3 KPI's Service Managers are Judged on-- Whether They Know it or Not (Service Drive Revolution)

Today on the big show, we're going to talk about the three KPIs you're being judged on whether you realize it or not. We are going to talk about how there's a conspiracy with the parts department and guns. And we're going to answer your questions and lots more. I'm Chris Collins. This is Jeremy from Advisor Fix and creator of the profitable service Advisor. This is Christian. He's the master executive here. Hey, Chris Collins Inc. Would you call an executive? And this is service Drive revolution.

Did you guys see these shorts that Tesla made? So you know Christian has a Tesla and so they made a limited edition short shorts. We ordered you a pair.

Will you wear those on the show?

They are six. They're priced at $69 and 420 cents. Tesla shorts.

Do I have to shave my legs.

If I wear them?

No, no, no, not at all. It looked better hairy. Yeah.

Okay. You have hair on your legs a little bit. Yeah.

Perfect.

Yeah, we're good.

As a Tesla owner. What do you think about that, Christian?

Like the model? Not so much the shorts for Jeremy.

Dude, I think you would look great in those.

No, we ordered them in your size.

It'd be tighter on you. They would actually look like basketball shorts on you.

We.

We run a competition with our. With our coaching clients every month that weighs the service advisors against each other in different categories and then different groups. So like if you're an advisor at a Ford dealership or gm, you're in the American group. And then the managers in the software are graded on their average advisor's performance. Right. And so we want to. We have the list of the winners last month, which is pretty, pretty exciting. So. So in the American group, the top manager was Baby Snack. Oh, by the way, everybody has a nickname in the comp too, so. Baby Snack. Congratulations, Baby Snack. Good job. Second place is the house. And the top advisor in the American group is the closer. Second place is Carlos bows to me. Third place is Frankie. Fourth place is Dingers 15. And fifth place is Uncle Rich. What would your nickname be in this?

I knew you were going to ask me a question that I did not know the answer to.

The top manager in the Japanese comp was Al Capone. And second place was the prodigy.

From Louisiana.

I think I would take Mahomes.

Because I'm the Mahomes of service advising.

Oh, boy.

Yeah, here it goes.

I'm just saying Mahomes just sign a $400 million contract.

Exactly. Scoreboard says it all. My numbers would give me the validation of that.

Okay.

Good.

Top advisor in the Japanese group, Lucky Luciano. Second place. Cpap. Cpap.

Cpap.

Cpap.

Yeah.

Is that like, do you guys like.

Prep for this before or like, you should coach him on that.

Third place is Sharpshooter. Fourth place is the Gems. And fifth place is John Dillinger.

Nice.

In the high line competition, Vector from the beautiful state of Illinois.

It's a three team for Vector.

Good job, Vector.

Dude, good job.

Vector is a huge Detroit Lions fan.

I'm sorry.

Never worked out.

So sorry.

He doesn't waver from him though. It's pretty impressive.

Owned by the Ford family though.

Well, that says it all.

Does it does. There's more on that to come. Stay tuned.

First place is Rover Hog for the Advisors. Second place is Beast Mode. Oh, I like that little, little.

Tribute to the Seattle Seahawks there.

Okay.

Even though that advisor's from Illinois. And third place is Rooster in the Euro Highline group. Top managers, the Monster. Good job, Monster. First place is New Spock for the advisors. Second place, Big Mike. In third place is lt and for Canada, top manager, Looney One. Top advisor, Road Runner. Second place is Michelle Mann. In the Asian zine group, Big Tuna is the top manager and top advisor, Ren Pauli. And second place is Haas. Good job, everybody.

In the com.

Last month, a lot of repeats there. So pretty, pretty fun.

So I'm excited to get the independent comp going, which is coming very soon. So we'll have a group of independents that we can have on the comp board and throw some numbers.

It is built, it's ready to go. It's got some really great KPIs that the advisors are gonna be competing against each other. We've got some technician stuff built in. There's some really cool stuff in there. I think it's gonna be great.

Okay, so I know you, you have a conspiracy theory about the parts department.

But it's based in fact though I can show you invoices and we'll do the dollar costing average, of course. And it's increased. I've got facts behind this.

Hold up for a second though. So Michael has a question that he was asking and I thought, oh, just ask it on the show and we'll get your opinion because it involves the parts department. And I know what a fan of the parts department you are.

Absolutely. If anything is wrong.

And so you're gonna love this question. So Michael, what is. What's your question?

Thanks for having me on the show. So the other day I went into my local service department and I was going in to Get a scheduled maintenance done as well as a recall, because.

What kind of car?

That's a Toyota Corolla hybrid.

What year?

2020.

And it already has a recall on the seat belts, of all things.

Oh, okay.

