Everything in the automotive industry is about providing a great customer experience. And someone who really understands customer experience is John Clavadetscher of Outsell. He’s spent years studying consumer shopping trends and how retail is categorizing and marketing to the individual customer. There’s a lot packed into this interview, from helping to grow Cars.com to the “automotive itch.”
Paul Daly: 0:00Kyle, I’m gonna let you say his name
Unknown: 0:12 this is Auto collabs.
Kyle Mountsier: 0:15
Oh, no. So we yeah, sometimes sometimes we start a pod. And we don’t know, we started the pod, which is what Paul just did right now. And I’m gonna attempt to say John Clavedetscher. Last Name. Good. We’re really excited to have him on today. And, you know, one of the things that you have to do when you haven’t met someone in person or, or throughout the industry is you kind of got to do the old, Hey, I’ve looked at his LinkedIn perusal. And what I’m really excited about with the conversation with John is kind of diving into the fact that, you know, he was early on with CARS.com, and Vetter and the whole team there and then has taken this brief hiatus outside of automotive, which I think is a really distinct advantage for him coming back into automotive understanding kind of the dynamics of retail and, and advertising and all of that. And so I’m just interested to kind of see the way he ties together the dots on, you know, his legacy, understanding of the business, the outside impression, and then, you know, coming back to the new industry, kind of like getting his feet wet again and tiptoeing into what’s going on interested to see what he says,
Paul Daly: 1:28
like anyone who’s a practitioner, right in the entrepreneur, entrepreneurial nature of what he did with CARS in the early days, and then what he did with the screen company that is like, thriving and succeeding, and then bring that energy back in anyone who does that, like I always move a little closer to those people, because I feel like they’re my people. You know what I mean? Not just a theorist, but an actual practitioner. Those are the kinds of people that just get me excited.
Michael Cirillo: 1:56
It’s, well, it gives, I almost said substance that only comes from experience to go there. But man, I’m excited to hop in. We hope you enjoy our conversation with John Clavadetscher.
Paul Daly: 2:19
John, thank you so much for joining us today. You know, it’s not every day, we get to have like a deep conversation with someone that we’ve kind of just met, but has a lot of industry experience. So excited to hear how this conversation goes.
John Clavadetscher: 2:33
Great. It’s an honor to be here really appreciate the community that you all built and what you’re doing for both automotive dealers and the automotive industry as a whole. So it’s an honor, it’s pleasure.
Paul Daly: 2:42
So thank you, and it’s great to have you here as well. So we were just been talking about the benefit of experience when it comes to disruption, to have seen cycles of disruption happen before. And to know that now when something else changes in an industry, you don’t have to be the first one to like instinctively react, just because you feel this need to have to do something, you actually have the benefit of saying like, okay, let’s we can we can actually pause for a second and see which way this thing’s going to run. And so we can react and cut it off at the point instead of end up chasing it. What are you seeing this time around? And like the disruptions that are happening in retail automotive and in digital? And how would you compare those to disruptions you’ve seen in the past?
John Clavadetscher: 3:31
Yeah, well, again, I’m super thrilled to be here. And just a pair of what you all have done for the community as a whole as you talk about these experiences, and the ability to learn from outside and what’s outside of auto, which I know is part of the vernacular of what you all do and what your organization provides. And it’s I mean wish list, we take great pride in what automotive has done across all verticals, from price contextualization to really be in the first search put in the first 800 number on a classified listing. I mean, there’s so many great examples of what Auto has done, that other industries have then borrowed. They can are at an inflection point where now we can learn from other industries as a whole. And so Paul, to your point, specifically, you know, one of the key things that I have learned over the last four years, once I left auto was seen about how retailers really embrace the first party data and really create a one to one personalized, customized relationship with their customers. They move away from this concept of sort of who owns the customer, right? So is it Coca Cola that owns the customer? Or is it Target that owns a customer that sells Coca Cola, and it really focus on who is the customer and what’s the best way to put the right message to the right person at the right place to provide that customization and personalization. And then Paul the other point is that you know your expectations outside of auto frames, you’re what you what you want within auto and so to auto then needs to evolve and auto the needs to then see what other industries have done to then change the customer’s expectation.
