Should Your Service Drive Do THIS During The Coronavirus Shutdown? (Service Drive Revolution)

Okay, let's. Should we. Should we do some questions?

Yeah, but hold on. I. I've got to be 100 compliant, and I don't want to offend anybody, so. Because we're going social and we're going to talk questions, I'm gonna get ready and.

Bro, you can't catch corona through zoom.

Well, you don't know that. That's not proven. So I just. I want to be conscious of the people out there that are worried if.

You'Re just wearing pants or not. I don't care if you have a mask and eye protection.

Dude, I'm at the shop. I got my Doc Martens on and my work pants. You know I have pants on. I just. I want to be sensitive to the people that want us to take the proper precautions, and I want you guys to know that we take this stuff seriously. You're gonna.

You're gonna give me a prostate exam with the way you're doing that?

Can you turn your head and cough, please?

Yeah. Right.

My glasses.

Okay, we need. We need somebody the. To read these questions. We need the voice of God to read them. Are you there, voice of God?

This is the voice of God.

Question number one.

This first question comes from Link.

Scott is Scottish.

Is that Sean Connery that we hear there?

In your episode about the fourth labor type, you said that in order to get a true hours per ro, to divide labor dollars by number of ROS, and then divide by current ELR with an ELR of 9428, that math produces 22.46 hours per ro. When I calculate the normal way with MTD numbers, I also get 2.46 hours per ro. My door rate is $119. Is there a benefit or reason for calculating it one way or the other?

Thanks, Chris.

Okay, so if I understand the question, Jeremy, should you. Should you calculate hours pero using the posted labor rate or the effective labor rate? Am I understanding this right?

That's the question. Yes.

Okay, now let's. Let's get something out of the way. What does posted labor rate mean?

Well, in California, that's just being Bureau of Automotive Repair compliant. It's a target rate. It doesn't mean anything.

You're right.

Yes.

Means nothing. So look at the example really matters is effective labor rate. So if you want the true measurement of what you're averaging per repair order, use the true measurement of effective labor rate. Your posted labor rate and your effective labor rate. If you have a pricing strategy and you're in our coaching program, your effective might be A little higher than your posted labor rate. But if you don't. I mean, the, The. I've seen a gap of 80 bucks before between posted and effective labor rate.

Holy cow. So in his example, he. His door rate is 119, but he's. He's generating 94.

Yeah, that's way too big of a gap.

That's huge. Yeah, you should have literally no more than 5% slippage is the absolute.

So you don't have a pricing strategy, and you're not executing on the pricing strategy. And the advisors probably aren't selling the stuff that they. That they should be selling. So you definitely need our coaching program or on demand, and we'll. We'll help you with that. But the true measurement, to me, the real way to do it is to use your effective, because that's really what you're collecting, and that gives you a truer number. Do you agree with that, Jeremy, or do you have another take?

No, I, I do agree with it. 100. I think looking at this, most cars on the road, I think the Car Care Council has this number. The average car sitting in a Parking lot needs 3 hours of maintenance or repairs. So that's just on average. So 2.4 is a little bit low. We want to push that number up. And if you're giving up $18 per hour. The one thing that I like to look at, door rate or posted rate is that's what advisors judge their value based on. And what I mean by that is if I say, hey, kris, we charge $125 an hour, but we're actually effectively charging 95, we're not charging 125. So a lot of times there's that slippage there, and the shops aren't even getting the numbers that they should be getting. And we should actually increase our pricing and raise our labor pricing up. So I do like to look at the door rate for that reason. And then also you've got to calculate effective. But the profits lie in managing that effective rate.

Yeah, well, you need to understand the different labor types and then how they're priced differently. And then you need to sell the ones that have the higher effective labor rate consistently also. Right?

Right. Absolutely. Yes.

Good job. Okay, voice of God, what's question number two?

This next question is not a question. It is a comment from YouTube. This comes from Willie on YouTube. Chris, as much as I love your videos and podcast, let's be honest, we don't want to risk our lives to increase RO count. Maybe the best thing during this time is a couple of cars a day and less than half the texts. I am in the epicenter of the pandemic. I do not want to increase ros. Give me a video where you are telling the owners to pay their techs and advisors and parts specialists extra during days off. Not this.

Well, I mean, first of all, Willie.

I want to.

Not assume in any way what you're going through or how you feel. And I think if you listen to that again, you. You would hear in that. I believe I said. I don't know, Jeremy, if you remember, I said not to make light of this and to be very, very careful and that our. That our people's safety should be priority one, Right?

