Are OEM programs a help or a hindrance?

Do OEM programs really work, or are dealers actually paying more for less? 

In this episode of Dealer Confidential, host Ilana Shabtay chats with Matt Lasher, president of Streamline and former Director of Marketing at West Herr, about the real truth of OEM programs: how much do they really benefit dealerships and are the OEMs, vendors, and dealers even in sync with each other? 

Here’s what one anonymous dealer had to say:

Dear Ilana,

As a marketing director, I find the OEM programs are increasingly limiting, and frankly, they’re just not cutting it anymore. There are software solutions that I would like to implement but can’t because they’re not part of the OEM programs. Even the softwares that are in-program don’t even properly integrate with my existing tech stack. 

Sincerely,

A Frustrated Dealer

Ilana and Matt dive into:

• Are OEM programs truly the best fit for the most innovative dealers.
• Is there really a one-size-fits-all solution for everyone.
• The knowledge and experience gap between OEMs and dealers.
• What are the unintended consequences of the OEM-vendor relationship.
• What does an effective tech stack for a dealer actually look like?
• Do OEMs share the same brand perception as dealers and customers?

Resources mentioned:

• Ilana Shabtay
• Matt Lasher
• West Herr Auto Group
• Streamline 

Episode Transcript:
Matt Lasher (00:00)

I worked at an OEM. I worked at Nissan North America. They don’t know how to sell a car. Like they don’t, they don’t really like they think maybe, you know, and so, so these OEMs put these programs together or guided by

advisors or consultants of like, this is going to really move the needle. And often they don’t, you know, that could be bad advice because they’re not in the trenches.

Ilana Shabtay (00:46)

Hello, Ilana Shabtay here with Dealer Confidential, the podcast where we take anonymous hot takes and talk about them with expert guests. Today I have Matt Lasher. Matt, how are you doing?

Matt Lasher (00:57)

Ilana, I’m doing awesome. Thank you for having me. You know, I don’t know, should I like block out my face here? So like you can’t and like blur my voice a little.

Ilana Shabtay (01:03)

No!

So we keep the hot take anonymous just to keep things simple. But if we had the ability to bring on anonymous guests, that would definitely be my next choice. But thank you for opening up the podcast with really who you are. I love it. I’ve known you for years now. We actually met on a previous podcast, which is awesome. I built a relationship from that. Matt’s the former Director of Marketing at West Herr although always connected to the business through family. So it’s always really nice to have you on. West Herr

is a 40 store group in Buffalo, New York with over 20 OEMs. That’s going to become relevant when we talk about the hot take. And now he’s president of Streamline, which is a fintech startup that came up actually out of West Herr, which is awesome. We love a good startup that’s actually connected really, really strongly to the business and helping bring solutions based on the retail side and the challenges that you faced. Tell us a little bit about that, and then I’ll talk about the hot take for today’s talk.

Matt Lasher (01:58)

Yeah, listen, Streamline

was just born out of a unique problem that West Herr felt, which was how do we find customers cars that they can afford and most importantly get approved on? And, you know, so we kept applying pressure. This was like back in ’16 or ’17, turned into a SaaS product. Everybody at the group used, we started sharing it with dealers outside of the group. And then we started connecting to lenders. So very organic experience. And then the opportunity got so big that I had to like pick a path between marketing, running the marketing team, which we had built at West Herr,

it’s about 10 people strong, and this other thing. So I’m a glutton for punishment. So I picked the other thing and now I feel resource constrained and all sorts of good things about startup land. But I love it. The topic we’re going to talk about, I’m excited about it. It’s something I spent 15 years in. So I think this is something that I’m happy to chime in.

Ilana Shabtay (02:43)

Yeah, and when I read it, you were the first person or one of the first people to come to mind. So here we got an anonymous hot take. It was given at NADA this past year in New Orleans, where the dealer from the South basically said it’s a marketing director that said OEM programs are limiting and they’re getting a bit tired of them. There are softwares that they want to work with that they can’t because they’re not in program. And the softwares that are in program aren’t properly even integrating with their like with their existing

tech stack. So how do we make this better? What’s some advice? Again, especially someone who was coming managing 20 programs, how can we help out this dealer who’s obviously frustrated?

