Competing for the Best Customer Experience, Not the Best Price

Colton Ray is the Chief Executive Officer at FUSE Autotech. He has more than 20 years of experience in the automotive industry, including several standout leadership roles. Before joining FUSE Autotech, Colton served as the Chief Merchandising Officer for Walser Automotive Group. During that time, Walser added nearly 5% of market share with 23 stores. In 2021, Colton was awarded Automotive News‘ 40 Under 40 Award for his performance at the Walser Automotive Group.

Alan Krutsch is the Director of Industry Relations at FUSE Autotech. His auto career started on the sales floor and progressed through finance and sales management. Alan has served as director of marketing for two prominent dealer groups where his brand management knowledge and skills as an innovative digital marketer led to market share increases and reduced costs per vehicle sold. He has also spoken at numerous industry conferences on digital marketing and customer experience.

Here’s a glimpse of what you’ll learn:

• Alan Krutsch and Colton Ray talk about the future of modern retailing in the automotive space
• How to handle artificial supply constraints in the automotive industry
• How the car market has been changing and what the future of electric vehicles looks like
• Alan and Colton discuss how more options and better transaction processes make car shopping simpler
• Dealerships that pioneered the one-price business model
• How to provide better customer experiences to car buyers

In this episode…

How much time does your dealership spend negotiating with customers for a fair car price? What can you do to make the buying process easier and simpler for them? How can you effectively compete with other dealerships when it comes to a better customer experience?

In the current market, many customers prefer to get one fixed price that is fair so they don’t have to spend a lot of time negotiating with salespeople. This means that dealerships need to have the right business model to make their customer experience fun, fast, and encouraging for future sales.

In this episode of the InsideAuto Podcast, Ilana Shabtay is joined by Colton Ray and Alan Krutsch from FUSE Autotech to talk about competing for the best customer experience. They also discuss the future of modern retailing in the automotive space and how demand and supply in the car market have evolved.

Resources Mentioned in this episode

• AutoLeadStar
• Ilana Shabtay on LinkedIn
• FUSE Autotech
• Alan Krutsch on LinkedIn
• Colton Ray on LinkedIn
• “Everything from the Garlic Capital of the World to Dealership Culture with Walser Automotive” With Sherry Schultz and Colton Ray
• Walser Automotive Group
• Schomp Automotive Group
• Mullinax Ford

Sponsor for this episode…

This episode is brought to you by AutoLeadStar, a company that helps car dealerships engage quality customers on the web and convert them into car buyers.

Co-founded by Aharon Horwitz, Yishai Goldstein, and Eliav Moshe, AutoLeadStar’s state-of-the-art software automates a dealership’s entire marketing funnel and provides around-the-clock service for dealers.

AutoLeadStar’s innovative technology helps dealerships automate ads, connect with customers, and discover ROI and performance metrics. 

Visit their website at www.autoleadstar.com to learn more about their around-the-clock marketing service.

Episode Transcript

Intro 0:03

Welcome to InsideAuto Podcast where we feature everyone and anyone you’d want to talk to you in and out of the automotive industry.

Ilana Shabtay 0:13

Ilana Shabtay Here host of InsideAuto Podcast where we interview top dealers, GMs, marketers, entrepreneurs and thought leaders in and out of the automotive industry. And before we introduce today’s guests, this episode is sponsored by AutoLeadsStar.com AutoLeadStar is automotive’s first and leading customer data and experience platform. Top dealers invest in CDXPs to unify dealership data sources automatically create one to one customized journeys and execute omni channel shopping experiences. It’s all in one connected platform. And today we’re welcoming our friends from FUSE Autotech. That’s the power team we have here. Hello, Alan Krutsch and Colton Ray.

Colton Ray 0:54

Hello.

Alan Krutsch 0:55

Hello, Ilana.

Ilana Shabtay 1:00

Are you guys doing today?

Alan Krutsch 1:02

Good.

Ilana Shabtay 1:03

Great. Well, Colton has actually been on this podcast before. So we’re really excited and looking forward to having you back Colton. I’ll introduce you both and then let’s get right into the juice of it sound good?

