Jim Fitzpatrick:Â For most dealerships, chat volume is higher than pre-COVID levels, indicating a growing consumer preference for digital communication and online car shopping. Yet, all too often, automotive retailers miss out on crucial leads due to subpar communication. On today’s show, we’re pleased to welcome back Ted Rubin, who’s the founder and CEO of Active Engage, to discuss how dealers can engage and convert more online shoppers with seamless 24-7 live messaging. Ted, thank you so much for joining us.
Once again, in the studio, this is a very hot topic, as you know, right? Everybody starts out online and everybody wants to chat, right, consumers. And if that doesn’t go well, dealers are in trouble, right?
Ted Rubin: No, absolutely. We’re seeing much more now, actually, that as we’ve, you know, gotten further away from COVID, even though that impacted the digital presence so significantly, that not only did it last, but it’s kind of like a snowball rolling down handle, right?
Jim Fitzpatrick: Yeah, I bet.
Ted Rubin: everybody’s moving much more to enhancing and expanding these conversations online. They’re looking to do other things. They’re looking to do more with evaluating their trades. They’ve always been there for service, but they’re looking for a lot more to be able to do with service even to be able to get loaner cars and things like that. They’re looking for financing. They’re expanding their utility and digital retailing, all of it. So you have to have a presence there and something that’s really going to support that for your constituency and you have to be also sensitive to a lot of these digital natives because they’re definitely you’re seeing them more come into the fray and they are they’re different to handle.
Jim Fitzpatrick: Yeah, no question about it and and to your point it is the new norm right I mean for consumers this is what we want and it’s just everybody tried having groceries delivered to their homes and now they’re They’re totally addicted to that. That’s it. They’re like, why would I ever go to a grocery store?
Ted Rubin: No, no, that’s it. Absolutely!
Jim Fitzpatrick: Myself and my wife included. And we have the groceries delivered, and you do it all online, and we both work, and it makes it very, very nice. So there’s no difference in the auto industry. From your perspective, what are some of the automotive retail trends that you see out there and the insights that dealers should be aware of as we go into 2024?
Ted Rubin: Well, I mean, I think you’re seeing, you know, that inventory is coming back, you know, significantly. And so, you know, that’s also impacting the market for, you know, shifting from more of a seller’s market, you know, a few years ago. And it’s been slow to see that, but you’re definitely starting to see that even, you know, toward the end of 23, much more to a buyer’s market. And these buyers are, you know, always starting online. It used to be what percentage of them start online. Now it’s all of them.
Jim Fitzpatrick: Right, that’s exactly right.
Ted Rubin: And they look for communication there and they need the digital communication there. And they’re looking to accomplish a lot more online. So the way that you handle that and the way that you impact those customers is obviously very significant because it’s like a walking talking billboard almost, because if you’re not accommodating them, if you’re not giving them the interest then they’re just gonna go to somebody that they can. They may do some research with you, so you may still get impact on your website. But they probably won’t engage beyond the digital impact.
It’s just like when you’re shopping. When you shop and you go on and you order a few times and they’re like, oh, we don’t have this and we don’t have this and we don’t have this and it just doesn’t show up, then you stop doing it that way. So the people who do it really well. Those are the people that everybody starts to migrate to. And it’s regional and there are pockets who do it really well and there are other guys who are still learning.
Jim Fitzpatrick: And it’s also word of mouth. I mean, people will, you know, because we leave reviews for everything now and also just plain old fashioned word of mouth where somebody says, oh, you want to buy a car, you know, we’ve got the dealer group for you. You know, you can do everything almost in chat nowadays, right?
Ted Rubin: Yeah, absolutely. I think that the word of mouth, you know, is really, you know, it’s interesting that you pointed out because it is super impactful, you know, It means more because you can check it out without having to go.
Jim Fitzpatrick: Yeah. Right!