Paul Daly: 5:01
That’s you just said the expectations you have outside of auto frame your expectations with an auto. I feel like that should be on a plaque on the wall at ASOTU CON Kyle, though doubt that is like put it on a t shirt and ship it
Kyle Mountsier: 5:17
someone clip that and send it. I mean, that’s just unbelievable. So well. But and here’s what I think a lot of. So I think we probably need to give maybe the listeners a little bit of context, because you said four years outside of auto, you had a lot of history in auto. So I’d like to refer you want to give a lot of a little bit of context there. But, you know, after you do that, one of the things that I think a lot of people think is like, well, I’ve never worked outside of auto. So how do you expect me to do that? Maybe frame it up as like, hey, you’ve had work experience career experience outside of auto. But really, from my perspective, everybody has experience outside of auto. And I think that’s actually what you were probably leaning into in that in that point was like, You’re you personally, anybody that is a you in this conversation has a framework outside of auto of which to perceive auto in, right. So walk through maybe your timeline, how you perceive it because of your career experience, but what you see is like people in general having that capacity? Yeah, I’ll start with
John Clavadetscher: 6:17
the second question first, because it’s quickly realized Welcome to the automotive industry, of which much more interesting and fascinating than my history. And what I would say is that, you know, I have a friend that has relatively older kids, and then they just, they just had a new young baby girl. And they’ve been outside of the diaper game and outside of the formula game for let’s call it, you know, almost a decade. If they look at their experiences with leading retailers, whether that is a CVS or Walgreens, a target. You know, for many of those last eight years, they never receive messages for baby formula diapers are things that were germain to babies, right, they would look at their app experience and look at their direct mail they received, they would look at their email communication from the retailer. And it really wasn’t about the, you know, the baby formula or the diapers. And that baby hits and she’s comes into this world, and it’s a blessing. And next thing, you know, you know, the messages that offers the content is all customized to the individual person. And when you think about your experiences, whether you are a Starbucks app user or you know, a American Airlines flyer, which I think both you all are from listen your podcasts, right, you want the in app experience to reflect your travel tendencies and what you experienced. And it’s that sort of ocular that then shaped your expectation within auto, you don’t want to be viewed as one of many, you want to be viewed as one on one. And I think that’s that’s, you know, significantly important. McKinsey came into did some great research on this, but almost a little over a year ago. And two things that were fascinated by that. One is, you know, 76% of customers really want to be engaged by the retailer in a one to one customized personalized way. Now, I’m sure that makes sense to this group and to the listeners, but was actually to me was even more fascinating is that close to 81%, or even greater number of people actually have a negative perception of the brand, when they get treated in a very one to many, or when they don’t get treated in a personalized way. So not only is a personalized message really enhance the experience, but by going the opposite direction and sort of saying in a very generic, you know, come in this Sunday for a great deal. That’s not unique to the individual car owner, then that actually has a negative impression of the brand. So I think to me that you’re absolutely right, kind of everyone is a customer, everyone is a shopper. And you need to look at your own experiences in you love all these entrepreneurs. You’re Gotta love terms of what you anticipate and expect. And I think that frames that up for what we need to do in the automotive space. And these, you’re gonna love these phone calls. Right? quite frankly, what you’ve been doing with the community and the I quickly, people, right, you’re talking to a lot of motivated membership that you’ve been growing about really trying to get people to understand the strengths of other industries and bringing it in auto now specific to my journey. You know, it’s it’s a great reminder of the benefits of luck, persistence, and, and really getting to know some neat people is that, you know, what I after I graduated college, you know, someone that I actually played basketball with in high school that was a lot older, he was one of those old sort of 38 year old, you know, individuals, which I’d love to be 38 years old now. But he was a neighbor of mine, and his name was Earl Hesterberg, who actually dissidents, he’s retiring from Group One. But at the time, he was working for Nissan North America, and this is in 1995. And I called him up and said, Hey, I really like it in the automotive space, I really have a lot of admiration for the entrepreneurs that are dealers. And then he said, I can’t get you a job, but I can get you in contact with right person. And I started in a call center where there was no computers, right? And you were just talking to people that are angry because they refuse to change their oil people? Well, I was motivated to to have a great appreciation for for the first you know, two years the car engine siezes you know, the engine blows, they need a new transmission. And now you know the company is under warranty, and they have to talk to someone like myself that had good talk tracks, but really not a computer to kind of figure it out. But anyways, neither here nor there. I anyone’s in customer service. That’s something that was a lifelong lesson. And number two, I was motivated to leave that department and enter into. And I got lucky because they really wanted someone to get into the internet. So this is now 1996. And my only qualification there was that I was young. Because they just said, Well, you must know a little bit more about digital internet, same qualification
Kyle Mountsier: 10:36
for social media people today still the same same qualification.
