my kids stressed out by that, right? Like, we go into a we go into a restaurant, and they can barely even focus on eating because there's a screen everywhere. Like what have we done to ourselves?

Paul Daly  19:19

I know it, I know it. So basically. So a McKinsey study shows that in an eight week period, check this out. People have adopted more technology throughout the pandemic, they'll take an eight week period and say people have adopted more interaction with digital things than they would have in seven years. Otherwise, we've talked about this phenomenon before. But the point is this, this is where it all comes together. So orienting your brand and your space and your dealership to think about how can I give people more calm? How can I give them more space and less because you walk into a dealership right? It's hustle, it's bustle, right? The person's already feeling stressed about it. And so some of the suggestions you know, they they talk in this article that I saw on Fast Company, it's linked up in, in, in the show notes, that things like digital check into a hotel room, right? Automating as many things as possible. But then following up on it, you know, like inserting one, human intentionality like I can digitally check in. But when I got in, I got a really pleasant phone call. Hey, thank you so much for being here. Just wanted to make sure can I send anything up to your room? Right, and they say, because you still need the human interaction to make the good brand impression. So I think that that again, just like the last, the last story, like this is something you can start implementing on immediate literally today. $0?

Kyle Mountsier  20:36

How do you think about your showroom as reducing the stress to digital attention? Right? How do you manage someone's attention? Even just recognizing the times that they go to their phone? Right? And how do you maybe draw them back into attention into the human experience, instead of the digital experience, whether it be their device, or the device that you're showing them? Or the five TVs that you placed in the showroom? Is there a way to change that environment? So people are more clear in their decision making, you might actually see a higher level of aptitude to say yes, in the showroom. And the same thing happens on the website. Right? All these things flying in, you know, what do I do next? Right. What we see is that the more simplest

Paul Daly  21:22

what you're saying that 23 calls to action, stress people out?

Kyle Mountsier  21:26

Look, don't get me started. I said we could go for an hour on this call.

Paul Daly  21:31

No, man, there's some whitespace on the site. Another call to action? No, another call

Kyle Mountsier  21:34

to action. Right? Like, I actually I was having this conversation with a dealer yesterday that was building in some new value propositions under the VDP. And it was just like, add this, add this, push this change that and all of a sudden, it was like, Whoa, I don't even like how can I even approach the fact that there's a vehicle that I need to figure out if it fits my family, and you're just shouting all this stuff at me. So stop shouted agian and started.

Paul Daly  22:00

I'm sorry to cut you off. Now. One of the dealerships value proposition was peace. Right? Or space. What does that just do to you coming to here and like, it reminds me of the beaver Toyota. They have they have literally like mindspace rooms, I'm going to call them and you can go in this quiet rooms and they have music and aromatherapy and a massage chair. And you can just go like close the door and sitting in there. Right? I think they've definitely there that Patrick Abad is onto something there. But without a doubt like this is countercultural to automotive. But it is not it is very in the flow and in the river of culture everywhere else. And we're telling you about it here. So if this can help you think about your experience a little bit more like a hospitality or a spa. I don't want I mean, that's kind of like the far extreme. But how can you insert more peace and more space into the process of people in sales and surface? I think if you can do that, the data McKinsey and the APA they're telling you that it would be a really good idea. We're telling you that too. Thank you so much for spending a little time with us today. I know we were full throttle. We can't give you space on a podcast because no one listens to dead air. But we'll see you tomorrow. Lots of dead air unplugged for a minute. Give yourself a little mindspace you deserve it. You deserve it.

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