Ted Rubin: So it used to be, go to this dealership, they’ll do a really good job. And you’d have to check out there. Or even if you tried to get a phone call, they’re like, come on down, and we’ll try to work it out this way. Now you can just sit in your home. That’s right. And go, well, let me see if that guy who recommended this story, is he right? And they’ll go on. And they’ll work out and try to figure out what they’re doing. If they can do it, then they’re super happy. And you’re going to win a customer that you may not even have seen yet.
Jim Fitzpatrick: That’s right!
Ted Rubin: But if you do it badly, then it’s going to have exactly the opposite.
Jim Fitzpatrick: You’re going to lose a customer that maybe you don’t even know about. You know what I mean?
Ted Rubin: That’s exactly right.
Jim Fitzpatrick: So we don’t know as dealers what we’re even losing in some cases, right?
Ted Rubin: Yeah, I think that that’s totally true. Absolutely!
Jim Fitzpatrick: Incredible. So can you drill down a little further on the current e-commerce trends and some of the changing consumer preferences out there?
Ted Rubin: Yeah, I think that we’re getting back to conversations. We’re at pre-COVID levels of communication. Definitely looking for more digital communication. They’re using it as we were just talking about, you know, they’re using it more pervasively, right? so they’re using it more not just to search inventory or to see if you have a car get some research on the car, but they’re using it to be able to evaluate trades.
They’re using it for you know, general more expansive Communication so you have to be prepared to be able to have those conversations and it has to be a more present conversation as well about know what you have or don’t have that’s available in a lot. They’re getting into financing details. They’re obviously using digital retailing, which is expanding at a great rate right now. It’s funny because just before COVID, it was like, really, you guys should be using it. Now, you got to have it. It’s so important. And I think, again, that if you need that advocate, you need that person that’s there to be able to be assisting along the way, because otherwise, they just disengage. They get to a point where..
Jim Fizpatrick: That’s right!
Ted Rubin: We’re still at a point because we’re not, it’s just an off the shelf product. And so there is some understanding of, well, why is this car different than this car? These look like they’re exactly the same model and trim level, but this one’s $3,000 more, $4,000 more. What is that? And even though it’s there, it doesn’t translate often to the customer. So you need someone to just kind of be the advocate for the customer who’s gonna help them through that process
Ted Rubin: And that does take…you need to interact in a very human way. If you’re not bringing that, I mean, that’s what everybody’s trying to do across the internet is you want to digitize as much as you can, but you want to bring all these services to consumers in a very human way. If it’s ultra cold, then they’re going to interact with you that way. And that’s not what we want.
Jim Fitzpatrick: That’s a good point. Very good point. That’s right. And they’re kind of depending on now retailers being able to provide that type of service, right? I mean, if you’re dealing with consumers today and you’re not providing this kind of service Maybe you shouldn’t be a retailer. I mean it’s almost to that point, right?
Ted Rubin: Yeah, I think that’s true. I mean you have to have some insight and you have to have some consciousness about the way that the market is evolving and the tay the consumer is evolving. So if you’re just watching sales or if you’re just watching the “digitality” of whatever it is… sure you have online and that’s one thing but you know consumers are definitely… migrating more to the web and trying to do more on the web. That doesn’t mean that they want a unilaterally, you know, solo experience where they’re not interacting with someone.
Ted Rubin: It means that they wanna be able to control the interaction, but they still want the interaction with another person or with someone, you know, who can assist them through the different processes. And while there’s value in, you know, the written word and obviously, we’re using AI for different things. But while there’s value in having some things just presented to the customer, and that’s great, and you can use AI for that, as you’re moving through the sales process, then there’s been plenty of studies that show that it’s just not, it’s not a selling tool.
Ted Rubin: It’s not something to interact with the customer to go, let me, I’m an AI, let me cajole you into moving in this direction. It doesn’t work that way. It’s more for research and it’s more for description. being explicit, getting information and stuff like that. But customers want someone who’s going to go, that’s a great question, or this is a good move, or I love that car, or I love this color, I think that was a good idea. All those kind of things, and it’s very personal to the customer.
