<p style="text-align: left;">In this episode of the Industry Pulse, Market Scan Information Systems Co-founder and President Rusty West discusses how all stakeholders in the automotive industry have built their own suite of technologies to facilitate modern retailing that seamlessly connects online shopping with the showroom — with data at the center.</p> [toggle title="TRANSCRIPT"] Joey Pizzolato 00:02 Hello, everyone, and welcome to the main episode of the industry pulse, a monthly market update on trends in auto finance and credit quality, credit demand, residual values, regulatory compliance, macro economics and more. is my pleasure to introduce Rusty West, co founder and president of Marketscan, who is returning for a second appearance on the Industry Pulse. Rusty, thanks so much for joining us today. And welcome back to the show. You got a bit to discuss. So I do want to jump right in. Rusty West 00:34 Hey, Joey, listen, it's a it's a pleasure. I'm always honored to join you. And your questions are typically a little bit provocative and really focused on our industry. And I'm looking forward to dive in. And this will be a fun topic also. Joey Pizzolato 00:49 Well, I appreciate I appreciate the kind words for sure. So you know, the concept of the last mile has been central to the success of many emerging businesses, as well as the transformation of entire industries in recent years. In the world of automotive data is now the last mile, enabling the consumer at the comfort of their home, to pick their car of choice by selecting their preferred downpayment, monthly payment, and the term of their contract is taking the industry decades to get to this point. And we're almost there, but not quite. Today, we're going to discuss how all stakeholders in the automotive industry manufacturers, auto lenders, marketers, retailers, and data companies have built their own suite of technologies to facilitate modern retailing that seamlessly connects online shopping with the showroom. However, it's the complete, timely and accurate data that is paramount to being able to serve up offerings for the consumers at home, that are Trent transactable. A complete data set, which is intrinsically which intrinsically connects each of the stakeholders correctly, is critical to facilitate a transparent, frictionless and much improved customer experience. Regardless of where the customer, customers are in their shopping journey, we're gonna take a look and break down all the pertinent data points necessary to arrive at a scientifically perfect transactable solution for the customer. So let's get into it. And take a look behind the curtain at what each stakeholder vertical in the industry and examine the critical part data plays along the way. So first, I think we should start with the manufacturer class of data. The manufacturers produce the cars and use data in various forms in their promotional efforts. So let's discuss that. What level of sophistication goes into the rebates and incentive programs published each month? Rusty West 02:55 Almost a measurable, right? You look at all the manufacturers from the big three domestics all the way down to some of even the even the small niche manufacturers. They've got teams of people and data scientists, and they're doing all kinds of research to try and figure out how best to move the needle, right how to how to buy the business for the exact right price, how to get the exact volume that they need based on you know, inventory levels, and production levels and all that stuff, which obviously are a bit of a mess right now with the you know, with all the ships, Chip shortage and stuff that's going on. And historically, it's it's all been a rearview mirror look, which is very insightful, right? And you look at companies like urban science, Experian, JD Power, they do an unbelievably good job at tracking the information that's happened with the transactions, right? We know which customers have bought, which cars what they paid for, and we know how the transaction looked, what types of rebates and incentives there was, and all that. But it's a rearview mirror look, literally it's like returning back to the scene of the crash to try and figure out what went wrong, right. And what we're seeing is a shift to, let's look and see what's going on in the market kind of real time right now. Right? And we have to take all of the information into account in order to do that, right. And then that last mile that we talked about literally is is all the information so you know, it doesn't matter whether your manufacturer or lender, does retailing company, a consumer, whatever. At the end of the day, what we're trying to figure out is how do we influence the consumers behavior in a manner that makes sense for us as a business entity regardless of the business entity. And we know now that consumers are much more payment shoppers and payment buyers than they have ever been right and i I think a lot of that has been driven by the pandemic. And so being able to sit and look and say, Okay, here's what happened, it's really important to be able to understand exactly what happened, but