Colton Ray 1:14

Sounds great. Awesome.

Ilana Shabtay 1:16

So Colton Ray is the Chief Executive Officer at FUSE Autotech. He comes with 20 plus years of experience in the automotive industry, including several standout leadership roles. Prior to FUSE, Colton served as the chief merchandising officer for Walser Automotive Group. During that time, Walser added nearly 5% of market share with 23 stores. In 2021 Colton was awarded automotive news 40 under 40 Award for his performance at the Walser Automotive Group. Congratulations on that. We have Alan Krutsch here, he has over 20 years of automotive experience as well and retail sales, marketing and leadership roles is auto career started on the sales floor and progress through finance and sales management. Alan has served as director of marketing for two prominent dealer groups where his knowledge of brand management and skill and skills as an innovative dealer, Digital Marketer, excuse me lead to market share increases and reduced costs per vehicle sold isn’t the dream. I would have spoken at numerous industry conferences on digital marketing and customer experience. And now he is the director of industry relations for FUSE Autotech. Wow, impressive to both of you. Thanks for joining the InsideAuto Podcast. It’s great to have you both.

Alan Krutsch 2:33

It is good to be here. My mom would be very proud of that introduction.

Ilana Shabtay 2:39

I know, it is super impressive. And I am last time Colton was on the podcast it was as actually CMO at Walser. So it’s exciting that you’re going to come here from the technic technology side even though we did touch a ton on technology on that podcast episode as well. But yeah, it’s it’s impressive. So you guys really are bringing a lot of your expertise to the podcast. That’s what we like to hear. We like to challenge the industry talk about some things that we think we can shake up. And on that I know you both are very much committed to the mission of appending. The future of modern retail for automotive. I’d love to talk a little bit about that. How you, you know how you see the future for modern retail for automotive and then how you’re kind of contributing to that at US auto tech and beyond. Colton, we can start with you.

Colton Ray 3:29

I think it’d be more fun to start with Alan.

Ilana Shabtay 3:31

Alan, let’s start with you.

Colton Ray 3:32

I love hearing talons perspective on everything. In fact, sometimes it shifts by on so

Alan Krutsch 3:39

yeah, well, that sounds like a lot of fun to me to certainly Ilana, I think that we actually don’t have a choice. So. And the reason we don’t have a choice is because of the influence of other retail experiences, and technology innovation outside of the automotive business. Customers just aren’t going to stand for the lack of transparency in turning what should be a pretty exciting day getting a new car into this 234 hour marathon. And so our perspective is this is coming we can either be out in front of it and create the future or we can get dragged along. And you know, I think one of the things that is holding us back is primarily success. Dealers are coming off of a couple of really good years. Most of them are probably going to have a really good year this year because of artificial supply constraints. So it is a seller’s market and you combine that with we’ve always done it this way. The motivation to change is maybe not a cute at this point.

Colton Ray 4:53

And Alan to put a finer point on it. I mean, all recent surveys are all saying same similar things of millennials who would rather go get a root canal than then come into a car dealership and Gen Z, which is, you know, now that that’s really the segment that we need to all pay attention to here as marketers, dealer operators, anybody in the business. They’d rather go, they’d rather clean their house and sit in the line at the DMV. I mean, this is this is crazy. I mean, this is really, this is what’s happening right now around us. And those that are, you know, formulating a plan and starting to execute that plan. Will will come out on top.

Ilana Shabtay 5:45

Yeah, and I think, you know, Alan, you mentioned that the supply, it’s a seller’s market, right, there’s a lot of demand and not a lot of supply. That being said, dealer dealer, it’s not going to be like that forever. And dealers need to set up some kind of system so that they don’t end up being, you know, a blockbuster when there’s Netflix around. And I think we’re kind of losing sight of that when they’re seeing the gross numbers, right, the profits right now, it’s hard, it’s hard to understand that there’s still going to be a time when you know, supply is going to come back to normal. And there needs to be a process in place to get your dealership at a point where shoppers are going to be excited to come to your dealership.