Matt Lasher (03:21)

There’s lots of really like evident examples of this. I can go way back 10 years ago or so when Stellantis introduced a shift digital recommended digital marketing program. West Herr had been doing digital marketing paid search for itself for, you know, five, 10 years prior. Right. And we were doing just fine. And what we saw was click inflation and more costs and less effectiveness and basically a rising up of the bottom dealers to some average. But it like punished

the innovative dealers that were sort of like up here and already doing something. And so we see this with websites, right? You want, you have to use a variety of websites. West Herr has over 20 OEMs that we work with. If you go through all of those required programs, there’s only about three website companies that you can use if you wanted to use one vendor, right? A lot of dealer groups aren’t structured like West Herr, very dense, located altogether. Most dealer groups the size of West Herr are all over the country.

Ilana Shabtay (04:07)

Right.

Matt Lasher (04:15)

So they don’t always necessarily care about the same tools, you know, within the whole group. But some of that’s just out of like survival. Cause you cannot actually get all these tools to work together. You know, one, one story I think worth sharing just about like OEM programs. I’ll share about Ford. Ford many years ago introduced auto alert as a preferred life cycle marketing tool for Ford dealers and

Ilana Shabtay (04:26)

Right.

Matt Lasher (04:40)

it was to do like targeted incentives for people and they say hey get on the program. West Herr was like hey great news. We already use Auto Alert right? So we had to enroll in the Ford version of the program. Okay, so we had already Been paying what we’d been paying we enroll in the Ford program. That’s now subvented and negotiated by Ford and it was more money. So I got

Ilana Shabtay (04:52)

Right.

But does that matter

to the dealership if it’s co-operable? Yes.

Matt Lasher (05:06)

Well, I mean, it’s all cost and stuff like it just seemed silly though that like, you know that that was

Ilana Shabtay (05:10)

What? No, you’re absolutely

right. I’m just wondering at the bottom line, does the dealer, does and should the dealer actually care if they’re getting the money back? I don’t know. I’m not sure.

Matt Lasher (05:19)

Well, I just look at it as a cost is cost. You know what mean? Nothing in life is free. So the dealer’s paying for it and the cost of the car or our contributions to co-op or whatever. it’s an example of like sometimes. But I think so this individual dealer that sent you the hot take, I think needs to also, you know, try to deploy some empathy towards the OEM that’s trying to manage a dealer network of, you know,

Ilana Shabtay (05:21)

Yeah, right.

Right, I know what you mean. That’s we go from our house. Yep. Yep.

Matt Lasher (05:43)

2000 dealers or however many because because it comes in all shapes and sizes. As you know, Ilana we work with all these different dealers. There’s no exact like one size fits all. And I think ultimately some dealers are good. Some dealers need a little bit of help. Right. And I think the OEM is trying to figure out like, how do we provide guidance, structure, innovation and move the ball forward? The OEMs though, conversely

also need to deploy empathy about what they don’t know about the dealer process. Like many people that I interact with on the other side of the fence now, I’m a vendor now, right? So like I put my vendor hat on or I interact with maybe lenders or OEMs.

I worked at an OEM. I worked at Nissan North America. They don’t know how to sell a car. Like they don’t, they don’t really like they think maybe, you know, and so, so these OEMs put these programs together or guided by

advisors or consultants of like, this is going to really move the needle. And often they don’t, you know, that could be bad advice because they’re not in the trenches.

Like maybe this dealer that wrote in is talking about, cause they feel it very deeply. When you’re on the front line of this interaction with a customer or customers every day and the pressure you feel to have your business make money and move along. You want to be innovative. You want to work with

you know, the Fullpaths of the world or the Auto Geniuses of the world or whatever you like as an, as an entrepreneur, you want to do that. And then you feel constrained by the OEM where I always balanced this in my mind as a dealer group was look, we don’t build the Chevy product or the Ford product or the Subaru product or the Toyota product. So we have to be respectful of that fact. And it’s a privilege and an honor to be able to sell that stuff like through a franchised monopoly system.

So you do have to play the rule, play the game the way the, the rules of the game are. but I think the best way to navigate that is not really to complain about it or like, you know, it’s mostly have conversation with your OEM and in particular and say, here’s what I love about this tool, X, Y, and Z. Here’s why I think it would be good. Right. And try to open people’s mind and channels of communication.  I just got to add like, like from the vendor point of view.

Vendors are really often desperate for these OEM deals. And it comes with a lot of like unintended consequences of like managing scale, customer service, execution. Yeah, like training, know, maybe you might be beholden to that OEM and it’s like your entire business now, right? So then it maybe changes how you innovate or changes what you do or whatever. like,

Ilana Shabtay (07:57)

Right.

