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Captive Audience

The editor has a little egg on his face after discovering that his recent criticisms of technology pushers were unwarranted.

April 4, 2014
4 min to read


I get a lot of public relations pitches every month. Each one touts some cure to what ails our industry. If I’m not buying what they’re selling, I typically respond with a promise to contact them with questions once I’ve reviewed their press release. But I’m usually willing to stay on the phone for a few minutes to hear what they have to say.

I spent a little time in PR myself, so I know a good pitch when I hear one. And when Joan Witte, the PR person representing the subject of this month’s cover story, contacted me last summer, I knew I had a real pro on the line. So I gave her a little time to get through her pitch.

Witte talked about new customer-retention strategies being employed by captive finance companies and how her client was driving those efforts. I reminded her that the magazine was geared toward dealers and asked if the company’s solution was marketed to that segment. I got a mixed answer: No, it wasn’t, but, yes, dealers will benefit.

Witte and I communicated a few more times before the close of last year, but I just wouldn’t bite. She tried me again in January as I was preparing for my trip to the National Automobile Dealers Association’s annual convention in January. She wanted me to meet her client. I begrudgingly agreed.

See, I arrived at the 2014 NADA Convention & Expo after penning an editorial that was critical of technology pushers who want dealers to take transactions online in the name of the customer experience. My main beef is we can’t ask dealers to do that using untested and unproven solutions and processes.

In fact, I opened with that line each time I met with exhibitors at the convention. To back up my statement, I relayed what dealers had been telling me about General Motors’ Shop-Click-Drive online buying option — that shoppers were dropping off once they were asked to complete an online credit application. Surveys might say they want to buy online, but it doesn’t appear to be happening, I’d say.

Most executives I met with just grinned back at me as if they knew something I didn’t. My hunch was confirmed when I spoke to executives with Wells Fargo. “They stop there, but there’s technology that will solve that,” said Bill Katafias, the bank’s national indirect production manager.

He was right. As I made my way across the show floor, I began to realize that technology and go-to-market strategies are beginning to align. And from what I’ve gathered, these strategies have dealers in the mix.

I wasn’t sold, however, on giving ChannelNet any ink when I met with its founder, Paula Tompkins. I even kicked off my interview by telling her about my editorial, the one in which I was critical of firms like hers. She didn’t flinch one bit. Instead, she showed me how her company is bringing together OEMs, captives and dealers to help move the metal.

My eyes were opened, and I admitted as much at the close of our conversation. “Well, you can correct yourself in your next editorial,” she said.

I will admit that things are moving faster than I thought, but I still believe I’m right in saying there are still issues that need to be resolved. However, the technology is there once they are.

So what did I see? You’ll have to read about it by clicking here. What I will say is I am noticing a change in how technology is developed. Remember when inventory management systems were all the rage during the downturn? Yes, the need to move cars over the curb was the main driver, but what happened was providers of these solutions were teaming up with information sources like Experian Automotive, Kelley Blue Book and Black Book to provide real-time data to help dealers manage, market and source used inventory.

Well, companies are once again teaming up on solutions geared toward other dealership departments, including F&I. So I encourage you to take a look at my story. Even if you don’t agree captives should have the connection to customers I describe, you need to know what’s going on right now.

Look, I understand how protective you are of your turf. I’m not saying you need to lower your defenses. What I am saying is that we shouldn’t be so afraid of technology that it stops us from seeing what’s possible. Besides, with 55% of all transactions involving a trade-in vehicle, there’s no way a vehicle is sold without the brick-and-mortar element.

“I don’t believe, at least in my lifetime, that the traditional dealer network goes away,” said Scott Fink, a Florida dealer who has seen ChannelNet’s solution in action. “At the end of the day, people can do all the due diligence in the world, but they’re not buying a camera from Amazon. It’s not realistic. The car is too complex of an asset.”

I couldn’t have said it any better.

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