Chris Collins and Jeremy discuss a recent Automotive News article by Larry Veliquet about automation in dealership service drives. They debate whether tablets/kiosks/apps can outperform human service advisors, cite statistics and anecdotes (e.g., advisor closing ratios, pick-up rates at unmanned pumps), and walk through financial examples estimating per-advisor salary (~$50k) and potential dealer savings (e.g., 6 advisors → $300k; 4 advisors → $200k). They conclude automation is impactful but argue humans still add value; they plan a follow-up on how advisors can avoid being replaced by the tablet.
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New article in Automotive News written by Larry Veliquet. I hope I'm saying that right. Larry Veliquet. Larry obviously is a good rider, but he doesn't know the first thing about Otto.
You can tell he has not.
He's never spent a day in his life in a dealership.
I agree with that 100%, Larry. At least on the service drive. Good.
Right? I actually think I've met Larry before.
Larry Veliquet, reporter covering Toyota and Volkswagen for Automotive News. I actually think I've. I've met Larry. So I don't know, maybe we're being too hard on Larry. But here's the thing, Larry. Anybody who has written service or worked in a service department knows that the way that you spell service advisor is with an or at the end, not e. And so through this article, he spelled advisor a D, V, I, S, E, R, which is not like you pointed out, not the wrong spelling, but not the correct spelling.
Correct. Not from the insider's perspective.
Yeah. So little inside. Little inside love for you, Larry, is. Let's. Let's change that E into an okay and it'll be a little more accurate.
Absolutely.
But great written article. I love. So I'm going to read part of this because it's really funny. He said, he said. Hey, service advisors, can you talk for a second? That new co worker and the service driver is kind of making you look bad out there. Upselling every customer, pushing accessories more effectively, checking on every VIN for recalls, equity mining every vehicle that comes through for sales leads, and all while processing customers and maybe a tenth of the time that you take and throwing every bit of information from each transaction immediately into the dealership management system like nothing.
Tell me about it. How does he have the energy to do it?
And the worst part, the same co workers doing all this without having to take breaks or complaining about long hours or needing health insurance or vacations. And this newbie is working for the. Admit it, a tiny fraction of what you're making.
Are you serious?
And basically the point of this is that, and it's something we've talked about on the show before is automation. And the stats are coming in more and more that just putting an iPad in front of a customer and letting them pick, they will sell themselves more than an advisor who doesn't ask.
Well, okay.
Right.
I agree. Now, if you understand sales.
Jeremy, seriously, okay, you and I. Well, I gotta put my versus the automation.
Okay, I will kick the crap out.
Of that automation 100% every time. Yes.
There's no way there's no way. What that. What we're saying here is that advisors don't ask and they're not consistent. And that's why. But there's no way that automation is going to outperform me.
I agree with you, absolutely. And the other thing is, if you look at the sales language, look at the words that he used to describe the sales process, pushing, upselling, those are all things that customers don't want. So yes, a tablet or a kiosk might pull things up and say, hey, it's raining today. Do you want wiper blades? Okay, well any idiot could say that, but you're not going to really double or triple your gross selling wiper blades. It's the connection that you get. Now the thing that I think is going to happen is the kiosk in my opinion is a novelty right now. What's going to transcend it is the app on the phone is when the customer can actually just check right in on the phone without having to go to the kiosk and it's already automated in through the system and they can drive the transaction there. There's always going to be a need for an advisor though. Always we need. So yes, absolutely.
Okay, so I've been in some meetings and I've been hired to come in and add my point of view to meetings about this. And the thought process at the top at some manufacturers and dealer groups is that.
Even if the automation performed to what advisors perform to. Now if you take out the expense of the advisors, right.
It's a huge profit. Okay, so it's a huge increase in profits.
Can I break it down real quick.
For the individual dealer?
So let's say $50,000 a year for an average advisor. Okay, six advisors on the drive, that's 300k a year is what they're looking at. They're saying that all they have to do is match what current production levels or sales levels are and they're going to earn that extra 300% or 300.
Well, they're going to keep the 50 grand.
Yeah, they're going to keep the 300K.
But if. So if you have a store and you have four advisors and let's say they're, they're averaging 50k, but it's probably a little higher than that with benefits and everything else. Right. So you're saving 200k a year. The average service department isn't making 200k a year on average. Like there's some making millions. But.
Something to think about, it really is.
No, I'm. Yeah, like it's a thing. So.
But there's a reason.
And then the point is, is it outperforms advisors. So that's like, that's the nuclear weapon, right?
They must have went to the worst dealership on the planet to get those numbers.
No, no, in the stats. In the stats that are out there. Well, here's the thing. I was speaking in a, at a, in a thing years ago and a guy was speaking before me.
From I think Chevron.
Okay.
And when I was all done, he kind of pulled me to the side and he was like, I really like what you're saying. He goes, you know that our average gas pump with no advisor there, 33% pick premium.
Okay?
So if the average closing ratio of an advisor selling breaks or an oil leak or an alignment or whatever is 30% okay. And they're saying that with automation it's closer to 50% okay?
You reduce your expenses and increase your, your net. And so could a parts guy coordinate that? Do you need an advisor? Like that's the thinking now. I don't know. It's kind of like driverless cars. It's like, yeah, eventually I'm sure that happens, but it isn't happening today.
Let me throw another curveball at you. Let's think about this. What if that Starbucks that you absolutely love because of the personal touch they don't give you. What if you walked in tomorrow? Well, you can't do it tomorrow because we'll be somewhere else. What if you walked in on Monday morning and there's a kiosk there, there's nobody behind the counter and it's fully automated and you can punch in your order. You know, you walk up, it does retina detection, honestly. And it says welcome Kris.
I would refer it to that face girl that's usually there.
Literally like the girl that's usually there in the morning is talking to the barista. Never even makes eye contact with me. Could care less that I existed. At least the machine is like, I don't know, I'm a gadget guy.
Like, so why hasn't stare. But it's done it yet. Then McDonald's is absolutely. But McDonald's. And I would say McDonald's is probably a good lesson in this.
Have you gone to the McDonald's where they do it?
Yes. Yeah, you've got the big.
Yeah, it's easy.
And they've cut down their staffing. They're payroll load is probably 50% of what it normally is without that system in place. So it's definitely an enhancement. It's something that we could do. I'm actually thinking of, well, how do I do this at my shop now, right? However, I still want the person.
What's your advisor's name?
Mike.
Mike. I'd be worried, bro.
No, Mike is really good.
How much does Mike make? It's an extra 60 grand to the bottom line. Mike.
Hey, come on. We're in hisperia. We only pay 3 bucks an hour repairs.
Minimum wage is 3 bucks an hour.
It's hisper. What do you expect?
That's so funny. Something to think about. Really fun article, Larry.
Absolutely.
Thank you. Yeah, bro, just the the o would make this for us insiders. I get that that's inside, you know, soup, but.
So our next show is going to be the five things Advisors can do to Avoid being Replaced by the Tablet.
Oh, that would be a good one.
There we go.
Thank you so much for watching this clip of Service Drive Revolution. Now you can catch the full episode 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.
