How Owning A Dealership Changed Me

Hey, so this is another fun week where we're going live on YouTube, LinkedIn, I don't know where else, but we're live everywhere we can be live. How does it feel, gentlemen, to be live?

Great.

Fantastic.

Doesn't really feel much different, right? Because we don't really edit the show anyways.

Yeah. Yeah, I think that's what most people will find is—

It's like hanging out with us.

Pretty much the same.

For an hour. Poor people.

I was gonna say, sorry.

Yeah. People think they want to hang out with us until they do, and then it's like, oh man. So funny. So welcome everybody to Service Drive Revolution. We are here in beautiful Indiana. So we took the show on the road. Today we're going to be talking about how owning a dealership changed my approach to fixed ops. And then in the academy after this, so if you're new to the show, we are going live now. And then when we're done with this, we teach in the Service Drive Revolution Academy, which is an ongoing training program that we're doing for anybody with a service drive that wants to learn how to improve their business. It's part of our on-demand platform, so you can go to chriscollinsinc.com and purchase on-demand, and you will get access to the academy. It's something we just started, so this is our second meeting today. You will see people are going to be coming into the Zoom meeting as we're doing this, but we had a couple hundred people in there last week, and it's, it's slowly Growing, and Hoagie's going to be teaching just the basic business fundamentals, the structure and foundation of how you run a good fixed ops business that I think most people don't understand. We're going to be sharing the knowledge that we've learned over the last 25 years. On what is the best approach mentally and strategically to run a healthy business that's profitable. Customers want to come back and you attract the best employees, the best talent. That's the overall goal. So that's what's going on today is just business fundamentals. And yeah, I don't know what else is. So I'm Chris Collins. Hogi's here, Adam is here. We've been here all week in Indiana, beautiful Indiana.

It's been beautiful, actually, a little bit. We came in with some storms, but, uh, sun's out today.

Yeah, so my flight was canceled. I had to catch a different flight. That was kind of fun. It was funny because I went up to Washington to my lake house and I rented a car from the rental agency there. And I'd picked a Suburban in the menu when I rented it. But when I showed up, all they had was a Ford. What do they call them? Expeditions? A Ford Expedition. And I mean, I love Ford, like Ford trucks. Ford was a big part of my childhood. I would say, um, you know, a big fan of Ford, love Ford. But I do think Ford has lost their way design-wise. Like, this Expedition is really odd. The way that the screen is really far away from you as a driver, the odd steering wheel that they're trying to be a Cybertruck but they're not. The technology doesn't match. Like, there's nobody designing the, the software so it looks the same. So the software on the big screen looks different than it does on the little screen. It's not very intuitive, and it was really uncomfortable. Like, I couldn't wait to get out of that thing. Um, yeah, it's not— I think that GM is doing such a great job with design. With the Corvette and the Suburban, the Escalade. But Ford, I really hope that they get somebody in there as CEO that understands how important design is to the experience for a customer. It's pretty bad. And then, so then this is why Adam is smirking. Tell them why you're smirking, Adam. Okay, you're taking too long. So I show up here in Indiana And Adam was going to pick me up at the airport, but because my flight got canceled, he had to come to Fort Wayne. And I got an Uber from Indy, from Indy to Fort Wayne. And when I got here, guess what Adam had rented? By the way, Adam keeps saying he has a truck, but for some reason he wants us to rent him a car versus him driving his own truck even though he lives right down the road. Super odd too. But he rented the same uncomfortable Ford.

Well, I heard that you had such a great experience. I heard that you had such a great experience in the Expedition.

I wanted to share the amazing experience that I had about my experience with the Expedition.

I love the Batmobile.

I love it. But it saved me having to tell the story to Hoagie because I'm like, Hoagie, look at this, it's so odd, right? Like, yeah, we've been talking about it every time we're in that, in that vehicle. Like, the, the design is just such an afterthought.

You got to admit though, the armrest, the armrest is— that's a nice touch though. I think that's pretty cool.

What do you mean, the center console? The, the, the— yeah, the center console moving like a seat forward and back.

You call that an armrest?

Well, my arm sits over on that side, so yeah.

Yeah, it's always weird when your arm touches my arm.

This is a G-rated show, thank you very much, Chris.

Well, it's whatever we want it to be. Uh, yeah, that whole thing, the whole thing, the center console moves, so it has like a little button so you can move it forward and move it back.

