Auto Dealer Monthly, May 2013

MAY 2013 AUTODEALERMONTHLY COM 23 Mike Esposito posito is a bit of a Renaissance man To o the more th than 900 dealers he does business with hes k known as the president and nd CEO of Auto Mate M His education is rooted oted in mechanic mechanical engineering but he also o holds a masters master degree in business In his free time Esposi Esposito builds fi ne furniture Its a hobby that relieves stress but its also a diversion that requires extreme focus the same type of focus hes had since taking over the technology company in 2005 ADM Youre into fi ne furniture correct Esposito Th ats right It allows me to forget about everything else thats going on in the world But youd better be focused on that saw or theyll start calling you Left y if youre not careful ADM So how did you wind up at Auto Mate Esposito I started with General Electric and was with them for about 10 years Th en I was with Schlumberger Limited which is an oil services company for about another 10 years I worked in the companys Fairchild Semiconductor division Aft er leaving Schlumberger I wound up running a car dealership through sheer happenstance in the early to mid 90s I did that for about fi ve years before meeting the gentlemen who owned Auto Mate ADM George Hearst the great grandson of newspaper titan William Randolph Hearst was the one who introduced you right Esposito I knew George through the dealer I worked for as general manager Th e dealer was big into polo ponies and George was a big polo player Th rough that acquaintance wed go to polo matches and that is where I met George It sounds more impressive than it was George asked me to direct his technical guys on how to develop a used car website for the Times Union back in 95 or 96 A couple of years later he asked me to meet with these two guys who had this little computer company Th ats how I met Steve and Paul Fullum Steve was Auto Mates chief soft ware architect ADM I read that the company was doing 20 deals per year before you came in You stepped in back in late 1998 and did 14 deals in six months Esposito I remember telling them during our fi rst meeting how much I disliked ADP which my dealership was using Well they never acted on that You really had to want to buy from them So what I did was help the company get more proactive about selling ADM You took over as president and CEO in 2005 correct Esposito Th ats right We had 200 dealers at that point Were now closing in on 1000 dealers which is right where we want to be ADM Auto Mate prides itself on its customer service How do you maintain that while also growing your companys footprint Esposito What I say to dealers when they ask me that is My father taught me you leave the dance with the girl you brought to the dance Th at is analogous to my dealers the dealers I have are the ones that have made us successful For me to leave my date for a 50 store blonde fl oozy I wont do that ADM How did the Great Recession impact your business Esposito I think dealers got religious about their expenses during the downturn Like that old adage Gross hides all problems Well when sales started to go away dealers started paying attention to expenses Th ats when they started wondering why they were paying so much money to our competitors ADM Th ey also started questioning those long term contracts You operate monthly Did that help your cause Esposito Th ats part of it but we also got involved with Toyota back in 2010 We were one of the two DMS vendors who helped Toyota redo its entire dealer communications system Historically if you were a Toyota dealer you could only use ADP and Reynolds You have to take your hat off to Toyota Th e kneejerk decision would be to use ADP and Reynolds because they have 98 percent of dealers But they didnt and decided to use non legacy system vendors And when Toyota announc ed that we were one of two companies to integrate with them people started to take notice ADM With the Driving Sales Award you earned this year I guess people did Esposito Th e thing I was really proud about was not only were we voted the No 1 DMS in customer satisfaction the other DMS vendors werent even close ADM Last June you launched a thirdparty integration platform Had you previously not been open to third party integration Esposito Weve always been open What we announced was a new technology were utilizing Its a real time bidirectional process which is what you need with the level of technology available today ADM I noticed you recently released a new service tool Is that where your focus is this year Esposito We recognize that a lot of dealers leaned on their fi xed operations to get them through the downturn Our interest in fi xed ops also is being driven by the market A lot of the stuff dealers are looking for has to do with service Th ey want to be able to retain customers through service So now theyre talking about mobile advisors conducting multi point inspections on the service lane and using radio frequency ID tags when the car comes in so they can service the customer faster ADM Your newest service tool connects a Windows based tablet to your DMS service module Will you be doing more in mobile Esposito My take on mobile is it makes a lot of sense on the service lane Historically youve always wanted your service writers to go to the car talk to the customer and then inspect the vehicle and write up a repair order in front of the customer We did that 15 years ago on a clipboard the technology just caught up ADM What is your outlook for this year Esposito As long as the credit stays cheap itll probably hit 15 to 16 million units ADM Are there any issues that concern you Esposito Dealers need to be paying attention to this data issue Th e problem is they arent In a lot of cases they cant really know whats going on because they have data aggregators who are pulling data and doing other things with it But the bottom line is the dealer is going to be liable for it MAN