#141 - Q&A with Luke & Jeff

You are listening to the Independent Dealer podcast with hosts Luke Godwin and Jeff Watson. Thank you so much for tuning in. Let's do this.

So, Luke, hope you're having a great week, buddy. We are going to do some question and answers this week. Maybe we'll have some people jump in on the live post if we kind of vet through the people that are on there. Hopefully we don't offend anyone, but if we don't really recognize your name, we probably, probably won't be bringing you in live. Or if we do, we might have to edit you out later on. But what I wanted to start out with Luke was I wanted to give a shout out to one of our most recent podcast reviews. This one was from September. Bomb Burner is the username. Says extremely informative, great production value and amazing guests. So I don't know if he reviewed the wrong podcast or if this was actually meant for ours, but I'm new to the used car industry dealer industry. This pod has answered many questions and offered much more guidance than I could have ever asked for. The overall quality of information being provided here is likely unmatched. Look forward to being a lifetime subscriber and learning much more. Awesome.

Holy cow. He did review the wrong one, I think.

Yeah, I think he did. But to that point, we do get emails all the time about new dealers and existing dealers, you know, obviously thanking us, asking questions. But I wanted to point out that itunes review. We really, really, really love the itunes reviews, guys. It helps us boost our rankings inside of itunes, obviously. I think we're the only podcast for independent dealers, so there's not a big, big competition. There's some other dealer type podcasts out there or salesman used car type podcasts, but obviously we want to reach as large audience as possible and bring our dealer community the most value we can. So love the reviews. Leave us a review, we'll read it on the next podcast and give you a little shout out. So appreciate that, Luke. What do you got in mind today? Luke, how you been?

You know, it's I guess this time of the year and this time in our country is just kind of hard to. Hard to figure out. Jeff. We slow month last month, good month this month, you know, getting close to the election. Be glad when it's over, when it's decided either way, you know, and just we encourage everybody to vote, of course. Vote, vote, vote often, vote early, vote often.

No, you don't vote as many times as you can.

Vote once. Get it done, you know, it really matters. So, you know, I Put that out there. But we keep getting. I get phone calls and I get questions on people saying, hey, what can I do to do this better, Jeff? And you know, I struggle, too. So don't act like I know all the answers or Jeff knows all the answers or any cardio knows how all the answers, because it changes daily. And the only way to really, I guess, be up on everything is educate yourself, listen to podcasts, read books, read the forum. Because there's a lot of things, a lot of education I get from the forums as well. And sometimes it's best just to sit back if you don't know what. If you don't know something about a certain area of it, sit back, read all the. All the answers. Because there's a wealth of answers. Wealth, knowledge in the answers in the form.

Yeah. And even searching previous ones. You know, we always recommend that search out those questions you have because very, very likely someone has asked that question before. And you could just go through those comments and get a lot of education, obviously filtered through the lens of who is it coming from? And do I actually need official legal advice, you know, to go down this road. But it can at least point you in the right direction. And that's the great thing about the Facebook posts and the pages. And so let's go through a couple of those questions that we've gotten through the Facebook pages, either in the forums or directly Message to us, Luke, some of the stuff that. I mean, we've got such a great list here. I don't even know where to start. I would say at the beginning, we had an individual message us to say he was kind of curious as to what are some of the systems and processes that we started out with as dealers that we either no longer use or that we move to a different system, either a software vendor or some other system, and why did we move there? And I think maybe what he's getting at is I think as a small new dealer, you probably start out with a lot of the basic. Basic stuff. Stuff. Right. You probably go with Dealer center or some free DMS software or free leads, or you're using Google Sheets to track your leads. And he's saying, you know, at what point did you switch and why did you switch? And as a young, young dealer or a new starting. I don't want to say young. I mean, as a young car lot, a new dealer, is it worth it just to jump in with stuff that you're going to keep for five or 10 years? Or is that just. Is it just gradual progression So I.

Think, number one, you need a DMS if you're gonna be a real dealer, and that's dealer management software. If you're gonna be a car dealer, and this isn't some side hustle or a hobby, you need to have a dms. There are plenty very cheap dmss out there that will work perfect perfectly fine for someone selling 10 to 15 cars a month. So number one, get a good DMS. You know, what I saw happen for years was you go to conferences and you go to these things as small dealers, and you all of a sudden get a new piece of software. The problem is you weren't ready for that software, right? Someone sold it to you. And so what would happen is you'd come back and you'd pay the $400 a month or $500 a month for a year because you're in the contract. And you never used it, never used its potential. And you think that that product is no good in reality, because I've done it in reality, you weren't ready for that product. CRMs are one thing. Probably certain advertising products are the same. So, you know, there's a time and place for new dealers to jump in with both feet. But you've got to learn your. You've got to learn your processes. You've got to write your processes down before you get to that.

