Cuyler Owens: The Cost of Every Vehicle Sold

Cuyler Owens is the Chief Commercial Officer at DealerWare - Dealerware is modern fleet management for the modern retailer. The Delaware-connected car platform elevates the service experience for dealerships, dealer groups and OEMs. By automating cost recovery, improving efficiencies, and promoting the customer experience, Delaware allows automotive retailers to lower the cost and complexity associated with managing courtesy vehicles, retail rental, and subscription programs. Launched in 2016, Delaware today contains tens of thousands of cars for hundreds of dealerships in North America, including the top 10 public dealer groups, across 28 OEM brands.👉 Register for the upcoming Fixed Ops Roundtable EventWhat we discuss in this episode:In this show episode, Cuyler talks about The Cost of Every Vehicle Sold. In a time of shrinking margins, better-educated consumers and increased demand for transparency, dealerships need to maximize all their assets to survive and thrive.One of the dealership's most visible assets – and often the most significant source of wasted budget and opportunity – is vehicle inventory. Choices made here can quickly create or break profitability.Cuyler begins the episode by talking about the "Marshmallow experiment." - delayed and instant gratification. The experiment began by bringing each child into a private room, sitting them down in a chair, and placing a marshmallow on the table in front of them. At this point, the researcher offered a deal to the child. The researcher told the child that he would leave the room and that if the child did not eat the marshmallow while he was away, they would be rewarded with a second marshmallow. However, if the child decided to eat the first one before the researcher returned, they would not get a second marshmallow. So the choice was simple: one treat right now or two treats later.He discusses how we can apply the marshmallow test approach taking advantage of the current situation in the auto market, considering that prices have never been higher on used Vehicles. The automotive industry has seen tremendous financial gains based on some pricing going away even at the OEM level because the demand is so high and the inventory's low.What would happen if you decided not to sell those vehicles and if you built those into a larger, longer-term business strategy?Dealers keeping a used or older inventory in their fleets are seeing some exciting benefits; additional monthly repair orders are generated for every vehicle you'll have. This means there are more appointments, and you're taking care of those customers, which is essential because you have RO revenue that's being generated. Still, it's also highly beneficial from a customer satisfaction perspective And retention rates.This proves the point that there is an opportunity to look at the long-term value of that customer. By providing those fleets, you've got options to meet customers and take care of them at a time when maybe you could jump into a quick sale of that vehicle but instead decide to build the lifetime value of that customer.The point is that having vehicles on the lot is critically essential to the long-term engagement with the customer, customer retention and the value you're delivering to that customer because we're not looking for a one-time engagement, as all of the money lies within this customer's life cycle and the customer's lifetime value.Quoting, "A vehicle that's a high gross nine months from now, 12 months from now, is probably still going to be a high gross vehicle."Profitability is certainly where we're headed. This is an excellent opportunity to look at the marshmallow test and understand the deferred gratification of taking care of your customers, making sure they have fleets available and te