Dealership Economic Hurricane Survival Plan | SDR #300

Welcome, everybody, to the big show. I'm Chris Collins, and this is Chris Sean.

Hello.

Today we're going to talk about dealership's economic hurricane survival plan, but it's much more than that. It's an incredible conversation about a little boy, a tire, a grocery store, a rotisserie chicken, and a mother and Pepsi.

That and much, much more. Coming up on this edition of Service Drive Revolution.

Christian took his car in for a simple thing.

What should have been a simple thing. Yep.

Very simple thing.

And.

You'Re disappointed.

I'm disappointed.

And we're not starting off this episode with a joke.

No, there's no.

There's no. I was walking to work this morning.

And although I might have to walk.

Home this guy with no pants on. And.

I said, I know you can get some pants. And the guy's like, I don't want pants. And then whatever. I don't know. However that joke goes, because he's free. Yeah.

So. So, yeah. So took the Toyota in for some tires. It was time.

And how many miles on the toy?

85, 000.

Holy cow. She drives a lot.

100 miles a day.

And so I think we should tell everybody it's not your car.

Right.

It's your fiance.

I'm just responsible for said maintenance on the vehicle.

Is there a wedding date, or is it just your fiance forever?

Sometime next year.

Oh, next year.

I think sometime in 2020. No, but sometime in 2025.

We had other things to worry.

June wedding.

I don't know.

It's so hot.

Yeah. I really like falls. One of my favorite seasons. Maybe a fall wedding could be fun, But.

So the advisor I've worked with a couple of times now, and he told me last time around that, hey, next time it's gonna be tire time. Which I'm like, I love that kind of stuff where I know ahead of time if I have to do something.

So they did an inspection.

Yep.

And they said, chris, Sean, next time you come in for an oil change, you should plan on getting some tires because your tires are wearing out there.

At the end of their life.

And I said, and is it all four tires?

All four tires now, like, one was it one was at 4, 30 seconds, and the rest are at 3 or something like that, but do them all, Whatever. So I said, okay, great. Give me some options. So gave me some options. Then I usually like to do what options. So Dunlop, Michelin, Yokohama. And then there was one other brand, Kumo or something like that, I think was the preference. I do. So I. I like Yokohama. Tires, and they also look like they're the best value. And then I do a thing where I always like to ask the advisor, which tires would you pick? And just see if they've got a favorite too. Not that it means that I'm gonna go with that, but so I was like, okay, so I'm going to go with the Yokama tires.

Are you having this conversation on the.

Phone or all over text? So today was the first time I talked to this fella. Everything else had been over text.

It's very Midwest of you. Okay, so you. Last time you're in for the oil change, you have this text exchange. And he says, hey, by the way, next time you come in, you're going to need tires. And you're like, okay, what kind of tires?

Sends me pictures of the different tires. Really? Really good job.

Really?

Yeah.

Why do you need pictures? You don't know what a tire looks like.

I just like that he did it. I know what a tire looks like. He doesn't know who I am. He doesn't even know that I'm in the car business.

Sucker for the extra effort of the picture.

Yeah, so.

So last week I text him and.

I say, hey, time for an oil change.

Time for an oil change. And by the way, get those Yokohamas on.

So we need tires.

Yeah.

What are you doing?

I printed the text.

Oh, this is the text. Can I see?

Yeah.

So you screenshot these. Are we going to put these up.

On the screen if people zap out his stuff?

What if they're listening in the car?

So start from here.

Hi, Alex, Christian here.

Christian, I left out a couple.

Do you think you can get me in next week for the oil change and to install the Yokohama tires? Yes, next week. Fine.

Let's say 6:41am Geez Louise.

Sorry.

Great. Tuesday or Wednesday works best for me. Just let me know which works for you and I'll bring the Chr. Is that the car?

Yeah.

In let's do Tuesday? He says yes. Great. I'll drop in the morning and put your name on the night drop envelope. Thank you. By the way, just so everybody knows, Christian has never seen the inside of this dealership. He. Do they park it out for you too?

I have to go into to get my autograph and then I go right to the valet stand. But I've never really gone into the.

So he does the night drop before they open and then somehow sneaks in. But he's never met the advice. It's only been text.

Just text.

You're the dream Customer.

