What happened to DealerSocket & Auto/Mate DMS?
A little over a year ago, DealerSocket — a leading provider of dealership CRM, inventory, and digital website solutions — acquired Auto/Mate DMS. In September 2020 I talked to EVP and GM Tony Graham about the opportunities. Now, I had the chance to sit with DealerSocket’s Chief Product & Technology Officer Alok Tyagi and Chief Operating Officer Byron McDuffee to ask What happened to DealerSocket & Auto/Mate. We talked about the journey, dealer feedback, and the future of the combined organization.
Q1) Looking back at 2020, what was most surprising to you in terms of bringing your companies together?
Byron McDuffee:
Mergers and acquisitions are always difficult, especially the integration component while you’re still running the business. What was incredible to see is the wonderful integration of our two companies, cultures, and capabilities through COVID. That ultimately led to us exceeding business and customer expectations. For Auto/Mate DMS, we had the largest bookings in history in Q4 [2020] and for December [2020]. It is exhilarating to see that momentum continue in the first quarter [2021] and how well the two organizations complement each other.
For Auto/Mate DMS, we had the largest bookings in history in Q4 [2020] and for December [2020].
Byron McDuffee
Alok Tyagi:
Going into the acquisition, we knew how much Auto/Mate’s customers loved the company. However, I would say the last 12 months further validated Auto/Mate’s customer-centric culture.
Q2) How do you feel your conversations with dealers have changed since the Auto/Mate acquisition?
Byron McDuffee:
Auto/Mate DMS has largely served that mid- to small-dealership range historically, while DealerSocket has played in the large dealer group space. We are now finding that our sweet spot is in the mid-to-upper part of the funnel. This is where the two complement each other. Having better tools, better user-experience integrations, and better business logic integration creates more frictionless workflows. That increases productivity and allows our dealers to improve their customers’ buying experience. We are seeing customers voting every day that DealerSocket and Auto/Mate have figured this out.
Alok Tyagi:
Our conversations with dealers are now more about our unified solution. From our retail solutions and CRM to DMS — and our ability to serve as that digital backbone of a dealer’s operation. What that translates to is a single source of truth when it comes to their data. That allows them to be more efficient and effective. That leads to improved profitability. Again, our conversations are not about the product but this unified solution — that digital backbone for these connected dealerships. These are very different conversations than we had in 2020 and will continue to have at NADA [Convention 2021] and moving forward.
our conversations are not about the product but this unified solution — that digital backbone for these connected dealerships.
Alok Tyagi
Q3) With Auto/Mate DMS in your house of brands, how have your capability set and use cases evolved in serving retailers?
Alok Tyagi:
It is more about the employees at the dealership and the different jobs they do. They are either trying to sell a car, service the car, or manage the operation. From a selling standpoint, we have mapped out the entire workflow. From the time a consumer starts the discovery process to the omnichannel buying experience. Maybe they initiated a chat with sales on the website. Or had a phone conversation before showing up at the dealership. So, we are very focused on how to bridge that experience from online to offline.
Another example of this unified experience is procuring the right inventory from a profitability and turn standpoint. So, as dealers navigated through COVID last year and through the fluctuations in the wholesale market, we saw dealers use our RevenueRadar data and equity mining platform as a sourcing tool, with our inventory software providing the right sourcing intelligence with the right pricing data.
Those are some of the areas where our unified DealerSocket solution can add value in terms of addresses the different personas in the dealership.
Byron McDuffee:
That’s spot on, Alok. The current dealership ecosystem is hyper fragmented. It is loosely integrated just through data points through batch or asynchronous transactions. But the reality is that it ultimately leads to a sub-optimized productivity level and a sub-optimized customer experience.
The current dealership ecosystem is hyper fragmented.
Byron McDuffee
When you think of selling a new car, you have to manage your inventory, promote your product, and then you have to complete a transaction. But there are almost 200 outcomes that are required to pull that off and several steps. When you think about it, the solutions that are in the market today only address subcomponents of all that. That leads to the fragmentation and the inefficiencies we see in the market today.
What Alok and his team have done since the Auto/Mate DMS acquisition is we can now look at this very holistically to create better processes, better efficiency, and better experiences for the user, the customer, and the customer’s customer.
Q4) What are the most pressing topics for you right now that drive product and technology, and how do you go after it?
Alok Tyagi:
Optimizing those workflows is a big part of how we approach product development. But let me step back for a second: We are deeply customer- and market-focused. We understand that dealerships are facing employee turnover, we know that dealerships are feeling a lot of pressure in terms of profitability, we also understand that managing multiple vendors is very difficult for dealers, who pay a lot more for the inefficiencies of that fragmented ecosystem. That’s why we have certain strategic tools that lay across all the products.