And you also have an overhead situation, right? I mean, so to get specific, when I started this, I was using DealPak, right? ABC away, I was using DealPak. It was one of the cheaper DMSs on the market. It was like locally hosted on the computer and like DOS based or something at the time, like it was. And they've come a long way. Their system's better now. So I was using that because it was inexpensive. You know, My first CRM was Autoraptor at like1.99amonth for unlimited users. I was using Gold Star GPSs when they were the size of a briefcase, you know, and recently I've switched some of those. I stepped up from autoraptor CRM. We got into dealer socket CRM. We're paying a lot, lot more. And I actually don't even use that now, so I don't know what I'm paying for. But anyways. And then I converted over from DealPak over to Dealer Socket DMS, which was obviously a large jump in cost, but also hopefully a jump in functionality. And I switched over From Gold Star GPSs over to pastime because I felt like the technology had gotten better. You know, so those are some specific examples where I upgraded my software or my services and hopefully my features because I started to grow as a dealer. I mean my accountant, right. I used to have a local bookkeeper that had no idea what the car industry was doing my books and it was a nightmare every single tax season. And now I pay for a professional car specific accountant. I think we.

I think before you jump into new software, you've got to have your, your processes outlined and if you don't, there's no really need to, to go get shiny toys because shiny toys don't equal new sales and people forget that. So have your bases covered. You can sell a lot of cars without a lot of, a lot of stuff. Right? You can do that. I think websites important. If you don't have a website, if you're trying to sell everything off of, off of your Facebook group, your Facebook marketplace, whatever, it's not a car dealer. Okay. You need your own way to market your product and your business. So you know, some must or a DMS and a website. And a website doesn't have to be a very expensive website. It can be a good website. But as you grow a dealer, you will need to upgrade from base products to bigger products. You just need to know when the time is.

Yeah, yeah, absolutely. Moving right along here, Luke, one of the questions we got in and this is definitely up your line. Recon programs, basically what systems are using to track your recon, right? Was that the question?

Yeah, I think Dan actually asked this and Dan's got two lots now and he's, you know, he's trying to, to get a hundred plus cars ready a month. I'm not saying you can't do it with a Google spreadsheet. I'm not saying he can't because you. I love sheets. We are trying to track it via Google spreadsheet and we're only getting ready about 50. All right. Our goal is 53 cars a month ready. Okay. And I can tell you this, that I think it's probably costing us several days a month in time to line average because we're not using a program. Those programs probably run about 500amonth. Seems like everybody wants to hit you at 499, but I think if you're having to get ready more than 30 cars a month, you probably need to look at investing in one Rapid recon, which I've done a demo of, looked really good and it sounded like that's kind of where everybody was going to. Maybe V Auto has one now. I'm not exactly sure, but that is the most costly beside advertising, beside employee costs. The second probably most costly thing in your dealership is not getting your cars ready fast enough. And I know it's hard to visualize that and hard to really think about it, but it really costs you a lot of time. Stale cash is stale cash. It doesn't do anybody any good.

Yeah, that's a good way to put it. It's just sitting there. It's just money sitting there. And we talked about this last week. I had that conversation with my shop manager. Hey, we got to move these things. You know the opportunity cost lost by having that car sit there is ridiculous. And we use Omnique, it's a shop management software, integrates with dealer socket and makes it easy. Obviously with any of these situations, the number one question, the first thing I ask any provider is do you integrate with what I'm currently using? I don't want double, triple, quadruple entry of VIN numbers and pictures and repair orders and personal information. So you know the level of integration for me is hugely important on any, any software program I'm going to use.

Yeah, I agree.

So moving along that, let's see here. Onboarding, new customers buy here, pay here. In retail, do we use things like Secure Close? Do you think having a recorded closing docusign, you know those types of things is that kind of what.

No, I think people were talking about after the sale, after everybody and I don't, I think DocuSign and secure close are going to be such important things in the future. I think that we all should look toward that because the more you can take opinion out of closing documents, probably the better legally you're going to be. Right. So I do think those things are important and space is important when it comes to if you could have everything digitized and not have to keep, you know, not have to print, not have to keep those documents would really help. But I think we were talking about so after you sell a car and you know something we do in the buy here payer space and we can talk about this retail wise as well but you know, you should have your collection manager or collector go in and sit down with the customer and explain what you expect as a customer, I mean as a dealership, you know, yeah, we expect you to make your payment on time. If you don't, we expect you to contact us. If you don't contact us, we're going to right to cure you. If you're in a right to cure state or we're going to Cut you off or we're going to repossess your car. You know, you've got to explain these things to the customer. You also need to explain to them, and this goes for retail and you know, and buy here, pay here is, hey, what happens when you have an issue with your car? Because we all know that we sell cars, Right. We do know the one thing we can promise our customers, that car is going to break down, right?

