Welcome to Car Dealership Guy “From the Show”—9 questions. 9 answers. Insights from our latest CDG Industry Spotlight Podcast.
Today’s guests are Jonathan Kienle, the Director of Operations at Walters Automotive Group and Kienle Motorsports in Riverside, and Truett Dwyer, Co-Founder and CEO of Clerq.
Jonathan Kienle is the Director of Operations at Walters Automotive Group and Kienle Motorsports in Riverside, California, where he oversees five stores spanning Mercedes-Benz, Porsche, and Audi.
Joining him is Truett Dwyer, Co-Founder and CEO of Clerq, the payments company he credits with turning down payment collection from a source of risk into a documented driver of profit.
D'Arc: How, historically, before you solved the problem, were you taking down payments?
Kienle: "Well, I mean, the traditional way, legacy ways where it's personal check, wire transfer, cashier's check, credit card, [and] cash obviously. There’s a lot of risk and we've over the years tried to mitigate some of that risk and really put safeguards in place in order to protect not just customers but also ourselves. And we've been burned a few times where a customer puts a down payment on a check and they leave with the car and you find out five days later that that check was cancelled and then now you're chasing the customer for a down payment."
D'Arc: What was the moment where you said, "Hey, look, we've got to find a better way than we had"?
Kienle: "I think the straw that broke the camel's back was we had an individual that wanted to put a down payment on a check. Customer didn't have a check with them. So, typically the sales manager would say, 'Well, you're chasing for the check.' So, the salesperson gets in a loaner vehicle, follows the customer to their house. Salesperson gets into an accident in the loaner car. I was like, 'Okay, there's got to be a better way to be able to get funds so that I don't have to send somebody to go follow a customer to their house.'"
D'Arc: Besides that not being safe, what was the other challenge with that process?
Kienle: "Well, and it's so inefficient, right? So now I take a salesperson who's a productive individual, take him off the sales floor where he can be productive, where he can be making follow-up calls, and now he's gone for an hour and a half just to go chase for a check."
D'Arc: Truett, when you got the call from John about this, does that ring a bell with other dealers across the country?
Dwyer: "Part of the reason that Clerq has resonated so loudly with dealers is because they're all running into those problems... So we set out basically to help solve those, because to date there really hasn't been a frictionless, guaranteed, low-cost way to accept large payments like deposits, down payments, other large transactions."
D'Arc: How are you able to do what so many credit card companies are unable to do with these large transaction amounts?
Dwyer: "Most people don't realize they have a $1,500, $2,000 daily spend limit on their debit card. And one of the worst things you can do when you have five people sitting outside of the office trying to get their deal done is spend 30, 45 minutes on the phone with a bank or a credit union trying to rectify a card decline... And we do that for 50 to 75% less than it would cost you to take a card."
Presented by:
Clerq - Clerq's instant bank payment solution modernizes down payments, deposits and other large transactions - helping leading dealerships drive more sales, cut costs and reduce risk. Visit here to learn more.
D'Arc: John, were there any concerns you had as you reviewed this as a solution?
Kienle: "I almost didn't believe it, truthfully. I mean, the theory of it made sense, that it's like Venmo. But I had never seen anything like it before... especially from a company that I had never heard of... I guess I was skeptical at first, but it didn't take long for me to be a believer."
D'Arc: Why hasn't a solution like this existed in the past?
Dwyer: "The reason that this solution hasn't existed in the past is because when you look at the payments ecosystem, the incumbents are making money off of card and they don't want to cannibalize those two, three, four percent take rates by offering a lower cost solution which is helping the customer save money, helping the dealer save money."
D'Arc: So what has actually switching the default down payment method saved you this year?
Kienle: "Just year to date, the organization's saved about $168,000 in credit card fees... We're on pace and going into [the] fourth quarter with it being the biggest quarter of the year. I would probably say a safe guess would be $300,000 plus in credit card fees saved."
D'Arc: What advice would you give to a dealer still relying on legacy payment methods for large transactions?
Kienle: "There's nobody else that's doing it, right? So, it's not like you're going to be shopping vendors to see who's got the best solution. He's the only shop in town, right? So, listen, right now margins are getting tighter, and fraud's rampant right now. So it helps minimize risk, it helps put dollars back to the bottom line, and it creates less friction with the consumer."