Jim Fitzpatrick: Oh sure! Sure! No question about it. How should dealerships position themselves relative to these trends to better manage these conversations?
Ted Rubin: Well, I mean, I think that you have to have the presence that’s there, right? So you need to have a 24-7 presence, you know, because customers are shopping all the time. And you know, it used to be like, I remember some of our big customers, they would say, well, you know, let’s see the graph and you know, who’s there when and they had, you know, huge volume during the day and then at night, especially in the wee hours, you’d see it would drop and it would go to almost nothing or to nothing.
Jim Fitzpatrick: Right!
Ted Rubin: And it’s much more level now, even at weird times, it’s surprising to us as well. And it’s not fair to say that it’s the same as what it is during the day. Clearly that’s not what’s going to happen. But the volume is phenomenally larger. At 2 o’clock in the morning, the volume is hundreds of percentages higher than what it was. And I think everybody’s busy and everybody’s trying to figure out what’s going on with their own personal interest and the way that the economy is. People work and they’re working hard. And so they get to it when they can get to it.
Ted Rubin: And so if you can’t get to it till 10 o’clock at night, or if you can’t get to it until six o’clock in the morning or five o’clock in the morning before you go to work, then that’s when you’re gonna get to it. And so you have to have somebody there that can interact with them. And sometimes we get tested, like are you a live person or are you just AI or something artificial? And what’s interesting is when they realize that it is a live person, is how much you get from people at that point.
Jim Fitzpatrick: Oh, I can imagine. No question about it. I’m that way. And it should also be said for those people that are on the East Coast, maybe on a business trip, but they live in California, but they’re doing their shopping at 8 or 9 o’clock. Obviously, it’s 12 midnight, right? Sure. Or if you’re on the West Coast, I should say, and you’re reaching out to the East Coast, it’s just one of those things where you never know where tomorrow’s customer is coming from or why they’re coming onto your site at that point in time. You know what I mean?
Ted Rubin: Yeah, they’re still in your DMA. But not today.
Jim Fitzpatrick: That’s right.
Ted Rubin: They’re traveling. And so, yeah, I think that that’s a great point. Look, the 24-7 is to, I think it’s primarily to accommodate the fact that people are getting online at all times. Yeah, they are. But there’s a lot of traveling. I mean, I was at the airport to get here and it was pandemonium, getting through security and everything because it’s just so much going on.
Ted Rubin: Obviously people are traveling, there’s a lot more business travel, it’s all coming back, you’re seeing it. I think it’s actually more expensive and that does transcend. So you have to just, the point to the question that you asked, which is what do you have to do to prepare, you need to have someone who’s going to be able to give some human interaction. You don’t have to have it just to give some descriptions, but if you want to try to further the sales process…then you do have to have some sort of humanity that’s engaged there. And then you have to have some kind of 24-7 service that’s gonna be there. There has to be integrations with other services or banks or with other tools that you may use, whether it’s digital retailing or other products, trade evaluations and other things like that that you can have.
Ted Rubin: And then it’s also good to be able to make sure that you can have people on staff, if they’re having these conversations, or if you’re trying to do this in another way, then make sure that you are trying to take advantage of upselling merchandise and things. Because you can do it in service, and you can do it in sales.
Jim Fitzpatrick: I’m always impressed whenever you come in and you share with me. I mean, you’re working with Penske, you’re working with AutoNation, JD Power, GM, GM on a couple of different levels, you integrate with CDK. Basically, I think like 14,000 dealerships, you’re indirectly touching or directly. Or directly, right.
Ted Rubin: Or directly. Yeah, we touch them all directly in one way or another. Sure. Some have more services than others that we supply.
Jim Fitzpatrick: That’s very impressive and I know for dealers that are watching, there’s some security in that. I mean, if you’re working with these big other houses out there, I say houses, but retailers such as AutoNation and Penske, chances are you’re probably gonna do a pretty good job for my 20 stores or 10 dealerships, right?
