Red Flags: How To Spot a Poorly-Run Dealership | SDR #253

Welcome, everybody, to the big show. Today we're going to talk about how you can tell if a dealership is a place you want to work. Dealership red flags. We got the news. We're going to talk about Dallas center of the country. Center of the country and our upcoming coaching meeting and much, much more on this edition of Service Driver Revol.

Welcome, everybody, to the big show. Tell everybody. Hello, Christian.

Hello, everyone.

Christian told us a joke earlier that he cannot tell on here.

I had a run of dirty ones.

How do you work? Yeah, you. You checked off a bunch of categories.

I don't think we could.

It's. I can't even say the category.

Yeah, it's so offensive that I don't think anyone.

You know what your thing was? Do you know what you said after. After everybody was like, laughed but then felt guilty about laughing. You said no cuss words.

I did say.

Which had nothing to do with the point. Like, you can tell a really wrong joke without swearing.

You don't need to swear. Yeah, that is.

It's not okay.

I think that that's my.

Something. We gotta at some point address your.

Childhood trauma and the fact that, like, I have no. Like, all I want to do is either freak people out or make them laugh, but I don't care either way. And the. The. The content that comes out of my mouth is just unacceptable.

The. The degree you will go to for a laugh is not okay. It's.

It's pretty. Pretty extreme.

It's funny, though. So we're going to Dallas for our quarterly coaching meeting.

Super excited about that.

So we had our last one here in the library. This next one we're doing in Dallas just because it's central, easier to get to. Then everybody come into la. Although people wanted to come here, which was interesting. Did not expect that they would prefer to come here. So in the future, I don't know that we do the Dallas thing. So we're going to Dallas to have our coaching meeting. So the way that week goes is we'll have a meeting with our team. Then you have a boot camp for new clients. Usually that bootcamp's pretty packed.

Yeah, usually like the 20 to 30 attendants, which is a good room.

Then we will have the coaching meeting and an elite meeting all kind of together. Right. So at some point, I'll break off with elite and you'll do the rest of the coaching meeting. But it will be a very fun time.

Oh, is.

It always is. And the place where we're kind of taking over a hotel, which is really cool. This. We've wanted to do this hotel for years. Even pre pandemic, we wanted to, and the hotel's always booked out, so I'm excited that we get to do it. This hotel is. They're a lover of tequila.

When did you first stay there? Because this has been on your radar for years and years.

Patricia said, hey, there's this cool hotel. The, you know, the owners are kind of cool, whatever. But they redid it. Would you stay there? I don't. Why did she want me to stay there? She wanted me to just stay there and see it. Were you with me?

No.

So I did. I just stayed there for some reason and ate in the restaurant and whatever. And then I think the pandemic happened and they were booked out, and then it just never kind of came together. But it's cool. It's like they took this hotel and kind of redid it in a cool way. Like, I don't know, the food is really good. It's re. You know, it's reasonably priced, but it's got style. It's.

One of our. One of our clients has stayed there, and as soon as we made the announcement, he texted me. He's like, that's an amazing choice.

Yeah.

I can't believe you guys got that hotel. Like, he's really.

We're probably almost buying it out, right? Because it's not that big of a hotel.

Yeah, we'll.

It'll be a bunch of us white pasty guys at the pool.

Yeah. So what are we going to do at the beginning of the week?

We're going to go there to look at buildings. Do you know that in Dallas, for the price we paid for this, we could have, like, a medical center. We could own a hospital.

We could also buy a megachurch. And some of these megachurches have gymnasiums and schools in them.

I'm not opposed to buying a megachurch.

Like, we could have our own school, right. K through 12. We could call it the Christian Lafferty School of Comedy. No, nobody wants that.

Inappropriateness.

No. Something else. I don't know. But whatever ideas the audience has for that, let us know. The Christian Lafferty School of Blank.

For what we paid for this building.

Yeah.

And there's a lot of mega churches for sale.

And keep paying. This doesn't end.

Oh, no, it doesn't end at all.

So great. You know, it's funny. So. So Chris had sent.

What's funny or sad?

No, funny. I'm. I'm over the sad part of this building. But Chris had sent Me some pictures of a place which was really cool looking, by the way, but was a building, like an office building with an attached house, right?

Oh, yeah. How cool is that?

Yeah. So I'm showing these pictures to. To Claudia, and what did. What does she ask me?