It is odd. Like, I, I thought the outside of it, um, like, you start talking Ford and then you even talk about somebody losing their way. Like, I don't even know what to think of what some of the design looks like on Lincolns, um, today, but that's a whole nother conversation. But like, I thought they came, uh, uh, came along from the previous couple models on the outside of it, um, But the outside looks okay. Yeah, it looks like more of a step towards a Tahoe or something, even like there's even little subtleties and stuff. But, but yeah, then you get in it and it's like, you know, yeah, that's a lot. It's a lot to digest. So I'm still haven't quite figured it out. But yeah, interesting is the word, I guess.

Well, just attention to detail, right? Because subconsciously, when you're in a vehicle and the software doesn't match and it doesn't work the right way, you unconsciously assume that there's other things going wrong because it just doesn't make sense. And it, you know, whenever you design software, like we, we have designed software, right? We have our Top Dog software and we've designed apps and other stuff. One of the things that you, you want is you want the experience to be consistent. So you don't want it to look completely different when you go from one part of the app to another part. It should all have the same design language and the same colors and everything. And it's so odd that it doesn't do that. Like, it doesn't make sense.

Yeah, it's, it's really weird because it's like, it's still Google Maps, but it's a total different background in the front versus that, that first image. So what you think you should be getting, it's the same thing, same directions, just different look. The, the whole user interface is, is a little odd, I will admit, but I still think it's pretty cool because I think my favorite part is you own a Ford, so you have to say that. Like, I don't have to. My truck's nothing.

I mean, Adam gets upset when I'm, when I'm talking about this stuff because he's like, well, you're, you know, You're making fun of my truck. We've first, frankly, we've never seen your truck, so I don't know that you even have a truck.

She doesn't exist.

You're like that guy that keeps saying you have a wife, but nobody ever meets them.

Like, yeah, I try to keep my truck clean in the garage.

What was the reason this time that you didn't drive your, your truck and you rented a car? Is it the same thing? You don't want to get a rock chip?

Eh, we're just putting the unnecessary mileage to it, you know.

You can't even answer the question, Adam. What is the purpose of a truck if you don't drive it?

Oh, I, I drive it. I just don't— I don't know, not right now. And I need an oil change. How about that? I need an oil change. I got nothing. Yeah, I guess.

Yeah, it makes sense then.

I suck.

Well, just doesn't make— yeah, it's not logical. How much fun, Adam, have you had hanging out the last couple of days, going to dinner, doing all the fun stuff we've been doing?

Honestly, I've had a really good time. I hope you guys have. I think the people we're working with are just fantastic. We've met a lot of people. I feel like it's like Friday, but it's, you know, towards the end of the week, we're kind of getting there. But it's just It's long, but it's a lot of value. So I've been having a great time. Just, you know, it's good. It's good to get out.

How many steaks do you think you've had in the last 3 days? How much red meat?

A bunch.

A lot.

Yeah.

That's what happens in the Midwest, I think.

We should simmer down a little bit.

But I would say I've gotten up every day at 4 o'clock to go work out. I've been missing someone to come with us.

I'm not going to that gym. I don't like it. I don't like feeling like I'm in trouble. I just don't. What is the name of that gym? What is it called?

Planet Fitness.

Yeah, I don't like Planet Fitness. They're not for weightlifters. And the couple times that I've gone, I get in trouble for lifting weights. They don't want you doing that.

I did.

It is interesting. Uh, Hunter and I were talking about that and that some of the, the newer ones are having more of the actual weight sets. And these last couple ones, they've got, I think, 4 or 5 in the area. We'd probably have to try another one, a different one, but they don't have some of the squat racks. It's really weird. The one I go to does, but I get it because it's everywhere. So at least you can go somewhere if you don't like the selection at the hotel. Or if you're at an Airbnb. So I like it for the convenience.

You've been to the gym I work out at at home.

Yeah.

And the only way to describe that gym is a weightlifter's gym. Like, the guy that owns it, yeah, was a, you know, he's kind of a famous bodybuilder. And that's the kind of gym I like. I don't like these trendy, matcha, hip, but nobody's lifting weights. Like, I don't know what people are doing, but they're not lifting weights, and I want to lift. And I don't want a 22-year-old reprimanding me. I'll just lose, it'll ruin my week. I can't, I'm close to snapping as it is. That would put me over the top.

Well, let me tell you, it's very limited staff at 4:30 in the morning, but I was impressed at the, like, back at home, there's like nobody that early, but this early, there's actually, it's like the retirees kind of came, come out and just hang out on the treadmills and just walk and talk. But there's—

oh yeah, they're not smacking weights around though.

No, no, still not my crowd. I mean, that's super sweet of them to get up early and do that, but it's not for me. Yeah, even so, Hunter, our coach Hunter, is with us, and his intention this morning was to deadlift, and he didn't get to do that.