John Clavadetscher: 10:41
You set the bar very high. So anyways, get into that, learn a little bit, Meet John Holt, learn about COBALT learn about at the time infinity net, and what we’re doing with y2k, and then eventually transferred to Chicago from LA. And then I really wanted to be an entrepreneur. And so I 1999, early 99 I met Alex Vetter, who was the it was the founder and CEO of CARS.com. And then I started an 18 year journey, always working for Alex being a part of an amazing group of people and teams and board members and eventually going public. And then I had the opportunity to after after that, and then leading the charge to bring my good friend Joe Cheshire, on board from DealerInspire, I then had the opportunity to wanted to leave auto to see what other industries are doing, particularly as it relates to attribution. And some of the neat things are doing from one to one marketing. So started up a small startup with a couple of friends. So early on early innings, and some great individuals, some great board members got to join the team when it was just two people. And then eventually went through a series of rounds series successful rounds, the company called cooler screens is doing amazing things, and eventually got to a point where I brought on someone to replace me that helped develop and run Amazon advertising. So took Amazon advertising from $0, like 10 years ago, to being part of a team that brought up to $31 billion. So at that point, you know, through the back of my mind, I’m wondering, like, why isn’t auto doing what’s what leading retailers are doing. And then through that process, I had the opportunity to meet Mike Wethington. And Outsell me to meet the Outsell team, talk to a lot of great dealers. And that’s how I joined Outsell and helping to again, bring about what is outside of auto and then tie back into auto and really helping that one to one communication.
Paul Daly: 12:30
Not hearing just so many stories, these days of people doing what you did. Being in auto usually when people are in auto, they either stay in auto, or they leave forever. Right. And so I’m intrigued by the story of you leaving and coming back. When you left auto and did CoolerScreens. Can you explain a little bit about what that product is? And, and then like you just explained like how you kind of came back into auto but like, I’m also curious to hear about like your perception of auto or any involvement in auto you had like after you you started doing the CoolerScreens thing.
John Clavadetscher: 13:08
Yeah, real quick, you know, for cool screens, what we do is we bring in digital displays into retail. So it’s that sort of physical, retail or digital, digital, physical, digital, and bring it in. And so it’s very similar to experience even @ CARS.com, where I’m going to kind of at this point, I’m going to lose the dozens and dozens of listeners, right, but you know, you have planograms, which is just a feed, and then you have imagery. And so you can actually take the images that instead of actually opening up a physical door and you see through it, and there might be frost or the milk stain, you could actually see a contextual view of the actual product itself. So we got in early with some of our investors, our investors like Microsoft, Verizon, which at the time owned Yahoo. And then we also work with some of the leading retailers and that’s how I learned a lot about CDP CDEP’s data, normalizing data and the one to one relationship as it relates, you know, Paul to the journey. You know, auto is incredibly addictive. I mean, it’s it’s amazing group, some of the 30 day best operators, some of the best entrepreneurs, community members, that that are out there. And so once you have it in your blood is I know you gentlemen do it’s hard to leave it. And so, you know, it’d be like the month end, and I’d be sort of itching for Okay, where’s that sort of number where your dealer friends and so that was always there. But but but I mean, the other thing I realized too, is I have a great appreciation and affinity for the dealer franchise system. I think it’s under attack. And as I saw some people that I know and respect both at Carvana Tesla Carmax great organizations, but they really haven’t also embraced this CDEP this ability to have a one to one relationship because they don’t get caught up in the tiers. They don’t get caught up in well, this is a tier one upper funnel communication versus a tier two middle funnel versus a tier three. They understand it just About the customer what the customer expects. And so I started getting more and more energized about the opportunity to come back work in industry that I grew up in, appreciate it. But now having the perspective of the last four years of not being an auto, and then being part of a dialogue and a conversation and being part of even this community, you talk about those customer expectations, and how do we help? How do we help dealers? How do we help here to agencies? How do we help manufacturers best connect and relate to the customers?
