…continued from part 2 interview with Scott Carlson
Scott: I’ll tell you the most important thing we’ve discussed today is that scoring by itself is not a full solution; you must understand how your business is (or is not) working for you. Scoring is simply applying numerics to the entire underwriting decision process. By capturing those numerics (scores) and using them on the front-end, you will help your decision-making process.
Understanding and evaluating your business comes by using the AutoZoom analytics and numerics as a measurement and by tying that together with financial information, time line information, and repossessions. Doing this will help you to find out what is actually working about your business. Then, we can determine your repo rate, frequency, and economics, by what your cash return or cash recovery is based on risks and things like that, and how that is tied to different score ranges and all the other facets.
We use several charts, graphs, drill downs and exports to help make the information visually understandable. Much of our focus has been about keeping the technology and information as simple as possible on the front-end so you reduce it down so that just anybody can use it and they don’t have to be a sophisticated underwriter. With some programs you feel like you need to have a Master’s degree in Accounting or Statistics or something to understand what the data is showing!
We worked really hard to make AutoZoom a visual and understandable experience – making it easy to understand the program and, more importantly, easier to understand what is going on in your business.
I’ve been in the industry for 34 years. I heard about you; I don’t know quite what you do, but here is my challenge. My spouse loves me, my attorneys love me, my accountants love me, and bankers love me. I make a lot of money; but for the life of me, I don’t know what’s really working in my business as far as underwriting and things like that. Can you help me figure that out?
I get at least a call a week like that. It’s amazing to me that in the auto industry almost all the dealers know baseball or other sports stats, they know what’s going on in their towns, and what’s happening around the world. They can keep track of all kinds of things, but they have no idea about what’s truly working or not working in their own business. They may have millions of dollars in receivables, but they don’t yet know their winning formula.
That is not a criticism, it is just the industry. Dealers are making a ton of money and they have become accustomed to flying by the seat of their pants with operations out of their pocket. In all fairness, most dealerships have become more sophisticated. But, with dealerships becoming more sophisticated, they have become more complicated and more competitive, particularly in higher car cost ranges. It’s getting more and more difficult to keep that competitive edge, especially in underwriting if you are opening multiple accounts. That can get really challenging.
Kenny: Yeah, that’s right. Warren Buffet said, “When the tide goes out, you see who is swimming naked.”
Scott: What did you say?
Kenny: When the tide goes out, you see who is swimming naked.
Scott: I recommend dealers track everything for their own use, but also because I want them to see the numbers change once they bring us on board. You know, if they just notice that their sales increased, but they don’t know how much their sales increased or why, that’s not good. And, if they only know their numbers increased because of something we did, that’s still not good for them or me. I want them to keep track and understand. I was amazed when I first started working with dealers how many of them didn’t really keep track of anything, as compared to a lot of other industries.
Scott: Well, you know it wasn’t until just the last decade or even the last seven to ten years, let’s say, that the deep masses, the dealer-management systems along with the software that’s written to run dealerships has become sophisticated enough to run larger organizations. I mean this is a maturing industry.
Kenny: Yeah. It’s amazing to me that it didn’t start much earlier along that track. There’s a lot of room for improvement and growth, and the tracking and studying of buyer behavior and customer retention, rather than just run a commercial “come in, sell the stuff, get their money cycle.”
Scott: Well, Kenny, you and I have talked about this a lot, and I know you’ve studied and learned that if you can measure it, you can control it. I know that’s an old, old adage, but it’s still true.
Kenny: Yes, and if you don’t measure it, it’s very hard to improve it. Well, Scott I don’t have anything else right now. If you want to add anything, that would be great. If not, I would like to know how people can find out more about you. What’s the first step for someone who found this interesting and wants to learn more?
Scott: Well, Kenny, I appreciate very much you taking the time to do this and it’s been a fun experience for me being on the line with you and doing this. I hope some folks can benefit from this information whether they become a Zoomer or not. Those who are interested can go to our website AutoZoom.com and look around the site, check out every page, or request a demo. Anywhere you see “Request Demo,” just click on the form and complete it. Here’s the promo code:
Promo Code = kea0412
If they use that promo code it will give them a reduction in the time frame that they have to prepay to use a system. This is not a cut in price, but instead of having to pre-pay 12 months, they can prepay six months. That will help them and it will make it worth their while to go to the effort of learning. Just go to our website and poke around; it’s a very easy site to navigate. We try to make it as simple as possible to get across a somewhat difficult topic. Also, we would be glad to personally visit with anybody. They can call me and just talk about the industry whether they are interested in AutoZoom or not. I don’t make a bad coach, if I do say so myself. I’m driven more by having a positive impact or having the ability to have a positive impact in people’s lives than I am by money. It’s not like I don’t like money, but I’m driven more by the aspect of helping people.
Kenny: Which means, more money will probably come anyway.
Scott: I think that’s a natural piece of it, but we had a lot of help along the way when we were learning the business and I would like to pass that along.
Kenny: That’s great and I know you’re sincere based on our many conversations as well as the conviction in your voice and presence. Well, thanks for the time and I will talk to you soon, I hope.
Scott: Okay. Thanks, Kenny.
Kenny: Alright. See you, Scott.