Dealerships vs. Independent Shops - Part 2 (Service Drive Revolution)

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

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Dealerships versus independent shops. Who has the advantage?

This was very fun, but here's the.

Butt that just means everything I said sucked.

Who will win the fight for supremacy?

If you're unsatisfied, go to hell and don't call us again.

Find out the answer only on this special two part Service Drive Revolution event. And it all starts right now.

Welcome everybody to Service Drive Revolution. We have an exciting show for, for you today because this is the second half of the first part which is Shop Showdown. Dealerships versus independent shops. Who has the advantage? Today we're going to talk about or Jeremy is going to talk about independent shops and why they have an advantage. So please welcome Jeremy o'. Neill.

Hello everybody. Creator.

Profitable. Service advisor. Advisor. Fakes. Shop owner.

Independent repair. Shop owner.

Father.

All that. Yeah.

To potatoes.

Trump voter. Conspiracy theorist.

Wow. The list keeps getting longer.

And Christian Lafferty.

So good to have Christian here.

Head of the coaching. And what else, what else were you.

I think we called me a dabbler.

Dabbler.

Explain. Dabbler.

So dabbler means that I enjoy the whole gamut of the business that we do here. So I try to understand and other things we might.

Yeah.

Like we, we had the idea and we love to hear your feedback of creating our own line of energy drinks. And what, what did you name it?

110 ELR.

Yeah. Would you drink? Because I don't know, every dealership I go into, it's like, Casey, half of them are drinking Monsters or Red Bulls.

Right?

Yeah.

Yeah.

Would you drink 110 of your ELR energy drink?

Yeah. By the way, I, I had a monster the other day having a look at the can, I didn't even get through like three sips of it. 54 grams of sugar in a can of Monster.

There's some good stuff going on in that thing.

It's not regulated. Monster zero.

Yeah, they do.

Yeah.

This is just a regular monster. So I was like, holy, I have not read a label in so long. But I'm excited today because I'm just gonna make, you know, the obvious, like come to the surface and I'm gonna go. You only had, I think six measly points on your dealership advantage. I think my list is a little bit deeper and better.

Okay, we concede that there were seven points for everybody keeping I don't like score at home.

Concede.

Yeah, yeah.

And then we'll see. We'll see. How I concede here today.

Okay, so I'm just gonna throw a statistic out there that says that 72.8 of auto repair consumers prefer the independent service experience over a dealership. Service experience says what?

Good Housekeeping Keeping magazine.

What Advisor Fixed.

Modco.

There we go.

Cosmopolitan.

Look, we all know it's no secret that once a car is out of warranty that most consumers don't go back to the dealership.

And then they gravitate 80%. But that really. You're changing the subject.

I'm not, I'm.

We're talking about specific advantages.

I just wanted to be fair in.

I didn't come out and say, like, oh, 100% of the cars sold or sold by dealership.

You know what's funny though, is I have a maintenance class that we teach service advisors how to sell maintenance. And in that class, I start with, you know, the owner's manual, and then I go to different dealerships and, you know, shop them on maintenance packages and stuff. And there's always some idiot in the back of the room that raises his hand and gives me our times. Like, well, why do you compare us to the dealership? You know, it's like not every car goes to the dealer.

Wait, these are independent employees?

Yeah.

And so point number one is they're idiots.

There's. There's at least.

No, there's one. One in the back of the room?

Yes. 1.

Is that a special form you fill out? I'm the idiot for this class. Keep going.

We just.

We're trying to keep score, that's all.

He'll always ask me, why do you look at the dealership? Because, you know, for maintenance, I'm like, where do you think the car started? What experience do you think the customer left with? They bought the car at the dealership, they picked it up there, and they're used to that dealership service experience. So that's why I kind of look at that and tailor my marketing.

The dealership experience does become the benchmark, good or bad.

Right.

Of what?

The customer experience.

It's how they start.

Yes.

It's their point of reference.

Yes.

So if it's better than that, then their references that the independent. If the dealership did a great job and they try an independent, then they're going to go back to the dealership. But the like we established. I think it was point number one that you conceded is dealerships have the home field advantage.

Yes, they do. And if you're used to having your car washed and vacuumed every time you have A service. And as an independent, I don't do that. There's an incongruency there with that service experience. But let me tell you the first.

Which point was that, though? That was perks.

Number one on my list. Independence one on my list. I actually hand wash cars at my shop.

And when they come back and by.

Yourself, because you don't have a porter.

If they spend over $3,000.

We don't call the cars that come back come backs. Those are second opportunities.

When's the last time you washed a car where you just replaced four tires?

Number one on our list.

For the audience listening.

Yeah, no, I just.

Silence.

I'm exercising my time management skills and understand we have a finite amount of budget to shoot this episode. So here we go. Point number one, all makes and models. We can service every car in your driveway.

Look, they got nothing. Nothing at all. What do you have to say to that?

Do you really think technicians are effective working on a Ford one day, a Hyundai the next day?