Yeah.

I don't say that. No, you did, because I mean that from my heart. I really do. And I'm not making. Listen, we're putting. We're putting on a show here, and I don't think you guys want to hear me come on the show and talk about the. The people that we know that have been sick or people that have passed away or people that their companies are going under, restaurant owners that are going out of business. Our troubles in our business also. I don't think that that's what you're tuning in for. I think Jeremy and I's role in this is to.

Try to shine a light on the positive side. The. The other thing I would say to that is.

No. No dealership or shop across this country is in the same situation. So for you to ask me to tell everybody to do. To do one thing, to pay their people and only write two ros a day, like, listen, Willie, people are going out of business. Like, I can't walk a day in everybody's shoes and give them broad advice. If a client comes to me with their actual financial statements, their cash flow, their sales numbers, I can come up with a plan for them. But, you know, you can't assume that dealers have enough money to go four months without selling a car. And you really have to understand the dynamic of a car dealership and how much money is in that inventory that you're paying flooring on. You know, you have $10 million worth of cars that you're paying flooring on, and you don't have a chance to sell them. And you have no income coming in except for service and parts, which is an essential business. This isn't a simple thing to talk about. You can't just come with some opinion, because where you come from, you feel like you should be writing two a day because you're in the, you know, heart of the storm. I just, you know, you got to be careful. Like, just like I am. I am very much feeling that you are having a hard time, and I'm sorry about that. And I feel with you, and we're in this together, we can't assume that we know what dealers across the country or shop owners across the country are dealing with, what their cash flow is. What if you. I was talking to a client yesterday. They just bought a dealership and closed on it a week before all this happened.

Whoa.

Like, just think about that. Like, you go, you buy your second dealership, and you. You know, you leverage yourself, and now, boom, you hit a wall. So let's. Let's not. Like, the thing is, Willie, let's not only look at this from our point of view. We got to look at this from everybody's point of view. And it's not just what you're dealing with. It's what, you know, the dealer is dealing with. The president of the auto group, the independent shop owner, the tech, the service advisor, the porter, the sales people. Like, salespeople have been. Have been furloughed, and they have no income. Like, you don't know what their bills are. Like, you know, the thing with the stimulus. Like, I have, you know, people that work for me that make over $100,000 a year. So if I furlough them or lay them off, they can't claim anything because they basically get. In the state of California, they're gonna get, like, a thousand dollars a week. Now, what if their mortgage is $4,000? They can't afford food. So it's a complicated thing, and everybody's situation is different. And what we. What we have to do is show empathy for each other. But, you know, I don't know. And then the last thing. And Jeremy, interrupt me at any time, but the last thing is, I. You ask my mom, like, she used to say this all the time, like, if you want to find Kris. When I was a little kid, if you want to find Kris, he's the one over there in the middle of a bunch of kids coordinating a kickball game or coordinating a soccer game or something. I'm a natural born leader, and I like. I like leading. I like going into a crisis where people are struggling and making it better for them. I like fixing things for people. That's what I was born to do, was to do that. So for you to tell me that I shouldn't want to lead in a crisis is crazy. I didn't ask for the Crisis. I didn't. But it's here and I can't control it. So I've said this many times, focus on the things you can control. I can only control what happens today and what I can influence. That's it. I had nothing to do with this. The CR coronavirus was started by the CIA in China. According to Jeremy, like, I don't know. I don't know. But I do know that if people are hurting and things are going bad, I'm going to keep a clear head and I'm going to see the trees for the forest. And I've been like that my whole life. I manage to the middle. I don't get super excited, I don't get super depressed. I don't care how stressful the situation. And believe me, I've been in some stressful situation, life and death situations. Also when I was a lifeguard and hanging out with my grandfather who, who was a fireman. So I've neck boarded people that were bleeding out. Like I, I thrive in those scenarios because I want to serve, I want to help. I want to help the situation be better. And me overreacting is, is not going to make any situation better ever. Never has, never will.

I agree, Chris. Well said. And I think you know to this point where my heart's at in all this is we can actually. Sorry, I'm getting all muffled up here. The service we provide can be.

Now we're not safe. You're listening to this. Jeremy took off his mask.