Yeah.

So you went in how many miles?

Not sure.

4829.

So you went in for your first oil change, Right. And when you went in, they told you how to recall or you knew.

So I knew. I had a recall before.

Did you get like a notice in the mail?

Yeah. Okay. Yeah. So I went in and they told me on the phone, okay, well, we can't, you know, we can't deal with the recall until we check out the car. So I said, great, I'll take it in. While you guys are doing my maintenance, you can check out the car. So they check out the car and I get a phone call at the end of the day saying, hey, we did. We did your maintenance and everything's done, but unfortunately, we don't have the part to do your recall, but we're going to order it and we're going to get you back in here next week and we can do your recall. So I set up an appointment and everything was great. Now comes this week. And just to give you some context, this weekend I'm going on a road trip and I need those seatbelts fixed because I need to be safe. So I have my appointment tomorrow. And I called up the department today just to confirm, called the lady and I said, hey, so when you called.

The dealership, did you ask for parts?

Yeah, I called. Oh, I called for the. The service department.

Okay, so you asked the service department.

Right. And I said, hey, I have. I'm bringing my car in tomorrow for a recall. Last week they told me to schedule an appointment for this week before I bring it in, I just want to confirm that you guys have the part that you needed to order.

So it's been a week and nobody's contacted you and said the parts in?

No.

So you're calling. So you're worried because you're going on this trip?

Yes.

Where's this trip to?

To Northern California.

And then the seat. The seatbelt recalls on all four seatbelts.

Or it's on the back seat belts.

So there's a recall in the back seat belts. Are you taking people with you on the trip that will be in the back?

Yes.

Do you care about those people?

For the most part, yes.

But technically, if the seat belts didn't work, it would be okay.

Yeah.

How close are they? Family?

No, no, you Know what a good.

Parts manager would do? Give them some loaner helmets for those customers in the backseat.

There you go.

So I called the lady and she puts me on hold for a good minute, you know, a little while, because.

She has to check with the parts department.

Correct. Okay. She comes back and she says, hey, so in order to get that recall, we need to get your car in so we can inspect it so we can see what part to order.

Didn't we already do that?

And I said, oh, well, I did that last week. They already inspected my car. And she said, oh, well, in that case. Your parts. Your parts here? Sure, if they inspected it, it's here. So just come on in. So my question for you is, is my part really there?

I'm gonna vote for no. I'm gonna vote no. I love. Yeah, so no, probably not.

So maybe, maybe call and ask for the manager and tell him like, hey, this is my confusion and I'm getting frustrated and could you help me? Or we could call together and we could ask for the parts department. Your appointments tomorrow. Yeah, we could ask for the parts department. And they might tell us in Jeremy's theory. They wouldn't, but, man, what a well oiled machine that place is, huh?

Yeah. So now. Now I am worried.

Well, there's either two scenarios. They either have a stockpile of those parts ready, but they need to have the inspection done first, which they claim they didn't do the first time. So if they had the parts in stock, it would have been done already. But I have seen countless advisors say that the parts are on order, and then the parts are perpetually on order and it never shows up.

You're taking this to the Toyota store by you, right?

Correct. Yeah.

You know that one of our clients is the Toyota store down here. Lithia.

That's not the one I took it to.

Yeah. In the future, we might be able to set you up.

See, they probably would have sent him a text message, says, hey, your part has arrived. We're ready for your appointment. Confirm your time. Push a button.

Well, at least we. We might know somebody there.

We got the inside track. We can hook you up.

Yeah, well, yeah, the part's not there though, Michael, for sure.

All right, so what. What do I do if I want to go on a road trip this weekend?

Well, I have four extra helmets at home. You can borrow two if you need to.

Okay.

I would. I would call and talk to the parts and maybe ask for the parts manager, but make a big deal out of it.

Okay.

And I would make Them physically touch the part.

But it is. It is sad that this is the experience.

Should I take my car in tomorrow just to see what happens?

No, not without them confirming they have the part.

Yeah, I vote for yes. Because you can probably raise an issue that if they don't have it ready, you might be able to get a free loaner vehicle for your trip if yours is unsafe to drive. Just saying.

He's not going to want a loaner.

I can.

I can tell you by knowing him.

I would much rather put the miles on a loaner car than my car.

I mean, if they're. If they're cool with me taking on a road trip, then.

Well, just tell them you're driving it locally. They don't check.

But what are the chances that Toyota store has loaner.

They might have a Camry for.

They don't have the parts for the recall. They're not going to have a.

To be fair. To be fair, when I brought my car in the last time, they asked me if I needed a rental or a loaner.

Listen.

So this is the difference.

Seat belts aren't a safety issue. It's not a big deal. You're not gonna put somebody in a loaner or a rental for a non safety issue.

