Does Market Size Matter? (Service Drive Revolution Drive By)

Foreign.

Welcome everybody, to your Friday drive by on service Drive Revolution. I'm Chris Collins.

And I'm Christian Lafferty. You know, before we get into everything, yesterday I went to the zoo. You know what I saw at the zoo?

It was pretty weird.

There was a bagel sitting in a cage.

There was. You went to the zoo and there was a bagel sitting in a cage.

Bagel sitting in a cage. That's weird, right? Yeah. So I asked the zookeeper, I'm like, what's going on with the bagel in the cage? And he said, it's bred in captivity.

There you go, everybody. Happy Friday. We're gonna have some fun today. We're going to talk about does market size matter?

Interesting topic.

Does size matter?

That was a staring contest to see what we could come up with there. That was pretty good.

What's my new favorite band?

Australian Death Machine.

Austrian Death Machine. Everybody, when, when you're done listening, go and listen to Austrian Death Machine. It's the perfect music for a shift meeting. It can only be played loud.

There's no doubt.

Don't play it quiet. It's great for leg day at the gym. It will motivate you if you feel like, oh, I need a cup of coffee, I'm a little slow today. No, you just need to put on some heavy metal. It will get you going. So we hear this a lot and the question sometimes is more of a comment, but it comes from a good place. And managers will say, hey, Chris, I read your book, or, hey, Chris, we bought your on Demand, your training. But, you know, you live in the big city.

You know, we're in a little market, we only have one or two advisors. And the techs that we have have been here for a long time and nobody wants to change. And it's real hard to, you know, really make a difference or improve or, you know, hire techs, that sort of thing.

Can we can contrast that to what they say to us in the big city?

Oh, yeah. So the people in the big city have the same excuse. Go ahead, pretend like you're big city, big city. Bob the service in.

The big city. You'd be a service director, right?

Great title. Awesome looking business cards usually too, but yeah, so. So I'm in the big city. I feel like it's not gonna work. There's too much competition. I can't find techs because in the city of 10 million people, I don't think anyone works on cars. And that's always a funny one. I've got too many advisors. I Can't get them to do anything.

Okay. So you and I make a bet.

Okay.

Because the. The common theme seems to be that it's hard to hire tech, so we'll just take that. But this applies to everything. But you and I are going to bet a sizable amount of money. Like let's say we're going to bet $5,000.

I like it.

On whether you can hire eight technicians in 30 days. They have to be qualified, good model citizens. They're going to stay. If you had to hire eight in a big city, so say Los Angeles, Chicago, Dallas, Miami, big city.

Or.

A little town somewhere in the Midwest.

Or Canada, because we have a lot of smaller dealerships in Canada.

$5,000. So if you don't hire the eight, you got to pay me five grand. Yep. This is a hypothetical bet, but I'm just. Because I know what my answer is. Would you pick the small market or the big market to hire techs? You got 30 days to hire eight techs, and your choice is little market or big city. Which would you take?

Little market.

Yeah, I would too. And honestly, you could do it in either one. But it is easier in the little market to hire techs. Yeah. And the reason being is that it's easier to get texts to relocate to a better quality of life. So let's just kind of talk about the advantages of being in a little market. It's easier to get texts, way easier to get techs and get them to relocate. So if you think about your attack, that's, I don't know, 28, 29.

You'Re good. You're an A tech by now, but you're having your second kid, you want to buy a house. If you live in Los angeles, you're making $32 an hour just like you would somewhere else. But the average house here is $870,000. Yep. You can move to a market where you can buy a house for 200, 250. The schools are better, better quality of life. You're probably. If you're a technician, you're more into the outdoors, so you can fish, hunt, ride dirt bikes, all that stuff. And so it just feeds to the lifestyle that you want. So you're going to. You're going to dramatically improve your quality of life.

And.

You know, your income to some degree.

Right? Yeah. So thinking just about what does $32 an hour mean to somebody in LA, and what does $32 an hour mean to somebody in Des Moines, Iowa?

Somebody making $32 an hour, their spouse works, and.

You Know, and it's tight. It's tight. But, yeah, in North Dakota, it.

Yeah. So I feel like there's a strong allure.