Kyle Mountsier: 15:26
Okay, so real quick, just a little bit of education. So if you don’t know, these are new terms in automotive, but CDP CDEP Yeah, EP or XP, like there’s, there’s people trying different things, but, you know, customer data platform or customer data experience platform, is, is really, the idea that you can have a unified customer data set that allows you to, to organize those, those those customers buy a bunch, like basically any filter that you can attach, and like either a line item or a column to that customer. And then and then communicate with them one to one, so you’re reconciling, you know, all of their data to make sure that you have up to date addresses and emails and phone numbers so that the communication is quick. And you know, what their patterns of purchase are, so that you’re communicating the right things at the right time. So that’s like my really simplified down version because this question, I don’t want to get into the weeds of that. But there’s a simplified version. The question that I want to get from that what I’m kind of extrapolating from what you just said, is, right now in automotive, what you see a lot is this, like, OEM tiered campaign, right? Targeting X customers, the tier two campaign, maybe it’s a regional or a group level campaign, targeting X customers with X message, and then you have the tier three laying in there, too, whether it be on service or sales, sometimes they sometimes actually, more often than not, they’re not just not in sync, they’re actually combative to each other. So how do you see us reconciling that as an industry with a better unified customer data set?
John Clavadetscher: 17:06
Right. So I think, you know, we had Outsell, we were very focused on transforming those those rules, relationships, that’s first and foremost, is that transformation in those relationships? I think were we in one step back is that, you know, it’s a company has been around for 17 years, it’s continued to evolve. And we’ve been very blessed to have some of the leading dealer, dealer groups and even, you know, agencies that have really guided us and directed us. So it’s fair to say that we are built for and with the dealer community. So it’s sort of that ocular, where we put a lot of energy on is if I can actually take your question, Kyle, and really focus on like, even dealer groups, right? So what we could do is we could say, Listen, there might be a customer that bought their used Ford at a Chevy store, but services at a Ford store, but they’re getting different messages from the dealer group as a whole. Or maybe there’s not even an ability for the dealer group to then communicate it broadly. So I’ll use one that I’m sure this group knows is like Germain Automotive, who has been great at the forefront, and that group has helped us out dramatically, but they’re, they’re able to send group messages that are very tailored accustomed to the customer, as well as making sure they’ve, with their dealer community understand sort of who gets to send the messages, and how does that relate so that the customer is not getting mixed messages. So that is an applicable use case that you can that we have been doing doing successfully for many, many years. Hard stop, you know, if you put on the sort of the, what would happen down the road and sort of least my you know, viewpoint is that at the end of the day, it all starts with the customer. So we don’t have this today. But we would love to basically say listen to every integration, whether it’s a tier one event, tier two, or tier three, it feeds into who that customer is, and then allow the brands to then play within their swim lanes, but to best develop and nurture those relationships that get the outcomes that they want.
Kyle Mountsier: 18:58
Man, I like the Holy Grail of customer data for me is a unified customer ID across like tier one to tier three, at least in brand, right harder to do at large groups are scale or across brands, right. And that’s, you know, playing at that. But at minimum in brand, having that unified customer ID and and customer centric data would be a game changer.
