Kelly Kleinman of Dealership News interviews Matt Arana of Identity Maxx to explain why having data security and the necessary coverage in place to reduce your dealership’s exposure in case of a data breach ahould be a high-priority. Identity Maxx covers not only the dealership’s risk but offers the same robust coverage for each customer as well. A truly novel approach at incremental upselling to say the least.
Kelly Kleinman:
Hello, everybody. Kelly Kleinman and you are listening to the DealershipNews.com podcast, where we spotlight the who's happening in the automotive industry. It's footsoldiers, visionary, salesman, GMs, owners, service managers and industry vendors alike. Our guest today is the founding force behind a new company that not only protects dealer and customer alike from costly data breaches, but turns the solution into a profit center for the car dealer. Welcome Mat Arana of Identity Maxx. How you doing?
Matt Arana:
Matt Kelly. I'm doing great. Thanks for taking some time today.
Kelly Kleinman:
You bet. Very happy to have you on board. I do want to mention that today's podcast is brought to you by the following preferred vendors Dealer Pay. They offer seamless integrated payment processing solutions, merchant services and credit card processing specifically for car dealers and the automotive industry. See Julie Douglas for any inquiries and Drive Centric. The offer is simple, yet powerful interface that anyone can use is intuitive CRM design makes it simple for salespeople to do their job and that's to sell. Go #LiveWithDrive. Tell Steve Roessler. Dealership News sent you. Matt I'd like to start every interview off with one question. How the heck did you fall into the car industry?
Matt Arana:
Well, I'm sure everybody's got an equally colorful story, but I am actually fairly new to the car industry specifically. But I found my way here after 15 years or so in the finance business. So I was in commercial lending with GE Capital and then Residential Lending for 10 years or so. I'll rewind backwards. And the more exciting part about my backstory, really, for the first 10 years of my adult life and career, I was a rock and roll musician, toured all over the country and played music and kind of put off growing up until I was in my early 30s and kind of fell into the insurance business from a friend. Did specialty risk insurance, worked for GE Capital, doing commercial lending for seven years. I worked for a credit bureau and data company for several years before getting into the mortgage industry. So that's what I did before this. I kind of got into the automotive space through a network of friends and some some of which are dealer principles that I was introduced to. And really just I was kind of I've always been fascinated by the car dealership industry in general because, you know, it's ironic, but there's some for some reason an association between the finance business and the automotive business, probably because car dealers are as much a finance company as they are selling vehicles in a lot of times. So from mutual acquaintances, I was introduced to a product that caught my attention being Identity Maxx specifically for dealerships. But relative to a lot of a lot of what I've experienced in my in my couple of decades of finance business.
Kelly Kleinman:
Matt, it makes sense to to find out to segway from finance into the automobile world, obviously they are somewhat finance companies, but it's not so common to segway from playing gigs to getting into the finance. Who'd you play with? The what instrument you play.
Matt Arana:
It's crazy. I still do play on weekends and I guess I'm still quote unquote professional. Because they pay me to do it. But it's it's more of a part time hobby playing. But I play guitar and sing and I play with a band called a number of different touring groups in my 20s. But I guess most notably a band called Modern Day Zero, which is a modern rock band we tour with like Nickelback and Puddle of Mud and Marilyn Manson and a lot of these, you know, more progressive rock bands and from like the late 90s through 2002 or so. So it was a lot of fun. I got to meet a lot of cool people and play some big stages. And, you know, we were we were as a movie, almost famous kind of that that was our story. We were we open for a lot of huge bands, but never quite pierced the veil ourselves. But we had a heck of a good time doing it.
Kelly Kleinman:
We could probably share some stories. In the meantime, let's imagine that you are in an elevator with the president of Ford. What would your 30 sec. You have 30 seconds to do this. What would your elevator pitch sound like to keep him wanting more?