Maybe with maintenance, like if you're doing an oil change, but a runability issue, suspension.

A car's a machine. Wires are wires, connectors are connectors. We have the same factory level information that dealerships have. And actually most really good independent repair shops spend more time in the classroom than dealership technicians or dealership service advisors. Our technicians at my shop spend 80 hours a week. 80 hours a year. Not per 80 a week, just training in the bar. 80 hours a week in the bar after work? No, they spend 80 hours a year training. Next week I'm bringing in a technical trainer for five days to my shop to do hands on training with our technicians for 40 hours. So sometimes the independence training is further advanced. Now I will also say this, being that we have to be everywhere and work on everything, I believe that our technicians are better technicians than dealership technicians because we don't fall into the rut of pattern failures. So we see cars that are older, that have more real world problems where you might have to fix harness issues, you've got to fix tougher drivability issues and you're dealing with a customer that may not have followed the maintenance plan. So it's a harder job, but I believe we're better at it.

Who would you say has more comebacks?

It depends on how you categorize comebacks.

If the car gets fixed and it.

Leaves and it comes a comeback.

What?

How many different ways could you categorize a comeback?

Wait, are you friends with Trump or Bill Clinton? I'm confused.

I did not. I Did not have sexual relations with that woman.

That was a thing right there, wasn't it?

I thought you were gonna say Camel, but no.

It would. That. That's not an industry. That's not independent versus dealerships. Dealerships have comebacks, too. Do you know how many times I've heard from customers that the concern they brought the car in for wasn't even addressed, wasn't even listed on the repair order, and they had some huge bill and it didn't fix their problem?

So you don't want to answer the question?

I just answered the question. So our number one advantage.

Would we not agree that independents have more comebacks than dealerships?

No, I will not agree with that statement. Okay.

You worked in both. So how.

I'll ask you this. How many shops in dealerships actually know their comeback percentage?

Well, that's a good.

How many technicians know their comeback ratio? Not many.

Not unless you're tracking it.

Correct. And how many actually track it?

Not.

Not as many as should.

Yeah. So number one on our list, we work on all makes and models.

Okay.

Okay. Number two is we provide a customized solution for the customer. So our parts department.

Doesn'T have a parts manager sitting there not doing anything, messing up the inventory.

So our parts department is better. We can provide the customer options. Let's say you drive a BMW M5 and you want a different brake pad than what BMW provides on that. Is the dealership going to provide that to you?

You mean the blem rotor from China that wasn't really made for a BMW but kind of fits if you really hammered on there with a rubber mallet.

The whole sort of lineup?

No, not that we don't put inferior parts on it. Do you know that most aftermarket OEM suppliers actually provide parts that are, at the minimum, meet OEM specs or are engineered better than the OEM specs?

It's proven. So we can provide different solutions that the dealership can't provide, which is parts. Now, the option to repair the car. There's not just one estimate. There's many different ways that we can provide a solution. So let's say your car needs a transmission. Okay. At the dealership, how many solutions are they going to give you?

I'll concede to this one because a lot of men, a lot of manufacturers don't want you to fix the transmission.

Right.

And so a customer needs a transmission. BMW, a customer needs a transmission. And BMW or whoever, a lot of the manufacturers do this, want you to replace the transmission. So you go back to the customer like, hey, it's gonna be 4500 or 5500 or whatever. And they're like, meanwhile, you take that transmission to Amco, they put a new seal in it or whatever, and it's less than a thousand bucks and it's back on the road. And so you, you, if you do that, you're kind of going against what the factory wants. And so it is, it does not give the customer as many options. Correct.

Right. So.

So you still do it though. But the, the independence do, do have an advantage where they have more options for the customers. But I don't know, in my experience, like, some of those brakes that are cheaper, you do, you do get what you pay for. So some of them, I know you said that little tricky thing like, oh, the parts are even better quality, the same or better. But you do know that there are parts out there that are worse, right?

Oh, absolutely.

Okay. So it can go. Look, we get what you pay for.

We fix 89 brake jobs at our shop. Yeah, we fix those. We don't do $89.

But just like dealerships, it go. You know, it depends on the person, the person in the shop and their ethics and their, their image of themselves. Right?

Yeah. So this customized solution provider, I'm your inside guy, I've got options for you. I think customers want choice today. They're savvy, they understand all this and we provide that. So we're two for two on the independent, independent side right now.

I think that the big thing that you get with that independent from the clients that I'm seeing is that they're technicians and the advisors and shop owners, they're resourceful and adaptable. Like the dealership side is definitely set in their way and they have the thing that they want to do and it's more like do it their way instead of the independent shop is really saying let's do what's best for the customer. That is one thing I would definitely say it's really clear that with our independent clients that that's what's going on. So I'm throwing a kudos to the independent world there.

You know, you know, one thing that is. Is odd.

That you know when, when we're coaching or looking at financials from independent shops is that their parts gross profit percentage is higher than the dealerships.

Most of the time, almost every time.