I feel like that was a joke, Michael.

I feel like the world just got turned.

I could just get some bungee cords.

This is what I say. Invite a couple friends that you don't really like.

And put them in the back. Put them in the ejector.

Friends that are with you. That the person that buys lunch that day gets shotgun and the other two are in the back.

Who pays for treatment and the people.

What's funny is the Toyota dealership he's going to has always been a nightmare.

Dude, that's a great question. Thanks for bringing that up. Absolutely. Great scenario.

Yeah. Sorry, Michael.

Thank.

Thank you.

Sorry.

I was going to tell you guys too. So over the weekend, I went out again. Like, again. No ankle bracelet too. Two weekends in a row. So I went to the zoo. And the only animal in the zoo was a dog. It was a shih tzu.

Get it? Shih Tzu.

You don't get it.

I don't know.

It's a play on sh.

T. Zoo.

Yeah. Got it.

Got it.

You're not laughing.

No, he. He usually laughs.

Hey, do you know. Do you know what Christian did on Monday at our company meeting?

No, I don't.

He opened it with a standup routine and it was hilarious.

How many minutes?

It's about three and a half dude.

That'S a long time. Good job, man.

You.

I'm. I'm telling you guys, like, we need to have a party and follow Christian to an open mic somewhere. He's ready to. He's ready to do stand up. It was hilarious.

Totally be down with speaking.

It makes the day for everybody go a little bit better.

We had a good Monday.

Yeah.

Humor, actually.

Wish we could have started today off like that. Today's been a total shih tzu.

Yeah.

Wow.

Silly dog.

There's no rewind button right now. We can't go back.

We'll go back and. What? Why not talk about shih tzus.

We can reelect our are.

Oh, what's your parts? What's your parts?

Well, this is hot off the press, so. You know they shut down Congress up in Sacramento in California.

I did not know that.

Yes, they did. Yep. Because they sent it. There was, like, five people tested positive.

For covet, however, in the California Congress.

In California Congress.

Yeah. Well, you know what they tested positive for here in California? Being stupid Shih Tzu leadership.

Shih Tzu leadership. That's what they tested positive.

How did you weave that?

There isn't. There isn't a leader from our governor to our mayor. There isn't a leader in a bunch of them.

When are you running for office, Chris Collins for governor? You heard it here first on sdr.

You know, that's a funny thing about politics. What's the. What's the. What do politics and diapers have in common?

They both have shih tzu's in them.

So close.

They're full of.

They always need to be changed and for the same reason.

Yeah.

Nice.

It's a disaster.

Now, I've been tracking our purchases at our shop, and I've noticed something with dealership parts departments, and the core pricing on parts is skyrocketed. So what I've uncovered through our very special journalistic channels in investigative reporting, is this. The parts department in the United States, especially in California, starting here. Because they're going to do this first in California. They're gonna take our guns away from us. Okay. They're gonna take the guns away. So the parts department only in California. They're gonna start in California, then they're gonna roll it out to the rest of the United States.

You think they're gonna take guns away in Texas and Oklahoma?

At some point they will.

Come on.

At some point in the future, they will try to do it. Now, what I've discovered is this. We put a lot of blame on the Parts departments and parts managers. Right. And a lot of it.

We do or you do?

We do. Okay, wait, you're saying I do?

Well, I feel like you drive the train.

I feel like just the way you started this out, like. Wait, is this a dealership? Parts departments.

Okay, well, let me get the story out. Here's what's happening. Parts managers all across the United States, breaking news. Are gathering raw materials. Because when they take the guns away, they're going to melt down the cores to build new guns.

And that's why the price of cores have gone up.

Yes. Because they want all this stuff back.

Got it.

Absolutely. That's.

And so you have this, like, you read this in on the Dark Web or. How did you find this out?

We did some very undercover investigative reports recording late at night, we had some hidden cameras in the parts trucks that are actually not dropping off new parts. They're loading up all the cores. That truck we followed got lost. It took a hidden turn, like through the bat tunnel. Remember how that was? The Batmobile?

It was yesterday.

And I think they're.

They're stockpiling them. So when they take our guns.

Raw materials.

So then we want to make friends with parts managers because they will have the guns when they take our guns.

Yes, absolutely. Okay.

They'll become masters.

So we need some parts manager friends.

Yes, we do.

Good. Maybe you might want to start being nicer to parts managers.

I'm not mean to parts managers. I love parts managers.

And there's a possibility most of the.

Stuff that goes wrong in the dealership is their fault. I can't help it.

Did you guys see the 4th of July?

I was on a tractor on the 4th of July.

Tractor.

I was doing. Putting sprinklers in, finishing up some yard work. Making the jumps a little bit bigger.