Correct.

Matt Lasher (08:10)

This whole network works. You got the OEM, you got the dealer, and you got these vendors. This whole ecosystem works together, but there are really interesting unintended consequences.

Ilana Shabtay (08:18)

Yeah, I agree. And that’s actually a really good point that from the vendor perspective, I think it does. It dictates a lot of the innovation and everything else that you mentioned. And it also cuts into margins. As much as you open up the network, at the end of the day, it’s also cutting into margins. So it’s just something to think about. But back to what you mentioned about vendors sort of like advocate, I’m sorry, dealers sort of advocating for the right tech.

In your time at West Herr or even at Nissan on the flip side, were you ever part of that? Like, did you ever advocate for a system that wasn’t actually OEM approved? Like, what were those conversations like?

Matt Lasher (08:52)

Yeah, I’ve been in a lot of DMA meetings and tier two sort of level conversations of like what’s possible. You know, and I think it’s some of it is patience. It’s hard to chase shiny widgets, you know, because like next year you’re going to want a different thing. And I think that there’s definitely a lot of that in our industry and there’s a lot of distraction and there’s a lot of like, this is the way, you know, and you look at some of these like AI solutions, like we’re sort of building the plane as we go, right?

Ilana Shabtay (09:03)

Correct.

Matt Lasher (09:17)

and trying to be on the forefront. So I think some of it’s patience, but mostly just developing genuine relationships and authentic, respectful points of view with each other. Like, we don’t always have to agree, right? But we can talk about, here’s what I think, and here’s why I think it. Would there be an environment by which we can make that happen, right? It’s a longer process than you’d like it to be.

Right. As a dealer, dealers are so month to month and we’re like, hey, we want this thing now.

Ilana Shabtay (09:44)

Yeah, yeah, yeah, for sure. I also think that like, mean, again, like I think we’re giving a lot of grace to every player here, which is important. What’s hard for me to see, and I’d love to talk about it a little bit just based on your experience, is the…

tech that’s in program doesn’t always integrate with each other. And I just feel like we’ve gotten to the point where there should be this underlying requirement for any in program software to just seamlessly integrate with anything else that that dealership is using without having to pay fees and without having to like pull teeth. Like let’s just get to some open API ecosystem and OEMs can really help with that. That’s something I just feel like I’ve been advocating and talking about for a while.

Do you feel like it’s like so not realistic at this point? Do you feel like OEMs are thinking about that? Like what will serve your exposure to that?

Matt Lasher (10:34)

Well, I think if you look at some of these closed gardens, so you have like CDK world that, you know, charges a lot for integration and access. You have a Reynolds ecosystem that wants to be, you know, and maybe some of the leaders there are thinking about this open line that you suggest. I think of it like a little bit like Ford doesn’t want to allow a Ford dealer to sell a Chevy in the dealership.

Ilana Shabtay (10:38)

Yeah.

Matt Lasher (11:00)

You know, like there’s definitely like lines of territory and boundaries by which you’re trying to build a business and like a competitive advantage around. So I think like totally copacetic open lines. It’s a power struggle, like who gets to be the foundation, who gets to be like the main thing, like, like streamlines endeavor. Well, I would love to be the Shopify piece of what we’re solving in automotive FinTech, but like,

I might not get the political leverage or like the momentum to make that happen, but like I would like that for that to be the outcome, you know, but then CDK or Reynolds or whatever.

Ilana Shabtay (11:30)

Yeah, but at

the of day, the dealer is like, how can we make the dealer’s tech stack better? That’s almost should be the bottom line, right? Like the dealer should be at the center because the dealer’s

Matt Lasher (11:42)

But just

pause for a minute, pause for that. So there’s so many different definitions of what that means and like what is better for a dealer because of how they want to sell a car. Like, know I’m a people over everything kind of guy, right? And I try to over index to that and I would.

Ilana Shabtay (11:48)

Okay, I take it.

Okay.

People

over technology, people over process. Is that what you use? People over everything.

Matt Lasher (12:02)

people over everything, right? Yeah.

People over everything. And I think ultimately though, like having really good tech empowers people, right? Having really good process makes people better, right? So I’m a believer in those things, but some people, like if I had a single little shop, one dealership, the customer experience would be better than the West Herr experience. And I say that some like humbly, I don’t mean it like West Herr’s not doing a great job. I mean it like it’s a big business, 40,

dealerships, 3000 employees, a lot of lawsuits and things, chaos and, you know, movements and capital improvements and all the things. And so like, if you’re a single boutique little shop, like a high end luxury experience, you know, you can know every customer, you know, their kids, you know, like what they need next, you know, where they’re going to dinner later, like, you know, people at a different level, which affords a sort of a different experience, like, like that Ritz Carlton experience versus like,

Ilana Shabtay (12:29)

Great.