Yeah.

So I kind of know what I got when it comes to Planet Fitness. I'd rather not deal with it than survive the disappointment. My dad left when I was 2 months old, and beyond that, I can't handle much more letdowns.

I'm saying, Planet Fitness.

No, the worst part is getting lectured by a 20-year-old kid that's been put in charge.

I, I feel like they've had to have, uh, let that go because I remember I left Planet Fitness when COVID hit because I was my— I'm big body trying to run on a treadmill with a face mask and it's nasty falling out. And then it fell off or fell down and the guy was yelling at me to put it back. I said, I'm it, I'm done. I left. I, I was totally out of there. Went to a different gym. I, I, I know what you mean.

See, all those gyms that, like, that gym I go to during COVID what, you know, nobody was asking you to work out with a mask on.

Yeah. Yeah.

People were doing it, but you didn't have to.

No, I, I could, we found, I found a different gym and then I, I specifically asked them, I'm like, do you have to wear mask while you work out? And she's like, uh, no, we got rid of all those, those people, you don't have to do that. If you want to, you can, but just don't push anything anyone else. I'm like, fair enough. Like, that, that's for me. But yeah, they— I think they've, uh, I believe they've grown out of that, but we'll see. I, uh, I did drop, uh, some weights today purposely just because I wanted to see if I'd let it, you know, just for you in case you decided you want to go tomorrow. But, uh, Nothing happened. Nobody came running. Maybe one person looked to make sure like I didn't fall, but I'm not willing.

You could throw weights across the room and tell me that nobody said anything.

I'm still not gonna say you're not very convincing.

You could, you could stream it live, whatever. I'm just, I'm not doing it. Just not. I'm sorry. You guys want to— you want to get into the topic today? So, how owning a dealership changed my approach to fixed ops. And I, uh, am very grateful for the fact that we live in a country where a kid like me can start off at a dealership as a lot attendant and eventually work, you know, my way up to running a dealership and then owning one with, you know, there's, I don't come from money. Nobody helped me, completely self-made, but just through working hard and perseverance and having some goals and, you know, achieving those goals, I was able to do that. And coming from fixed ops, we talk about this a lot. Like our goal often is to encourage really talented service managers or fixed ops directors to start thinking about becoming a general manager to moving up. Most of the time, you know, us from fixed ops think that there's a ceiling and fixed ops is kind of director is where we end. And we're always trying to take the lid off of that can. And get the really talented ones to think a little different and think bigger. But I mean, I always thought that I could own a dealership because I'm just wired different and I'm, I don't know. I don't know why I think that way, but I kind of always have. I've shared that story of me in the alley with the dealer that I used to work for when I was a kid, when I was a porter and as a porter, just asking him like, How much does one of these businesses cost? And I think he said $7 million. And I was like, okay, how do I find $7 million? Like, I just thought it was possible, you know? And America is a great place. Like, I, you know, growing up as a missionary's kid in Mexico, I think that oftentimes you can't appreciate something until you see it from the other side. And when you see what happens in other countries and the lack of opportunity versus what we have in this country, and why so many people come here from other countries and become very successful is because it's a game here of if you work hard and you add value to the marketplace and you're really good at something, it's pretty hard for you not to eventually move up in one way or another. It's really hard to keep talent down, and especially if you know how to sell stuff and you know how to fix businesses kind of like we do, there's always an opportunity for that. And so I'm very grateful.

I wanted to ask you, actually, when you were telling that story the first time,— when you ask how much, you know, how much does it cost to buy one of these and he told you $7 or $8 million or whatever it was, was— so was it just in your— was that a goal or was it like in your subconscious or like where was it where you first not even got interested, I guess, but when did you make the decision like, hey, I'm going to be a dealer? Was that then or was that planted the seed and Was there some sequence of events along the way where you're like, okay, it's time, I'm going to go do this? And then, you know, like what was the, you know, kind of genesis of I'm going to go do this?