Yeah.

Because it's going to.

Yeah.

And what you do when that car breaks down, well, here's my service department's number. You call my service department, you get your car towed in here. You probably have towing on your insurance. You know, these are things you should go over with your customer. You know, after the sale when they're at their highest peak in it and somebody asked you want to, should I email them? If you can come up with a good email to send each customer, which you could actually make happen through your CRM. Every time my deal is closed, booked, that email goes out and it goes over those points. That's a great idea. It's a really good idea. For one, if you're in retail and you have a service department, it's going to probably increase your service revenue.

Yeah. What I've been meaning to implement and I did for a short time was a follow up phone call. So to have my front desk girl or my collector or my office manager, they every new deal, they are required a week later to call that customer and follow up with any missing documents and then re, like rehash over. Like, do you remember how much your payment was? Do you remember when it's due? Do you remember how it's due? Hey, we didn't get you signed up with autopay, let's do that now. Or hey, how was your, how was your purchasing experience? Like give them a little survey at the end. Like, hey, how was the buying process? What was the biggest pain point? What would you think? What was the best thing about it? How could we be better? You know, like a quick little phone interview so that that customer knows you're checking in on them. They get thrown so much stuff at the time of closing. Whether you're buy here, pay here or not, they're not going to remember stuff. They don't know what paper the warranty was on or who they're supposed to call, if they have a claim or when their plates and tags are going to come in or what documents you're missing from them. So waiting a couple of days and then doing a follow up Phone call, I think means a lot. Sometimes it's a little scary as a buy here, pay your dealer because you know everyone, it's a meme the guy posted the other day, you know, you never ask them how their car's doing because you just, you know, you're opening a can of worms. They're gonna complain about something.

We always ask that our sales staff, our sales staff supposed to, they're required to send a thank you letter within 14 days and they're also required to make a phone call to that customer within 14 days, verify everything's good to go. If not, help them out with the service partner, get everything straight, but also ask for a referral at that town, you know, and this gets lost to so many, so many dealers is asking for the referral. You should stay in contact with that customer for a long time. And you should always ask for referrals over and over and over again and know that you are their car guy or car girl. And if you can instill that into them, every time they hear somebody asking about a car, they are going to refer you and that's what you really want. So there's a lot of reasons to do this after the sale.

Yeah, it makes me think and I don't have any evidence to back this up, but I do feel like since I've gotten more people on autopay, I've actually had less referrals. And I don't know if that's just because I'm not, they're not coming in every day to see us and us hit them up. It's like we sell a car, we put them on autopay. I may never see that customer again. I don't see their name come up in collections queues. I don't talk to them. I'm not able to have those touch points of like when they used to come into the dealership to make a payment and we're losing that.

So if you work it properly, your sales staff should touch your previous customers every 30 to 90 days. Just automatically should make a phone call every 30 or 90 days. And that's the only way that salesperson can keep their customer.

So along those lines, personal branding. So we just got a message in that said, guys, give us your tips on your Facebook pages. How do we make those Facebook pages more active, more viral, more organic reach? And I think that fits in here right when we're talking about being in our customers faces and having that touch and being top of mind with the people that we've already got them in the lot. And we've dazzled them with how quick our process was and how easy and how great our car is and how we're not like a typical used car lot. Now, how do we keep that in the forefront of people's minds?

I mean, Facebook, TikTok, you know, Instagram. That's how you do it. And you do it by engaging customers. You don't do it by trying to sell them more. Right, right. Why would everybody want to see a car for sale on my page every day? That's. That's silly.

Yeah, that's the big argument. So you got to take a page out of the book of a lot of the guys that are doing it. Right. It's 80% entertain and educate and 20% sales. Right?

Yeah.

So eight out of ten posts should be funny, entertaining, and educational. And then two out of those ten could be a car for sale. Or here's our deal of the week. Or here's our special event that's going on. Right?