Matt Lasher (12:56)

the Hampton Inn or whatever, you know, like, and so I think what is a good tech stack for a dealer is so over the, all over the map right now. Like, should it be an all in one ecosystem, like A to Z sync for a sales process thing or like an upstart or like a, you know, tablet type ecosystem thing? Should it be flexible? So you have gateways and points that like allow for different tack. where does AI fit in this? Is this, is AI answering service calls a good thing?

I see a lot of stories right now about that and how a lot of fixed directors are really enamored by this coverage, this baseline coverage. And we say, well, if customers don’t want to talk to a robot, they can bounce to a person. Well, I might have the point of view of, I don’t want my customers talking to AI ever. I’m a people business. The only thing that the car dealer does is a box of people connecting to other people. So I think it’s really challenging.

Ilana Shabtay (13:34)

Okay.

Matt Lasher (13:49)

Also, like the customer journey, like the digital, like sales side, like should it be an e-commerce checkout experience? Like should you present F&I products to customers upfront? Should you allow financing to be, you know, completed without anybody at the dealership touching it? There’s a lot of questions there that I don’t think are like universal answers or truths.

So I think like what is a positive tech, I think where you started though of like open API and some flexibility lends itself to more innovation, more like curiosity of like what might the right solution be.

Ilana Shabtay (14:23)

Yeah, or also it doesn’t matter what the technology is. Meaning if the tech stack is different between dealer to dealer, it shouldn’t matter as long as they can connect their existing tech stack. Maybe that wasn’t clear, but I do think that that can help the highline dealer, the mom and pop, the, know. And I also think just going back to the like original topic here, what you were saying, that even though every dealer is different, they still live, at least for the franchise dealers, under this like,

Matt Lasher (14:37)

Sorry.

Ilana Shabtay (14:50)

OEM program life where they still have to they’re they’re limited in the sense that that OEM program still needs to cover their bases and needs to speak to all those different dealers, right? So like I wonder if it’s doing that. I know you mentioned, know, let’s give a little grace to the manufacturers. They really have to think about like every single dealer and how they how they are using tech to solve their problems.

I think that’s sort of like the question here. Do we feel like the OEM programs are vast enough and or inclusive enough and or flexible enough? Again, I’m not in the weeds the way that you would be and I would hope that the answer is yes and I feel like that they’re always thinking about that. But how can we make it better and or how can we help dealers that are challenged with that?

Matt Lasher (15:29)

Different OEMs think differently about this puzzle. So that’s maybe like a big piece of this that maybe causes some friction. Some brands want or align to some sort of seamless transaction. They maybe look at a Tesla or some of these other brands that have done, you know, vertically integrated type things and they’re like, hey, this would be better. Let’s do that. And they’re ambitious in their journey that way.

Ilana Shabtay (15:32)

Yeah.

Matt Lasher (15:52)

There’s other brands that are also very protective of themselves. Like they might position themselves as like this tier one luxury brand. I’ve seen such a disconnect with like some brand. Like I’ll just call one out, maybe Mazda. Mazda internally positions themselves as like a tier one luxury brand. Like.

Ilana Shabtay (16:07)

Just so

know, here in Israel, Mazda is a tier one luxury brand, okay?

Matt Lasher (16:11)

Okay. So no, this is cool. So like, it’s like Volkswagen, like Volkswagen’s all over the map. Some places in the world, it’s like high end and like some places in the

world, it’s like budget, right?

Ilana Shabtay (16:20)

Like if you have a Mazda SUV here in Israel, like you’re doing just fine. You’re rolling. Yeah. I know, I know, I know.

Matt Lasher (16:24)

You’re rolling. Yeah. Well, bring that to Buffalo, New York. I’m not sure that’s the same truth. Right. But,

but, everybody inside Mazda, like to their credit has drank the Kool-Aid and like they believe in where they’re going from a brand perspective, quality of product perspective, whatever. But like their perspective of how the dealer should operate is through this particular lens. But then the dealer sitting over here, like not catering to tier one luxury customers. They’re not the same people as like buying a Mercedes.