What.

How long do I have till we move to Dallas?

Really?

Yeah. So her view was that we were going to Dallas, and then I was going to move into that.

Does she want to move to Dallas?

She'll go wherever I go.

Here's the thing. We can move the office to Dallas, but I don't want to live there. So I don't know how we navigate that. I'll go there for a little while every month, but I don't want to live there.

I don't think that you need to be there every day.

Man, we would save so much money. California is doing everything they can to keep us from being able to be a business.

Yeah.

It is just. This is the. You just shake your head like, I don't understand how. Yeah. I just don't understand the logic of any of it.

Yeah, it's super interesting.

It's why so many people have left. But.

Yeah. So the. Let's just say that the value is phenomenal. And then I looked at houses around the area, and, man, what you can get a house there for? Yeah, it's so cool.

It's a lot of space.

It's a life changer. Yeah.

Like, so when. When people there like, oh, I just bought a house. The. What's the question? That comes right after it.

How many acres?

Yeah, I got 20 acres over there. Right. Right here. I mean, I live in a pretty big house, and it's on a postage stamp. It's just straight up or sounds there. Oh, yeah. You could have all kinds of varmints.

Right.

Of horses, cows. You could have. We could be sitting around. I could be like, christian's got a thousand head of cattle that's right. On his 20 acres.

I could be a rancher.

I don't know that that math works, but you might need more than 20 acres.

Maybe a llama or two.

Yeah. So you're down.

I'll go wherever we need to go.

So we're gonna go look.

Yeah. I'm trying to think if there's any. That I. Any place I wouldn't go. St. Louis.

That was random.

Yeah.

Other than that, I mean, was St. Louis the. An option at one point?

No.

Yeah, I didn't think so.

No, but it does. I. I grew up hating the St. Louis Cardinals.

Okay. What's in the news because I'm excited to get to this.

A couple of things. Maybe some people have started to figure this out already, but it looks like according to studies, the semiconductor shortage is coming to an end. Just kind of putting the math.

Great. So I can buy a PlayStation now?

Yeah, you'll be, you'll be clear to get. Because I. Because all I do is think about you sitting around playing video games.

Yeah, no, you know what? You know what? Now you can subscribe and just play any video game you want. I didn't know that. I think that's how it works. I really have an idea. I just heard somebody say that.

Yeah. So just kind of putting it into perspective. In 2021, the estimate is that not having semiconductors cost 9.5 million units of production for cars. And then this, the most late. The latest.

Estimate is in the first six months of 2023, we lost 524,000 units of production. So that's significantly less. It's still not good. I mean still half a million cars, but. But it's coming to an end is what they're saying.

Just as consumer demand slows.

Well, they're expecting by 2, 2030 that car sales will exceed 100 million.

Which is pretty interesting.

A little wide.

Yeah. I wonder what the mix is going to be.

Like.

Who's going to have the big piece of that pie? It'd be interesting.

Might be a company we haven't even.

Heard of yet, quite possibly or a Chinese company.

Maybe. You never know. And then the next thing is I enjoy the fine state of Alabama. And the state of Alabama is looking for 11,000 auto industry workers. So they're really. They've started campaign, it's called the shift campaign. Trying to get people to get into the automotive industry. Technicians, sales, but mostly technicians it looks like as I'm looking on this, but. But the government's actually.

Putting a lot of effort into that. So not just on the dealership side, but also on the production side. So believe it or not, listen to this. Alabama has plants for Mercedes, Honda, Hyundai, Toyota and Mazda all in then 150 suppliers throughout the state too. So yeah, that's pretty awesome. But they're trying to get people to get into the automotive industry, which I think is really great. That is so. Thank you.

Alabama. Should we move to Alabama?

Well, we have the airport issue.

But.

Like, I don't know. I think that Birmingham's a pretty nice city, like in the northern part of the state.

The food is so good, the people are so nice. Lord, you have to have such a great story.

You have to have a wheelbarrow for me.

All right. And then this next one, we diabetic.

In three days, maybe.

I was going to say three months, but yeah. All butter and biscuits and grits. I'm making you hungry just talking about it.

I don't even know what a grit is.

When's the last time you had a biscuit?

Spit a minute.

Yeah.

So, yeah, I could do. I could do a nice biscuit Southern style.

Yeah, like some. Like a mom that knows what they're doing.

