Dealerships vs Independent Shops - Part 1 (Service Drive Revolution)

Monday, Monday. Monday. It's the battle of a century. The Shop Showdown.

I really feel like he stacked this against me.

Dealerships versus independent shops. Who has the advantage?

We have bicycles. We have scooters. We have tricycles. We have red wagons.

Who will win the fight for supremacy? Let me even just kick you in the cojones one more time. Find out the answer only on this special two part service drive revolution event. And it all starts right now.

Welcome everybody to Service Driver Revolution.

We have an exciting show for you today. We are going to talk about the shop showdown. Dealerships versus independent shops. Who has the advantage? It's gonna be fun. Welcome everybody, Jeremy, to the show.

Thanks for having me. Chris, how are you?

Creator of the profitable service advisor and shop owner. Somewhere in the IE.

Somewhere in the ie.

And then Christian from Chris Collins Inc.

What department do you run?

Coaching.

Coaching. So head of the coaching department and.

Then I like to dabble.

That's not our department.

Last week we had on a best of because I was gone. Right. So I went on vacation. I went up to Washington State and you guys are both parents, right?

Yes.

So do you. Do you realize that you guys are raising potatoes?

Tell me more about that.

Your kids are potatoes. They're worthless.

Okay. They might disagree.

So I rented this Airbnb on this lake up in Washington that my family's had property at forever. Every summer we would go there and we would water ski. So, like water skis, like one ski or two skis. And we literally would water ski until like our hands fell off. Like, we couldn't wait to get there even if we got there, like late Friday and we were going to camp out there. We would water ski in the dark with a flashlight. Like the best thing. These kids that you guys are raising don't water ski. You know what they do?

They water ski on their devices.

Like.

What do you mean?

Their cell phones.

Yeah. There's a video.

No. So they, I don't know. Now they have. They're not even inner tubes anymore. Like, we used to ride a real inner tube behind the boat.

Like the black one.

Yeah. Now they have these. These blow up kind of inner tubes that are like a lounge chair. And they sit in the lounge chair texting behind the boat. But nobody was water skiing.

It's a shame.

Why do you think that is parenting. Terrible parenting.

Parenting.

Like, why don't you guys tell your kids to put the phone down or the Xbox and actually go outside and throw a rock in a car or something?

Well, we could tell them that, but they don't listen to us. So if you want to get through them, you have to text them that, and then they might do it.

Yeah, that's a good point. That is the way to communicate.

That is the way to communicate.

So. So my son, the potato, he's big into astronomy, and he asked me one day, he says, dad, how do. How do stars die?

It's the greatest segue ever. Okay, wait, so.

So your son, the potato, sun, the potato.

I'm gonna try and get this.

Your son asked you about astronomy?

He did. Well, he said, how do stars die? And I had to sit down.

Is he interested in astronomy?

Yeah, for sure.

Loves it.

Telescope, the whole nine. And I had to think about it, and I'm like, gosh, how do stars die? And I looked at him and I said.

Typically, an overdose.

I get it. Do you get it?

I get it.

Nice segue, Christian.

Thank you.

So. But we do acknowledge that your guys kids are lazy. You're raising a generation worse than the last lazy generation. Like, things just get more.

So it's really interesting right now. So they canceled the Rose preference parade, like, done. And California has said that if your county's on the watch list, that they can't go back to school. So now we've got this dividing basically everybody, right? So I'm thinking, as a parent, I've got to really step in, because now you lose that regiment of the bell rings, you got to be up early, you got to get to school. It's online. I check in. I really think we've got to do something, because you're right. We're going to go down a path where, you know, just personal responsibility, accountability, work ethic, all these things are just going out the window. It's so it's. It's a pandemic. I mean, no pun intended, you know.

So this was funny, but the Airbnb I rented up there, the neighbor, like, at one point, I was out on the deck barbecuing, and he comes over and does. From his deck to the deck I'm on, he does the hey, where are you from? Like, all that. And then he says, oh, California, you guys are all dying down there of COVID or whatever. And then he says. He says something like, he goes, you know, in Mason county, we only have four cases. And then he made some funny comment, like, and we killed those four. Like, they're buried. Like. But no, there's no covet up there. Like, there is here, right? But it's not dense. Like, people there, like, have acres and live on Property.

And I'd be curious how many tests have they actually ran in that county? I mean so per capita nobody's sick.

So they don't need to. But, but social distancing is natural up there.

It is, yes.

Yeah. And you're outside and they communicate with smoke signals. No, but seriously, like it is a weird thing that nobody water skis. I thought that was really odd.