also to be able to say, okay, where are we in the marketplace right now? What's being presented to consumers real time every single day? And how do I, how do I make myself attractive to them, but not too attractive? Right? You know, and it's, it's a very difficult math puzzle. It's one that a lot of companies are throwing a ton of resources at man. It's, you know, it's changing shift. And that little, that last mile, literally is changing the way a lot of the manufacturers are starting to look at their incentive spending, the rebates bend, and even their subvention programs, you know, how they support those for their captive lender? So Joey Pizzolato 05:54 great. Well, I mean, let's jump into like the lender class of data, you know, Lin, lenders play a key role in providing financing for the consumer. So what data elements from a lender's perspective are part of the role they play in servicing the consumer and getting their share of the business? Rusty West 06:12 So as Super similar to the manufacturer, right? It's, it's, it's looking at the same data through a different lens, if you will, right. You know, if I'm a manufacturer, what my my focus is, here's the cards that I sell down to a very specific trim level, right? And even though we get to a particular trim level, we need to know Okay, what are the representatives are a fair representation of each one of those individual trim levels? Meaning that, you know, they've got certain levels of equipment, they got certain MSRP, and that kind of stuff? And how do we compete against the equivalent competitive trim levels from the other manufacturers? and all that kind of stuff, right? And we take that into consideration. And then we lump that together with all of the rage, residual values, tax policies, dealership, quoting rules, all that kind of stuff, to figure out how do we position ourselves? If we look at that same mindset, to a certain extent from the lending institutions lens, the the variance in the msrps, and costs and that kind of stuff aren't anywhere near is important. Because relatively, they're going to be the same, right? Everybody's payments are going to go up or down, kind of in a linear fashion with the more expensive or less expensive widget, if you will, that trim level. But knowing if I'm lender x, and no one where I what my payments are compared to the other lending institutions in the market, down to the trim level down to the consumer demographic level, if you will, your credit score, driving habits, that kind of stuff. 07:55 Then Rusty West 07:57 it gives us insight into how do we position ourselves to be exactly where we want to be right? I did a webinar thing a little while back. And we use the example of a Ferrari right. So if, if I'm a lending institution, I come up with a program where Joey, you can go get the brand new $40,000 Ferrari, and it cost you 15 $100, upfront, and $250 a month, a 36 month, 12,000 mile a year lease and the end of the 12,000 miles 36 months, you get to walk away, I suspect tomorrow morning, you're going to be at Starbucks and a $4,000. Ferrari, right? The problem is, is me as a lender, I'm going to go bankrupt because I paid way too much money for that business, right. And conversely, if I'm quoting you a Ferrari type payment on a new Honda Accord, you're not going to do business with me either. So the lending institutions are using all of the information necessary to figure out exactly what an actual transactable type payment is, on every trim level, for their programs, and all the competitors in each individual market for each demographic. And I know that if I'm $100, a month more expensive than the than the number one customer there are lending institution that's out there, on a foreigner dollar a month car, I'm not going to get that business. So I might want to move my my spend around my residual risk, I might want to take on a little bit more, I might drop, you know, drop my yield, you know, lower the rate, maybe waive a bank fee or whatever to get acquire that target. And then conversely, if I'm $100 a month cheaper than the next best campaign to much of that business, so maybe I'll move $90 a month of that, from that vehicle over to the one that I'm $100 a month higher, and I can get both customers for about the same span. So basically, you know, the goal is to spend the same amount but increase the volume, right? Or keep the volume the same and spend less depending on the appetite and that's but that's what they're doing. That's it's that same last one. Now that you've talked about is what is the actual payment the consumer sees? Right? And, and that's the hardest one to get right? Joey Pizzolato 10:11 I would love to be able to drive a Ferrari for $400 a month. Rusty West 10:14 Yeah. Me do the insurances 1000 hours a month, but the payments only $400. Right? Hey, Joey Pizzolato 10:20 you gotta take lean get. Yeah, Rusty West 10:22 that's right. That's right. Oh, good one, Joey. Joey Pizzolato 10:25 I'm sure I would, um, you and I will both never see me in one. But you know, we can we can dream, right? Yeah, that's right. Okay, so Can Can you give me an example of