On today’s show, we’re pleased to welcome Mike Dodd, CEO of Trade-In Valet, one of the nation’s largest vehicle appraisal platforms. In this segment, Mike discusses how the business has changed since being acquired by Affinitiv and the exciting things they have rolling out at the upcoming NADA Show. Don’t forget to drop by their booth #4537C.
VIDEO TRANSCRIPT:
Jim Fitzpatrick: Thanks for joining us on CBT, Mike.
Mike Dodd: Thank you for having me. Happy to be here.
Jim Fitzpatrick: Sure. So how is the Trade-In Valet business overall? I understand you guys have been acquired again.
Mike Dodd: Well, we have. Business is absolutely booming, thank you for asking. We have been acquired again, this time by Affinitiv. As you know, we were an AutoLoop company most recently.
Jim Fitzpatrick: Right.
Mike Dodd: And AutoLoop merged with Affinitiv, which is really it’s super exciting because it’s helping our business grow tremendously.
Jim Fitzpatrick: Sure. Fantastic. So congratulations to you on that. How has that helped your business overall, the acquisition?
Mike Dodd: Well, Affinitiv has an incredible technology stack and just an incredible product suite that we’re able to draw from now. So two ways really that it helps is we’re pulling from that technology stack and product suite and we’re implementing new functionality into the tool which makes it more productive, more efficient, more effective and so on. But the other thing that I’m excited about is we are able to draw from an incredible dealer support network, so our dealers are really seeing the benefit of that where we have larger field teams and we just have more bandwidth and manpower to support the dealers.
Jim Fitzpatrick: Fantastic. Is Trade-In Valet geared more toward the new car side or the used car side of the business?
Mike Dodd: That’s a good question. We say we’re geared towards the sales side of the business, because our engagement platform is kind of agnostic. You can imagine the people that are trying to trade, they may be little for a new car or a used car. So we say we’re geared towards the sales side of the business. Now the used car departments and with an ancillary benefit, which is they end up with the fresh trays, the faster turning units so that overall on the used car side, inventory grows more responsibly, it’s the things that the dealers are wanting to keep, the faster turning units, the more profitable units, the trade-ins that we’re all after. So new car side absolutely, used car side sure, but the used car business ends up growing over time as a result.
Jim Fitzpatrick: Okay. So I read an article that you wrote recently and it mentions the quality of vehicle dealers are acquiring through Trade-In Valet is better than what they are able to get through traditional channels. Can you elaborate on that a little bit?
Mike Dodd: Okay. So the traditional channels, you know, we all go back to the old school source where we all used to get trade-ins from the traditional brick and mortar options, right?
Jim Fitzpatrick: Right.
Mike Dodd: And there are very few dealers today, there are some that do an incredible job, but very few of us are able to trade for enough inventory.
Jim Fitzpatrick: Right.
Mike Dodd: So we go out and we find the auction houses of the world and the inventory supplies. What’s happening over time is what we’re all realizing, is that trade-ins are much more valuable than they’ve ever been. The traditional sources, I’m going to say auction houses, their volume is up, they sell a lot of cars. But if you analyze that, if you take it down to a granular level, those auction volumes are not the core inventory that we as a new car dealer [inaudible 00:03:50] need in order to thrive. And this is the most competitive automotive environment we’ve ever seen. It’s not going to get easier. And these trade-ins are becoming much more valuable. So what they’re not finding and what we can’t find is new car dealers through these traditional sources are the three-, five-, six-year-old faster turning units that make the most money that allow us to grow the business more responsibly.
Jim Fitzpatrick: Sure. In your article you mentioned CarMax and Carvana. What do you think they do differently in your opinion?
Mike Dodd: Okay, this is good because I don’t think they do much differently than a lot of the good dealers out there today. But the one thing that I think that they focus on is they’ve learned how to make the customer more comfortable. They’ve learned how to appear to be more approachable. I’m in dealerships all over the country in 20 group meetings or what have you, and I hear dealers say the same thing all the time is, we want to source more inventory from the consumer, we want to buy cars off the street. I can’t buy anything.” And we all have the same concerns.
Jim Fitzpatrick: Right.
Mike Dodd: But what we’re seeing is they don’t know where to begin. And if you analyze the guys that you just mentioned, the CarMax’s and Carvana’s of the world, there are other players that do the same thing, but everyone’s familiar, they’re the big ones.
Jim Fitzpatrick: That’s right.