John Clavadetscher: 19:24
And just to build on that, that’s what we have. We do have a unified customer ID within a dealer group. And we’re starting to work where applicable, where we can work hard, the dealers win in the various different tier one, tier two can win. How do we then exchange that ID so that, again, you’re providing the best customer experience, because really, at the end of the day, it’s this is what it’s all about. This is what everyone’s in this industry for us providing great customer experience. And right now, to your point earlier, kind of we are competing, and we’re not looking good when we do compete. And so how do we then do that by knowing where the customer is in her journey?
Kyle Mountsier: 19:56
Do you do you perceive, do you know, you know, what the wasted ad dollar spend potentially? That’s a question industry, right? Because when I think about what you’re talking about right now, in this, like hitting customer multiple times the capacity for us to waste ad spend across tiers, or even within a group or against stores within a group seems like it would be astronomical as an industry.
John Clavadetscher: 20:28
Yeah, I don’t. I mean, if you look at the industry as a whole, right, so it’s both ad tech and Mark tech, you know, you’re I think the numbers are on 40 billion, it could be offered in auto and the annualized basis in North America, but I think it’s roughly at it, I don’t know what it is in terms of waste. But I do know, if you look at consumer packaged goods, retail, when consumer packaged goods retail have this unified customer ID and markets towards the customer ID, they’re able to shift $100 billion annually. And they did this this, this evolution in less than four years, but kind of it’s exactly what you and Paul have been talking about. It’s that unified customer ID that you can then see where the customer is in her journey. And then how do you best deliver the right message by person? So that, you know, we can see does one customer prefer direct mail more than social? And then how do you make sure that you tailor that experience to that customer?
Paul Daly: 21:21
When you say shift 100 billion annually? What timeframe? Would you give that like when when did that shift occur? What what time period?
John Clavadetscher: 21:29
Yeah, it’s a little bit. So what happened from about 2018 to 2022. And quite frankly, Paul, like, I would say, retail benefited by Amazon. Because Amazon, if you think about who is the best at this unified customer, ID, it is Amazon. And so they forced the Walmarts, the Walgreens the Targets, the leading retailers to they had to evolve, they had to not worry about well, who has that sign on ID. Because at the end of the day, this is what first party data. This is, it’s a little bit easier for retail because retailer, there’s one dominant CRM, which I think everyone on this call knows who that customer is. And there’s one dominant in retail, it’s POS, but it’s like a DMS. And you know, that’s that’s actually, again, one dominant player. In auto it’s, it’s there’s really no one dominant player, no offense to anyone in the CRM space, CMS space. And they often compete. And you know, Kyle and Paul, they’re not talking about a unified ID, in fact, oftentimes, against what they will do to do that. So the secret sauce, or what Outsell does is that we do dial in to your DMS to the CRM to the CRM, we layer under the third party data, and we get this viewpoint of who the customer is. And I’ll tell you one of the things that really kind of accelerated my desire to leave auto to learn. And that was really why I did it was I remember, I was meeting with the head of an agency which shall nameless, this is in 2016. And I’m going to, they’re talking about how, instead of buying target rich two sided marketplace audience like CARS.com I got to listen to the podcast with Doug Miller who good friends with instead of going down that path, I was being told that, oh, you know what, we’re going to use our data management platform. DMP. Because we created really great look alike audiences, and we can get cheap CPMs which then begs the question like, well, what’s your what’s your KPI? What’s your criteria? And like, we want cheap CPMs? Like, really, you don’t want outcomes? You don’t want effectiveness? You don’t want positive brand equity. And like no trying
Kyle Mountsier: 23:40
to make this a 50 minute podcast.