Remember, you're on the outskirts.

I'm gonna backflip on my. My mountain.

It was like World War III here in downtown la.

It was how I imagined Beirut is what it sounded like. It. And it just went on for hours. And it didn't stop. Three in the morning. I. I woke up and there was still stuff going on. Walked out of my balcony.

Talk about a broken culture. The culture in Los Angeles. Our mayor is a moron. All Democrats, by the way. Our governor is a moron. And it is a broken system. There is no pride here. People literally just take a dump in the middle of the sidewalk. There's homeless people everywhere. There is no pride here whatsoever. Nobody cares about the city. Nobody really wants to be here anymore. It's like a bunch of zombies walking around, and I'm very curious why. I feel like I'm about to get a prostate exam.

No, it's not prostate. I. I heard that. The coming down. It was amazing.

How you're listening to this.

Jeremy's wearing black rubber super serial killer style.

The only thing he's missing is my.

Alter ego is coming out here. If I can't believe how trash this city is. Like, I think I was down here a couple months ago, and now it's just ridiculous. But I heard the. That you guys had to. There was a body found right outside the building here.

Just.

Dead body in the bushes.

Yeah. Yeah.

So I forgot my face shield. I've got my mouse, but I needed to wear gloves, so.

No, it. It's insane.

It is insane.

I don't. I don't understand it. I don't understand why people don't want to have pride to live here.

Yeah.

Like, it used to be such a cool place to live. Like, you know, I'm. I'm the kind of person, like, I hate little towns. I love diversity. I love art, culture, big cities. But this has gone way too far. Like, it. I can't even walk to the gym in the morning. Like, there's homeless people on every sidewalk.

They're everywhere. Yeah. The parking lot that I parked at, half of the stalls had sleeping bags on them.

I don't doubt that even in the least.

Yeah, that's crazy to me. And this could be another conspiracy theory. This is the government's way of pushing us and seeing how far they can push us. And I was just amazed at, you know, the Fourth of July, the firework display. I watched the Macy's display on television with my kids, and it was crazy how they had all those fireworks all over New York City. I thought the Empire State Building was going to actually catch on fire. It was crazy. But for Los Angeles just to cancel everything. I mean, I can understand we don't want public gatherings and all that, but the fireworks are up in the sky. They could still do the display. People could still enjoy it from the safety of their home or wherever. It's just. It's crazy.

They're no leadership here whatsoever. They're just trying to get by.

Yeah, absolutely.

They don't have a plan. They don't know what they're going to do. Their deficit is. You know what? I think they're estimating it at $53 billion. They're going to have to raise taxes. Taxes here are already the highest in the country or maybe Second highest behind Manhattan. It's, it's.

They've already slashed the LAPD budget so they can't steal more money from that department.

Yeah, and that's a joke too. Like the, the last thing you want to do is slash the budget for a police force that's already over.

See, this all makes sense as to why the parts managers are stockpiling raw materials. They need this, they need that stuff to build the guns of the future.

Yeah, the guns of the future.

Okay, our, our subject today. And I, I, I love this. And it was, it was Christian's idea, is the three KPIs you're being judged on and don't realize it.

And so the first one is profitability. Right. So the thing that we find more and more, and I, I think it applies to shop owners too, is you ask like, what is, what is your profitability? And nobody knows. And I don't. I always thought that the reason for doing business was profitability.

That is the nature of the beast, for sure.

Like the reason for doing charity is not profitability.

Unless you're a very profitable non profit.

Which is very common.

Can be. You can have a high salary. They don't cap salaries in nonprofits. Maybe we should turn this into a nonprofit. We could. No, they don't.

Unless you can pay yourself like $5 million a year.

Absolutely. And it happens on a regular basis. It's non. For profit. Means that you're not seeking to have profit, but it doesn't mean that there's not stuff.

Hey, there's overhead. We have to run the organization. We need a CEO.

So there's no governors on charitable organizations and the profit that they can pay out. But there is on shops and service departments.

That's right.

What are they, what are they governed at? What's the limit for how much profit you can make?

Well, it's America. There's no limit.

You just said there was.

He did. I didn't.

No, there's a limit.

You shook your head.

You agree with him.

No, I did not.

You did.

No.

It's a conspiracy.

No, I did not. Not at all. So do you know what? Okay, so I agree with you. And profit is key. And from the advisor position, it's interesting because we can get so stuck in the four letter word. Do you know what that four letter word is?

Shih tzu.