Ted Rubin: Yeah, I mean we have to. Listen, all these big guys, Cox as well, they have standards that it’s very black and white for them. You’re either having success or you’re not. They manage everything statistically. It’s not about, there’s no emotion in the process really, which is okay for us. We have to meet these standards. We have to handle things a certain way. We have to be able to kind of jostle and adjust to their new requirements or changes or language changes.
Jim Fitzpatrick: Sure.
Ted Rubin: Conversion things and such like that. We also have to meet their security standards.
Jim Fitzpatrick: I would imagine that’s the strongest in the business.
Ted Rubin: Yeah, it’s very prominent in their contracts and in the way that we address everything that we are able to meet their security needs and our uptime capabilities as well. So we have to have a very stable platform. We have to have something that they can interact with, that their customers can interact with, that we can keep up all the time, and that ultimately we’re capable of making sure that it’s secure, it’s private, it lives up to all the national standards, state standards, and all the rules that exist today that so many dealers have been concerned about for the past few years. We’re kind of at the front end of all of that. And so we have to do that in a very significant way.
Jim Fitzpatrick: And I think that’s a key point, is if I’m a dealer and I’m concerned about how we’re going to communicate with the consumers out there and they’re going to communicate with us, it’s like me turning my firstborn son over to, as a baby, are you going to be able to take care of this baby of mine? Right. And so I think that’s worth noting that you’re working with all the big guys out there and they’ve kind of paved the way for me to feel better as an independent dealer, right?
Ted Rubin:Â Yeah, no, I think it, you know, I appreciate that. I’m glad that you brought it up. I think that it’s, I think it’s really significant for them. Like you can’t get by without it, you know, for those guys. And for individual dealerships, yeah, you know, we’re well beyond, you know, what your needs probably could be. But at least you have the expectation that you’re getting the same [quality]!
Jim Fitzpatrick: That’s right.
Ted Rubin: Right, and I think it even translates all the way down. You know, you’re getting consistency in the communication aspect as well. So a lot of the difficulties when you have AI that’s customer facing, not agent facing like ours, then there are things that you don’t exactly know what’s gonna transpire and you don’t exactly know what it’s gonna say. And we can’t allow that to happen. So it’s not that we don’t wanna use AI, we do.
We just don’t let it talk to the customer because you’re not always sure what’s exactly going to happen there and that can be potentially very dangerous.
Jim Fitzpatrick: Yeah, for sure. So you guys are always up to something. What are the latest active engagement developments out there? I mean, you’ve got innovations and strategic initiatives. Talk to us about that.
Ted Rubin: Well, we have this “Flip2txt” piece that we’ll be showing at NADA. We’ve had it out for a while. We were piloting it and now it’s ready for full release. It’s a great product. This product essentially is there to alleviate the stress on inbound phone calls. So now when you call into a dealership, the customer will have the option to stay live, but they can convert the call from an audio call into a text call.
Jim Fitzpatrick: Oh, nice.
Ted Rubin: And then there’s documentation of who called. It goes right into it. So now you have every call going into the CRM at least that chooses this option.
Jim Fitzpatrick: That’s great.
Ted Rubin: And it can be supported. So you know this customer is calling and this is what’s transpiring. This was not just, I see the phone number that called, but here’s the communication that transpired. It was about service, it was about sales, it was about a problem, it was about an issue where they’re having a problem with their current car. So they’re looking to buy another car. Two different paths in the dealership that you wanna fall through with, right? Maybe three if you count the trade.
Jim Fitzpatrick: Yeah, it’s true too.
Ted Rubin: So I think that it’s gonna be a super valuable thing and we’re seeing that with the people who have been beta testing it, that it’s an incredibly valuable thing. It can take all the stress off of your operators that are in the store, both the main operators, the sales operator, if you have one, the service operators, and it allows a lot more throughput for the consumers.