Yeah. Let's talk. Let's talk about a few people in there in the group that really do that. I think Kenny Martin has a good way to. He. He puts a lot of video out there. Tracy Myers, of course, he's probably the father of that Craig from Flying Wheels. I mean, he makes money doing it, y', all, so. And then Jack Carter. And, you know, it's funny about Jack Carter's is he's selling you something like he engages. It's very unique. So he can put a car out there in the copy that he uses within trying to sell the car, engages people. And I think that's a. That's so unique and so, so great. I mean, that's. Yeah, I've never seen my. Do it like that. So these are some people you can go to their. Their Facebook page and look and see what they're doing. And it's a good thing to copy. I don't.

You know, one thing I kicked around, Luke, one thing I've kicked around, and I'm gonna do it. And maybe one of you guys will do it as I think that the Facebook Live infomercial is gonna be a thing someday. And I just don't have the ability or dedication to do it. But my vision is this. You go live on your Facebook page once a week, let's say on like a Wednesday evening during the commute or when people are at home, five, six, seven o' clock at night. And you basically do what was old school infomercial. You know, here's a car, here's this, here's this funny thing. Here's a giveaway. The first person to text me gets free car washes. Maybe we're giving away a cheap car tonight. If you come by the lot between six and seven, you know, the first person here that messages me this gets this. And you're doing this 30 to 40 minute live video once a week where your community starts to want to tune in every Wednesday at 6 o' clock to see what nonsensical thing you guys are going to do live on Facebook. Whether it's a giveaway or some fun thing. And in between, you're pitching your dealership and you're pitching a car and you're. I think there's something there. Luke and I, I don't have the ability or dedication to do it, but I hope someone in our audience does and lets me know how it goes.

You know, I like it. And it would take the preparation to do that would take eight hours. You know what I mean? Like it would be.

Or you just have to be a really charismatic dealer. You just wing it. I don't know. You're right. It could be 40 minutes of total boring. But we got really close one time doing it. It would be a production. But I think the payoff, you know, I mean infomercials did and do do and did work or late night commercials. I think you used to run commercials.

But yeah, I think if you could, if you could spoof one of the, you know, older infomercials, you know, I think would, would actually go well.

So along those lines though, for advice for Facebook pages, get a content creator. This is something I dedicated to three, four years ago. We have a full time video editor shooter. She's here all day, every day. She shoots video, she edits it, she makes our infographics and our helps with marketing and all that stuff. So I think as dealers making the dedication to a thousand to $1,500 a month, hire someone who's really good at shooting and editing video. Pays off dividends. When you can create original content on the queue. If you as the dealer are trying to pull yourself out and get a phone and shoot it and then edit it and then get it online, you're just not going to do it as often because it's difficult and you don't really know what you're doing most of the time. If you look at our Facebook page, it definitely evolved from when I was doing it and I was shooting videos and taking pictures and trying to put graphics on it to when I finally Got people who knew what they were doing to take time and do it. And I think it goes a long way to having a professional image and also just getting yourself out there as often as you have to these days. You can't just post once every other day. This is not working. You need to be on there once to twice a day between Facebook, Instagram. If you want to do TikTok or LinkedIn or any of these places where you're getting eyeballs, you got to be.

There often for sure. It's consistency like anything.

Okay. And to piggyback off Facebook, one thing I wanted to mention, Luke, and this was a funny thing that happened last night. I'm sure dealers have had this happen. It actually ties all these topics together. We had. I was. I was scrolling through my feed last night and I saw one of those posts to the local yard sale site that said, hey guys, I got bad credit. Where can I go to get a car? Where should I go? You know? And I look at that, I'm like, oh, I'm so excited to read these comments and see who stepped in. We maybe have three or four main kind of buy here, pay heres that have their names dropped. And then I'm reading through. This chick had like 30 or 40 comments as of this morning on this one post. And thankfully overwhelming. My community came to our defense. Not our defense, but came to our offense and said, hey, go to Four Seasons. They're a great place to buy a car.

Yeah, that's right.

It's such an awesome way to take the temperature of what your community feels towards you. As a dealer, if you don't get mentioned at all or you just get mentioned negatively, you might want to rethink the way you're putting yourself out there to the community. And hopefully you've got people that are promoting you. Those raving fans, which we've talked about in previous episodes, those people make you so much more money than it will ever cost you to turn them into raving fans.

Oh, for sure, sure.

So anyways, kind of a funny experiment, guys. Look into those. I'm sure you see them.

Yeah. Just one thing on that, Jeff. You know, you talk about how much it would cost to turn somebody into a raving fan compared to how much they're gonna bring you. Just think about this. Let's just say. Let's just say a customer bought a card two days ago, and two days from now they notice that a motor mounts broken. It's Gonna cost you $300 to repair that motor mount. If you turn that customer into Raven fan. How many cars are they gonna sell for you?