how a lender is using this data differently from past years? Rusty West 10:41 Yeah. I'll give you a couple, right. A lot of lending institutions and manufacturers are starting to do this too. But a lot of lending institutions have started to adopt a different philosophy, right, which is, it's not how they see the outside world that matters. It's how the outside world sees them, right? It's how you as a consumer, on an individual transaction, see them? Right? Because you're probably exactly the same as almost every consumer out there, which is, you really don't care what the national average monthly payment is of somebody and, you know, Wisconsin's paying for a Honda, right? If you found a vehicle that you want, what you want to know is how much are you going to pay upfront? And how much you're going to spend every month for how many months? And what's what's my financial package look like? How does it affect my family? That's, that's the part that makes a big difference, right? And when the lending institutions are starting to look at the world, from the outside world's view, it changes everything, right? And so they end up really being scientific about how, how we go about this, right? We take all this information, we say, Okay, I want to be $5 a month cheaper than my nearest competitor across the board on this segment of vehicles, right? These, this is our sweet spot. These are the vehicles and these are the demographics of customers that we want in our portfolio. And every lending institutions focus is different, right. But we want to be positioned here, right, as opposed to down here. And in order to do that, we want to be positioned exactly here we want to be, we don't want to be $100 a month cheap, we want to be $5 a month cheaper, how do we get there, and they'll they'll spend a lot of, you know, there's technologies out there, that'll give them that kind of focus, where they can say, this is the target that I'm looking for, what switches and levers do I pull down to the individual trim levels, zip code level consumer type level, in order to acquire that exact payment, so I can be presented to a consumer in a manner that influences their behavior for the exact right price. And that's, that's what we're starting to see. And it's, it's really changing the way the way some of the more progressive lending institutions are, are going about it. So it's kind of fun. Joey Pizzolato 13:05 So how is the data being used to tie in like Linder operations with the retailer's? OEMs? You know, etc. Rusty West 13:15 It's it's kind of all the same, but just us but used by different players. Right? So we look at you just from like a, an overarching view, right? There's several pillars to the foundation of the automotive ecosystem, right. And the main ones are the the manufacturers, is the lending institutions, obviously, it's the digital retailing companies that are out there. It's the marketing companies. And, and the individual dealership, right, so at the end of the day, we've all got to take a look at the big picture, right? And say, okay, as a manufacturer, I want to acquire a particular target, right, and the switches and levers that I can pull in order to get that target. And that target is that monthly payment that influences Joe's behavior, right? I can change my rebates, my incentives, rates, residual values, acquisition fees, whatever, if I control this event and programs from a lending assistant lending institution standpoint is very similar, a little bit different lens, but we're trying to influence your consumer behavior, right? So if we take the manufacturer and the lenders as two pillars, right, and we take those offers that are going to influence your behavior, we have to accurately represent them to you, right, so the digital retailing technologies need to be able to provide you with the payments that the lending institution the manufacturers want, based on the analytics that they've done, including all the taxes and fees and all the rest of the stuff right. The marketing companies need to be able to do the exact same thing because you know, the marketing companies basically are driving to the retailing companies, which in turn are driving to the store, and the store needs to be able to replicate that transaction. Exactly. And everybody's trying to accomplish the exact same thing. And, you know, it's almost like, you know, imagine building a bridge from one side of a river to another side of the river. And if you're not communicating to, well, you got a little bit of a mess. Well, this is like five bridges that are gonna meet in the middle with a with a roundabout in it, right. And if everybody's, everybody's building them and communicating along the way, then you're great. And if not, you got five bridges that are just, okay. Launch ramps into the lake, right, you're gonna, the write ups, pretty fun, but the end of the journey is not so good. And that's, that's what we've seen. Time and time again, in the market where customer gets engaged in a website, and he's super excited about it, it's paying $3 a month, and he goes, take a look at his vehicle, I guess what, that's