Dealership Pretax Profit Down 33% | SDR #302

Welcome to the big show. Today we're going to talk about the one thing you don't want to do when dealership pre tax profits are down 33%. Do not do this one thing. Also, there's a funny thing that happened in Albuquerque, New Mexico, in a Toyota store and much, much more. Coming up on this edition of Service Drive Revolution.

We should probably warn everybody right off at the top that we just got an espresso machine here at the library. And there's a special espresso that we source from Seattle. Not don't say the name because we don't want them to run out, but it does elicit a certain energy.

That you don't normally have.

Yeah, you're, you're hopped up.

I like a little bit like crack.

Yeah. So it's funny if I don't know if the camera will do it justice, but Chris is wired right now and.

I'm super excited and I haven't even finished it.

Yeah, I killed mine and started on another one. But.

That espresso machine is no joke.

And it is, it is the best latte you'll ever have.

Yeah.

That coffee I, I took you when we were in Washington last year.

Yeah.

I'm like, we have to go.

It was an experience.

You couldn't explain it unless you went there. I just. Because it's not, it's not coffee the way you think it's coffee. I mean, there's something about the foam in the latte that's like meringue almost. And then the coffee. Sweet. So funny that Claudia was putting sugar in it.

She put sugar.

Never put sugar in.

Doesn't need to.

It's naturally sweet.

Yeah. You can just enjoy it the way it is. But you know what that reminds me of the, the story that you tell about the pepper and the salad, but like she put sugar in without even knowing what it tasted like.

Just automatic. It's a Latin, it's a Latin thing. It is, it is funny. So now we have the espresso machine because there are times when we have events in here where we should have espresso.

That was the idea. There's been a couple times.

Well, and more events are coming, so we've got a lot going on at the headquarters.

We just had a, a master class which we used to call a boot camp, but now we call it a master class. But that's for new coaching clients that join the family and then they come and it's kind of a workshop for a couple days. We do those once a month. We just had that. It was really fun and it was packed. And then this week we have another one of the leadership experiences. So Friend, who sent five people to the last one, was so blown away by the changes in them that he bought it out and we're doing it for 40 people, which is going to be more than we were thinking we would do.

We will learn a lot.

So we're going to have to change the setup in the library to classroom style. I think we've got only done one. What's the. Oh, that reminds me. The only time we've ever done that before was for Top Dog. We did classroom style because what do we have, like 108 people in here or something?

Funny you should mention that.

Top Dog is coming up.

That's right.

It doesn't. A lot of people that listen to this Christian aren't in coaching, and if you're not in coaching, you're not going to be able to come. So it's really. I mean, we can talk about it, but we're not selling tickets to it.

Yeah.

Because it. It already is almost booked up. If you are listening to this in your. In coaching and you didn't see the email a couple days ago, you better hurry.

Yeah, half of the slots are filled up already. And I would say that we've had some amazing guests at Top Dog over the years, but I don't know that we've ever hit a guest that was like, at the perfect part of their ascent in terms of, like, popularity and like, he's catching fire.

I mean, the last time we did that was with Jocko.

Jocko was also really, really good timing.

Just becoming famous and we had him.

That was eight years ago.

He was so sweet, too. Yeah, he's a nice guy, but Will Guerrero is a really nice guy and really smart. And if you don't know who Will is, Christian is going to tell you all about it because you read his book twice.

So Will is the author of the book Unreasonable Hospitality and also was a general manager at a really cool restaurant in New York City called eleven Madison.

Park and was the number one restaurant in the world.

Number one restaurant in the world did not start out at number one. They had to.

And kind of the basis of the TV show the Bear influences it. He's a consultant on there.

Yeah, he's. I. I keep thinking executive producer, but maybe it's just a special consultant, but he's got a lot of input on that show. So, yeah, he's credited on that on that show as being a contributor.

We did do An SDR with him. So you could go back and look for that too if you missed it.

Which I would suggest if you do nothing else. If you've only got five minutes. Listen to the part where Will's talking about his dad. Gold.

Such a great episode. That was a lot of fun to do.

Good stuff. Did you, did you see the new sea doos? The 2025 sea doos? Only because it was on my screen in the office.

He has the. He has a giant TV in his office and the 2025 Sea do lineup what just happened to be on there.

So now all of them are 325s, which is great. I don't have to buy the red one because I never wanted the red one. I was trying to figure out vinyl.

Yeah.

For them. But I think next year I, I, I don't know if I need to trade them both in, but I'll trade one in and I'll get the 325.

Like the one. Kind of like the one I have, I think. But I'm excited about that.

I think you'll be happy.

They come in normal colors.

Yeah. They look good on the screen.

Red's too much.

The. Yeah. What were those? White. It was blue and white.

Yeah. I've never been a red. I've never had a red car.

I'm really leaning towards a red car.

I know. You were saying that.

I know.

Bring that midlife crisis full circle.

That's right. If only I could make it.

Why don't you start on. Button your shirt a little more. Show some of that chest.

I was thinking about growing chest hair.