It seems like the contrast is even worse in Canada. Oh.

Between the big city, Vancouver, Toronto.

Real estate is nuts because of all the money from Asia that's come in. And they just, like, it's just crazy what's happened to real estate in those markets. So it seems like it's a little worse. So hiring techs and rebuilding my shop is easier. I personally just think that people are nicer in smaller towns. Word of mouth travels faster. So if you have a good reputation and you're in the local community and your kids are in school and the local schools and all that, you're just going to have built in relationships that are going to make it easier. But overall, just when people say hello, they mean it. When they ask, how's your day? They actually want you to stand there and tell you how their day. How your day is. Right. Which is kind of a lost art in a lot of ways.

Oh, yeah. Here if you ask someone how your day is, you're just begging for them not to answer.

It's more of a formality. But nobody really cares about you or your day. Right. So people are way more.

Yeah. Just genuine. I guess. I agree to some degree. Now with that genuineness comes, like, they're a little more judgmental to you.

I don't know. I feel like there's the same amount of judgment.

I don't think that you experience it as much as I do. Maybe not, because people just look at me across the local restaurant and like, you're not from here. But that's my fault. It's the way I look and the way I dress. So that's on me. I could blend in more too. Right?

Yeah.

Better quality of life. We kind of talked about that.

In a dealership. In a smaller market, your expenses are way lower and the variables are way lower. Like in the city, you have all kinds of expenses. You don't have in smaller markets and just rent, overhead, everything is much lower.

Yeah.

And. And same thing. Like, let's just say you have a Chevy store in Los Angeles and a Chevy store in Des Moines, Iowa. Your effective labor rate can be 125 in both. That 125 goes way further in Des Moines, Iowa.

There's no doubt.

And so your. Your profitability, you can be, you know, we. We have clients in markets like that.

Where.

They'Re 40, 50% net to gross. Where in the city, it would just Be way higher. It would be harder. And also you're paying advisors and clerical and cashiers and everything. Just a higher wage because you just have to. There's too much competition where in a smaller market for, you know, 15, $16 an hour, you can get somebody to answer the phone.

Yeah. And I think that competition actually leads to the smaller market. The customers are a little more forgiving because they've got to work harder to defect. Here in la, it's easy to defect.

The other thing that I found when I go in to fix a store in a smaller market is I can get advisors to drive an hour each way. I don't know how many times I've found the top advisor 45 minutes away and I get them to drive. So. So I think a lot of times we think like, oh, because, you know, my, the population in my town is 2300 or whatever. Well, if we go out 30, 40 miles, there's no traffic. You can, you can go a long ways in 45 minutes in a car because there just isn't traffic. Right. And so you talk about in la, to go three miles can take an hour. And you, you know, and so I've been very successful getting texts and advisors to commute. And they have a big piece of property, a big house. And, you know, if we don't change their pay plan and we offer them opportunity, it's a good, good environment to work in. People will drive. So a lot of times you think your market, yeah, okay, so there's 5,000 people in your market, but if we just go out 40 or 50 miles, that, that becomes a couple hundred thousand really quick. And so it's way easier to get people to commute than it is in the big city. If you asked me to drive from LA to Orange county every day, forget it. No way. Wouldn't do it. It'd be hard to get a tech to do that.

Right? Yeah. I think that really, for me, in downtown la, my max commute five blocks.

I really think at the end of the day, whether you're in a big city or in a smaller market, it all comes down to just what you believe and you create your own destiny. Like, I believe you're painting your own painting. You're the author of your story. So if you want it to be hard to hire techs, if I'm sitting in a conference room with a dealer and a service manager and they say, well, it's impossible to hire techs, or you can't hire techs.

Okay, just get up and leave. What does that mean.

If you want that to be true, it'll be true. But what have we done? I don't know how many times in the last month we're on a zoom with somebody and they're like, oh, you can't hire text. I'm running an ad, and I haven't got any replies. And I literally. I just go to Google and I try to pull up their ad. So I'll type in their shop or their dealership or whatever, and there's no ad. Or if there is an ad, you can't find it, or it's terrible. You know, everything about it's wrong. And it's like, I don't know, if you put up an ad and it doesn't work, why is the automatic response, okay, ads don't work. Why isn't it? Well, why don't I run it somewhere else and why don't I write a better ad and keep writing ads until it works? It's like. It's like our buddy Matt, right? He's like, oh, I can't meet a girl. What? Because one time he went on tin. Like, what is he doing to.