Colton Ray 6:20

Wow. Ilana, I want to I want to jump in, I’m gonna ask a question to Alan, if you don’t mind,

Ilana Shabtay 6:26

To introduce this podcast, co-host.

Colton Ray 6:33

So Alan, you know, picking up with Ilana saying dealers, manufacturers are saying hey, we’re not going to overproduce them. Why do we think that that maybe isn’t going to be the case in the future?

Alan Krutsch 6:50

Well, I think the goals, you know, particularly as articulated by Jim Farley at Ford, about moving to kind of a perfect balance between supply and demand, a build to order strategy. I mean, as a business plan, business model, it sounds awesome. My question would be, when Ford loses three or 4% of market share, to Chevy to Hyundai, maybe to a company we’ve never heard of, maybe to a Chinese and trip, are they going to say, let’s just keep supply exactly at demand and watch our share go down? Or are they going to say, we’re building the cars sales team go out there and sell them to the dealers, dealers, we put an incentive on him move into the market, you have new market share goals. I think this all works great. As long as nobody wants more market share. And I think that’s going to be the key because there are two things that drive manufacturers among many other things than their related. One is to make profit. factories have to run efficiently at near capacity. A factory that’s running at 60% capacity is not profitable, they need the volume to be profitable. They need the market share and the market activity to absorb that manufacturing. Because there is a lag between when you dial up the factory. And when the cars hit the retailer. Manufacturers have to plan in advance. And so if they say next year, we’re gonna have 15% market share. And that equals pick a number a million cars, they’re gonna put the plans in place to build a million cars. If the market changes between the plan, and when they hit the market, where did those cars go? They go on dealers lots and the manufacturer adjust their plan to sell all 1 million of those cars.

Ilana Shabtay 9:09

Oh, is that, you have a follow up?

Colton Ray 9:13

That was pretty good. I mean, I don’t know what you’re saying. Alan is when, although this is all great in theory, the minute that that anyone loses a smidge of share. We’re going to see more vehicles.

Alan Krutsch 9:28

Yeah, and I think, you know, I’m not privy to how manufacturers do all of their market and production planning. You know, I’m sure it’s a combination of both market studies, sales and marketing dealer network and the manufacturing. That when let’s take an Asian manufacturer when they work with their US subsidiary and say, Look, we are going to sell a million cars in 2024. And believe me, those plans are being made now if they weren’t made long ago. They’re gonna set in motion suppliers, hiring people at a factory booking ships to bring cars to America. You know, the plan happens a long time before the vehicle hits the market. And so I think that once that plan is made, most of the people at the head of the company say, somebody’s got to figure out how to sell these 1 million cars, they’re not going to say, look, if demand goes down, just keep dialing back our market share, just keep dialing back the factory will be happy with whatever the market gives us. And the market is hard to predict. And I think particularly now, as we move into an EV era, it’s yet to be seen who the leaders are. Five years ago, if you would have told me, Hyundai looks like a front runner. In EVs based on Ionic, I would have said, huh, and they Ionic. If you would told me that there’s a relatively large industrial building in Vietnam, that had an Italian design company, design their electric vehicles, that’s going to sell the vehicle without a battery, you’re going to lease the battery so that you can replace them. I mean, none of this could have been predicted. What will we see next year, GM is putting all their chips in the middle on EB. And we haven’t seen the beginning of that. So I think the market is going to be very hard to predict. There’s going to be some winners and losers, as everybody goes after the market that Tesla has started to create. Yeah. And so this is going to be an interesting time. hard to predict. Elon.

Colton Ray 11:52

Go ahead, Ilana. Sorry.

Ilana Shabtay 11:53

Just I’d love to hear your thoughts. I just want to say one thing on that, which is that, I think with EVs specifically, it’s not just that we don’t know how the manufacturers are going to be in which manufacturer is going to be leading, but we have no idea what the Evie consumer market is going to be like, right? Right. Before we got on this podcast, I just told you guys, we bought an Eve I my husband bought a Navy, I had, I would never have thought that we were going to be in the Evie market. So I think that’s also going to change a lot of what the marketing will look like, Colton Go ahead.