Matt Arana:
This is a tough question because, you know, from a manufacturer standpoint, they might not think that data breach at dealerships or, you know, obviously they understand compliance. But Mr Ford, President, how would you feel or how cool would it be if he knew that every dealership in America that had your name on it was 100 percent protected from any type of Identity theft, data breach. And if every customer that bought a Ford vehicle was offered that same protection for themselves and their families. Sound interesting. And I think he would probably want to hear more.
Kelly Kleinman:
Well, I think he's at least going to take another couple floors. How's that?
Matt Arana:
Good enough.
Kelly Kleinman:
He'll stand up in the elevator. Well, let's. Before we get into how that particular solution is monetized, obviously identity breach is a huge problem and dealerships are far more exposed than I think even many of them realize. So how does Identity Maxx, protect the dealer from the risks and the costs involved and how does that translate to limited exposure for a customer?
Matt Arana:
Right. So Identity Maxx, was created specifically for car dealers. But, you know, most consumers these days are aware of a variety of different identity theft protection programs that are out there, to, if not monitor certainly alert you if you've been breached or help you recover any lost assets that you've been breached. So it's not an unfamiliar concept, but in the automotive space, as with in the finance business, the FTC and the Gramm-Leach-Bliley Act that was passed in '99, I believe it's been a long time, has imposed fines for violations of privacy and non-public information that crosses the desk of every single car dealership in America. So obviously the exposure was there and basically Identity Maxx was developed to cover the dealership in the event of a data breach, cover all of their employees and all of their families in the event of a data breach. And as a product that can be offered to every customer that buys a vehicle from that dealership and the product itself is is much more robust and comprehensive than a lot of the other identity theft protection programs that are out there from a consumer standpoint. But from a dealership standpoint, it it covers Most of what they need to be in compliance with the privacy rule, the safeguards rule, any red flags rule.
Kelly Kleinman:
Well, let's see Matt, that they're not in compliance or that they're lacking compliance in certain areas. What are some of the punitive costs to a dealership that gets breached? I think dealers need to know the costs of taking data breach for granted.
Matt Arana:
Yeah, and it's it's hard to quantify that. I mean, actually give you the exact numbers with respect to if the FTC comes in and they want to place penalties for, you know, violations on their main for basic privacy stuff and they can come in and slap $100,000 fine on the privacy rule, it could be I think it's $41,400 or some change. And then the safeguards laws and other $41,000. So that means if they come in and they say, OK, let's see your data breach protection program, what do you have in place? Do you have a CIO is there someone we can speak with? And you failed to provide what they deem to be sufficient to cover those particular guidelines. And they're slapping fines right and left. And they are, you know, like I say, coming from the finance business, both commercial and residential lending, especially audits are happening. Fines are being put in place and examples are being made across the industry, you know, to to enforce these guidelines. Now that that doesn't take into account Kelly, the cost of having a data breach at the dealership. That's just fines from the FTC, if you have a data breach, you're absolutely exposed to class action lawsuits. And there are plenty of attorneys circling around waiting for these types of things, you know, to grab a big group of people that have been affected. And, you know, with dollar signs and in their eyes like they all do for any any time. There's a mass affected situation like that. Your dealership could be. crippled, if not disabled. 100%. Especially small and mid-sized dealers. You know, the effects of class action lawsuits can be terrible, not to mention, you know, speaking of other damages, the reputation. Sure. If it gets out that you've been breached and it sort of implies that you are negligent or not really putting all that much importance on your customers' private information. I mean, the loss of revenue to be immeasurable.
Kelly Kleinman:
Absolutely. Absolutely.
Matt Arana:
Very costly. And on a lot of levels.
Kelly Kleinman:
Well, it makes sense to engage in a program like this to me. If I was a car dealership. I'd be very, very concerned with it because it's such a common problem. It's so common that it seems that although there's the potential for a reputation, you know, taking a hit, it seems to pass quickly because it's become all so common. But it's expensive from a financial standpoint and a reputation standpoint. Agreed. It is how? So let's go through the process of I am at the desk, I'm doing the deal. How can a dealership profitize off of Identity Maxx? And what does the pitch to the customer sound like?