He's not changing up the recipe.

No, because it's not. It's. It's not for lack of personality. He's a good guy.

Hilarious.

He's a. He would be a great catch to the right girl, but he just gives up and doesn't. Doesn't try anything else. So I think it comes down to you as a leader and you being the author of your own story. And if you want the narrative to be that you can't hire techs in a smaller town or you can't change the culture in a dealership or you can't sell more, then that's what the narrative will be. But trust me, that's not true. And there's this great story.

That I actually didn't know who the person was in the story, but I don't know if you remember in Jocko's book Extreme Ownership that he told a story in there about in. In SEAL training, and maybe it was in Bud's training, I'm not sure. But the context was that they would have three soldiers on these, like, rafts and they would race.

Oh, yeah, right in the beginning of the book. That's right.

And.

So what he did was he took the. The team that won the race. So it's three guys paddling through an obstacle course in a boat, and he took the leader off the winning team and swapped out leaders between the first place and the last place teams and did it again. And the last place team won. And the. The moral of the story was the leader. Now do you know who that leader was in that story? Because my trainer Matt was telling me this the other day because he did an episode of Billions. He was the choreographer and Jocko was on there.

Okay.

And so they spent a lot of time during that. And do you. Do you know who the. It's somebody that you know.

Have a guess.

Okay.

Is it Goggins?

Yeah.

Yeah.

So it's Goggins. That so. And that's a book too. If you guys haven't read that book, just play the first five minutes every day. Wow.

He'll knock you into shape. The first. The first part of that book, the intro, is just. It takes away all your excuses. I've never got through the whole book because I. After a while, I just. I feel like I'm in a. I feel like I'm in the military. And you like it? I loved it. Yeah. Matt's running 100 mile races now from it and everything, so it motivated him. I'm. I'm motivated a little bit different. But the moral of that story is it's really about the leader. And I know beyond a shadow of a doubt, I would bet any amount of money that you wanted that I could take one of our elite managers, just about any of them, honestly, and plug them into a store in a small market that you think can't grow, and they'll double the sales hands down, no questions asked. So it's all about the leader. So just think about that. Jack Welch says a thing where, you know, the key to success is every day when you go into work, pretend like it's your first day on the job. And I think part of why that works is you got to unlearn all your excuses and all your relationships and a new manager coming in. If we take an elite manager, like let's say we take Roger and we plug him in a. In a store, he doesn't have all the excuses and reasons. He just wants to make his mark and wants to make a difference. And so he doesn't have to unlearn everything you have to unlearn because you've been there 10 years or 20 years. So if you. If you really, you know, step into your day thinking it's the first day on the job, how would you do things different? It probably would. Would serve all of us to think that way a little bit more. So little. Little food forethought. But it's not about the market. It's about what is, what is our full potential and what can we accomplish. And we have found that the smaller markets have a huge advantage in the marketplace today because the bigger cities have priced everybody out. And there's a lot of really good people that are very talented that would love to be in a smaller family environment where they're not just another number.

That's right.

Right. So food for thought. Going into the weekend, we wish you a happy holiday and hope you spend some time with your family and friends and loved ones. And do me a favor, stay tuned for a preview of what's coming up on the next Service Drive Revolution.

Next week on Service Drive Revolution, the four reasons consultants can't and won't save you. Who else would give better advice than somebody who's been divorced six times?

You have everything not to do trial by fire. There's sub reasons within the reasons, too. Like, I can't wait. It's gonna be great. No holds barred.

So he meant jail.

So he had a little bit of a speech impediment.

Told him, I go, if you want to pay me, I'll fix it for you. But there's glitches in your system. You're gonna have to change.

It's weird, right?

Thanks for watching this week's Drive By. I hope we gave you something to think about over the weekend. 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.chriscollinsinc.com now that's offers.chriscollinsInc.com I'm Chris Collins, and I'll see you in the next video. Sam.