Colton Ray 12:20

Well, I was I was gonna say, you know, a lot of these manufacturers, I think are chasing that that Tesla Tesla like experience. But we all know, even with the way the Nissan LEAF was rolled out way back over what was 1212 years ago now, or 1010 or 1210 to 12 years ago. You know, manufacturers can’t help themselves, but put a lot of options. And optionality in vehicles, where your your Tesla might have, you can get it in black, white or red, you can maybe at a large wheel or not. And that’s your options, you know, under 10 options. You see these manufacturers and we’re going to have this these heavy amount of options and different packages. And I really that I really think that leans into exactly why we need to update and continue on the path of a modern retail experience at our dealerships. Because I don’t think anybody’s making it easier for us. Alan, what do you what do you think?

Alan Krutsch 13:26

Well, I think you’re right, the as marketers and product, people look to penetrate the market, find a niche, find growth, many times the vehicles become more complicated with options. So on a consumer journey, you have product selection as being complex. Once you have selected a product, then we move on to the transaction itself. And it’ll introduce a funny notion. I think we should do less.

Ilana Shabtay 14:03

Less is more.

Alan Krutsch 14:04

I’ll give you one other quote from a very famous industrial designer named Dieter Rams. And he said lessons, the more or less is better. And so buy less what I mean is, look at all the steps in a transaction. Look at how people move from one software system to the next many times with double entry, many times with integrations that aren’t perfect. And so you take the manual processes were aware of meaning customer system with the salesperson salesperson doesn’t know what the payment is. They marched to the desk, they do a couple of laps there, then somebody else has to enter it in to another system. So I think we need to consolidate this into less. Obviously there’s a shameless plug in here somewhere for FUSE Autotech, which is what we’re trying to do is make buying a car simple. There are many others working towards this goal, as well. But, you know, we’ve turned one of the most fun experiences owning and driving your new car, we turn that shopping experience into quite a marathon. And so that’s the question is, how do we one reengineer processes, that’s people mostly, and then develop the technology that accelerates those processes, that adds transparency, reduces the time, and gives the customer a little control in this process, lets them see what’s going on with, let them push the button now. And then rather than going up to the top secret sales desk, and getting a payment, and then marching it back. Yeah.

Ilana Shabtay 15:50

And we can even talk a little bit about that. Before we get into the technology part. The process part I know, walls there was was one of the first pioneer if I’m not mistaken, one of the first pioneering groups to do the one to one person.

Colton Ray 16:07

Yeah, there’s, there’s a lot of other great groups in the United States doing doing this. Alan can help me but the Schomp Automotive Group, there’s even stores that are adopting this process. You know, I don’t know if we can, if we can talk about all those stores, Alan, but But I mean, it’s, it’s happening more and more. And it’s really fun to watch.

Alan Krutsch 16:31

There’s a long history here, it goes back almost 40 years to the mullinax Ford stores in Florida, who were one of the first to have a negotiation free business model. I think this might be more than 30 years ago, maybe even 40 years ago. But this was a fringe group of dealers, the right Dell stores, autos, shop, yes, or polar Chevrolet. There were a bunch of pioneers, but it was just a fringe group. And the conventional wisdom did that man, these people might be nuts. Maybe they can make it work in their market. But that’s not the way you run a car dealership. But here’s what’s happening, this whole concept of transparency, of fixed price or non negotiated go, it’s starting to have a moment. And that’s because manufacturers are talking about it. And there’s a critical mass that’s coming. I remember 10 years ago talking to a representative from a very large OEM. And we were trying to get a new point, we were trying to get a franchise. And we talked about our business model and how friendly this is for consumers how easy it is to buy. And they looked at us like we had two heads. Let’s make some deals, man, come on. If you’re not able to negotiate lower the price on the spot, how are you going to do any volume? Well, obviously, that’s a bit of a canard. If you look at well of export and Florida market, share leaders, look at shop and Denver market share leaders. Look at Walser in Minneapolis, market share leaders. And it’s because customers love this and tell their friends. Customers come back because they go that was painless. And I’d like to do that again. So what we’re seeing is now the era of competing and customer experience, start to move to the forefront. The days of just throwing $100 bills at people till they buy. Okay, that’s a little harsh, but I think I’m close. Yeah, those things are kind of going away. Yeah, customers don’t like it. There’s so much anxiety, because shoppers don’t negotiate anything anymore. Now, somebody will always say, Well, how about a house? Okay, that’s not exactly true. In the case of purchasing a house, both the buyer and seller, hire and pay 10s of 1000s of dollars to an agent to do the negotiating for them. The buyer or seller actually never engaged in the negotiation themselves.