Shih tzu. B usy. Being busy. So you can get caught up in activity, but you don't follow the profit. And a lot of times there's work that we can actually do that will be profitable. And then there's other work that we take in that is not profitable. And I just look at so many times I've said yes, trying to help somebody, but at the same time I didn't think about the profit. And then it actually cost us money. And you got to realize that every minute of your day counts the productivity of the shop. You've got to get that work out. And if something's going to steal profit in time, it's going to cost you to fix that car. And we should not pay to fix our customers cars. So we have to be smart, realize that being busy is a four letter word and you want to be profitable. So when people ask me, how am I? You guys are really busy. I said, hey, I'd rather be profitable than busy.

So, so the, the thing that I know in the dealership world is the financial statements. If you, you know, if you're good and you know what you're doing, usually print around the third of the month. If you're old school and slow, they print around the 10th of the month. But either way, a general manager or a dealer is getting that financial statement and the first thing they're doing is opening up and looking at profitability by department.

Most of the time the service manager never sees that, but they're being judged on it. And it's a trick bag. It's a trick bag from the dealer's side that they're not educating them on, that they're not sharing it with them. It's like the best kept secret that you're judged on.

Right?

Like I can't think of another analogy of something like that where you're judged on it but you're not involved in it.

Well, and how much of it do you control too, which is you, through awareness needs to be brought that if you're a service manager and you don't have access to it, you need to get access to it because your job in your career is riding on that profitability, that bottom line number.

Well, I think what happens is that people come into the service manager position and let's say that their pay plan is based on gross profit. They assume the social contract that their measuring stick is gross profit. The truth is that it's net profit, it's total profit at the end. Whether or not they know or are exposed to it doesn't change the fact that this is judgment, not what they think it is with the pay plan. That's why it's so easy for them to come in and then they Might generate a ton of gross profit over expend. Right. And have their expenses and exceed their increase in gross profit. They're losing money, they're jobless, and they. They don't even figure it out at the end. I was trying to think of it too. Like, I can't think of an industry where we're judged on something that we're not, you know, privy to the information. Like, that's. Yeah.

I've always said it's like driving a car without a steering wheel. Like, you, you know, you have a brake and an accelerator, but you can't really steer. And so, but what. What happens in. In dealerships is most of the general managers or dealers come from car sales.

Yep.

So they're not sharing the service in parts numbers that much because they don't understand them. So it's kind of like, I know this, I know sales, I know f. And I. So let me work on that. And I don't understand this. So it's a necessary evil. But they don't understand that the, the, like every month that you don't make that other $100,000 adds up to a million dollars a year. Like, how many times do you. Do we go into a dealership and that break even becomes millions of dollars, like, very quick. Because 100,000amonth, 200,000amonth, it adds up. Right. Like you were showing me a client that was that literally, if we stayed on that pace, would be 10 million a year.

Yeah, it would be. No, if they do it now, they're almost 13 million a year. But the important thing is when we started that program, it was less than 100,000 in net a month.

Yeah. But 13 million of unfound cash, that goes. Right. That's. We're talking about the bottom line. We're not talking about 13 million in sales. Sales. We're talking about 13 million in profit.

Wow.

So just think about another hundred thousand a month adds up to 1.2 million. Another $200,000 a month. Right. Like, we've had service departments that are making half a million dollars a month in profit. Profit. Not adjusted profit on a forward statement, not, you know, gross profit. We're talking about, bottom line, $6 million a year. Right.

Well, and I think the important thing right now is to understand that the pricing of our service and our. The labor is going to drive profitability, and labor is the one thing you can control. I can't necessarily control my part pricing. Right. If I'm not making enough profit, it's very easy for me to change My labor rate, my effective labor rate and make sure that we're driving the profit down to the bottom line. And, and I believe just this is just a general statement that most service departments and auto repair shops are undercharging their labor by about 40% today just based off of real estate costs, real estate expense, the expense of running the business, doing business in California, all that stuff. So there's room to grow, but the limit is right here.

Yeah, but so to that point though is most of the time if you're driving a car without a steering wheel and you don't have access to the information and then if you did have access, you don't understand it. Right. So it's like a, it's like a, it's compounding problems on top of each other is so in that if you were a person trying to run a good business, you're a service manager, the only thing that you're going to revert to is if we're busy, we must be doing good, right?

Yep.

And so what we see time and time again is every hour of labor they sell, they're losing 10 bucks. And you'd be better to stand up front and give customer five dollar bills.

Cut your losses in half.

Yeah, but they don't understand how profit is created because they don't have access to the information.

Right. Which basically the, the point of every business is unique and has unique fixed expenses that go into the cost of doing business. So you can't necessarily compare your labor rate to shop across town or the dealership across town because their expenses are different than yours. So you've got to be able to understand it to your customized way and make it right for you.

Yeah.

