Q & A | Should Dealers Give Employee Discounts?

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Chris, if you ran a store as you once did or once owned a store, what would you do about employees asking for discounts on service and or parts? I've heard a lot of different opinions about this, and people do it a lot of different ways. I'm curious what Chris Collins would do.

Okay, so the first thing, if I own a dealership, the first place I'm going to look for this question, you guys want to guess where the first place I would look is?

If they buy a car?

Yeah, the employee parking lot. I want everybody that works for me driving our brand. So I am going to go to, I mean, we used the store that I ran. We had this great sales manager on the desk that was so good at the auctions. His name was Ali. And we had almost everybody in the deal that we had, people driving cars that, you know, they had disclosures on them or whatever, but they were driving a new BMW for 1,99amonth or whatever it was. We, we wanted everybody there to be driving the brand for many reasons. One is they, if they're driving the brand, they're going to love the brand and they're going to feel better about the job they're doing. Second of all, they feel included in the brand. Right. If you're, if you're working a BMW store and you're driving a, you know, lesser brand or whatever, you don't, you feel like you're not, you're not one of them. And we want everybody to feel like they're one of, like we're all in this together. And then the third thing is they're going to get leads. We're in the business of selling cars. So when they're at church, when they're at the PTA meeting or whatever and people like, oh now nice BMW, we want them to go, oh, well I work at Hoagie BMW and if you need one, you know, let me have somebody call you. But it's, you know, it's all, it's all a part of it. So the, the V, like our, it blows me away that in a lot of dealerships the employee parking lot doesn't represent even 10 the brand that they're working for. It is nuts, like nuts to me. I see that all the time when I go to dealerships. It's like, oh, nobody drives the brand like and so we would take big haircuts to get people into the brand because the, you know, the, the, the only time it ever came in into issue is like, let's say you have a, you know, let's say you have a new model or whatever and everybody wants that model. Then somebody has a family member that wants that and you're, you know, it's a premier thing. You're not, you know, you got to tell them, okay, we, we're not discounting this one yet, you know. Yeah. But for the most part you can put people in a certified pre owned or you know, new demos, like demos with disclosure. There's all kinds of things you can do.

To, to get your people in a car that don't involve you, you know, losing money. But that's the first thing. Then the second thing is there should be a benefit to working for us. Right. So there has to be some sort of, of discount. Like, you know, what is, what is the thing that I said about the new leadership book and our team to.

Give one to everybody.

When, after or before?

As soon as they get here. Well, you said it before, but you want them to be the first ones to get the book.

Yeah. So I want everybody on our team to have it before anybody else because they're a part of our team. They're on the inside. Why wouldn't they feel special? I'm not going to charge them for the book. They're going to get the book. I'm, you know, it's.

I don't know, I just feel like that's, you know, there has to be, there has to be some sort of benefit in those sort, you know, in those sort of situations to being a part of the team and the team shouldn't be the last one to know or experience whatever it is that's going on. If you go to really nice restaurants, like I've witnessed this at some of the top restaurants here in la.