Matt Arana:
Well, here's the thing. It's, you know, protecting your dealership should be first and foremost, right? I mean, protection vs. profits. Not exclusively, but in the order of things. Because if you're not protected, who cares about profit, you're exposed and you could lose everything. Right. Versus, you know, dollars and cents on a deal. But the way this product is designed is that any dealership partners would offer five years of recovery to every person that buys a dealer or buys a vehicle from that particular dealership. So as a part of XYZ Automotive, we care about our dealerships, privacy, the data that comes through our dealership and we also care about our customers and their families. You protect a lot of other things in your life. You know, you have insurance on everything. But protecting yourselves and your family from financial catastrophe should be very much up there. So we care about our customers. We're going to give 5 years to everybody that buys a vehicle from us and it protects them and every member of their household. Pretty cool. So that's for every vehicle you have to offer it to everyone. Right. As a part of F&I when they're at the desk signing the deal. This is where it not only pays for itself, but becomes profitable as an F&I product. Really? Hey, Mr. Smith. Jones. Whatever the case is, we appreciate your business. You're going to receive five years of recovery from Identity Maxx. Give it to all the folks to buy the vehicles. Plus, they also offer 5 years of monitoring for yourself and everyone in the family, which means if anything suspicious happens on any of your accounts relative to your private information, you'll be notified in the event of any damage, of any breaches or any affecting of this thing. You'll be assigned a personal advocate that will go after all of your losses for you and reimburse you.
Matt Arana:
So it's not in that reimburse you, but go after all of your losses without you having to do it yourself. So that's that's pretty much the pitch it's nine bucks a month. How's that sound to you? OK. Click a box and it becomes an F&I product. So terrific. Yeah. So at roughly 9% penetration and I'm using 100 vehicles a month as a round number and roughly 9-10% penetration on that upsell. The dealership now has no cost in offering to say every every customer. So anything above that becomes profit. Pretty attractive. I mean, obviously, every dealer can run their own numbers and see kind of where they're at and where their break even is. And on that. And that's that's not taking into account Kelly. the value. The why buy here, the marketing potential that it has, there's just a way to say a lot of car dealers are not thinking this forward. They're not all that concerned about it. But we are. If you're going to buy, buy from us.
Kelly Kleinman:
There's a strong perception of value add. I agree. Yeah.
Matt Arana:
So you can't really measure that necessarily. But it's it's pretty compelling. And that's why I was drawn to this product. You know, it made so much sense on so many levels. I couldn't really find a proverbial hole in the product where it wouldn't make sense other than if a dealership is overly confident maybe and thinks because they have I've got cyber insurance or I've got a company that comes in and orders my emails every year I do this or that. It does not cover a full blown data breach and it does also not cover, you know, let's just face it. If an employee writes down a customer's credit card number and customer #2 comes and takes a cell phone photo of the credit card. That's not cybersecurity. That's that's that's a data breach in your dealership that came as a result of something that you're not covered. But if you have this program in place, if it does safeguard against class action lawsuits, it can give you another level of security that you probably don't already have.
Kelly Kleinman:
Well, listen, Matt, I want to thank you so much for coming on board today and breaking it down for us. Dealerships, beware he'll be knocking at your door shortly. And I, again. Thanks for stopping by. Data breach is a huge problem and I think this provides an outstanding solution for it and at a great price to the consumer. Needless to say, Matt, thanks again.
Matt Arana:
I appreciate your time. Thanks.
Kelly Kleinman:
Well, folks, that's about all she wrote. This is Kelly Kleinman. DealershipNews.com. That was my podcast for Thursday afternoon. Have a great day and we'll see you soon.
Kelly Kleinman:
I'm going to do another ending. OK.
Kelly Kleinman:
I want to thank Matt Arana of Identity Maxx, for stopping by and providing us with all that great information. This is Kelly Kleinman. DealershipNews.com. This podcast is over. We'll see you soon. Have a great afternoon.