We're not in, we're not saying you have to raise your prices. We're not saying you have to do anything. All we're saying is the leverage and the power is in understanding and knowledge. You can figure the rest out. But if you're driving without a steering wheel, you're, you just think because you're busy, you're doing okay. And every month when the general manager dealer pops up financial statement, they see your face.

Yep.

So they see a negative number, they see a break even, then they see your face.

They don't see your face, they see your paycheck.

Yeah. And then what they do is you walk by the office, you're going to get me 500,000 in gross. And you're like, yeah, well he's happy if I get him 500,000 in gross. Meanwhile 500,000 in gross, you're losing 20 grand because you discount your way into the 500,000 or whatever.

Right. And then your pay plans built off of the gross profit. So the general manager just overpaid you for negative net. Yeah, that's not a good long term perspective for career.

My advice to anybody listening to this, that is in this situation is I would trick them into giving me the information because they're not smart enough to do it on their own. Honestly, like, they're not. So what I would do, and I don't know what you guys think, but I would go to them and in a, you know, cool way say, hey, I want to be mentored on this. Would you mentor me? And play to their ego? Because dealers and general managers have huge egos. Play to their ego and say, hey, I'm trying to learn this. Will you mentor me? You're, you're super good at it and smart and a genius. And so would you please mentor me and teach me this? And then you probably will get, get to see it and you'll start to have access to it. But I would do that because the turnover in service managers happens more because of this reason than anything else, even though nobody realizes it. You're firing the service manager because he's not getting your result, but you never gave him the tools or the training to get the result. I don't know how many times a dealer calls us and they're like, hey, we're gonna hire you as soon as we get a new manager. And we're always like, give us the manager you got, we can fix him. People are smart. Like, if he shows up every day and he cares, we just need to teach him what he's looking at and he'll figure it out. But I think we were tracking it for a while. We're 90% at saving those managers.

Yeah, it's super high. And the thing is, and I think that that's probably the best part of our job is that we get to go in somewhere and someone, maybe they're on the ropes.

Right?

Right.

They're just about to go out. And sometimes they know it, sometimes they don't. But you actually change their own worth of what they're seeing themselves. And they actually get to learn tools right in front of yourself. And like, our favorite thing is when a manager that was on the ropes and just about to go out turns it around in 90 days and all of a sudden they're like this new person and then they're irreplaceable. Right. At that point, they've got the tools and it's fun to see how often. But I'd much rather, I'd much, much rather train an existing manager than go out and start all over fresh.

Absolutely.

Number two is the customer experience, customer satisfaction and retention.

I like that.

What does retention mean?

How many customers come back to you?

Yeah, yeah.

So if got that one right.

I was so scared.

Oh man.

We should, we should do a terms.

You should know, Jeremy, this is a test.

So why DO dealerships lose 80% of their customers to independence over time? When they have home field advantage.

They.

Sell the car, they have home field advantage. And over the first three to four.

Years, you said it's the customer experience. So one thing, retention is very vague for an advisor on the front line. So you got to think, we're Busy, we're writing 30 cars a day, you know, maybe 20 if you're, you know, a little smarter instead of a harder worker. But the retention side of, takes time to come back. So what I like to judge is the customer experience. Right. How many 5 star reviews organically are we getting? And then are those customers referring people over to us as well? So the challenge is at the dealership level. The process is a lot different at the independent, whether it's location, it's easier to get to the independent speed of service, the communication process. And you know, we compete with some dealerships in our town that have really great systems in place, but still their retention falls too. We, we gather those customers.

Yeah.

And so the reason the retention falls is the customer's perception and feelings about you. That's it. And so as a service manager, you need to get involved in the car sale. You need to own the idea that you have home field advantage about how those customers are trained, how they feel about us, what they're scared. They perceive that your prices are too high. They perceive that, you know, like Michael, it's a, it's a, it's a joke. Right. He buys a new Toyota and just a simple recall for a safety item, he, it's a, it's a huge hassle.

Yeah.

You're in the business of being lubricant in the process and constantly figuring out how you can improve the customer experience. Because that's the future. The customer experience is the future.

Well, and think of this too. So in Michael's case, that service advisor, if you have the wrong culture in your service department, this is going to lay it out for you. The service advisor is looking at Michael's ticket like, oh, it's not a big ticket. Right. So what's the. The effort that that advisor is going to give that particular ticket? They're going to let the system kind of deal with it. Okay. He goes to 10,000 miles. It comes back in. It's another small service. 15,000 miles, 20,000 miles, 25. So now the first time that Michael's really deep into the experience of the dealership is at 30k. And what does the service advisor try to sell him immediately when he shows up? A big ticket. So we've got to get our focus off of the dollars and cents and the paycheck and put it on the experience and realize it's the lifetime value of that client that's going to pay us, not necessarily the transactional value.