Well, I had this moment when I was 13 in church. So my stepfather had left my mother and I in Washington gone back to Mexico and kind of cleared everything out. And my mom and I were basically, you know, we weren't homeless in the sense that we didn't have a place to stay, but we were homeless in the sense that we didn't have our own home. We were staying with my grandparents and then we bounced around with, you know, her best friend. We stayed with them for a while. We lived in this conversion house that the actual church that this happened in ran. But growing up as a missionary's kid on faith, you're really poor. Like, I wore clothes that were donated and my parents were often talking about not having, you know, we couldn't afford things and we didn't have money sort of a thing. And we lived on faith. That was, you know, as a missionary running a church, you live on faith. And there were a couple times that I thought, well, my stepdad could get a job. Like, this has ran out. Like, we're at the point where we have zero money in the account. It's probably a sign from God, if you want to think that way, that this isn't for you. You should get a job and do something else, right? Like, most people would think that way. And then every time, invariably, you know, a check would come in or something would happen. And then everything would be okay for a while. But I hated being the kid. So in Mexico, I didn't fit in. And in America, I was the poor missionary kid wearing donated clothes. You know, I never felt like I fit in or I mattered in that way. And so, you know, so this is after my stepfather had left us. We're in this church. It's a Sunday evening. And the pastor at the end of his sermon, and I don't know if you, Hoagie, have you ever been in church on Sunday evening as a kid?

Yeah.

Just want to go to bed.

Like, yeah, yeah, yeah, yeah, yeah.

It's not the, it's not the best experience. And so, um, so he calls me up, like, he says like, hey, can, can I get Chris to come up here? And I'm looking around like, me? Like, what? Like Why is— I didn't have any warning that this was going to happen. Completely caught me off guard. And my mom was kind of pushing me, encouraging me to go. I was embarrassed. I was very shy. And so I go up there, I walk up there, and I start— I don't know if it's a panic attack. I don't know what you call it, but I had an out-of-body experience where I literally left my body. I was above myself, looking down on myself. And if that hadn't happened to me, I wouldn't believe that that's possible. But the stress and the humiliation of it made me separate from myself. And I went up there, I was completely mortified, and he took an offering for me to have school clothes and to go to school. And, you know, he starts off the story about how my stepfather had left and people kind of knew the story because that was a church that supported that ministry that that my stepdad ran. And in that moment, in that humiliation, I kind of just decided that the adults don't know what they're doing. Like, I can't trust it. As soon as I can make my own money, and I always ran my own business when I lived in Mexico and I went to school in San Diego, I would buy jewelry in Mexico and sell it at school. I was always mowing lawns. I was always doing something to make money. So, I was always entrepreneurial in that way. And I just decided in that moment that I wasn't going to be poor. Like, I wasn't going to live on faith and I wasn't going to be poor. And so, then from then on, I just started trying to figure out how to own a business, how to run a business, how to be successful. And then that was my default setting. And so, when I would talk to people who owned businesses, I wanted to be them. I didn't think of them as my boss in a sense. I thought of them as somebody I could learn from and model. I just had a completely different thought process because most people would be intimidated at 17 and a half or 18 to be talking to the dealer, right? The owner of this business. And I was just like, okay, this,— you know, he was second generation, so his dad is the one that started the business. But still, like, how do you do this? What does it cost? How does it work? I just thought that way. And it just comes from that moment of humiliation and not wanting to be poor, not wanting to live on faith, not wanting to wear donated clothes, not wanting to feel like I didn't fit in. You know, at the core of all of us, like, that's the thing we want is we want to fit in. And I never felt like I fit in. I didn't feel like I belonged. Yeah. So just different thought process, right?

Yeah. Yeah. So yeah, that makes sense. That makes sense. Like, it was always in there, like, and then you were just kind of figuring out what the next step was along the way. On your way to becoming a dealer, who would you say influenced you the most?

That's a good question. 'Cause I worked for a lot of dealers, right? 'Cause I was fixing service departments all over and I worked for a lot of dealers. So I would say that I had two buckets. I had the bucket, and we experienced this, you'll be able to relate to this, We have people that hire us that don't really want to do better. They don't really run good businesses. They're not great dealers and they hire us. I mean, sometimes we wonder why they hire us if they don't wanna get better, right?

Mm-hmm.

And then there's the bucket of dealers that are hiring us for the law of the slight edge. They just wanna know, they realize that we're in a bunch of other businesses and we see what's working and what isn't. And they want that information. They want access to what we know is working because we're in a lot of different places. And so I had two buckets and I would say in, you know, in the bucket of the really, really good ones or ones that had an approach, I would divide those up into different categories. So there were some dealers that were really good horse traders, but they weren't great at running the business. They were good at acquiring and selling dealerships, and that was one skill set. There were, there were dealers that were just really good at the front end and weren't good at the back end, and that, those, those dealers always were kind of thin to me, but I still would try to learn from them about what their approach was to sales. And then you had the, the dealers that, that came from fixed ops. Those, there were less of those, but I did work for a couple of them that started off with a shop and then, you know, ended up acquiring a dealership eventually. So I was always paying attention to that, and I had a pretty big list. And then I would just say that the dealer I worked for, Don Crevier, I think maybe had the biggest influence on me because he was, he was one of those dealers that ran a really good business, took, you know, owned his marketplace, did things the right way, um, had a lot of fun in the process, like was fun to be around, was always selling. Like, you couldn't go to— you couldn't go to lunch with Don Cravier and not have him try to sell the waiter a car. Like, he was always selling, and just— he was a great example. But don't, don't you guys feel like with what we do you get to observe from the outside huge egos, but not very effective business owners in a lot of ways.