But why don't get a. Why don't you get a gold chain?

Oh, yeah.

This is a good idea.

Right? I could.

My ears are pierced. I could go and put earrings back in my ears.

I think everybody would love that. They would support that.

There's no doubt that I wouldn't be a handsome devil with earrings, chest hair and a gold chain.

Would you do like a diamond stud or would you do like a hoop?

So, so probably diamond stud and gaudy diamond stud.

Like you're in the NFL kind of.

Yeah. Total. That. The, the gold chain, the earrings. Yeah. I'm going to be like Travis Kelce.

Does he have earrings?

He better.

I don't think he does. Oh, I'm not sure.

Sorry. Trav Travy.

Okay, so top dog Will Goodare. We talked about that. What's in the news, foreign.

We're going to talk about is going to be our topic today. Not this first story. This is so crazy to me. I don't know, it's. It's a testament to what's going on in the world, I think. But in Albuquerque, New Mexico. Albuquerque or Albuquerque, there was a Toyota dealership that In a mere 30 minutes, two burglars broke in, destroyed 60 computer monitors.

Yeah. Caused $100,000 in damage. A Toyota dealership employee in New Mexico is accused of causing $100,000 in damage to the store during an overnight break in. The venom appears to have been an act of revenge by the 20 year old and a friend who, whom the store had recently fired. Imagine how that sofa discussion went before. They are like, hey, what are you doing? What do you want to do tonight? Well, let's go break into this place that just fired me and wreck all their stuff. Surveillance video captured at Larry H. Miller American Toyota shows the duo is spending a half hour destroying all the stuff. Then they also spray painted, I think I can say this. They spray painted male genitalia on a woman's desk. Like so it's high class break in. And then my favorite thing is, is that the burglars tried but were not successful in sealing the following 15 iPads and sports collectibles. And most importantly, they were not successful in obtaining the manager samurai sword. Like it's not success if you didn't get the samurai sword and then other employees personal belongings.

But what is it with managers that have samurai swords? Like I've seen that before. I don't, I never get that.

Yeah, I've seen quite a few. I think they're cool.

They're cool. But why would you have it at work?

I don't know.

Like a power play.

Yeah, it's got to be a power play. There's no doubt in my mind. And have it mounted on the wall like.

Above a fireplace mantle.

That was automotive news, right?

Yeah, that was automotive news.

Pretty funny.

Yeah.

Do you think the those kids go to jail or do they do like they do here in California and just let them out?

I don't know. A hundred thousand dollars is a lot of damage. That's got to be felony criminal damaged property, right?

Oh, wow.

And then breaking and entering and all that stuff too. So I don't know. I think they, they could be in a bit of trouble would be my thought. So that. Yeah. So interesting.

I don't know what's.

Part of this problem is I've never been fired before. But had I gotten fired in my 20s, the thought to go and destroy the place I that fired me never would occur to Me.

It'S like, I don't know how that goes to that.

I wouldn't say that. It would never occur to me. I just wouldn't do it.

Okay, so you might have the evil thought but not act on it. Yeah, okay. Yeah. It's all about consequences.

Sometimes it's fun to daydream.

That's fair.

But doing it is the problem. Thinking it isn't the problem.

Yeah, it's free to think.

Yeah. You just can't do it.

Yeah.

But you got to know better.

Yeah, it's just sort of like a weird lack of ability to understand reality. I think it just feels like it's a video game or something.

Funny. The kid's 20.

20 years old and just completely screwed up his life over a. I mean, if he's 20, what position do you think he held in the dealership?

General manager.

Yeah, so probably a gm, but yeah, that's probably an entry level position. And for that firing then now he's in. Now he's got a little bit of a challenge ahead of him, so. But it'll be interesting. Please, if you get fired, don't break into the dealership and break all the stuff, please.

All right, what else you want to talk about?

Dealership pre tax profit is down 33. So we predicted this. And the thing that we want to say, because this happens every time there's a downturn in the automotive industry.

Is.

The thing that happens is everybody panics and they start to cut into the bone right away.

I remember.

In the last downturn, I was interviewing top texts and advisors from one of the public companies and I was looking at their numbers and I was like, why, why would they, why would they let you go? And they go, because we made the most money. And I go, yeah, but you flagged the most hours. Like. Yeah, they don't make that connection.

Yeah, they look at some sort of HR report that says this employee, 200 grand.

We're cutting 200 grand. But they don't realize that they want to cut the bottom, not the top, if they want to cut at all. So what's going on in our world? And re, you know, the opportunity of a lifetime comes once a day. Customers are keeping their cars longer because you can tell by the sales volume they're not buying new cars. They're buried in the ones that they have, which forces them to maintain and repair what they have. So the average car, we talked about this the other day is 14, 000 miles. It might hit 15.

No, no, 14 years old.

Oh, yeah, 14 years old, it might hit 15. The thing to do in this sort of situation is to start marketing fixed tops, like going after it, get good at finding those customers online marketing fixed stops and grow it. Don't, don't shrink it. I know the tendency is to run scared. I mean, how many, how many dealers furloughed technicians during COVID and then immediately regretted it?