not exactly what it is, we're off the end of the ramp or into the lake as opposed to whatever, because it's not 300 is $4 a month, because, you know, the lending institutions to their job, the manufacturer did their job. But there was a disconnect between the technology company and the dealership or the marketing company, that technology company dealership or whatever. So everybody has to be singing off the same sheet of music. Joey Pizzolato 16:15 Hmm. Well, I'm glad you mentioned, you know, municipality has I would like to talk about, you know, the types of federal and local local government data that influences automotive retail transactions, for example. You know, how does taxation and registration fees vary from state to state? Rusty West 16:41 That's varies wildly, right? I, I never ever talked politics at all, when it comes to business. And I'm not going to on this call. I'm completely neutral, say. But when you start looking at how municipalities calculate certain things, it's very clear that there were some bureaucrats that were involved with it, none of them are mathematicians. Right? So so it is the most complex convoluted all over the map thing you have ever seen. If you only look at the registration fee, calcs. And there's a few companies out there that have it right. And, and to get it right is a daunting task, right? You look at California, which is where we are, it varies from zip code to zip code, and it varies wildly, right is based on the selling price of the vehicle, the weight of the vehicle, and then all these other goofy things, and they're expensive, then you got a, I think it's Wisconsin, or one of them where it's based on taxable horsepower. And you got to know the bore stroke number cylinders, all that kind of stuff. Then you have all of the the state and local taxation, for lease finance, balloon cash purchase options, and those are all over the map as well. And some markets, there's 13 markets in the country that are super easy to understand, because it's very black and white, California is one, hey, we tax you on absolutely everything, right. But a bunch of the markets, there's discretionary ways that you might interpret the tax laws, because they're a bit ambiguous. And some dealers will take a highly aggressive approach about how they interpret them. And then some dealers take a super conservative approach, those two approaches generate different monthly payments. So you know, when we're trying to put together our programs for a lender or manufacturer, or a dealer, right, or a marketing company, or just retailing company, or whatever, we're trying to influence the consumer behavior, we need to have a representative set of that class as well that manufacturer or municipality class data, because we want to make sure we're quoting you really what your payments are. So we need to know where you are, how that dealer is gonna interpret those tax laws and all that kind of stuff. It's, it's very complex. Joey Pizzolato 19:00 I mean, it sounds like I try and keep up with all the state regulations, and it's a nightmare. So I can imagine it's incredibly difficult for any lender to kind of keep that in, in line. Rusty West 19:15 I used to have a ton of hair before we started tracking it, and now it's all gone. So Joey Pizzolato 19:21 Well, that doesn't bode well for me, Rusty. That's Sorry, man. Already have a ton of gray. Yeah. Oh, really? grain stay. 19:32 All right. Yeah. I Joey Pizzolato 19:33 mean, I'm for it. So you know, the selling dealer has to take all the compulsory data into account in calculating and presenting payments to a consumer. So what dealer specific data comes into play in order to be able to transact? Rusty West 19:51 Yeah, so it's a great question. So we just touched on a little bit of it a minute ago with the municipality stuff, right, which is, if I'm a dealer How do I want taxes calculated, right? Because they've got to match what's going to come out of my cDk or Reynolds box or auto soft or whatever, because when I generate the document, it's got to be right. But there's a bunch of others, right? There's different lending institutions that I have available for my customers, right, maybe only use my capital, maybe I've got a relationship with US bank or ally financial, and they're really aggressive on certain vehicles. In my inventory, I want to be able to offer my customers cheaper monthly payments through through those avenues. And then there's all of the other, I guess, terms and conditions under which I'm on the transaction that have to be taken into consideration as well. Which is what what fees do I charge? Right? Do I charge a documentation fee? If I do? Is that taxable? Yes or no? Where do I collect it? On least I collect it and Inception fees? Where do I collect it? And the cap cost, I collect the tax on it the cap costs or the reception fees? All these little things that can influence how you end up as a consumer, seeing the transaction, which is how much upfront how much for how many months? And then it's all of the all the rest of this stuff, right? Which is, do I have aftermarket products, do I sell that f&i products