Yeah, I could see why the drive of wanting to be a dealer or to acquire one, because you see so many different things and you're like, man, if I could just, have the, what do we say, like the gun and the badge in the sense, but I'm loving what we're able to do and come across all that stuff. But I could totally see why you'd want to kind of take the reins on that though too and just show people the way.

Yeah, and when I was going around fixing service departments, when I would go out to dinner with dealers or when I was hanging out with them in their office or talking to them, I was talking about sales. I was trying to learn sales. I set up some internet sales departments. I was sitting, setting up BDCs and I was, I wasn't doing it for the money. I was doing it because I wanted to learn that part of the business and have it in my toolbox. I mean, you guys see me do that in all kinds of different areas all the time. I'm always learning things that people are like, why are you doing that? And I'm like, because I want to know, like I want to understand how that works, whatever that is. 'Cause it always comes back around.

Well, and you're not one that's big on name dropping either, but like there's just so many people that are all over the internet, all over the car business that I know, you know, that people know today that, you know, you've helped them. And it's funny, a lot of the business advice I've heard, you know, you're sharing with them, it's funny how much of it is, more the same than it is different. And I think you get a really good feel for that. Like you were saying, like the first thing when I came to work for you on this side of it, that was just a, blew me away from a perspective or vantage point was I'm looking at financials before I ever go to the store, see the facilities, see the people, see, like all I know is the numbers. And then you go see what those numbers look like in action. And it is, it's a flip. It's a flip in your mind. It's more insightful. It is.

Way more insightful.

It is interesting though that people in a business out of survival, and it's a mechanism in our mind, right? Like we talk about this sort of stuff all the time, like human behavior. In psychology and, you know, why people do the things they do. But they tend to think that their business is, is special and different than anywhere else, and they give very little validation to the actual report card, which is the financial statement. And when you look at the financial statement without knowing all the other stuff, without knowing the town it's in, without knowing even, well, I mean, you kind of know the brand, but say you didn't know the brand, whatever it is, you can tell what's going on in that business without ever stepping foot in there. But the people in the business are the last ones to realize that.

Yeah. Yeah.

Because they are convinced that their thing is different, that it's harder where they are or unique or, I mean, we hear that all the time when we're talking about recruiting techs is people are like, well, you don't understand, I'm in, whatever, and techs don't want to come here. And you're like, actually, you got the advantage. Like, yeah, but it— if you, you know, if you think you don't, then that will become your reality and you'll give up and you won't try. But most of the time, the, the thing that people perceive to be the disadvantage is the advantage.

Oh yeah, that's well said. That's really well said. So, um, Like, you got a crazy story, and I was sharing with you and Adam a few days ago about how, like, when most of your story, like, when we started doing this a couple episodes ago, like, I felt like I knew your story pretty well and I'd heard it. And then as you started going through it, like, there's definitely pieces of that I hadn't heard. But Like, I guess in regards to becoming a dealer on that pathway, when it really started getting serious, like what was the hardest part? Was there a piece on the way to it that, you know, you didn't think you were gonna make it or about to give up?