Paul Daly: 23:43
Nothing wrong. With Steve cheap CPM. You shouldn’t apologize. No, like you shouldn’t apologize because you’re speaking the truth, like walled garden works for Apple, right? It doesn’t work for automotive, DMS CRM just doesn’t and it’s not going to work. And so you don’t have to apologize at
John Clavadetscher: 24:02
all. So anyways, it was it was I mean, at that point I needed to learn because the other benefit of what is customer data engagement platform is its full cycle, meaning we know that that social ad paid off because we actually then pull and run, you know, and see now we public, we dive into the DMS we see the outcomes. And then you can then figure out you know, what actually effectively move the needle and then allows either through and I hate to use the term AI but either through AI or through, you know, just the dealer or the agency sort of playing with dials and figure out what’s the most effective way to get the outcomes and really think about it like the what makes Auto so special. It’s so outcome driven, right? So customer focus and outcome driven. And yet marketing largely has not been about outcomes. It’s been about other things and what CDP’s can do so I don’t know the waist but I would wager it’s pretty considerable, particularly when you can start to layer in what the outcome combs could be
Kyle Mountsier: 25:01
Wow, wow, that’s incredible. Well, John, I’m telling you what I feel like we’ve like this. We went in and we like pulled back just a little bit of the pill. And we’re like, look, look, look, everyone look inside and then we shut it right back up on him. But I I’m excited to kind of hang out with you in just under a week from this recording and, and get to know you and your team at Outsell more really appreciate you being here with us today and having a conversation. I feel like I feel like you’ve opened up a little bit of Pandora’s box for a lot of listeners. And hopefully people got a lot out of that today. So on behalf of myself and Paul, really appreciate you being on
Well, listen, it’s an honor to be here, you really, truly want to lean into what you’ve been doing with your community can’t wait to meet you face to face and to be with you. And I know that Outsell is sponsoring the event on Sunday evening, the the kickoff and so look forward to seeing you there. And I can’t wait to meet you and so many of your listeners in your communities for Thank you.
Paul Daly: 25:57
So I love the energy and the obvious, obvious
Kyle Mountsier: 25:57
Well, I do get excited. I know you do. I don’t astuteness to what is going on across all the different industries that are integrating technology and the retail mindset. Just excited about what they’re doing. And I don’t get know if y’all knew that about one of the reasons that that excited about tech. But the fact that he seems to be just grabbing from all these areas and saying no, no, no, no, no, we can do it here. We can do it here. Everybody, look, the pieces are coming together, right we’re gonna work together
Paul Daly: 26:30
I get excited about it. When I get excited about we’re gonna get there just gets me excited that there are people like that working on thoseproblems. tech. Honestly, I think it’s mostly because you get excited about tech, and it’s so much fun to watch people get excited about
Kyle Mountsier: 26:51
what they’re passionate about. Well, and here’s the thing, this is what’s really cool, because I you know, I’m I come from like just loving the sales environment and engaging customers. And that’s like, that’s my passion. If I if if if I get to be in a showroom, I love trying to find my way to talk to a customer. And so for me like tech, and what he was saying in that understanding what a CDP or two, or a CDEP or a CDXP, whatever, whatever version of that customer data platform that you want to have, like actually has customer facing implications for the way that customers perceive your brand because of the message that you’re telling them at the right time at the right place because of their interaction, like having tech inform a better customer experience, like a company like Outsell can can do or like connected data platforms or customer data platforms can do is is so important in an age where that’s what everybody’s getting from all of these other you know, entities. You know, I think like I always explained to salespeople as I’m training, you know, your people that are coming in are experiencing life in a purchasing lane of Instagram ads, right that everything they say everything they do integrates into their into their shopping behavior. And then we get them into the showroom. And it’s like, and we slap him across the face and tell him to stop shopping that way. And this is this is a way for us to allow people to shop and integrate that into their regular behaviors like the rest of the world doesn’t I think it actually provides us with a better opportunity as an industry. Like dude,
Michael Cirillo: 28:24
forget the metaverse where we are installing cheat codes on real life. That’s the impression that I get I’m like, you know, to get that level of intelligence to be able to to act much more effectively efficiency blows my mind and certainly we hope you enjoyed this conversation as well right here on auto collabs. On behalf of Kyle Mountsier, Paul J. Daly and myself, Michael Cirillo. Catch you on the next episode.
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