So. Okay, that's good. That's one of my points here. All right, so keep going.

Self anointing yourself the dream customer a little bit. Okay, so I'll just read this part again because this is a double, double text here. It says, great, I'll drop in the morning and put your name on the night drop envelope. Thank you. And then you said, do you need a credit card from me to order the tires? What made you. What made you ask that? I just want to make sure. Oh, get in.

Yeah, so that should be. I get in and out in one day.

Let's make sure. Oh, get in. Oh, get in and out in a day.

It's funny when you read my typos.

I just want to make sure. Oh, get in and out in a day.

Yep. And then.

So when he says, no, you're good. You're doing a lot of work here.

Yeah.

I would never do this.

I understand. But I really wanted to get my car in and out in a day.

So yesterday I text to make sure.

Why do you want to get it in and out in a day?

Because we switch cars. She's taking the BMW and putting all the miles on it to do her. I don't want miles on my car.

She drives to San Diego. Okay. Hi, Alex. Hope you had a great weekend. Just confirming we are go for tomorrow tire appointment. For tomorrow's tire appointment. I didn't get an appointment reminder like I usually do. He said, correct, and then you said, thank you.

So then you go, I'm going to guess the punchline to this.

So drop it off. 6:45, night drop envelope. And then 7:10, I get my first phone call.

7:10 in the morning?

Yeah. Oh, wow. What?

Have you ever talked to him that early before?

I never talked to him before.

Oh, so now we're past text.

Yes.

And I'm like, get the real.

So when I see the phone number come up. What do you think? I know already.

You had a pr. You can tell by how many times you asked that you had a premonition.

I did.

Okay.

So. So they don't have calls me.

Do they have the Dunlops?

Yeah. So he's like, was it the Dunlops you wanted? And I'm like this son of a gun.

You don't like Dunlops?

No, I just know that no, it's the Yokohama. So. But what he was saying is he. That. Was it the Dunlops. Like, oh, yeah, I forgot that I said Yokohama. Dunlop. Really close words. But I'm like, no, it's the Yokohamas that We talked about in the text, and I verified and then verified again. And he's like, yeah, they sold those over the weekend.

Sure, they did.

Whatever. So he couldn't tell me last night when I confirmed. And. And he's like, hey, so can you just bring the car back on Thursday? And I'm like, my whole point to doing this was a one day in and out. And. And I. I literally said. I'm like, I don't know how I could have made this any easier. Like, as could. Can you think of a customer that ever did this much work for you?

No. That's crazy.

So I do think that I'm a pretty good customer.

I would have walked back and had him held in the parts. I would have said, I have some coming in. Hold those. Yeah, I would have. Even if. Because sometimes I wrote service to places where the parts managers were a pain in the ass. I would have created an RO and had them put it on the ro.

Especially if I was willing to pay for them or whatever. Right. So my head went to, like, if I really wanted to get this done, I would have had to bypass the advisor altogether, called the parts department, bought the tires.

Well, that's usually how I do it as a customer. So I make friends with somebody in parts.

Yeah. So this is what I should have done. I should have called the parts department directly and had the appointment. Set the appointment myself. Because the other thing I'd almost guarantee. I bet he never put an appointment for me in the system.

Well, of course not. You didn't get a reminder?

I didn't get a reminder. So then I didn't get an appointment in the system.

By the way, this dealership is owned by one of the big auto groups.

It is.

So it's not like a. It's not like a locally owned thing.

And it just kind of. The whole thing kind of just got me thinking about, like. Remember a couple of weeks ago we were talking about where, like, they did that monitoring of people calling and, like, 25% hung up without setting an appointment?

Like, oh, yeah.

This is a good example of, like, everyone's like, oh, you got to sell tires and alignments and all that stuff. And then, like, people are begging you to do it, and we still drop the ball.

It's on the execution.

Yeah.

The demand is there. People need tires.

And. And he did really well through 80% of it. The follow through is a last.

I would. I wouldn't. I wouldn't say he did well through any of it.

Oh, I like that. He told me last Time that next time. I think that's.

That almost feels like an accident or.

Maybe I pushed it. I don't know. Like.

Yeah, I don't know. It doesn't seem. It doesn't. All of this is driven by you. He's just. All of his. Look at, look at the amount of.