The point is we do not conduct our strategic planning and product road mapping in isolation. We look at our road map in terms of what macro market trends do we need to address.
For example, the consumer journey is a significant aspect of our road map that cuts across all our products, whether digital, DealerSocket, or our Auto/Mate DMS. We want to make sure we can provide a consumer journey from start to finish. We are similarly focused on dealership profitability and what we call the connected dealership. Our vision is to be the digital backbone that provides the connected dealership with a unified solution. That’s our approach to product development.
Byron McDuffee:
Equally important, and what I have been impressed with since joining the company, is our obsession with the dealer. Obviously, dealers have played an important role in this industry for the last 100 years. But I would also say they have an even more critical role to play over the next 100 years. That dealer obsession our organization has from end to end and top to bottom is all about having a dealer-first mentality. If it’s not making the business or the lives better within those dealerships and for their customers, then it does not have our attention.
The second thing is that our organization, especially under Alok’s direction and leadership, has shifted into an insights-driven organization. As you talk about data, it comes from various channels — from the connected car to website exhaust data, you name it. Those are necessary attributes to help power the next generation of services for the dealership.
It’s also about providing foresight for the dealerships. We will be delivering new capabilities that offer very prescriptive recommendations to dealers on how they can take their dealerships to the next level of performance in the various areas of their business. All of that is coming out of Alok’s organization and coming out of my service organization — DealerSocket and Auto/Mate DMS Customer Success Managers, Strategic Growth Managers, and trainers. All will be empowered and filled with the knowledge those new capabilities will provide to deliver that value to the customer.
Q5) What is your perspective on data serving vehicle retailers and dealership use cases?
Alok Tyagi:
It’s a huge aspect for us in terms of innovation. When we talk about this unified solution and digital backbone, there are three layers of unification. The first is all about the first use of our solution, or when a dealership onboards a new employee. This is where we believe we can reduce training costs. Because you don’t want 10 products with 10 different experiences that a dealership has to spend time and money on onboarding new employees. So, again, the first layer is all about this unified experience. The look and feel are the same, employee onboarding and offboarding are the same, a single sign-on experience, better security — all of that.
The second layer centers on repeated use and employee productivity. This is where we are taking away all of the redundancy of manual data entry, duplication of data, and data errors. We are also providing very deep links in our solution. So when you are in your DealerSocket CRM workflow and need to move to the Auto/Mate DMS side, you can jump within the context of the workflow. That makes it a lot easier from a product workflow.
What we are super excited about is the third layer, which is data integration.
Alok Tyagi
What we are super excited about is the third layer, which is data integration. We are un-siloing the data across all our products. That brings it together to have actionable insights at your fingertips — whether you’re the Dealer Principal, General Manager, or second-level manager. That also means providing those insights in a mobile framework, because many of these roles inside the dealership require mobility. So, providing the right operational insight in a mobile form and in a very intuitive way is where we’re taking our entire enterprise data cloud. At NADA, we will be introducing our DealerSocket CRM Analytics, which represents our first step toward addressing the front office side. We will also be demonstrating our development of Enterprise Analytics.
As we build out these data analytics capabilities, we can start to apply artificial intelligence and machine learning to take that data from rearview-mirror reporting to more predictive, more preventive, more foresight analytics. Ultimately, we don’t want our software getting in the way of a dealer’s ability to sell and service a car. That means having the right information at the fingertips of the GM, Dealer Principal, or level-two manager.
Byron McDuffee:
I think there is an opportunity from a digital-retail perspective to optimize from the upper funnel all the way to the contracts with finance sources. However, think about some other use cases and capabilities with dealership [data], like connected cars. You have enormous amounts of data flying off that OBD-II port. 99.9% of it is noise, but there are some important things like default trouble codes. These codes can be deciphered in the cloud into a recommended repair order or estimate, automated scheduling, or automated parts ordering to satisfy that customer in a nondisruptive way.
When you think of what we have gone through with COVID, there’s the ability to deliver a loaner vehicle, take the car back, have it serviced, and transact it all back digitally with the consumer. You are talking about no longer disrupting the customer when it’s time to service their vehicle. You’d even see higher repair order values because you provide great convenience to the consumer — fully automated. The world is not far away from that coming to life. But there is a data responsibility that comes with it. We are a dealer-centric organization, so we take the security of a dealer’s data very seriously. The same goes for a consumer’s personally identifiable financial information data.
This interview was conducted on Thursday, 02.04.2021.