that I want to take into consideration that I can offer you, and you know how much they are, what they look like that kind of stuff, or maybe even like, spray on bedliners, you know, if you're shopping online, and you're looking at an F 150 truck, and you want to spray in bedliner, you should be able to say, Hey, I like this, I like that four and $10 month payment, I'm okay with the upfront, what happens if I get a spray in bedliner, you know, in, you should be able to say I want the spray in bedliner. And they should be able to tell you Okay, Joey, it's gonna cost you another $6 a month or whatever it is to have that spray in bedliner, nothing out of pocket or whatever. So all of those things I need to be able to set as well. And all of the terms and conditions under which me as a dealer, under which I'm going to transact, need to be accurately represented and respected by everybody who's quoting payments on my behalf, to my potential customers. Joey Pizzolato 22:07 So, you know, you, you talked a little bit about, you know, digital marketing companies, technology companies, so I kind of want to, like, punch in on that a little bit more, you know, technology companies, you know, including digital marketing agencies play an increasingly larger and important role in servicing the customer. So my question to you is, do these companies have a specific, have specific data that is technology specific? Or do they generally take all data from the other classes, and include that in the offers, and finance slash lease payments they provide to the customer? Rusty West 22:46 Both? Right. It's, it's unfortunate, not everyone takes everything into consideration, right? We didn't really see that all that much before. COVID. Right. And, you know, all of us know that COVID has changed everybody's lives. It's changed the way we shop for everything. You know, I'm, I don't want to say addicted to Amazon. But I'm very proficient with, okay, I need that, you know, maybe it's something for my office, maybe it's whatever, click fine, boom, I know exactly how much it's gonna cost by it. Now, nothing shows up the next day. And lo and behold, they charge my credit card. Exactly, what what they told me, they were going to charge my credit card, right. So the different digital retailing companies that are out there are all kind of trying, they all exist in order to provide a better experience for the consumer. And one that drives consumers through the process electronically into the dealership to take delivery of a vehicle. Well, we run into a bit of a challenge is not all of them are created equal. And not all of them take all of these different classes of data in consideration. The ones who do do a great job, and dealers are very well represented, the CSI scores are high, their grosses are higher, because that level of trust is never lost, right? And then the digital retailing companies that don't take everything into consideration, are realistically causing a big mass for the, for the whole ecosystem. And, you know, there's some guys out there who are absolutely not going out of the park and getting everything right and there are those who aren't and the, you know, the difficulty is the consumer pays the price if he goes down the wrong path. Joey Pizzolato 24:43 So, you know, again, talking kind of about the consumer class of data, you know, the consumers situation and circumstances, obviously influence, you know, a purchase or lease. So what factors in data are consumers Specific. Rusty West 25:02 So there's several, right? Obviously, who are they? And where are they? Right? When we look at the consumer, the, the different offerings that are available from the lending institutions and manufacturers are dictated by where the dealership resides, and where the consumer is going to drive the vehicle, right. So which special programs are available to me, depend on where I am. And then there's also a whole bunch of them that depend on who I am, right? There's, you know, we look at different rebates there. And there's how many billions of dollars of rebates that are available right now, I do know that as a as a, as a nation, the manufacturer spend roughly $40 billion a year on rebates. And, and most of those fall into five categories, which are automatic ones that apply to everybody, or one of four super common conditionals, which are college grad, military, repeat customer loyalty or conquest. But there's billions of dollars of other ones that don't always get taken advantage of my favorite one, which they don't do anymore. But Christ used to have one that was called the National Funeral Directors Association, a $5 rebate of your Undertaker, they, it was always a fun one to demo. But there's a ton of those out there, and they can't always be combined. So they get this stackability, if you will, terminology, because we're kinda like coupons for grocery store. So we have to get those right. And then obviously, where you are, is gonna impact your taxes, your registration fees, all that kind of stuff, as well. And then there's a whole nother big giant chunk of the transaction, that's kind of the fuzzy