Words that I do versus what he does.

He. He put let's do Tuesday. No, you good.

That's it.

Yeah.

And those are three different texts, right? No, he's not doing any work.

Okay.

He seems indifferent. See, that's the thing about text. It's hard is. It's hard to know context. But on this one, look at all how much you text. And he goes, no, you good? Correct it.

It looks like I'm the advisor.

Yeah, no, it does. It looks like the roles are reversed.

That's super interesting. And I still didn't get what I wanted.

Yeah. I wouldn't go back.

I'm running out of toilet dealers to go to.

Go to. Go to.

There's a tire thing up with old Sears up there. There's a tire shop would have it, right?

Yeah, no, I'll find it. I really like servicing at the dealer.

Go to Longo.

I can't go to Longo either.

Why?

Because I'm mad at them because of the seven hour oil change. Oh. Maybe they're better now.

Probably not.

It's hard being on the other side, isn't it?

Well, I don't mind it because it, it's a great reminder of how important what we're doing is.

Yeah. But unfortunately with the consolidation, this public company doesn't care about this. They just look at this dealership as a number. They don't care about the outcome. The only time, the only time they get worried about customer satisfaction is if they can't buy another dealership.

Right.

Let's say.

Do you think that that is a thing that I kind of noticed as I was going through and thinking about, you know, what we're going to talk about today is that.

The consolidation thing, what do you think is going to happen there? I think that there's been this thing where the price of dealerships keeps going up and up and up. So these acquisition costs for these big companies keeps growing. I think there's a shelf there. I think it's going to crash. The ships are not gonna be worth as much. And then what do you think they're gonna do a crazy sell off, don't you think? Because it's just about pluses and minuses and all that stuff. Like there's not a desire to make sure that we keep.

In the words of the great Bob Dylan. The answer, my friend, is blowing in the wind.

Thank you.

The answer is blowing in the wind. Yeah, my friend, blowing in the wind. We don't really know, but it doesn't. I mean, the, the other thing that's going to happen eventually is the new car side is going to be more automated like.

Tesla in the sense that you're gonna buy the car online. There's no reason for you to go through all the pain that you go through. Right, Right. So most car dealers are, are.

From the sales department. How many car dealers want to own a service department and parts department?

Very few. They feel like it's that necessary evil.

Yeah. So in 10 years it'll be interesting to see what that's like. But I mean really it's going to be more about the service because the.

The more.

Autonomous the cars are, the more it's just a transaction. Right?

Yeah.

Also I would say too, like a lot of the design of cars is very boring. Like cars are just a transactional thing. Well, only at the top high end.

Are.

Cars exciting design wise. Like, I don't know, all the Toyotas and Nissan's look, Hondas look the same.

Yeah. And now the Hyundai's and the Kias are starting to look like those. So I don't know, they're all just, they're all together a little bit.

I don't think people have a personal connection to their car like they used to either. Not in the cities.

I don't know.

It's. It's interesting.

You know, there's a couple of brands that hold on to it a little bit.

I don't know how much we want to get into this, but I think about this stuff a lot. I was talking to my cousin who is in the grocery business. Right. And so, so you know that. So I sent Christian a picture when I was up in Washington at home. And the thing that blows me away is in Washington as a state, like growing up, you had, especially in the summer, you had the freshest vegetables and fruits.

Yeah.

And like you, you know, there were farmers that had cows and you would hunt and you would eat deer, but all the meat you would eat was local and fresh. You would can fruit, so you had it throughout the year. So you'd can peaches, you would can pears and you ate very healthy. Now, I mean, I've been in California 25 years or something. We eat better here in LA than the people in Washington in the sense that most of the grocery stores have been consolidated. So there, there's two companies that own all the grocery stores now, basically. And then the third option is Walmart. There they have a grocery which is.

Probably the busiest of all of them. Right. Like, that's where.

But the most.

Walmart does not care about the quality of the food they're buying and selling.

Yeah. I would suggest there's nothing local in a Walmart for Washington.