So if you go early and you notice their shift meeting and it's a fascinating thing to watch in the Michelin star restaurants in that shift meeting before they open the door, most of the time they're tasting the desserts, they're tasting the cocktail, the special cocktail and then whatever new entrees or on the menu because they're, you know, in a regular restaurant, maybe it doesn't matter that they walk up and they go, hey, the, the special today is a special, a five Kobe beef. Maybe they don't need to taste it. But in a really high end restaurant where, where all those little details matter and you're dealing with, you know, really high end clientele, you, you can't sell something you haven't experienced. And so, you know, you need to be able to say like it's, you know, it's something special. It's incredible. The dessert tonight, this thing they're doing or whatever it is they're sampling, you know, they're not eating the whole thing, they're standing one around and everybody's taking a bite, but they're experiencing it. And so I think there has to be a benefit. So for me, I go pretty deep on those, those discounts with advisors and their families. Like there's got to be some sort of benefit, you know, to that. So the only, you know, and I don't. We could debate shop time for the text. I always had, you know, a couple days or a day a month where the text could use the shop in the evening and work on whatever they wanted to work on. That's a debatable thing. The, the only time I want that reciprocated is I pay very close attention to what sort of parts the techs are buying wholesale on the back counter because they're running another shop and they're fixing other cars consistently. That's costing us money as a business. And you, you know, I want the text to be able to say like, hey, no, come come into my and ask for me or whatever it is. But I don't want a bunch of texts that are, they're running a whole another business and competing with me on the side. And so that's the only place then I'm going to look. And what I'm going to do is I'm going to call those texts in. I'm going to say hey, it would appear with your purchases through parts that you're fixing a lot of cars on the side, and can we talk about that? And then I would talk about it and I would tell them my feelings and that sort of thing. And then at some point I might cap them or, you know, depending. Most of the time, just bringing it up and talking about it fixes it. But that's the only place that I'm really nervous about, you know.

I feel like. I feel like you got to kind of prioritize that sort of stuff and make it special because there's got to be a benefit to, to working there. And the family part matters too, right? Like if somebody can go get their mom a deal on a car, get their mom's car fixed at, you know, some sort of discount, that makes people feel better, you know?

Yeah. Yeah. Well, it's. A lot of times we talk about lowering the silos between the departments, between sales and service and things like that. And. And I remember a lot of times, even as a tech and then later as a service manager and director, the.

You know, there was people on the sales side that I sent my family to because I knew they were taken care of. There was people on the sales side that sent their family to me because they knew they were, you know, they knew they were taken care of. And you, you want that? Like, you know, it's a great feeling when it's a customer and it's as equally great feeling when it's a co worker's family or. Or that co worker commenting. But hey, thanks so much. Like, you know, my mom, like, we didn't know we were gonna do, you know, so problem solving like that, just helping people, it does. It endears you to them. Like, it brings, it brings it together. And the. You touched on this a little bit, but it seems like whenever this comes up, when I get this question, almost always it's a thing where they got stung by somebody abusing the thing and they want to throw the baby out with the bath water. And I would encourage you not to do that for all the reasons Chris just went over.

You're gonna get stung. It is, you know, it is what it is. You can, you can fix the person stinging you, but yeah, you don't want to throw the baby out with the bath water.

It's usually why this question is coming up, though.

Yeah, it's gonna. Every once in a while it's gonna happen. It. You know, it's just human nature, right? Yeah. But for the most part, people are good and honest and they appreciate the fact that they feel special in the sense that they have a discount or, you know, somebody's working to get them a car or whatever. But, you know, that's the other thing. Just a short little thing here is, you know, new internal newsletters for all the employees is very effective because you can talk about all the specials. You can know the people in service don't know that there's a special on the this model right now with an employee discount of this from the manufacturer or, you know, that sort of thing. So having a paper newsletter that or flyer that goes out once a month to everybody letting them know about what's going on is usually pretty effective. And tell your friends that you know, that sort of thing too. And then always like, have the culture of come tell me if you need something. Like, don't, you know, you never want to make people feel weird to ask about buying a car or getting something serviced or a friend that has something you want. You want to encourage those conversations because it makes people feel like they're not a part of the team. It's a way longer answer than you expected. But it's complicated. And how much of a discount I would give would depend on the brand and the situation and all that. So I'm not throwing out 20% or 40% or whatever it is because I don't know what the margins are. I don't know any of that. But I would be aggressive. I would be aggressive. I'm not trying, you know, I'm covering overhead, but I'm not trying to make money off of employees. I'm trying to retain them and make them feel good. It's great.

So 833 3, ask STR if you have a question. Thanks so much for that one, Brian and everybody. Have a great weekend. We'll see you next time on Survey Drive Revolution. 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.chris collinsinc.com now that's offers.chriscollinsinc.com I'm Chris Collins and I'll see you in the next video.