The service we provide can be done. Restaurants could be open. The thing is, I will not buy in to the government shutdown of. Oh my gosh, nobody do everything. We're going to take care of you. They're not, they can't. We are a democracy. We're a capitalist economy. We have to get out and make things move and shake. And I will not stand by and just let things go the status quo. There's a bigger conspiracy here if you want to talk about all that. But the point of us saying how do you continue to drive business? Look, dealerships can handle the same amount of car for they were handling before and they could do it safely with whether you want people there or not. You could have your technicians fix the cars at night when nobody's there. You could disinfect the place before. You could disinfect every car. You can do a no touch drop off so our businesses don't have to be shuttered, they don't have to be shut down and we can do it safely and effectively and more effectively than we did before. So I'm not going to buy into, oh, let's only write up two cars a day and pay everybody. And I'm using Willy's words. And Willie, thank you for the comment. I'm not going to pay everybody extra just for sitting at home. That's bull. We've got to work, we've got to show up and we've got to make things better. The only people that are going to get us out of this is society as a whole. And if society continues to listen to the people who have an agenda that isn't in our best interest, then we're going down the wrong path as a country and we have to stand up and fight for this. And the way we do that is we live our lives and as normal as we possibly can and continue to provide value and provide services for the people that we serve. And automotive repair and dealerships are a grassroots business. We touch our community every single day. There's no reason we can't be selling cars, we can't be servicing cars and we can't be increasing revenues and setting record sales months right now. We don't have to sit back on our and not do anything.

So at every turn of this, the government has failed me. I don't know, but they first they said that most of my people are independent contractors and they said that independent contractors would count under the stimulus. The night before the stimulus went live, they said, no, we're not going to count independent contractors. And if they make more than 100 grand, they don't apply anyways. So they would basically get unemployment. So now I'm in a situation where the, the whole time I think I'm going to be able to get a stimulus that it's going to work. Now it doesn't. So then the stimulus that I do apply for, I apply, nobody can take it. And I'm bank, I have a personal banker with bank of America. I've been with bank of America forever trying to get our loan in. You can't apply for the stimulus if you don't have a line of credit with bank of America. And I'm like, so because I ran my business the right way and I don't have a line of credit, I can't apply for it. Then the next week they open it up, we apply for it, we've, we've had it in and then today they're out of money and our thing has just been pending. So and, and that's my government. It's fine.

I don't need the government.

I'll figure it out.

I agree. I was. I applied.

Wasted all that time on trying to do the thing the way the government has. I should have spent that time figuring out how to make money another way.

Well, you know, Kris, I bank with B of A as well with the shop here. And I applied for the paycheck protection.

Loan and I credit.

I had a credit card with them and that worked the same way.

Oh, see, I don't, I don't have. I don't have any credit cards.

But I was one of the first ones and I haven't heard anything back then. I got all my paperwork and here's the thing. I wasn't counting on that. The only person that you can count on is yourself. That's why I have loved being a service advisor my entire life. My paycheck is 100% dependent on what I do every single day. And I'm not going to sit back and just let the government tell me not to do anything. Look, we're going to what's going to end up happening. My prediction is they're going to slowly open the economy back up. And if you're high risk, they're going to make you self quarantine. And if you're not, we're going to have to go to work in doctor lab coats, glasses and face masks. We're going to have to change the way we do things. We're already rolling that way. We're prepared for it. So let's rock on and make some sales.

Yeah, and we don't have a crystal ball. Right. So the only thing we can do is focus on the things we, we can control. And if, if we love living in a society where the harder we work, the smarter we work, the more we make. You got to take the good with the bad.

Yeah. We have to fight to protect that right now because it is under attack. It's easy.

Wait, is this a, Is this a political Democrat Bernie thing? Bernie's out.

Oh, no. Who's Bernie?

The Democratic candidate? No, but socialist.

What they're doing is they're testing our societal response to control. They are controlling the masses right now. People are locked down. They are letting the government push them around and say live on this. And you know what I say to that? Sorry, I'm not gonna live like that. That's all I got to say about that. I'm moving on.

You listen to the far, far right radio, don't you? Like your past, Fox News, like you're into that. Like Breitbart, like what. What radio do you listen to?

Well, George Norrie and Art Bell are my neighbors, right? So I hang out with those two guys all the time. If you don't know who they are, just Google.

I don't know who that is, but you're far right, man. That's funny. But somewhere in the middle, Jeremy, is the truth.

Thank you so much for watching this clip of Service Drive Revolution. Now you can catch the full episode on on YouTube, iTunes, or Spotify, or wherever you consume your podcast. If you have any questions, go ahead and post them in the comments below. Make sure you subscribe and hit the Bell icon so you're notified when we post new episodes. I'm Chris Collins, and you can find me on Facebook and Instagram at Chris Bulldog Collins, and I'll see you again on the next episode.