Yeah, for sure. All right. And last but not least is 2025, we are going to see a return of a car that's kind of near and dear to my heart. Only because I really. Romance. No, I wasn't that fancy growing up, but growing up, that I thought was just the coolest car in the world. The Dodge Stealth.

See?

The coolest car in the world.

I loved that thing. I really hadn't had a lot of exposure to the Viper. So the Stealth was like. That was.

That was the orange car.

So like the twin turbo version and everything like that.

Yeah.

I equally like the 3000 GT, the Mitsubishi. That was the. Because that was a joint effort car between Mitsu and. And Dodge. And they're coming back in 2025 with a stealth, just not as a sports car. It's going to be an SUV replacement for the Durango, which I don't.

You walk me through the logic.

I can't. Oh, I don't understand what this is.

Like when they made Mustang a. An electric suv.

Yeah. Which is not even remotely Mustang.

Even a suv.

No, it's a hatchback. Right. Literally, that car is a hatchback.

Every time I see one of those on the road, I have to do a double take. And like what.

You know what, though? They must be selling a little. A few. Because I. I do feel like I'm seeing more.

Yeah, I see them.

But. Yeah, so they're. So they're rebadging it, releasing it. So the picture looks like it's gonna be. I'll call it a very sporty suv.

Right in. Right at about the time your lease is going to be up. You could. I finally have that.

Really think I'm gonna buy that thing. I'm gonna buy that BMW.

And keep it for a long time.

Make it too easy for you to just get another one.

Yeah, but the residual is pretty nice on it, too.

That's what I mean. They make it too easy.

No, the residual is. It's reasonable, I think, to buy it out.

Yeah, but it's the. You'll be able to roll into something for the same price.

Yeah, maybe.

Okay. Dealer red flags.

Okay, so explain the context of that.

So a lot of people ask us and it comes up a lot in the.

Interwebs, like on Facebook, LinkedIn comments.

We get emails directly. I'll. I'd say I get one to two a week. I don't know how many you get, but people reach out to you on Instagram too. So interwebs, social media, it's a comment.

Asking, like, how do I know if a dealer is good or not? Like I'm talking to this dealer. How do I know? I'm scared to jump. Right. That sort of thing.

Yep.

And so we have made a little list. You made a list? I made a list of red flags for dealers. I'm not going to go in the order that I have here because I think.

Are you going to try and hit your big point last?

I don't know which one you would categorize as the big point.

Okay.

Okay. So a couple things and they kind of go together is.

In an interview I would ask when was the last time they changed the pay plan. So if I'm interviewing and I'm assuming to be an advisor, but even if I'm a tech, I want to know when they change the bonuses, when did they change the paper? Now, what does it tell you if they change the pay plan a lot.

That they don't really know what they're doing.

Yeah, they're chasing it. They're managing the department through the pay plan, not through systems. And it's not scalable.

Let's say that's a very reactive.

Yeah, yeah. Technician to advisor ratio. So a lot of times we see dealerships that have two technicians to every advisor. It should be three to one or four to one, but if you have two to one, the advisor probably doesn't have a chance to really make money and the technicians are probably going to be over overwhelmed.

Yep. So one thing that I would do in that aspect, one, asking how many techs, how many advisors is really, really good. Asking how many they're looking for. But what I would ask a service manager do if I was sitting in front of him, I would ask for an advisor performance report from the previous month. You can learn so much just by looking at that data.

Yeah.

Because it'll tell you whether the average hours per hour, it'll tell you what the mixes of customer pay, work versus warranty work versus internal work. You learn a lot just by asking that question.

So let's touch base. Touch on that really quick, because you bring up something that I kind of hadn't thought about.

It depends on the brand. Right. But let's say you go, let's just say General Motors, and you're looking at the Advisor performance report, and 50% of their work is warranty. What does that tell you?

That they're not converting it to customer pay. They're just one line.

And that they don't have enough techs. Yeah. Because most of the time, if your warranty starts to creep up, it means you don't have capacity. Customers have to come to you for the warranty. If you're booked out four weeks, you're going to lose the customer pay to independence because they can go to an independent for customer pay. It's the warranty they have to come to the dealership for. So that warranty to customer pay ratio is an indicator of not having capacity in the shop.

That's a really good point. I like that.

The next one is how many ROs do the advisors write? So I would just say, hey, how many, how many on average? How many ROs are we writing a day? 100. And then you do the math. Do the math. 10 advisors, 105 advisors, and 100. They're writing 20.