I see your point, but I would make a counterpoint to that. That people will pay for a good experience.

Oh, absolutely.

I believe that dealerships aren't losing customers so much because of price, because we do a lot of work with independents, and it ends up the independents are more. In a lot of cases, the independents are buying the parts from the dealer and selling them for more than the dealer sells them for. As in, you do that every day.

What's wrong with that?

But I'm just saying it's customer perception.

Yep. There's no doubt. So I think the big thing is, is that when I think about independents versus dealers, is in Michael's case, he's working harder to service his car at that store, then the store is working to service him when he.

And he has to because it's warranty. And so the dealerships take advantage of the idea that you have to go there, but they lose them as soon as you don't have to go there. 80% of them go somewhere else.

Right. And the magic happens after the warranty period.

Right.

But we think we've got this at the dealer side. We've got this captive audience. But the beautiful thing is, on the independent side, they're recognizing that and they're capitalizing on the dealer customers. Before the warranty's out, they're already starting to get them to pull for regular maintenance. And you go where you're used to going and where you perceive the value. Right. And I think that that's the difference.

Yeah. And with retention, too, I think consumers have shifted, and definitely where society's at today, people's patients definitely shorter. People are kind of agitated. So you have to execute perfectly during that transaction. And you've got to use every bit of technology to deliver that to the customer. There's a number of things that they could have done to hit a home run for him. I'm just curious what he would rate them right now on a scale of 1 to 5.

A 1. The thing, too, that in this whole thing is lost is Michael's, like, the sweetest guy that would do the right thing. Just want, like, if you said, like, hey, could you come back in an hour? He would. He's not trying to impose his will on anybody. He just wants it to be fair. That's it. He's not. He's not, you know, like, now the voice of God. He would probably stand on a desk and throw stuff at people. But lightning bolts, you're talking about. When that sort of stuff happens to somebody like Michael, it, like, makes you want to fight because it's just such a waste of time.

And, you know, the sad part of this is, the actual fault of this is the parts department. So fault. It all boils down to parts department.

Man. I didn't think that before, but you're starting to win me over with the conspiracy.

There it is with the.

They're gonna have the guns. So we need. We need to be friends with them because we're gonna need the guns. Now, do you think that they're gonna take the cores and make them into ammo?

Absolutely.

Or will somebody else make them?

Primers, brass, all that stuff?

All of it.

All of it.

Do you think they might load them a little hot?

Absolutely.

The third one on this list, shop efficiency.

It's incredible that you.

Are running a factory and you have no idea what the factory produces.

It is crazy that the monkeys, most of the time, have the keys to the zoo. Like, there's two questions that can tell you how good somebody is at their job. What's your nut to gross? And what's your shop efficiency? And when you say, what's your nut to gross? And they're like, I don't know. And then you go, what's your shop efficiency? And they just look at you. You're like, it's a production facility. It's a production facility.

If I.

If I go up to a plant manager in a Pepsi bottling company and I go, how many cans? They'll be like, we made. We bottled 3 million cans yesterday.

Yeah. Their waste was probably point zero two percent. And they know the efficiency.

You go into an American Express phone room and you're like, how many calls? We had 3,000 customer issues, and 1750 of them were solved within three minutes.

Nice.

And it's probably posted on a board somewhere for.

No, it's on A tv. Like the idea that your shop doesn't have the numbers posted, that you're not judging your shop on production, and your shop is running.

You.

You're not running your shop is a recipe for disaster. It's suicide.

The missing link there, the hardest part of this efficiency boils down to human behavior. And we have to be able to manage our employees and, you know, our team members to help them get results. I used to say, you know, that every hour, every day counts, then every minute, and then when I really broke it down, that every second of your day counts, efficiency went through the roof.

Yeah. This is kind of getting morbid. It's making me think, what did one casket say to the other?

Oh, wait, I know this. I know this. Hold on.

Is that you coughing?

Is that you coughing?

Nice job, Kijawa. Good one, man. That was awesome.

I wrote that down.

You was prepared.

I was.

Right.

Awesome.

Okay. Those are the three.

Any.

Any other ideas on that before we take questions?

I had one, but the casket just.

Threw me for a loop, so I do that sometimes.

You have that. That way.

Okay. Voice of God, do we have some good questions this week?

The voice of God has excellent questions.

Question number one. As a fairly new manager of an independent repair shop, how would you deal with a technician that will not take any type of criticism? He gets mad and walks out. He comes back the next day and apologizes. But I still lost a lot of time and service because of him.

I know what you're gonna say, Jeremy.

Fire him.

No. Ah, dang it.

That's my instinctual response there. What would I say?

Calling his wife.

How do you know the guy's married? I'm just assuming he could have a life partner.

Same thing, isn't it?