So they don't care if they're buying it from nap, wherever they're marking it up. And it's usually closer to 50% and dealerships are closer to 40.

But yeah, and I mean, the warranty goes behind that as well. I think a lot of times independents provide a better warranty on the service repairs than the dealerships do.

What?

Yeah, absolutely.

Explain that.

Okay, so what's BMW going to back up their brake pads for? What's the warranty on them?

12.

So we do 336 on brakes, parts and labor. Yeah. Nationwide warranty.

They squeak.

I'll fix it. I guarantee my brakes don't squeak, rattle or groan. And don't give you that annoying dust that you get from the dealership. We can have it done by five. Does that work for you?

Yeah, I don't need breaks. I just bought them from you.

Number three, grassroots, community based. So we provide a faster option where the customer feels they have this personalized service experience. They don't have to wait four days for a phone call back from a service advisor.

What?

Yeah. Have you ever tried to get in touch with a live person at the service department?

Oh, yeah. That's a nightmare.

Yeah. So, like, I pick up the phone at my shop. It's a great day of free. Tom Auto, this is Jeremy. How can I help?

So more of a direct line.

Yep.

Less layers, you know. Press four for parts, press one for.

I only do that if it's somebody I know that I don't like. Thank you for calling Freedom Auto Repair. You've reached us during a very busy time. Four parts, press 1. For service, press 2. If you're checking on the status of your car, press three. If you're unsatisfied, go to hell and don't call us again. Click.

You have that?

I just did it right there. I can ad lib very easy. That sounded like a request, but you don't.

You don't have that.

No, I could do that at times. This is what I bought the shop for. Oh, so I can have fun with it.

I don't know. Sometimes we're.

That was a joke.

Sometimes we're sitting around.

Tell your customers to go to the dark side. Anyways, okay, so, yeah, we're grassroots community, I think. You know, the one thing I've had my shop for almost four years now, and it's the faces, the names, the relationships that we have with our clients. I feel that we do a better job becoming a part of their everyday life. Whereas sometimes at the dealership it's a once off or it's every year or every two years or just when the car has a problem. So it's a more negative experience versus a positive experience. I feel like we can actually Become, you know, really good positive source for that customer at a grassroots level.

Speaking of everyday life. So I'm walking down the road the other day and I pass a couple, and it's a. It's a blind woman talking to her boyfriend.

And.

So wait, the other day you're walking. Where are you walking?

Just out on Wilshire.

So you're out on Wilshire walking, and then you walk up to a blind lady?

No, no, I. I walked past. It was a blind lady and her boyfriend talking.

I didn't know she was blind.

She slither in the glasses and the whole night.

Did she have a dog? A seeing eye dog?

No, just the stick.

She's probably on a list.

And she. And she says, I overhear her saying to the boyfriend, I'm seeing another person. And I left. I'm like, wait.

That could either be really good or really bad.

I'm seeing another person. So it could be that she's not blind anymore, or it could mean that she's cheating.

Right. I'm hoping for the not blind thing makes perfect sense.

It totally applies to what we're. What we're talking about.

Right on.

What was your. What was your last one that you said? Grassroots.

Grassroots community.

Okay.

Now, I do.

I do believe.

That that is not an advantage that is exclusive to independence. We do have dealerships that are a part of the community and do a good job with that.

But I think more independents lean that way. More independents are part of the community, especially with dealerships. With consolidation, you have more groups, you have more.

I think, you know, I think it's because we understand it's our lifeblood. And I go back to when I got my first dealership job. I always had my own personal cards made up. I would leave tic Tacs with the cards, you know, in the center console, and I would create that relationship. I always walk the customer to the cashier, walked them out to their car. I think one of the things I observed, the service writers that were there longer, that had that built in client base, didn't work as hard at really fostering that relationship. So I feel. Yeah, yeah.

But I feel like dealerships could they. There are dealerships that have. That isn't an exclusive advantage to independence. It's just independents think that way and they operate that way.

Right, but you do concede that point. Just that it is an advantage for the independents.

Right.

That's three for three.

I think independents use that, but dealerships could use that as an advantage.

So we're three for three now. Okay. Number four you have a weird way of counting.

What's your oh for three? Holy moly. Wow. I better dust off my toolbox and get back to the technician role. I'm gonna go to expense control. I think independents are more nimble. And so we can provide a lower cost repair or a better value repair because we can actually move quicker in certain areas and actually control our overhead, control our expenses, rather than a large, you know, fixed offs operation in a dealership where a lot of times the advisors have no control over any of that. It's out of their hands. Parts pricing is already preset, the labor rates preset, and the cost of overhead is preset. They have no control over it. So we can actually, you know, understand each technician's efficiencies and productivity. So as I'm quoting out a job, I can know that, okay, technician number one, he can do this in this real time. So I can actually. My gross profit for actual hour can actually be higher and I can manipulate that and actually control it better. So I think we do a better job at expense control and that's an advantage that we have.

Well, I think that the person that's writing the training.