Yeah. And so it ends up that the people in Washington are very unhealthy. They, they look unhealthy, they're. They just are unhealthy. Like, it's crazy. The cancer, the obesity, it's, it's, it's sad in a way. Like, and people are eating these calories and they're addicted to carbs and sugar. And I mean, I just see it with my family. It's crazy the amount of just junk food and chips and all that that everybody's consuming. And so it always blows me away. The line at the pharmacy at Walmart is longer than the line for checkout. Like, it's just nuts. And so the picture I sent you wasn't from Walmart. It was from Fred Meyer and I sent Christian a picture. They have a whole section at the pharmacy there, which is literally across the street from Walmart.

It was a room.

It was a room. And what did it say?

Diabetes care.

Diabetes care. And like, you go through that grocery store, it's really hard to find healthy options. Even though stuff is grown in Washington, most of that produce is coming from Brazil or somewhere else. It's not locally grown. You have to go to a farm, like a fruit stand to buy locally grown stuff. The, you can just tell by the, the peaches. And you know, it's just, it's terrible. Even the strawberries, like, come from somewhere else. And it's like Washington used to produce tons of that stuff and now it, you know, it's just not economical. Whatever, whatever it is. But I'm talking to my cousin about this and.

The economics of it are just interesting because he was explaining to me the psychology of a grocery store. And him and I talk about this all the time and he knows I'm fascinated by it. And I forget what I was telling him about psychology wise, but he goes, well, yeah, you know, all the end caps in the grocery store, this and that and the other thing. And I, and I said, how much do the, how much do they pay? Oh, I know what it was. So Missy wanted a rotisserie chicken. So we're waiting for the rotisserie chickens to come out. Like, say it's like 10:45, and they put them out at 11. So we're. We're standing around waiting. 11 comes, they put out the rotisserie chickens. And on the rotisserie chicken thing, they say, you can get a six pack of Pepsi for a dollar if you buy a rotisserie chicken.

Oh, no.

And there's a bunch of just regular Pepsi there.

And we got two rotisserie chickens. And then, of course, my mom wanted to get the six pack of Pepsi. We got.

How can you turn it down for.

For a dollar? And we go up to the cashier. My mom tells the cashier, like, hey, these are a dollar because we got two rotisserie chickens. And the lady's like, yeah, the computer will take care of it. And sure enough, it did. Like, as soon as she scanned the rotisserie chickens, it took the -299 or whatever. So I was asking him, like, how can they afford to do that? And he was telling me, like, basically those six packs were either gifted in a deal or whatever, you know, or they were very cheap, but they're not losing money on that.

And I'm like, well, what's this? Like, why do you want people to drink that sugar water, like, with a rotisserie chick? Like, it doesn't even make sense. And then we're talking about the end caps. That's how we got there. So he's talking about the end caps. And then he's like, yeah, so the end caps are always some sort of special and whatever. And I go, well, how much do the. The comp. The food companies pay for the end cap? And he's like, well, it varies depending. And.

I was saying, well, there was so just this crazy, like, thing that just stuck in my mind when I was walking around the grocery store is they have lay's potato chips with Liano Messi on them. The soccer player.

Because that's how he got to where he's at.

Yeah, of course. Like, so you got. It's like Metallica having whiskey. Like, they don't drink. They're all recovering alcoholics that don't drink, but they want us. They want to pitch out alcohol to everybody. It's so disingenuine. It drives me crazy. So. So he's like, it's a bag of potato chips, but it's a picture of him. Like, people used to have their picture on Wheaties. So he's. It's the. The Messi. Messi. His name is across the Top, and then it says lays. And then it's his potato chips, and it's on an end cap. Right. And so I was like, okay, so let me get this straight. I'm saying this to my cousin. They pay that guy a million dollars. They. They lower. Well, he was saying they lower the. The serving amount in the bag. So Instead of like 12, it'll be 10 ounces of potato chips or whatever. Yeah, I got the ounces wrong. But basically those are shrinking. And lays is paying, I don't know, a couple grand to have that end cap. They're paying him a million dollars. And they could care less about the quality that the consumer. As long as it's crunchy and salty, it doesn't matter what it's fried in. It doesn't matter. It doesn't matter if it gives people diabetes. They could care less as long as they're addicted to it and they're just eating it. And.

All of the margins are going in. The value isn't in the quality of the food. The value is in the marketing and how easy it is to grab and put in your bag.

That's right.

And that's where we're at as a country.

Is it?