Ilana Shabtay 19:20

They hire literally pay 1000s of dollars so that they can avoid it. Yeah. It’s a great, it’s a great point. And I just want to reiterate something you said which is the we’re competing now on the customer experience. I feel like automotive needs to kind of digest that because it’s true. I mean, I don’t think anymore. It’s about the I don’t think it was ever about the negotiation experience. But I think you know, today’s consumers and Colton, you mentioned Gen Z and the in the next generation of shoppers, this is it has to be tightened buttoned up experience. And so I think we’re getting there. I mean, I think we are thankfully we have technologies also like us and others that are helping us, you know.

Colton Ray 20:01

how Ilana I think I mean, I really do think customers are expecting, you know, we’ve been guilty of this in our business where we add vendor off after vendor, they don’t talk to each other, every vendor does a specific vertical and nothing else. You know, when I think about even like our advertising or marketing, you know, customers interact with one ad, and then something completely different happens out of the CRM, and it just there’s, there’s no connectivity, I think, you know, AutoLeadStar is on the right track, with the customer experience data platform. I mean, that’s kind of industry first. That’s unifying all of the marketing activities. So we have, you know, consistency and, and payments, we’re advertising on the website and the ads and, you know, CRM engagement that we’re doing within that platform. And then I also think about it. You know, there’s a bunch of digital retailers on the market. I’m thinking, how does that really connect to in store and it hasn’t yet, there’s a few on the market that are starting to think about it. But once we hone in our marketing activities, which in a way does go into our funnel of digital retail, how does that all come out in the wash at the dealership? And these are the things that are keeping me awake at night right now. You know, how do we connect this whole thing together? And that’s what customers expect?

Ilana Shabtay 21:30

Yeah, 100%. And it does, it starts at the dealership level in terms of cleaning up data, consolidating data, and making sure that everything is integrated so that whoever is following up with that lead doesn’t need to call them and say, so what vehicle are you interested in? Because it’s no longer creepy to know exactly what the shopper wants? It’s No, good. So if I were to put in my information, and I get a call from someone, and I have to start from scratch, I’d be pretty pissed. So you’re right there before any fancy technology.

Alan Krutsch 22:00

yeah, exactly. Consistent. You mentioned the consistency. And it seems so important to me. You know, just thinking you go to the grocery store, and then you take your merchandise up to the scanner, it’s off by 60 cents. You’re kind of you’re kind of angry, you push the button, hey, this is wrong. What about somebody that comes in a store, and they find the payments? $100 different than what the advertisement was? That person feel?

Ilana Shabtay 22:29

That’s good. One star review status?

Colton Ray 22:32

Yeah, exactly. Exactly. You and these things? These are the things that the dealerships need to start thinking about now, how do we create an consistent online marketing slash digital retail slash in store process that really never breaks the customer’s expectations that we know what’s happening from beginning to end? These are the things that we need to keep working on.

Ilana Shabtay 23:03

Yeah, I think we I think we hit on some really good points here. In this podcast, we talked about setting up the right process so that shoppers can expect smooth car buying, which is something that we don’t often think about when we think about car buying. And then of course, making sure that the dealership has all the right technology for consolidation and data integration so that they can ensure that customer experience so things that FUSE Autotech and auto lead star and others are talking about a lot day so you can join into the conversation. If you’re interested, you can tune in to insideautopodcast.com Thank you both so much. This was an wonderful, wonderful conversation with two of the best in the industry. Thank you so much.

Outro 23:52

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