Mike Dodd: They make the customer comfortable and they’re focused on acquisition. When I say they make them comfortable, they’ve learned when… They have learned what information to share and when to share and it makes the customer more comfortable that they’re willing to give out the appraisals and the information that the customer believes they need in order to get comfortable enough to approach a retailer, which ends up being CarMax or Carvana, the people that are sharing that information with the customer. They just seem more approachable.
Jim Fitzpatrick: Yeah, boy that’s for sure. And they really put themselves out there as the place to go sell your car and without even having to buy a vehicle there. In fact, some dealerships will report that if they’re close on a deal, but they can’t step up in the trade-in, sometimes they’ll send it over to… tell somebody take it over to CarMax, the consumer, and sell your car there and bring the check back. Have you heard something like that in the industry? That’s crazy.
Mike Dodd: That is crazy and I’m glad you being that up because every Trade-In Valet deal, we as Trade-In Valet, we provide the dealers that are on the program with a blanket guarantee, a CarMax guarantee. If there’s a CarMax appraisal, if the appraisal is good at CarMax, it’s good at your store. So we guarantee the value of every CarMax appraisal in the nation.
Jim Fitzpatrick: Wow.
Mike Dodd: I’m glad you brought that up.
Jim Fitzpatrick: That’s huge.
Mike Dodd: Well, how responsible is it if you think about it, to tell the consumer they want to pay you pick a number 12 grand and wouldn’t you believe we’re stuck at 10, go get your check?
Jim Fitzpatrick: I know.
Mike Dodd: The customer leaves the dealership, we’ve lost control.
Jim Fitzpatrick: Totally.
Mike Dodd: They put him in the car, he gets a phone call from someone else and ends up in the competitor’s store. So in order to help assist with that situation, we guarantee the value of every CarMax appraisal in the nation.
Jim Fitzpatrick: Or even buying a car directly from CarMax. If they’re told to go there for the trade-in value and they like what they see and they meet a friendly salesperson and that moves forward, they might just call you back and say, “I’m good. I’m over here, you told me to come over and trade my vehicle here and bring you a check. I’m just going to trade it in here and buy a car here.”
Mike Dodd: And you just touched on something because you said that they go there to sell their car because like I said earlier, they have made their process seem less intimidating to the average consumer. Therefore, they seem more approachable. The customer is willing to pull into the parking lot, sell their car, and then they come to me and you to buy a new car and we have to do it on the trade-in as a result.
Jim Fitzpatrick: Right.
Mike Dodd: They just maniacally focused on seeming more approachable to the average consumer and it’s benefited them.
Jim Fitzpatrick: That’s right. That’s right. So what can the average dealer realistically expect to accomplish on Trade-In Valet?
Mike Dodd: Well, I can give you a laundry list of things because it’s my baby, but let me tell you that there’s not one thing that… We’re not going to tell you that it helps sell new cars, it helps sells used cars, it helps grow your used car… yes, it does all of that. The thing that we’re focused on is online engagement. The dealers that are doing the best job in 2019, 2020, 2021, the dealers that are doing the best job today understand it’s all about online engagement, and it’s all about helping, it’s about influencing the average internet shopper, which is all of us. It’s every one of them. It’s about influencing the average internet shopper, influencing their decision to pick a dealership to visit. It’s about making them comfortable enough with your process, so you seem approachable so they’re willing to show up, test drive a car, and it’s just a car they love, they’re buying a car.
Jim Fitzpatrick: Right.
Mike Dodd: So understanding that it’s about influencing their decision, the bigger story of it is we do the engagement is all online. All we do is help dealers harvest online… I mean their core site visitors, not third party leads, which are necessary in some situations, but your core site visitors are the ones that we’re all after. So we help harvest the core site visitors, we pull people out of the service drive to buy cars and trade cars. We pull people off of social media. We have a data mining component to the tool that will dig through the dealer’s database DMI and pull out the most likely intenders and we’ll begin to market to these people to help not only trade for cars but buy cars, like you’re mentioning earlier.
Mike Dodd: So what can they expect to accomplish? I think it’s new and used car sales, it’s much more effective online engagement, which makes it much more affordable. But if you extrapolate the effect of trading for more cars and you look at it from the top down, from the dealer principle down, you’re trading for more cars, you’re servicing more cars, your parts department benefits, your service department benefits, the finance departments, our reinsurance companies. So it’s the one area of the store that if we focus on and we learn how to do a better job trading for more cars and/or buying directly from the consumer, it will impact every department in the store, finance, parts, service, reinsurance, offshore service, everything.