It's, it's a different generation for having fun. Like, you know, our parents used to tell us we'll be home when the street lights come on and you know, so you'd be out playing and stuff. You didn't sit down for hours on end. I'm amazed one of my children will. Literally. I get up for work sometimes at 2:30, 3:30 in the morning and as I'm leaving he's still playing video games with his buddies. And it's just like that's normal these days. And it's like, that's crazy.

But it's funny, I don't remember as a kid, I don't remember my parents ever saying go out and play baseball all day. Like they didn't tell me you did it. Right. Like it was just one of those things that outside was the freedom and everything like that. But the world has changed. But we do own that. Like we have to fix that because it's going to be ugly if we don't. If they don't have some sort of sense of motivation.

Yeah, absolutely.

That's a really good point.

Interesting.

Literally they're texting on the back of one of these loungers riding behind a boat with the wind in their face. Like. Yeah, they're not doing nothing. Just it's not physical either.

Yeah.

Should be happy they have waterproof phones.

The Chevy dealership by my mom's, I drove by no cars.

Really?

Zero cars. Like empty.

The four dealership cars for sale or no cars in service?

For sale, no service, no inventory. Zero. Right. We have clients, right. That don't. They won't have cars until middle of next month.

Yeah, there are some that are even further out than that right now. Yeah, it's really getting crazy.

They don't have a car to sell.

Yep. Auction prices are going crazy for pre owned vehicles too. Like it's a thing we did.

We did three of our monthly calls with. With. So we had our elite call. So all the elite managers in our coaching group. Then we had two of our bigger dealer groups and record months. Like booked out two weeks like crazy. And the whole time I wasn't wearing pants.

So Proud of him.

Oh, because it was on Zoom.

Yeah. Got it.

Okay. My. Obviously. Clearly my jokes aren't as funny as Christians. I need a better segue. Like I should have said, like. You know what that reminds me of?

Yeah. There's got to be a transition.

Yeah, it's all about the transition.

I'm excited about the topic today. Should we get to it? Are you ready? Yes. Shop showdown. Dealerships versus independence. Who has the advantage? So today we're going to do dealerships. And then in the next episode, you're going to have your rebuttal.

I have to wait a whole week for all this pent up?

I'm gonna pound this into you today.

You're gonna need some.

Obviously, independents have the advantage.

Obviously, independents have the advantage.

Obviously.

Don't you want to hear my list first?

Your list is probably like you're. I'm gonna make a prediction. Half of the items on your list are funded by a very large corporation and a huge budget.

What's the. What's the conspiracy theory with that? I don't understand.

There's no conspiracy theory.

Funded by. Funded by what?

Well, you'll see. Read your list. What's number one?

What's number one on my list?

Yeah.

Okay, so now we are talking about the. Who has the advantage? Dealerships or independent shops. Who has the advantage? Right. So the first advantage that dealerships have is. Is they can sell them a car.

They're lucky they get to sell them.

The car, but they can sell them a car.

Well, they can and they do.

Yeah. So it's the circle of life, right?

Yes.

So if a car needs more work than it's worth, they can just walk up to the sales department.

I'm thinking of a statistic that I've heard on the show numerous times of the retention that dealerships have after three years on the service drive. Yeah.

Home field advantage. Yeah.

Well, is that.

I call it home field advantage. Okay, so.

So dealers are really good at service retention after the car is out of warranty, right?

No. And most dealership services and afterthought. But they have the advantage. I'm not saying they use the.

Oh, so they don't actually exploit it?

No.

Okay. Okay, I. I can understand they do.

Not exploit it, but they could if they wanted to.

Absolutely. They could. Could you imagine if dealerships put the time and effort into servicing the customers that they had rather than trying to sell new cars, what that retention would do? Like, I just imagine, like all the money they put into marketing.

Not only could I imagine that, I stay Awake at night thinking about it.

And that the sales would happen organically if they took just.

Do you agree that that's an advantage? I'm not saying that they use the advantage, but it is an advantage.

I just have to clarify one thing. Is there a bet going on here that you're going to get me to your side of this fence?

Yes.

I have to concede on this one. It is an advantage.

Okay. Yeah, it's clear. Clearly an advantage. I don't. I don't think that's too much of a stretch. Right.

Okay. Okay.

The next one is perks. See, dealerships have more perks for the customers than independence. Example, loaners.

Because the cars break down so much they need to put them in loaners.

Listen, loaners, okay? Shuttles.

Everybody has access to shuttle drivers.

Okay? But the. The other one I have here is people for contingencies. So let's say in. In most independent shops, if there's three customers that need a shuttle at the same time.

In a dealership, you can pull a cashier, you can pull somebody from somewhere, but usually, I guarantee you.

You could find somebody from the parts department not doing anything. But that guy probably has a nose ring tattoo.