stuff, which is credit related, right? And so, you know, what's your, what's your credit profile look like? And, you know, the, in the credit spectrum is all over the map. And then lending institutions spend a ton of time figuring out how best to analyze each individual consumer to, you know, kind of determine, okay, what's your risk? What's, you know, what's the risk reward? Right? You know, is this gonna make sense at this rate? If not, you know, do we need a different rate, you know, you get some guys who can walk in, and they can get anything they want, because they've never missed a payment on anything. And then you've got other ones who, you know, especially through the pandemic, have had challenges and, you know, maybe trying to rebuild our creditor, or whatever. And then you've got, you know, you've got the guys who are like, I really want it, but I can't afford it, but I'm gonna try and get it anyway. So all the credit stuff comes into play. And then there's just, there's a ton of other stuff, but those are the big ones, you know, Joey Pizzolato 27:43 hmm. So, you know, before we kind of like, take a step back, you and I have talked about quite a bit, um, you know, on this call, but I do want to ask you, you know, more on the weekends coming up, inventory is super tight, like, what are your thoughts about the weekend? Rusty West 28:03 Um, it's going to be very telling, right? I was talking to one of our large customers, right, you know, we are a bunch of different technologies. And one of them is a big digital retailing company, and they're one of our largest customers, and, and we were kind of just catching up, right, because he's also a good friend. And he says, you know, he says, is super challenging right now? Because, because his customers are very low on inventory. Right. And, you know, a year ago they were all griping that hey, you know what, we got all these cars, we're gonna customers, can you help us out? Can you you know, maybe give us a discount for a few months while we get through this? And now they're all calling and saying, Hey, you know, we got all these customers, we don't have any cars. So can you help us out? Right. And you know, the, the concept kind of circle back around to this may be the very best example, the application of the laws of supply and demand that our auto industry has ever seen. Right? I mean, literally, it is, it is both opposite ends of the spectrum in one year, right. Tons of cars, no customers, tons of customers and lots of pent up excitement about Hey, things are opening up I can go out I can go into a dealership I can go buy a I can't they don't have one. Right. So I think the that vibe is going to be pretty good. I think almost everything that these guys have on the ground might get sold I think it's going to go for a premium I think we're going to see a ton of used cars sold you know that because they use car markets really really hot right now. And I think it's going to be just a weekend right it's gonna be a weekend where there's you know, there's a lot of customers who want stuff that they can't get because it doesn't exist. There's a lot of customers are going to buy and stuff and but it You know, I look at? It's a great question. I'm sorry. I don't mean to ramble on. I know, everything that we're dealing with right now. Is, is a challenge, right? It's a it's a problem, right? And every player in this space that approaches it as a, let's find a solution, right? And I say every player, lender, manufacturer, dealership marketing company, technology company, everybody, right? If you look at everything that comes up that super challenging as Okay, that's a problem. And we need to try and figure out how to make the best out, we need a solution for this problem, what is that solution for the problem? Those are the ones who are going to look back and say, you know, that era really was a pain in the butt. But we learned from it right, and we improved, right? We can't change the fact that there's only a certain number of cars out there, right. But what we can do is we can figure out how to make the best of it. And we do know that the market is going to correct the right things are going to happen, right cars are going to get built. And then everything's going to kind of normalize right, whatever that quote unquote, new normal is, I hate that term has arrived to me times, but accurate, right? And we're gonna go back to business, right? The question is, What business? Are we going back to? Are we going back to what we used to do? Or are we going to come out of this thing? Running a million miles an hour and slaying dragons? And I think that there's, there's lending institutions, there's manufacturers, marketing companies, or technology companies and their dealerships, they're going to fall into both buckets, they're going to be the guys who learned, evolved and came out of a great and they're going to be the ones who were woe is me this, this is terrible. Why is this happening to me? Why can I get a break? And you know, what? I hope there are few and far between most of the companies that we're seeing that are out there are you