It is, yes.

Yeah. Calling his husband or his wife and ask them to help.

That's playing the trump card.

Yeah, absolutely. That.

Were you gonna say fire him?

Yeah. There's tons of technique. I saw, like, four ASC Master certified technicians on the side of the street.

Those were homeless people.

Oh, they must have stolen the jacket from somebody else. I know where this question comes from. Gene in Florida. Great question. The challenge here is nobody wants to lose a technician, and the talent pool for technicians is dwindling. So even if you're at a dealership or an independent, this is a real world scenario that happens all. All the time. So if you have a technician that doesn't want to take and he's labeled it criticism, is that correct, Voice of God?

Yes.

Okay, so it's not so much constructive Feedback. It's criticism. Nobody likes criticism. You gotta understand we're dealing with human behavior and you have to manage that behavior. So the thing I don't like is the fact the guy walks out in the middle of the day. That's just not good. But then he comes back and apologizes. So. So maybe his heart's in the right place. He just doesn't know how to deal with his emotions. So maybe we need some sort of therapy. I bet Obamacare could underwrite that. What do you think? Oh, boy, oh boy, here we go. What do you think?

So I think that in order to be able to do the criticism with the technician, what I would want to do is I'd want to pull the whole thing back. One, I would explain that the behavior is not acceptable. And then the second thing I would say is before you make a withdrawal, you have to make a deposit. So you have to connect with your people. You have to look and say, here's what I expect out of you. And if you're not doing this or if you're doing this, then there's kudos or there's corrections to be done. And then say, there's going to be times when I'm going to give you corrections. It's because I care and I want you to be the best version of yourself that you can be. And I'll need you to accept that criticism, grow and learn from it. But what I would do is I'd make some deposits first before taking them. Withdrawal all out and the criticism. But the other line in the sand is that like walking off a job and storming out like we're not in preschool, like we.

Almost as bad as throwing a wrench.

There's not much of a difference. It's the same tantrum, right? So it's the same behavior. And a lot of times that comes from us not having enough deposits before we're trying to coach people.

Yeah, great point. I think a lot of times too, we hire people and we don't actually set those expectations up front. And we think just because they are a technician, they have 15, 20 years experience that they know how to do it. Well, they may not know how to do it our way. And we still need to treat them like a new employee and walk them through every step of the way. The challenge is, where do you find the time to do that, though? But I think you're right. You've got to set the stage, what's acceptable, what's not. And then you've got to make some positive deposits and make it happen.

Good.

Great question. Guess what we got coming for Gene. What? A hundred bucks. And. And some swag.

Nice.

Wow.

Good job, Gene.

Good job. This next question comes from email. I recently asked the service director after interviewing an advisor if the advisor asked what our net to gross percentage is at. He informed me he did not. I then inquired what we average month to month, and he told me we stay around 11% each much each month. My question is, how bad is 11% and what percentage should someone's dealership push to achieve? Thank you for your time.

So 11% isn't bad. It's a little higher than the national average. So it's not bad.

The. The goal would be 30% plus. I hesitate to say just 30 because it seems like we say 30 people hit 30 and then they put their feet up and kind of quit. So you know as much as you can while having high retention and taking care of customers.

Absolutely.

So it's a balance, right?

Yeah. That retention is going to be the barometer too. Your reputation's out there, so don't worry. Customers will give you the feedback on the pricing model too. And when the value doesn't exceed, you know, when the value is not there with the pricing, that's where you'll know.

So I think that's super important to say. Don't always assume that your price is too high. I'd say first thing I'm looking at is the value proposition because are you meeting what the expectation is of the price? So I don't think it's always that your price is too high. I think it's sometimes that you're not doing. You're not following through on the promise.

Absolutely, absolutely. So yeah, 11% could be a great number if you were getting 3% six months ago, right? Yeah. It just depends on where you're.

I'll tell you this, if you're losing money, it's harder to get from losing, to break even. Then from 11% to 30%, nets and gross, you're. You're doing more right than you're doing wrong.

Yeah, absolutely.

Okay, that's it for this week.

Thank you, voice of God. Thank you, gentlemen.

So I have a question. The last question was from email. So do we send the swag to Gmail or where do we send the swag?

The voice of God is pretty good at tracking down addresses.

Nice.

The voice of God sees all.

My faith has been restored. Thank you.

Thanks you guys for tuning in. We'll see you next time on Service Drive Revolution.

Thanks for watching this episode of service Drive Revolution. If you have any questions, go ahead and post them in the comments below. Make sure you subscribe and hit the bell icon so you're notified when we post new episodes. I'm Chris Collins and you can find me on Facebook, Facebook and Instagram at Chris Bulldog Collins and I'll see you again on the next episode.