Jim Fitzpatrick: Wow.
Mike Dodd: So what can they expect to accomplish by trading for a lot more cars? I think it changes their life if they do it right.
Jim Fitzpatrick: No question about it. As impactful as it can be, is it difficult for dealers to implement in their stores?
Mike Dodd: As a dealer? That’s a good question. As a dealer, one of the things that used to be one of my pet peeves is we’d get a pitch and we’d get excited and we’d buy something. And then I would figure out that I couldn’t get my guys to use it. It’s a tool, but if they don’t use it, it’s worthless. So as we were building the tool, the one thing I kept harping on the developers was it had to be user-friendly and we can’t change the behavior inside the store.
Jim Fitzpatrick: Right.
Mike Dodd: I don’t need to teach them to use another tool, they won’t do it. So there’s almost no change in behavior. There’s almost no change in your process.
Jim Fitzpatrick: Wow.
Mike Dodd: It’s about online engagement. And we have live trade-in trainers that spend time with the… When we launch a store, takes us half a day to get a store completely up and running.
Jim Fitzpatrick: Okay.
Mike Dodd: So the learning curve is minimal.
Jim Fitzpatrick: Yeah.
Mike Dodd: And we do have, now that we’re part of Affinitiv, we have that broader dealer support network I was talking about.
Jim Fitzpatrick: Right, right.
Mike Dodd: We have internal support, we have field support. So as it grows and if they need more support, we’re definitely here to provide it, but it doesn’t take much of a learning curve at all.
Jim Fitzpatrick: Yeah, it sounds phenomenal. I mean it’s something that dealers need. It’s one more tool, but it’s an important tool in their toolbox to win that customer over. And as you said, that starts online. It doesn’t necessarily walk in the door the first touch point to the dealership, right?
Mike Dodd: Absolutely. And I say this to dealers all over the country is your customers don’t come in because you’ve paid the most for their car, they don’t come in because you have the “best price,” they don’t know what the best price is. There’s no such thing as the best price. Customers today, they gravitate to the ease of process, they’re going to choose the dealerships that seems the least intimidating.
Jim Fitzpatrick: That’s right.
Mike Dodd: And those of us, the retailers, the new car dealers that have learned to give the consumer the information, give them what they ask for when they ask for it, they base their decision to visit that store not on the information they get, but your willingness to work with them.
Jim Fitzpatrick: That’s right.
Mike Dodd: So we share the information in a manner that benefits the dealer and they thrive from it.
Jim Fitzpatrick: And this little tool right here is the tell all because once that experience has taken place, they’re going to jump online and tell all their friends whether it be negatively or positively, and this certainly lends to the positive side of the customer experience at a dealership, which is so valuable nowadays, right? It helps in service. If it’s in service, it helps with sales. I mean it’s everything, right?
Mike Dodd: That’s an understatement.
Jim Fitzpatrick: Yeah.
Mike Dodd: And they gravitate to the ease of process. And when they like it, they talk about it, unfortunately not often enough. And when they dislike it, they really talk about it. So it’s about the access to information and winning them over, winning the visit. So the dealers that win the visit usually win the car deal.
Jim Fitzpatrick: That’s right. That’s right. So you’re going to be out at NADA, right?
Mike Dodd: Absolutely.
Jim Fitzpatrick: Okay, so we’ll put the booth number on the screen here. For those of you that want to learn more about Trade-In Valet, do yourself a favor and put it on your list of stops to make at NADA. Perhaps you’ll meet with Mike here. I’m sure you’re going to be at the booth probably most of the time, right Mike?
Mike Dodd: Yep.
Jim Fitzpatrick: So get a demonstration on this. Do yourself a favor, get all the information on a program like this because keep in mind chances are your dealer’s going to… Or I should say your competing dealer down the road, if they have a tool like this and you don’t, where do you think the customer’s going? Right? We all know that game. We’ve been in that situation before. So I want to thank you Mike, very much for joining us on CBT News. This has been very enlightening for our viewers. And as I said, dealers, it’s 2020. You need every single tool you can get in your toolbox to win the click and win that customer over. And this is a really big one that’s been tried and tested time and time again. In anticipation of this interview here today with Mike, we did some snooping around with these clients and they all gave it a thumbs up. So I think you’re in good company with Trade-In Valet, and again, visit Mike out at NADA.
Mike Dodd: Thank you for having me.
Jim Fitzpatrick: Thanks so much for joining us.