No, you know, I probably should have should have given up, I think, in a sense. Like, I got deal heat and I had goals and I wanted to hit my goals no matter what. But what, what kind of happened was I, I didn't want to work for somebody and buy a dealership, so I quit. And I was just, you know, it took me a year to finally close on a dealership, and I I went to over 100 banks. I would, you know, I had this packet and I would— you don't know this unless you've done it, but there's banks everywhere. Like there's banks in just weird buildings that loan money, you know, that are little banks. Like they're everywhere. And those are the banks that kind of like feed the entrepreneurial side of America. And so I would go and apply for these loans and then, None of them understood the automotive industry. They don't understand the margins. Like, they can't understand how you move that much money and only make 3%, right? Because the cost of vehicles is so, so large. And so if they didn't have experience in automotive, they would just say, we don't understand this. It doesn't— go buy something that has margins like software or something else. They didn't get it. And so a lot of times I was educating these guys at banks on how the automotive industry worked and that sort of thing. But I got turned down a lot. And then, you know, towards the end, I probably had 5 banks that would loan me the money at different rates and different kind of ways of putting the deal together. But that was a great experience learning how banks work and getting, you know, having to pitch it to them because they don't understand the business let you understand how they think. Like, they don't want risk, and so they're just trying to avoid risk. And people say, like, the car business is the quickest way to lose a million dollars. Like, you know, it takes a lot of capital to run a dealership, and it's, you know, it's high risk. For sure. And, um, so I don't— yeah, I learned a lot during that process about that, you know, that side of it that I didn't know completely on my own. Like, I had no mentor really at that point because deal— you know, dealers would want me to partner with them, but then it, it was like I was getting 20% and I wasn't looking to be a general manager for somebody for 20%. I wanted to own my own dealership. And everybody that owned dealerships wouldn't make a deal with me where I could buy it out over time, even though that would have been the smartest thing for them because they could have made a lot off of me. All I was looking for was ownership in the end. But they don't, you know, you kind of understand that dealers want to own you and they want you to be a general manager for them. But they don't really want you to ever own your own thing. Like, we know general managers that have left clients and gone out and started their own, and it take— you know, it takes a lot. You got to save and really have it together in order to do that. So I would have people that would want to partner with me, but the deal that they would propose wasn't any better than the deal I had as a general manager just running a store. It felt like being an employee.

Is there any advice that you'd give people that were trying to pursue? Like, I know it's kind of— I don't know, anyone that I've ever spoken to has always said like nowadays it's really hard to get any sort of ownership, uh, opportunity, whether it's car or truck. Dealership. But if somebody was out there, what would you advise them to do?

Well, now that I'm older, I think that if I was to try to do that now, I would go get a family office or venture money and scale that way. So I do feel like you have to have more money today. You also could go and build a shell into a public company too. But I do, I do think it's a different game now than it was when I was a kid. So I, I would, you know, I talk all the time to people who are raising venture money to buy dealerships, and there's a lot of people on the sidelines that would put money into a dealer group that need an operator, and that might be a better way to do it now. Because the, the price of entry is just a lot higher.

Yeah.

And the working capital.

Yeah. So I made a little list here of how owning a dealership changed my approach to fixed ops. If you're just joining us, we will be going live here in a couple minutes in Zoom for our Service Drive Revolution Academy. We're going to be talking about the basic fundamentals of business. That's the membership side of this. So if you're not in that, you can go to chriscollinsinc.com, purchase on demand, and that will get you access. But I made this list of how owning a dealership changed my approach to fixed ops. And the first thing I put on that list was the circle of life. Like when you're running a dealership, you really understand from 10,000-foot view that the sales department is handing the vehicle to parts and service, and how you, how you retain the customer in fixed ops has a big effect on how many cars you sell. How they feel about you, uh, in fixed ops is how they feel about you in sales. And if, you know, if they have a bad experience in sales, they're gonna carry that over to fixed stops. And if they have a bad experience in fixed stops or an indifferent experience, if they're indifferent, they will carry that over to sales and they won't be loyal. And so that circle of life of if you can get that part right, that is the magic because your cost of acquisition and what you have to spend on marketing is much lower if you have a really high percentage of repeat and referral customers on the sales side, driven by fixed ops. And in service, we just don't think about that. We don't think about that in fixed ops. We understand it, you know, at a kind of unconscious level that that's how the business works. But when you own the business, that's a big priority. It's a really, you know, big thing. Like we experience oftentimes dealers who are really good at sales, just will give stuff away in service and they just want service customers to be happy. They don't care if service makes money. They just don't want to lose them, right? And that comes from the understanding that how we make them feel in service is how they're going to feel about the brand and how they're going to make their decision the next time they purchase. And then manufacturers understand that. Also, so manufacturers are trying to implement quick lube. They're trying to do all this stuff that works against the profitability of fixed ops, but helps raise the perception and the feeling about the brand when it comes to selling vehicles, because everything is driven by people buying a vehicle. Does that make sense?

Yeah, yeah, for sure. Definitely does.

And then, you know, in a dealership, you just have 5 or 6 businesses under one roof. And when you own one, you see all of those working together. But when you're a manager of one, you see your department as being the most important. And that's the worst. Those silos are the worst part of what happens in our industry is that the parts department is its own business. Service is its own business. F&I is its own business. Sales, pre-owned. But to a customer, it's all one. And the customer gets lost in that. The customer experience is diminished by a pretty big chunk because of the separation of departments. Where I believe the industry will evolve to The salesperson will also be the service advisor. We will have client advisors managing a couple hundred clients. Like, they will have their portfolio of clients and they will coordinate service. They will coordinate their lease return and their next purchase. It will be one person. It won't be them going to different apartments. And I don't think we're that far away from that as an industry.