Can I grab it and throw it in my bag in my shopping cart? And is there a celebrity that doesn't even eat this stuff on the COVID of it endorsing it? Like, that's. That's where all the money. That's where the margin is going. And there's absolutely no research or thought going into, how could we make these healthier? You feel terrible after you eat it. You feel absolutely terrible. You have like a potato chip hangover. You have more sodium in your body, or you drink that Pepsi and you have more, you know, that's a lot of carbonated sugar garbage in your body. You feel terrible. And that's where we're at. Like, that's how grocery stores are feeding people is. It's all in. Hey, does Kim Kardashian drink that? Then I'm gonna, you know, and nothing to do with how we're growing the food, how we're preparing the food. You know, it could all be made in a warehouse in. In, you know, Mexico or Brazil or whatever. Deep fried junk with the most sugar. And people are just walking around going, I just. I deserve another cupcake because I'm so depressed. Everybody's depressed and eating bad food. It's just nuts.

It's gonna. It's gonna keep going, but just to.

The consolidation of the car dealership. It's the same sort of thing as. It's like, they don't care. Nobody. If we called corporate for these guys and they don't care, they would yell at the guy. Maybe because it's you, but they don't care. They could care less. It's just a number on a sheet. Like, there was a time when dealerships were in the community. They were like, the guy who owned the dealership also saw everybody at church.

At the grocery store or the church. That's exactly right. We have a few clients like that.

Yeah. But they're dying every day. Like, they're going away like it's a ma. Like we've let consumerism and marketing and everything get so far. I mean, we talk about that with our company and the leadership thing is like, we're going to judge that thing on the results that people get from reading the book and from doing it. We're going to charge what we need to charge for it, but it's going to be quality and we're going to. You know, there's. There's thought that goes into it. It's not just endorsed by a celebrity or.

Yep. Or how we feel or how popular it is.

Tons of celebrities are buying the book.

Yeah. It's pretty cool. It's funny to see those names on the manifest and everything like that. But. Yeah, so we've done. Definitely made a commitment. Is that like, we're not gonna celebrate after a workshop. If it felt. Feels like it went really well, we're gonna talk about it in two or three months and say, okay, what were they like coming in? What were they like coming out? Very results driven. Like, it's just about, are we making a change?

I would. I would contend that if we wanted to buy dealerships, we could do it the way we do things and we would kill everybody. Like, I don't know. I ran the number one BMW store in the country, and that was the. That was the mindset that, like, customers were the priority, the experience was the priority. It wasn't. It wasn't the other way around. Like.

That was never even a thought. Like, it just wasn't. But it would have been re. You know, it would have been really hard to duplicate that in 10 locations.

Yeah. Because there's only one of you. Right. So if you're.

No, I think. I think at some point those, those, like, like a lot of the managers that work for me are general managers now and running stuff.

Oh, that's true.

So.

Yeah. You know, I take that back. I think you could. You could do it in 10 locations. It's just having the bench. But I don't know, we could take. We could take our team right now and do that.

Yeah, we have enough people.

Yeah. And enough talented people that they could run something and attract talent and all that other stuff.

Right. And scale it. That's a really good. That's a really good point.

But maybe things flip to that. Maybe we should be thinking that way.

I don't know.

We're just. We're talking out loud. We're thinking out loud. But the grocery store thing blew me away when I was talking to him about that because it's like, oh, they paid for that end cap. They don't get that end cap for free. And then they're discounting it. Well, they're lowering the serving that's in there normally. And they got a celebrity on there.

That's right.

Nobody cares about the nutritional value of.

That thing or what they're buying. Right. But the, the Pepsi thing makes perfect sense to me because what you start to do is you can go in and just buy a chicken and walk out, but if you have the chicken and now you have the Pepsi, now you're formulating a meal which requires the chips and all the other things, like, it makes perfect sense to me.

I know another thing that he told me that they do.

I can't wait. So they put three Twinkies by the Diabetes Care, give you a. I'm going.

To give you a loose example because I don't know. I don't know what, I don't know. But.

What they will do is if you're used to, like, the ketchup and the mustard being together in the store, they'll move the mustard.

Guess why they do that?

Because you have to go to other aisles that you wouldn't normally go to.

That's interesting. A little smart.

Well, you know what I was thinking about is, like, how I always say, like, just move their.