So do you agree that there's somebody sitting around in parts that could be pulled, which creates more perks for the customer because they're sitting around, Especially because.

That person is probably going to try to sell the marijuana on the way home.

What?

Yeah. You didn't know that? That's how parts profits rise is they funnel marijuana through the shuttle drivers on the way home. It's pretty good.

If the customer says no, is that a lost sale?

Yeah, it would count against the closing ratio.

GoT.

Is legal in California.

It's legal in a lot of states. I think Colorado, Washington, I don't know what else.

Okay, so I agree with your perks. Now, I walked into some dealerships and I look around and I'm like, who is paying, paying for all this?

Did I say car wash?

No, but it's a good one.

Perk, Car wash, automatic or hand wash?

I actually we had a dealership as a client that had a movie theater.

Yep, seen it before.

Really?

Movie theater. How many closed down? Many independent shops have movie theaters?

Well, it depends. Does an iPad count as a movie theater?

Like a real movie theater?

Like lounge chairs, popcorn, all that?

Oh, yeah, popcorn. Cookies. Cookies. A lot of dealerships have cookies.

Well, some independents do, too.

Coffee.

Okay.

I've seen a sushi bar at a dealership before you.

The espresso machine I have here in the safe house Any, any independent shops.

Have that we will soon coming to Freedom Auto repair.

Really?

In 2020. Quarter four.

Okay, so that's a tie.

I'm not giving you perks.

What?

That's a tie.

Please, please explain.

Cuz anything on that list, Okay, I don't care. I could beat your three people standing around. If 15 customers needed a ride at the same time, I could handle that.

We have Uber, we have Lyft, we have bicycles, we have scooters, we have tricycles. We have red wagons. We have my car, two of our loaner vehicles.

That, that's interesting because number three I had on here is that independent shops think that customers want to ride tricycles.

You.

Wait, are you serious? Let me see that red rider. Oh my gosh.

So you're saying that customers want to ride tricycles and bicycles?

Absolutely. It's a new era of transportation. Do you agree that.

So basically you're conceding.

No, it's a tie. I'm not giving you that one. Not, not giving it on that one.

Next one I have is expertise. And this, this is a long list.

Expertise at fixing the same car over and over again.

Yeah, so you're, you're, you know, in an independent shop, one day you see an F150 pickup and the next day you see a BMW 3 Series.

And so you don't have the special tools for the BMW. You don't. Sometimes you don't have all the diagnostic equipment. So in a dealership, you have the tools, you have factory training, you, you have bulletins and warrant. You know, you have access to.

Wait, are you telling me that the dealership has access to the bat phone to the engineers that built the car?

Yeah, essentially.

Yeah. So you're gonna have some sort of technical support.

So. So nice. Yeah, that's a pain for me right now. I mean, obviously you guys know, being an independent shop owner, that sometimes I have the duty of fixing the hard cars. Yeah, I can. Okay, what else you have on that list?

You have a parts department. So the parts department's there.

Are you actually saying the parts department is an advantage?

So hypothetically, in a dealership, if you have a lot. If you're a Ford dealer and you have a lot of F150s and they go through brakes a lot. You have those brakes and rotors that if the parts manager is doing his job, you're gonna have the stuff that is needed that you see trends of. They're gonna be right there in the back. You just walk back and Somebody's gonna hand you that. They're gonna put it on a repair order, and you're. You're.

It's a pretty big.

You have to go somewhere to get it or wait for it to be delivered. It's right there.

I will say that the part.

Special tools.

Okay.

Factory stuff, support. Right. Factory training. So they train the techs. The techs are only working on specific cars.

Okay.

Even in some dealerships, like, we have clients that have, like, Ford dealerships, the technicians not only only work on Fords, but they will only do suspension.

Right.

Or they will only do transmissions or. Oh, I'm a drivability guy. And you're like. Well, there haven't really been a lot of drivability concerns in the last five years. Well, that's what I do.

I'll wait.

Yeah, I'll wait.

So it's a Ford.

Specialized. Specialized. It's a huge advantage because that guy knows everything about drivability ever on a Ford. In the history of drivability ever being.

An issue, I really feel like you stacked this against me. Like, you had to go first with dealerships because expertise. I. I did. I have to concede.

I did not. I did not concede. Consider.

That going first would be an advantage. I actually thought going second would be an advantage. I would have happily gone last.

You're gonna bias the audience just because you're going first?

I think going last biases the audience, don't you, Christian? I always want to go.

Our experience is that the person that goes last usually has the biggest impact.

But.

So, I mean, there is an end game to all this.

The facts are the facts. Like, you're gonna win on the facts or you're not going first? I don't think matters. Okay, so do we concede that one?

So you're two for three right now.