know, they're licking their wounds, all of us are, but but we're all pushing to figure out, Okay, how do we make this experience better for the consumer, because when things do open up, we're going to be in a great position. Joey Pizzolato 32:10 And I mean, I think it just adds credence to, you know, everything you and I talked about today, and the importance of data, and, you know, really kind of, you know, using the insights that we have to, you know, make the best of the situation we're in right now. Rusty West 32:26 Yeah, no question. It's all, you know, it sounds kind of goofy, but it's unity, right? We all have to have the same message. And that there's no magic to the message, right? Because there's only one accurate answer, right? This is the very best program that's available to jelly right now in the vehicle that he wants. And it represents accurately what the manufacturer is willing to do for Joey, it represents accurately with the lending institutions willing to do and accurately represents what the taxes and fees are and what the dealership says he's willing to do. Right? And, and that's all driven by a massive amount of data and the ability to make sense of it. But it's not magic. It's just difficult, right? And computers make difficult look like magic. Right? And, you know, just tie it all together. And everybody seems, sings off the same sheet of music, if you will. And what do you know that it's, it's Amazon? Right? Hmm. Joey Pizzolato 33:27 All right, well, let's let's kind of look at the big picture. And like, take a step back, maybe try and make sense of, of all this. Um, you know, what, what kind of data are companies involved in retailing using today? That's different from years ago? Rusty West 33:42 Um, a lot of the stuff that we talked about, right? And then maybe what's being presented to consumers, right, and how they're shopping? Right? You know, we look, we look at the world from our lenses, right. And one of the things that we started doing a while back is we started tracking everything that comes into our ecosystem, right? And we're quoting 345 100 million payments a day, right? And a lot of our analytics, but a lot of them are consumer facing. So we started tracking all these that are coming in. It gives us insight into what's being quoted to consumer, what's the average MSRP on these vehicles based on these trends? What's the average selling price, average fees, rate markups, and that kind of stuff? And those types of analytics. And there's a whole bunch of companies that are out there that are doing all kinds of similar things, right. And every company that's tracking consumer behavior is doing it outside of the automotive market in the automotive industry have been for years. But it gives us It gives I think, all the different players in the marketplace a little bit of insight into how do we how do we influence consumer behavior in a manner That makes sense for all of us, you know, all the other data that we talked about, it's static at any given time, right? You know, the rates, the residuals, the taxes, the rebates, incentives, and all that stuff. And, you know, 1138, today, those numbers are those numbers. But what's being presented to me as a car buyer, or you as a car buyer, that might be changing every, you know, every time a sales manager changes something on a, on a desking tool and calculates the monthly payment. And, you know, it's, it's kind of fun for us, because we get to see those, you know, so it gives us a little additional data, a little, little additional insight. Joey Pizzolato 35:37 So I would imagine that, you know, data we have today, is is more accurate than that it was say, I don't know, five years ago, um, is that a fair assumption? Rusty West 35:49 Yeah, I'm way more accurate. Not just the accuracy of the data, but the bill ability to, to get to it is, is better, you know, there's more data than there was before, it's, it's a little bit weird, because there's not as many lending institutions as there once were. But there's much, much higher level complexity amongst all the different offerings, right? We look at the Li financials, one of our fun ones, right? We do a ton of work with those guys and gals, if you will. Aaron capacity over there is very forward thinking they say, and they come up with some crazy programs all the time. So they, they have a whole lot more programs than they used to have, right? All of the lending institutions have kind of figured out how to get their messaging out there to a certain extent, right. And I think now, almost all of them have bought into the concept that if we want to earn certain business, we want to accurately be represented in the consumers eyes, right? That whole shift from it's not how we see the outside world, it's how the outside world sees us. Well, if we don't tell the outside world, what we have to offer, the outside world can see us right. So they're, they're being better about sharing their data. And some of them even about getting their data out ahead of launch. Right? You know, it's important that whatever technology company they work with, says, okay, like, we're not going