Right.

Yeah. I mean, it's nothing. So just treat customers right and you won't ever have to worry about it.

Yeah. Yeah. And we have got our customer appreciation month coming up, and we'll probably talk about more in another episode. Some ideas we're doing to kind of do that with the social distancing situation. Luke, we got time for a couple other questions.

What you got? What you got? What you got? You know, this came up the other week, and maybe it's not a huge thing, but a separate account for payroll and operations. Do you have a second separate account? No. I don't either. I'm not saying. I'm not saying it's the wrong thing.

To have, but I also use a payroll company. I use an employee leasing company. So I technically lease all my employees from this company.

What's that called? A P. What's it called? PPO or. What is it?

I have no idea what the official term is, but they're basically just a fancy payroll company. And I just. I don't do anything. I send the hours at the end of the pay period, and they handle everything else, and I pay them a little fee to do that. It's a hundred percent worth it. I don't know how you guys do all that stuff with. Anytime you have a garnishment or taxes or FICA and matching and blah, blah, blah, cafeteria stuff, heaven forbid you get into health insurance and other stuff.

So we do not use separate accounts. We use a payroll company. You know, I think it's your preference, right?

Yeah.

If you. I look at my bank account every day. I look at my controls every day. If you're not doing that, I expect you to start doing that. I close the month myself. They get everything close. I finish it out. I reconcile everything. If you're not doing that, if you don't have an accountant doing that, you may want to separate it just so you can see exactly what's coming out. You should always look at. If you're using outside payroll company. Every time a payroll is done, you should definitely get a copy of it. Okay. You need to verify what's being paid, because if you use an outside company, you can look and make sure what everybody got paid. And if it's. It's not right, you should know. But, you know, I think. I think that's preference. I don't think it's a must, but I don't think it's a horrible idea is the way I look at that.

Yeah, it's been helpful for us, but yeah, I see. Still ran to those situations where I went and looked at an insurance. We provide health insurance. And we had an employee that had been. We'd been paying his health insurance for three months after he had been fired. Just one of those oversights that. It's like, wait, guys, you notice we haven't given him a paycheck in three months, and yet you kept him on the health insurance. So, you know, always got to be looking.

We did the same. We did the same type of thing, I and I. It was. It wasn't health insurance, but it was like a Aflac or something like that. Right. We had paid it for six months. And the way I realized that this had happened was I reconciled account that I was like, that doesn't look right. Start reconciling and I find the error. So those things happen. So just. Just. You just got to keep an eye on everything. I know it's just something extra to do, but you got to do it.

Yeah, absolutely. Luke, awesome episode. Fun answering some of the questions that we got.

Some real breaking last news. NIADA just announced they hired a new CEO.

Oh, really? So Steve Jordan went over to Cars.

That's right. And they just hired CEO Robert Voltman.

Robert Voltman. Do you know anything about him?

Yeah, he was a CEO of the Transportation Intermediaries association, and I think that was in D.C. so he is. He has been a CEO of a trade association before. It looks like he very qualified. And we'll. I guess we'll look forward to meeting him and we'll try to get him on here within the next month, I think would be a good idea. If we can. If we can do that.

Yeah, absolutely. Absolutely. Good. Lot of. Lot of stuff happening over there at NIADA these days. Shaking up some presidents and members and board members and everything else. Right.

So, yeah, a lot. A lot of stuff going on. You know, I look forward to hopefully us getting a convention next year and meeting so many more of y', all, which we didn't get to do this year, which is sad. And hopefully after next Wednesday, this Covid thing will go away.

One way or another. One way or the other. It may go away next week. Hopefully we'll have some good news to report then. And as a reminder, if we've given you any value, jump on, leave us an itunes review. We'll try to read those before the podcast just to give people some shout outs and appreciation for giving us some love.

Yeah. And, Jeff, were we gonna try to do maybe a roundtable next week.

Yeah, we're gonna try to reach out to some dealers, get you guys on here to discuss. I know we do a handful of vendors, and we know there's some value there. We just wanna make sure we're keeping this podcast authentic to the dealer community so that you guys know it's not gonna become a big sales pitch with vendor after vendor after vendor. We wanna learn from dealers. That's the whole premise of this podcast, is dealers helping dealers do it better. So, yeah, we're gonna do some fun roundtables coming up. And then obviously, December will be how I built this series again. And we'll get a handful of dealers on here to tell us about their ups and downs and their treacherous journey through the used car industry.

Yeah, we've all been there.

All right, Luke, talk to you next week.

See you.

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