How many times have you had to call a dealership and ask them for a tool?

I don't do that.

What do you do when you don't have a special tool and you can't get the thing off the widget off the thing?

I go to my toolbox, and it's in there.

So all the. So you're saying all the special tools we buy from the factory that they force us to buy are useless?

Well, I'm saying a lot of times you can engineer it yourself for, like, pennies on the dollar.

Interesting.

There's more than one way to get set.

Cam timing technology is amazing. My grandfather and I were.

I like it. I'm in your head. Yeah, a little bit. Because you're like, oh, I didn't get.

To see my head.

Yeah. So my grandfather and I were.

This reminds you of your grandfather?

It might.

Another segue.

You didn't hear that 30 seconds ago.

I did. I tried to step on it and he came right back. This reminds me, Jeremy. This reminds me of my grandfather, who is a fireman, by the way.

Special tools.

It's got to be loose. It's got to be a loose. Jeez. But yeah, he told me that I was too wrapped up technology and I called him a hypocrite and unplugged his life support.

What's even better, you couldn't get it out without laughing.

Dang it.

Practiced.

Okay, so I like it. I'm in your head because you're already kind of conceding. You're like, oh, he got to go first. Like you're giving all these signs.

Same way that you're dealing with the audience by going first.

See, it's.

It's all the power.

I think.

I think NLP and persuasion, our audience is 50.

50. I think so.

I don't know too. Like, when we're done with this list, I want you guys to put in the comments what you think we missed on the list or what, what your thoughts are. Right.

Great thought. Yes.

Okay, so the next one I have is it dealership service departments or one.

Stop shops, unless you have to order parts.

How many tires have you done in the last month in your. In your shop?

I don't do tires.

Most of the independent shops we talk to don't do tires alignments. They don't have a body shop. So even if a dealership doesn't have a body shop, they will have a relationship with the body shop that they get kickbacks from for sending them the business. Right. So their one stop shop, full circle.

This is a tie as well. Because anything that the dealership can do like that independence can provide as well.

But let's just say you wanted to exercise your home field advantage and you wanted to be a one stop shop. It would be very inconvenient for a customer to go to your shop to get the widget replaced and then go here to get tires and like, it is. It is an advantage. Do we not agree how well they execute on it.

Is a secondary.

I'm sorry. So we're just talking about isn't an advantage, not how well they execute. So execution is completely different.

Well, in anything. Right. You talk about NFL teams. Some are good and some aren't.

Like, all right, I'll Concede on this one with the footnote, the understanding that consumers are shifting and they do want more convenience wrapped up in their service experience.

What does that mean? They want to go to Costco to get their tires and they want to come to you?

Well, I mean there are certain, there is a certain segment of the market that wants to go to Costco, but at the same time it, if we're servicing say 150 cars a month, that's 150 set of tires that are going to be sold at some point in time. How do I tap into that market if I want to provide it? So if, you know, and dealerships numbers are a lot larger, like they may work on 1500 cars a month. So it's a natural add on there. I think it's just. Is it an advantage to have one stop under one roof? Absolutely.

Well, I think, and I don't, I don't know if you guys experience this in a day, day to day thing just in your personal life, but the one thing that people don't have is time.

Right.

And so a lot of times dealership, the tires will be more expensive, but a customer isn't going to spend another two hours, meet somebody they don't trust, go through the process. Maybe it's done right or not and they have to come back. If they have a relationship with the dealership and they trust them, they'll pay a little bit more for the tires just to save the time and have it done. And if the car is there for the morning or there for the day, why not just have it done while it's here? And so it is an advantage.

So I mean we all have the same 24 hours in a day. And I think it's in today's consumer time is greater than money. So if I can save you time, it's worth dollars. And those are companies that are becoming billion dollar companies overnight have found a way to save consumers time and that is translated into dollars. So you're absolutely right there. I can't tell you how many customers buy their tires somewhere else and they don't want to go back there for the rotation simply because it's inconvenient. Right. It's more convenient to have us do it.

If a customer needs a body shop, what do you do?

I have a quality auto body right.

Down the street that I plug for Quality auto body.

Richard does a great job.

Okay, next one on my list. And I know this is a huge advantage.

I disagree completely.

You haven't even heard it yet.

I can already predict for your do.

You know that that's the definition of something that's difficult? You're disagreeing before you've even heard what it is. So I have two and a half more here.

I'm just trying to stonewall you so you'll forget it and say something.

Well, I wrote it down.

You've actually built up anticipation.

But, you know, it reminds me of my grandfather.

Yeah. See how easy that is to do?

How's he doing?

So they have built in traffic in a dealership. The service department in a dealership has built in traffic because.

They have to come back for the warranty. There's recalls.