A lot of them for sure.

And don't do that again. You can grow it like the opportunity to gain market share. And when sales turns around to have a bigger customer base is right in front of you. All you have to do is be strategic and execute. That's it. Don't panic and run. If you panic and run, your sales aren't coming back anytime soon. Like it probably won't be until later next year. Depending on how the election goes. It might be longer than that. But people are putting miles on cars and they're not trading them in for tennis shoes. In the words of the late Bob Crevier, people are not trading their cars in for tennis shoes.

That is one of my favorite things.

They're driving more actually.

That's right. So, so there's the opportunity from the customers coming in. There's also, and I think that this was something that I saw in 2020, is that you have to understand that as much as we can talk about not panicking, people are going to panic, which means that some really talented people are going to come available. So this is the time where you can build an all star team to take the best care of customers. And it's so funny to me that like the strong will just get stronger. And this, these downturns like this are my favorite time for fixed ops. It's like it's once every 15 years that fixed ops gets to be a star. This is that time like it's here. And the profitability, if you're not making, you know, really healthy profit and service and parts right now you are, you're missing the ball. And the ability to make your dealership sustainable. So with that, you know, it comes at the value of the product that we sell. So if I've got the best team, the best techs, the best advisors, the, the best parts department personnel, and then the ability to get customers in and out in a very fast method and communicate with them really well, you will just, it's literally the rich will just get richer. But there's going to come a point where if you don't have your fixed ops set when Everybody else is 30 steps ahead of you, it's Going to be tough to keep up.

And the starting point I think for you is to raise your standards now. If you raise your standards now, you will start to attract that talent that is out there and looking for a good home. But they want to. One is when they are furloughed or laid off or whatever it is, they're going to be a little bitter. And so you need to be able to talk their language. And they need to know that when they come in that you're holding yourself to a different standard, but which means you are set up to gain market share in these situations, not contract. I don't know how many times we've had a client come into coaching and we've gone into a store and we literally had to hire back everybody they just got rid of. Like it makes no sense.

To let technicians go. Like you need more texts, not less techs.

You had to do that with coach. Vicki, store where it was tax.

Support staff got let go. Yeah. Advisors got let go too. Right? Yeah.

There were a couple other stores then that stopped washing cars. They were doing all kinds of weird stuff and just trying to figure out how to cut. And if you, if you.

Went and watched that, it flipped so quick that we were adding on top of that.

Right. Yeah. Because the, the part of the equation nobody is taking into consideration worth those cuts is that the customer still needs service.

And the secret is answer the phone.

What?

Like focus on the stuff that matters. I think a lot of times we're so disconnected to what's happening on the front line that we're missing. You know, we, we've talked about it before, but you're missing appointments, you're missing drive ins because you don't have the capacity. And everybody's conditioned to push people away instead of gaining and grabbing as many customers as you can.

Yep. Profits are down 33%. Close the BDC.

Get rid of warranty.

I'll fix it.

It's so funny. So get I, I would challenge everybody to, to think of this as a time to gain market share. If, if you need a roadmap for that, call us infohriscollinsinc.com we'll, we'll help you with that. You can hop on a strategy session and we'll kind of look at what you got going on and see. But the opportunity is everywhere.

Yeah. I think I told you this last week is that, that is definitely been a thing that I've noticed over the last two or three weeks with those strategy sessions is the focus is coming into the right things. So there's some people that are. They. They've caught wind of this and they're trying to get ahead of it. There's a world where you can be profitable, have the best customer satisfaction, and while everyone else shrinks, you grow. Why not be that one?

Don't be the one that panics. Panicking and running scared is the easy. The easy way out, which actually is death. It's not the easy way out.

It's awful.

It's finality.

Your. Your hair would be on fire. Nobody likes hair on fire.

Check out those 2025 C.

I feel like. I feel like sea doo should give you some sort of, like your. The, you know, service drive revolution sponsored by the 2025 CDU. Like they should.

I'm lucky if they'll book me two weeks out. Like, they don't care.

You're just a customer at that point. Right.

What we should do is buy a. Buy a dealership. That's what we should do.

I have a feeling some will become available.

Dirt bikes and watercraft, especially up there in Washington.

That's got to be a great place to have a power sports dealer.

I love it. And the people are fun. Like, it's a fun environment.

Yeah. And they're serious about their. Their power sports.

Okay, everybody, do us a favor. Have a great week. Don't panic. This is the time for fixed ops to step up, and we'll see you next time on Service Driver Revolution. Thanks so much for watching this episode of Service Job Revolution. We're uploading new stuff every day, so make sure you subscribe and click the bell icon so you don't miss out. If you have a question you'd like us to answer on the show, call 8333-ASK SDR and we'll answer your question on the show. That's 8333-ASK SDR. For special deals on our books and training, head over to offers.chris collinsinc.com now that's offers.chriscollinsinc.com welcome back, Tom. I'm Chris Collins, and I'll see you in the next video.