I don't think we are either. And I keep thinking we're, you know, and there's good examples of it out there, but as an industry, I keep thinking we're edging towards it. And then I find a bunch of evidence we're not, but of the silos between departments, I keep thinking, you know, maybe they're coming down, maybe they're coming down, but I agree 100%, Chris. I think we're getting closer to the point where there's going to be some type of interruption with a model that doesn't give the opportunity for any silos at all. Like if the salesperson is, you know, there's just in that type of architecture, you know, there's no silos to be raised to the customer's detriment, right? Like, again, we're thinking—

we might be the ones to evolve that because we're always thinking that way, right? We're doing things in that direction as it is. The next thing I put on my list was marketing. So in, In fixed ops, you don't really mark, like you might do reminder letters, but you're not doing branding and marketing. You don't do that as a part of the business because the customers are coming to you. Now, I believe that most fixed ops managers would approach the customer experience different if they were involved in the marketing of the dealership because there's dealerships that spend 50, $100,000 a month on marketing, and it's easier to retain the customer than to get a new one. And so if FixOps was paying for that, or if the FixOps managers were involved in that, they, they would have a much deeper appreciation and focus on the customer experience. But learning marketing and how marketing really works was something that really affected me again and how important fixed stops are and how you can save money if you just take care of customers and change that experience in a way. And how, you know, we had a VIP club and we made customers feel a part of something special in fixed stops that retained them in sales. So free car washes, all these benefits, boutique, different events. We would have events that customers got to come to. All of that worked together. You didn't see a sales customer different than a service customer. They were just our customers and we treated them in a certain way that carries over to fixed ops. It changed how I saw marketing in the the value of retention than fixed ops. Then the other thing is just processes. Like, every department has an inventory, every department has a way of making money. It's all based on human behavior and psychology. So in service, our inventory is, you know, the shop and time. In parts, it's parts. In sales, it's the vehicles or whatever. But the process of how that is experienced by the customer and how it is sold and the money is collected is very much the same. It's people helping people, right? Yeah, you're a customer and you just appreciate people that make things easy to do business with them. Make things very clear. One of the 17 Laws of Leadership is success is attracted to clarity. That clarity across all departments and then in the individual departments really drives the process and drives sales. Process first and then people second. And we say that all the time. People think that we're saying that people aren't important. That's not what we're saying. Good people get chewed up by bad processes and the customer is the victim in that. And so, you know, the process that I used in the service drive is the same process I used in the sales department in the sense that, you know, the repair order kind of told you the story, the deal jacket in sales told you the story, you know, greeting the customer right away and taking away decision-making like we do in service. Lowering the stress level and kind of putting the customer on a track where we're making the decisions for them and they just start trusting us because we're like, hey, go into this lane, do this, wait for the, all of those commands that we're doing to a customer in service, they're just like, oh, I matter. They know I'm here and they have a plan for me. That same thing works in sales and it's just as effective. To get a customer to demo a vehicle, get them to buy a vehicle, 'cause when they trust you and you take away decision fatigue, you don't confuse them with a bunch of decisions and questions, they perceive it to be one of the best experiences that they've ever had, which endears them to the business. And so process, you know, across all departments is exactly the same. It's about, taking away decision-making for the customer, building trust and validating them, like really making the customer feel like they are seen and they are important. That's, that's a big part of, of that process and you know why it works so well.

Yeah.

The, the other part of marketing is we would do a lot of events, so we would go to SEMA, we would, we would have different companies accessorize the vehicles. We would accessorize the vehicles on the showroom floor. And because I'm a fixed ops guy, I was allowed to do all that. Nobody— I couldn't— there wasn't a sales manager that could tell me, oh, we don't want to move wheels from one. I'm like, I'll have a tech there on Sunday. Like, and I did. I had techs there on the weekend to move wheels around. But we, we put, you know, the stuff on the cars that we wanted to sell, which drove parts sales, lifestyle, and boutique sales. But that was a big focus is when there's somebody running the dealership that is from fixed ops, you're able to break down all of those silos and those barriers in that way. What were you gonna say, Hoagie?