Ilana Shabtay (16:52)

Right. This is an interesting piece of

Matt Lasher (16:54)

You know, it’s different.

And so like we sit over here and like, like, like, dude, like, do you know, like that’s not who’s coming through the door, you know? And so there, sometimes there’s a disconnect in how we’re perceived or how we want to be perceived or where we’re going. We’re like, maybe the OEM is too far in the future. Um, you know, cause you do have to do those product planning cycles and those like every three to five year sort of things. And, you know, you look at like Jaguar, that’s interesting brand. They, just bombed away or like exploded their customer base for the

Ilana Shabtay (17:12)

That’s interesting.

Whoa.

Matt Lasher (17:23)

pink, you know, Neo.

Ilana Shabtay (17:25)

was just

thinking about that when you brought up the Mazda example, I felt like it was, yeah, I mean, I think they lost half their customer base with their recent.

Matt Lasher (17:33)

I don’t think they

care. They’re like, we’re going to go get a new customer base. Which is cool or interesting, daring, you know, whatever.

Ilana Shabtay (17:36)

Yeah, yeah, it’s interesting. Yeah, yeah, very

daring, very daring. Yeah.

Matt Lasher (17:42)

So

I would say broadly, my perspective, Ilana here is the OEM programs are not sufficient for innovation for dealers. They’re restrictive. And sometimes they’re restrictive on purpose.

Ilana Shabtay (17:54)

Right.

Matt Lasher (17:55)

Like the OEM doesn’t care that they’re restrictive. They’re like, no, no, that’s good. We want this e-commerce solution. You know?

Ilana Shabtay (18:02)

Yeah, but I also like what you

said in the beginning, is like dealers need to know how to play the game. At the end of the day, they’re not making the cars, right? So like play the game, figure it out. But of course, also like be innovative. Figure out, you got to figure out how to strike that balance, which I’m sure is difficult for dealers while they’re also just trying to sell as many cars as possible and stay competitive. So.

Matt Lasher (18:19)

Well, by

the way, do you really believe you want to be innovative? Like, are you going to really invest in it? Like innovation comes with failure. Innovation. Like look at Sonic Automotive five, six years ago, they put, I don’t know, spent like $50 million on this like iPad gateway solution, whatever. Well, guess what? Like technology jumped the shark and like everybody’s like, I don’t need an iPad. I could just like do this thing. So like they like swung and like maybe didn’t connect all of that. So like it’s a risky game out there.

Ilana Shabtay (18:24)

Well, that’s

It’s risk taking, it’s failures,

correct, but you won’t get anywhere without it. So I agree, you gotta be true to yourself on if you actually wanna be innovative and take those risks and be okay to fail in life. Yeah.

Matt Lasher (18:54)

If you’re an example outside of

auto, let’s talk about this. Pepsi just bought Poppi which is a prebiotic drink for $2 billion. Okay. Four years ago, they tried to launch their own drink that was prebiotic, whatever. It didn’t work. Pepsi, they’re the bazillionaire global conglomerate, right? Like they can’t pull it off themselves, but they bought something that gained market traction or whatever, cause it’s nimbler. It’s a little, you know,

wriggling through the cracks, making those deals, and got to sufficient enough scale to be like, okay, cool, we’re gonna go into the mothership. I think sometimes that’s what, but Poppi is one of a thousand.

Ilana Shabtay (19:30)

about Carvana right?

Carvana can’t break into the industry just bought its first dealership. Maybe you’re out maybe it’s on something I don’t know.

Matt Lasher (19:37)

Right, right, no doubt. Or they’re

preparing to get acquired by Amazon and they’re like, you need to have some, you know, whatever.

Ilana Shabtay (19:43)

Right. Right. Yeah, that’s

also true. Could be. We’ll have to check back here. But anyway, this was awesome insight. Thank you so much. I love when people come on here and are super brutally honest. And I knew that you would be the perfect guest for Dealer Confidential

Matt Lasher (19:56)

Hopefully, yeah, hopefully I was that. Do I get

to still work in the industry? I didn’t say anything too controversial, I don’t think.

Ilana Shabtay (20:01)

No, no,

no, you’re fine. And if something happens, just blame the podcast. I’ll take the hit, it’s okay. But thank you, Matt Lasher and to our listeners, if you liked this episode, Dealer Confidential, you can find us on all your favorite podcast streaming channels, Apple, Spotify. You can also find us on fullpath.com/podcast. So thank you again.

Matt Lasher (20:21)

Like and subscribe.