Right.

That's not good.

So oftentimes there's commonalities between how many ROs the advisors write and turnover. And that's the next one I have is what's the turnover? Yep.

So the tenure of the employees.

Yeah. So if they're churning through advisors, there's no reason to think that you're going to be the one that sticks.

You also learn a lot. If there's five advisors and everyone's been there for two months except one person that'll tell you a story or two.

You brought up a good one. That was. What would you do.

To kind of learn about a dealership? You would go sit where?

In the waiting room.

And what, what would you observe?

So there's a couple of things. One, it's a lot like, to me, it's like going to dinner with somebody and watching how they interact with WA staff. I know that I can go into the waiting room and you'll. You'll get to see interactions with the customers, or if there are barely any interactions with the customers, you know, that's telling you a story too. But there's a weird thing that happens in the waiting room. It's like employees forget that there's people in there, and they literally. It's Almost like if you put security cameras up somewhere for the first week, everyone's like, oh, crap, there's security cameras. But by week two, they don't recognize that there could still be an audience. So, like, the conversations you hear at the cashier window, if you have a cashier window or salespeople walking through the. The lounge and what they're saying and then the way that the customers talk to each other. So I'm looking for all that interaction and just kind of taking that feedback. Are the customers, do they seem happy to be there? Are they really frustrated or are they not getting any updates or, you know, like I said, when they. When they think no one's watching, you'll learn everything that you need to learn. Does the sales manager or service manager have to go out and put out a lot of heat in the waiting room? You learn how people present? Usually, actually, yeah. So there's a lot of stuff to learn.

Then you learn like how dirty the bathroom is, what kind of coffee they're serving customers. Is the coffee fresh? Just the overall attentiveness, how they treat customers, how they're going to treat employees.

I agree with you.

So the waiting room.

Oh, the cleanliness of the bathroom is really good.

Oh, yeah. That tells you. The cleanliness of the waiting room to.

How we do anything is how we do everything.

Like, sometimes you go into these dealerships and they have like 20 people in chairs watching one TV in the waiting room.

And, you know, not everybody wants to watch Fox News.

No. Or, you know, it's not. It's not very well laid out. And then the, the last one that I have on my list is just reviews. Google Reviews.

Okay. Oh, so I have a little bit of a spin on that. So when you think of Google Reviews, what is it that you're looking for?

Just basically not answering the phone or doing the basics. Right. So, like, if you're looking at a review for a restaurant and they're like, I made a reservation, but they didn't have it, or I showed up and they weren't just the basic. How you handle the process.

Yeah.

So I'm looking for the, you know, can they answer the phone? Can they do what they say they're going to do? Right. If they're struggling just to do what they say they're going to do, that's probably a bad sign. That's chaos.

Okay, that's great. I never.

Then the next level is emotions, how people feel. Like, do they make people feel good or do people feel bad? Do they feel important or do they feel unimportant?

So I think the best places, you see a lot of employee names in the reviews. Now that could be manufactured from the dealership. Right. So I look at it two ways. One is I'm looking for the ratio of sales to service reviews. And in a lot of places where I'll look at the reviews, the sales will be stellar, the service will just be angry customers. And then I also think that there is a possibility that you can have two perfect reviews. Like a store that's at a5.0 and never had any bad reviews. I actually really like to look and see kind of like the timeline of a review when you have an issue where a customer's like, oh, they told me the part would be there Tuesday, but it didn't get there till the following Monday. And then you see a response from the dealer. That stuff matters too, because it's them trying to address the situation out in front of everybody. And I really think that some of the best dealerships do a good job of addressing that online reputation. They recognize that, like one, they, they, they had a customer leave that wasn't satisfied and then they're publicly trying to do their best to make it right. So I think that's a really big key in terms of if they treat the customers like that, that's how the employees should be treated as well.

Yeah. So I just think too kind of wrapping it up is like how they do anything is how they do everything. So there's commonalities.

Yeah. But you can. When it's really bad, I think you can spot it.

Most of, most of the chaos is from lack of production in the shop that everybody thinks it's advisor training and it's not. It's having the production.

Yeah.

The capacity to produce more than anything. Good. Well, good stuff. Thanks, everybody. We'll see you next time on Service Drive Revolution. 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 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.

Video.