to, we're not going to tell the world what you're doing until it's effective date, but let's get it in as early as we can. That way, when that special does hit the street, you're able to get it in front of as many consumers as possible, and get it accurately represented. The dealerships are starting to come around that way as well. You know, before the pandemic, every dealers like we don't want to quote anything online. And now it's like, Okay, if we don't put anything online, we're not getting any business. So we got to figure out how to record stuff online, we have to share that type of information as well. municipality stuff is municipality stuff. It's just it's public. So it's not too tough, but but the only holdout is manufacturers, and they're starting to come around as well. So So access to the data is better. And then I think all all of the players in the space have continued to evolve, the manner in which they aggregate and just and organize this data, in a way that's been our biggest focus for 33 years is, you know, improving that process. And, no, we've been doing that. And then what's really made it fun is, you know, you have all this data, right? And we kind of have a saying around here, big data without science is just noise, right? You're gonna have a ton of this data. But if you can't make sense of any of it, all you've done is spent a lot of money figuring out how do I get all this check data in here. And with the rapid growth of cloud services, and cloud computing, it's changed the world for us, you know, we were able to calculate ridiculous amounts of payments, for not too much money. Now, that five years ago would have been impossible. We had a record day this month, or we calculated just a hair over a billion payments in one day with a bee and I was like, This can't be right, then we start looking at what we've got. We've got some customers who use our analytics tools to run a lot of stuff, right? So they weren't consumer facing, obviously, you're never gonna have a billion payments in a day. I mean, it'd be nice if you did, but a billion payments that one company calculates a day to go after, you know, consumers are just not that many people shopping for cars in that day. But, you know, to do that, five years ago, if it was possible, I can't imagine how much you would have to spend in order to make that happen. And for us, it was you know, it was just a cool statistic and a cool chart on the the monitor, but you know, now things are data is available, we're able to track it accurately. And thanks to ridiculous cloud computing power that's very affordable, we're able to make sense of it all. Joey Pizzolato 39:57 Well, that segues nice nicely. into my final question. You know, obviously, great strides have been made, you know, in the industry over, you know, the past year. What, what sort of improvements? Do we need to look forward to kind of going forward? Rusty West 40:18 I think, I think, continued effort on the same focus, right, which is we have to accurately represent every player in the space, which is every one of these classes that we spoke about, we have to accurately represent them every step of the way. And all of us are working towards that. And then, you know, from a kind of next steps thing is when we can tie all this ecosystem together, which hopefully that happens sooner rather than later. How do we really shake things up? Right, you know, and our, our life is, okay, let's look and see what's the what's the next big problem that exists out there? And maybe it's a problem that people aren't aware of? How do we solve it? You know, so we have this kind of discover, solve, expose approach, right, try to discover a problem, solve the problem, and then expose the problem. And we call it Willy Wonka's disease here, right? If a Joe, you got Willy Wonka disease, well, what is it? Well, you didn't know you had it. But if you don't take this pill, you're gonna die. And you're interested in the pill. Right? They're not that simple, right, but, but I think that almost everybody in this space is starting to adopt that type of philosophy, which is, we now know that we can, we can evolve much more rapidly than we ever thought possible. And a lot of technology companies and manufacturers and lending institutions are out there, trying to evolve the process to improve the consumer experience. And, you know, if we all start, I think maybe working together a little closer and a little more open, and a little better. I think that that's the, that's the next big thing for the industry. Joey Pizzolato 42:03 All right. Well, Rusty, it's always a pleasure. Thank you so much for joining me today. Next month's industry pulse will feature Mark Edelman from McGlinchey and Rusty will return again in November for his third appearance on the industry pulse. To all our viewers we'd love to hear from from you. You know what market trends are you most interested in? shoot us an email at info at auto finance news dotnet. And as always, thank you for joining us and we'll see you next time. Rusty West 42:31 Thanks again, Joe for having me. It's a lot of fun. Always [/toggle]