Ted Rubin: As we talked about before, these digital natives, they’ll migrate to that like that.
Jim Fitzpatrick: Oh yeah, for sure. So they love it.
Ted Rubin: And we’re having all these conversations and everything is flowing now all into the CRM, as long as it can be tagged by the CRM for whatever it is. So I think that that’s like a super big thing that we have. We have a new app that’s coming out. We have a few new things. So there’s the text piece. We also have this app that’s coming out. We’ve had an app. Because we’re…primarily managed services and we have been primarily managed services…the app was a little bit more superficial historically and we had some complaints about it frankly and stuff, so we wanted to give something that’s more robust and especially for the people that want to be able to chat on their own from the stores. We needed to have an app that was much more substantial.
Ted Rubin: But another thing that we’ve gotten involved with with some of these big customers like Cox and AutoTrader. They’ve asked for the video functionality, and they’ve also, and what we’ve seen is that we wanna be able to get video engaged for the F&I department. Okay. And so this app brings all of that to bear, and you’re trying to get something in this much space.
Jim Fitzpatrick: Yeah, yeah, right, right.
Ted Rubin: So it took a long time, actually, I can imagine. This has been in development for years to be able to get something that is easy to navigate for the user. We can still handle conversations or not. You can handle them in the store. We can transfer them in. We can get someone through digital retailing. And at the moment that they get through digital retailing, if we want to, or if the store wants us to, we can pass it off to an F&I manager who’s on video for the customer in the store. And then they can upsell them on services and products and other things like that right from there. Or they can engage from video if that’s something that they want right from the beginning.
Jim Fitzpatrick: You know, that kind of engagement, that kind of communication to a consumer has to impress them…that you know beyond the price or beyond the car itself or the fancy showroom just to be able to communicate like that in real time with the dealership it just puts you head and shoulders above your competition it would seem to me right?
Ted Rubin: Well I think that it does and I think that it does. I think it will, for a limited period of time, but I think it’s going to be common expectation. It’ll be the norm right. So we’re just trying to be ahead of the curve on it a little bit you know and I think that you know we’re bringing it and people are going to see it. And you’re even seeing ads about this video and action. And now I think that there’s going to come a time within the next 18 months where you got to have it. I mean, it’s just going to be something that is expected by the customer.
Jim Fitzpatrick: That’s right, isn’t that funny? And then of course you guys will be working on something newer, maybe a hologram where the consumer shows up. *laughs*
Ted Rubin: *laughs* They just show up in front of you. We’ll just teleport into your store.
Jim Fitzpatrick: You guys have got such an incredible name out there in retail automotive. I was surprised to hear that this is going to be the first time you’re at NADA actually exhibiting, right? Talk to us about that.
Ted Rubin: Yeah, we went about 16 and a half years without going to NADA. And I think it primarily was because we did focus on a lot of these bigger entities in the beginning. It was by design, you know, we had relationships and also we knew because of the way that we were building the product that it was going to be a more statistically, analytically solid product that these guys were going to want and hopefully want to use. And so, you know, in focusing on them, it was more one-to-one, you know, with a lot of the depth of the personnel in those groups. And you know, now that we’ve gotten deployed to these thousands of stores that we talked about earlier.
Ted Rubin: I think we just, you know, we need some more visibility in general so that people know that “Hey, you’re getting leads from us today!” You know, I think there’s some dealers that don’t even realize that they sign up for certain programs than if you’re on buy a Toyota in some areas, if you have Autotrader and you’re getting chat and stuff and we’re sending you leads.
Jim Fitzpatrick: And you may not even realize. You may want to stop by their booth. To meet the people behind the company, right?
Ted Rubin: Right. And I mean, you should know what it is, and you should know what else we can do that you may want as services as part of those things. Or you can expand and we can offer more kind of in a congealed, unified presence at the store, because it ties into all these other features as well that you may already be getting.