Oh, I was just, that was one other question I had was like how coming from fixed ops kind of like impacted you going into some of that, but you, You know, you kind of hit, hit that right on the head right there. That's all I was gonna—

well, yeah, when I could tell the sales manager that they didn't have a choice, and, you know, I understood that they— we didn't want to lose wheels because they didn't get moved from one to another and we didn't track it. So I just had somebody there that would do that for them. I made it easy for them. But, you know, you— in a, in a month, you can sell 2 or 3 sets of 8 $10,000 wheels. You can, you can sell a lot of stuff, right? Like, people are leaving the, the place they buy a vehicle and they're going and putting better speakers. They're, you know, I just did it with my jet ski, right? And, and lucky for me, the dealership that I bought my jet ski from put in the aftermarket stereo, but I was going somewhere else to do that. You go somewhere else to have it tuned, You go somewhere else to get wheels. And we were losing all that. And the other part of that, the flip side of it, is the most enthusiastic people out there for a brand are the ones that are accessorizing and personalizing their vehicle. So if you make that easy for them and you do that, they see you as an advocate for their lifestyle, right? Because it's a lifestyle to them. To go to these, you know, off-road events. And if your dealership is the one providing that to them, then they see you as a part of that lifestyle in that way, or racing or what, you know, whatever it is, the modifications. And so the enthusiasm for the brand really, really shines through when you're a part of those communities and you're marketing in that way. Um, so that, you know, the parts lifestyle stuff is a, is a big part of it. The other part is just, um, the appreciation for the value of vehicles. Like, when you're in service, you kind of understand, like, oh, we need to turn our used cars around quick. But when you're actually running the dealership, you, you can do the math on That car costs $40 a day sitting there. Like, their cars, even new cars, are not going up in value once they're on the lot. They're going down in value. And so every day a vehicle is sitting there and not sold, it is costing you money because you're flooring it. So you have a line of credit that that's on, but also it's depreciating. So, I mean, I always make the joke, the best used car manager is the one that's pacing out front chain smoking because they're just so devastated that these vehicles— and, you know, now it comes to service and you're telling me it needs tires, and it's like, ah, how long is that going to take? You know, it's just— they're— everything is going down in value every day. And the quicker we can get those vehicles up, the quicker we can fix problems for sales, the, the better it's going to be for us, the more cars we're going to have in the drive in the long run. So, and that's back to just kind of that circle of life of selling the vehicle, handing it to fixed ops, and then handing the customer back to sales, you know, and building a relationship in that way. And then the personality types, like there definitely is a different personality type in the sales department than there is in the service department. They're just different. And learning how to, connect and manage those different personality types makes you a more effective leader. Where in fixed ops, we're all kind of more introverted, a little more like, hey, we'll read the manual and we'll figure it out. Where in sales, that's much higher risk. They're more extroverted. It's a different sort of personality. And being able to connect with both of those makes, you know, makes you more well-rounded as a human also. But I think when we— when I just worked in fixed ops, it was always like, oh, those sales guys are a little too excited. They come out of that sales meeting all fired up. What's going on?

Yeah.

But then when you're the one running the sales meeting, it's, you know, it's completely different. And you can't run that sales meeting like like you would run a fixed ops meeting. And you can't run a fixed ops meeting really like you would run a sales meeting. It's just different. They're different personality types, different motivations. Yeah. That's kind of the list I came up with.

That's a great list.

I thought how owning a dealership changed my approach to fixed ops. And at the heart of all that is the customer experience. Like it is so much easier to retain a customer than to get a new one, to go out and get a customer that doesn't know about you.

Yeah.

Yeah. Has no relationship at all.

Maybe we can talk about this on a future episode also, but I want to go get this GM survey and frame it that came in. And I was looking at it when I was in the store a few weeks ago, but the lady had said, I hate that they think I know what I'm supposed to do when I'm there.

Hmm.

It was like, uh, ouch. Yeah. And she had just bought the car and then it was her first service visit. Like there was a lot kind of tied to it. And, uh, yeah, we were having the advisors read it and like—

Customers just fall through the cracks of the different silos.

Yeah. And, uh, she's never coming back. Yeah. No.

Yeah.

It's tough.

Well, thanks everybody for hanging out with us. If you're in Fort Wayne, Indiana, text Adam. He'll take you out to a steak. I think I'm doing chicken tonight myself. I don't think I can have another steak.

Uber— if Adam offers to pick you up, just, uh, Uber there. He's a good time once he's there. The car rides is less enjoyable.

It's always fun, you guys.

Um, we're gonna hop off here and we're gonna jump into the Service Drive Revolution Academy. Academy. We're going to be talking about business fundamentals. So if you're, if you're a member of that, we will see you on that side. If not, chriscollinsinc.com, you can sign up. Hope everybody has a great week and we'll see you again real soon. 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 833-ASK-SDR and we'll answer your question on the show. That's 833-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.