Jim Fitzpatrick: But then there’s going to be company, there’s going to be dealers out there that… or maybe not using you that need to be using you, that will be introduced to your brand and to your staff and yourself, and that can take advantage of the services that you’ve got, right?
Ted Rubin: Yeah, I really look forward to going to NADA this year. It’s gonna be exciting. It should be a very good one. I think it’s the most, the closest thing that we’re gonna see to continuing on from where NADA was before COVID, right? So it feels like it’s gonna be a big NADA.
Jim Fitzpatrick: I think it’s going to be, yeah. People are coming off of three great years in a row. Hopefully, from all the indications, from all the people that I speak with here at CBT News, or I should say from CBT News, with Cox Automotive, Economists, and Bloomberg, and the others out there, they say 2024 is going to be more of the same. We’re going to be rolling in, and the car sales will be there. And things are going to be going real well for us in the industry.
Ted Rubin: I agree. I’m hearing the same things and it looks like we’re going to have a little bit of a bump on volume. I think they’re estimating somewhere around 15.7% or 15.8%. That’s right. So that’s good. We’ll see a little bit of a bump there. But I think it gets back more to like now we’re going to do business the way that we’re used to doing business. And that’s what we’re good at. It’s great to be able to just take orders with limited vehicles. .
Ted Rubin: You know, this is how most of the dealers grew up in the business. Yeah. So they know what to do. That’s right. And so now they’re back on track. And also, I think you get to see things kind of progress and move forward now. So you’re going to see advances and you’re going to see dealers migrate to a lot of the services that we’re talking about here.
Jim Fitzpatrick: I was going to say that some of these things that were that dealers felt as though I better get on this thing, you know, after COVID to make sure that on our online presence and that communication goes well, that’s going to flow now way past COVID, you know, and to your point, it’s the new norm. It’s the new norm. You know, it really is. No question about it. I understand that you’re running a workshop. What are some of the other things that they can expect to see?
Ted Rubin: That’s right. So our COO, Carol Marshall, she’s going to be running a workshop and it’s called Debunking Miss, the digital native conversation. So it’s talking about these digital natives and what those conversations should look like. That’s going to be on Thursday, February 1st, and it’s in room W222. And that’s going to be a really interesting conversation. And something that even for me, having been in the business for so long, that you’re having to learn to kind of accommodate and acclimate to these digital natives, these younger people that grew up in this.
Jim Fitzpatrick: Digital natives, I love that term!
Ted Rubin: Right. Also, Eric Schlesinger, our CRO, he’s going to be in the pitch competition for the Flip2Tech. So if you want to learn more about the Flip2text’s feature. And if you want to see how he’s pitching it to see if we can win that competition. Then that’s on Friday on February 2nd in the main lobby in the West building at level one great and our booth is 6113Â North Hall. It should be a beautiful booth.
Jim Fitzpatrick: Fantastic Yeah, we’ll show all the information on the screen here so that you can jot all that information down and and and you know, I obviously you know your company has been doing some great work for dealers that are out there so dealers that’s the booth you want to get to!
Ted Rubin: I want to see you there!
Jim Fitzpatrick: We will be there We’ll be there Ted Rubin CEO and founder of ActivEngage This is a company that you’re going to want to put on your short list if you’re going to NADA this year! We hope that you are going to NADA But these are the kinds of solutions that we want to be bringing you here at CBT news you owe it to yourself and your Dealership you’ve heard me say that before but it is really really imperative that you get the technologies that you need to win online. That’s where it’s all happening, folks.
Jim Fitzpatrick: You know, the beautiful showrooms are great, but they’ll never see those showrooms if you don’t win them online. As one friend of mine said, if you don’t win them on the laptop, you’ll never see them on the blacktop. And this is a part of winning that customer over. So, Ted Rubin, thank you so much for coming.
Ted Rubin: Thank you very much. Appreciate it.
