#162 - Dealers In The Music City

Welcome to the Independent Dealer Podcast with hosts Luke Godwin and Jeff Watson. A podcast by dealers for dealers. Here we go. Hello. Welcome to this episode of the Independent Dealer Podcast. Today we are coming to you live from Nashville, Tennessee. Luke and I are at 20 group this week having a great old time.

We are, and it's so awesome always to be around other dealers and get takeaways and see what we're doing wrong. Because, Jeff, I'm doing things wrong.

I didn't even know that. I couldn't believe it until I saw his composite numbers. Luke is doing stuff wrong. But the beauty of this is, you know, we've tried digital conventions, we've tried zoom meetings, we tried the podcast, we tried Facebook pages. There is definitely something magical about pulling yourself out of your dealership and being in kind of a concentrated area with other dealers for a day and a half. Right.

It's so important. You know, we do hopefully have conventions this year and we believe the second best way is to listen to podcasts, of course, to get knowledge, but being here, really you can talk through things. We've been, you know, Alexa and I have been trying to figure out exactly what we're doing wrong when it comes to handling leads and we kind of thought that the BDC way was the way to go. But I tell you, after hearing what people are doing in our 20 group now with their BDCs, I definitely know it's the way to go.

Yeah, that's really interesting. And next week we will do an entire follow follow up episode. We always like to give you guys kind of our top takeaways, the action items. We did our first couple of days back in the dealership after getting home from 20 group. So next week, look forward to that. But as kind of a teaser, this week we're going to interview a couple dealers out of our 20 group. You're going to meet Jim Ramsey.

Yeah, Jim's great.

He's a great guy. He operates three dealerships across the entire state of Montana. Left, right, north, south, he's spread out. And then you're also going to meet the Watkins, who is a new member to our 20 group. So we're going to put those here at the end of the episode, a couple little five minute interviews with them to hopefully bring some education to you guys. But Luke, you touched on your bdc. Any other key takeaways you want to kind of foreshadow that maybe we'll dive into more next week, but kind of things that have hit you in this first day of meetings, you know, there's.

Nothing like that stands out other than we talked about advertising and lead management. I think those are the really two things I want to take away from here. And not that we're doing advertising wrong, but how do we do it better?

You know, I had a premonition and we talk so much about lead attribution. Right. But we don't really. I mean, if you really think about how important it is to know where your sales are coming from, I mean, it's more. It's as important as getting a credit app. It's as important as getting a carfax on the car. It's as important as doing your paperwork. Right. And being compliant, like. And all we do is we ask our salesmen to just ask them, oh, where did you come from? How'd you hear about us? And the customer says, I drove by. And it's like. And that's it.

And it's so wrong. And there's gotta be a better way.

There has to be a better way. And we've gotta figure it out, because when we find out where we're spending our money, we know where to spend the money.

That's right.

To drive the sale. So that was a huge takeaway for me also. Another big takeaway for me was really working your database. Some of us have been around for a long time and we don't do a good job of not only retaining previous applications and especially people that are approved but not sold, you know, you've got to be working those leads and have some sort of a continuing database. And maybe you switch CRMs and you lost them all, or you got a whole box of credit apps sitting in the back room. You've got to find a way to harvest to those people because eventually you get to the point where you don't have to advertise anymore.

I believe it's very possible in Buy Here, Pay Here business that you could turn all your advertising off and just mine your data and be way more successful than you currently are.

Repeat referral. Repeat referral. Repeat referral. You know? Yeah. So that. That was another huge takeaway for me. And there's a handful of other ones that we'll go over more in depth next week. But. But again, it's. It's drilling home the old adage that we always talk about working on your dealership and not in your dealership so hard for us, so hard to get away, but these are the times to do it. Right. Right, Cool, guys, here we go. We are going to join the conversation we had with Jim Ramsey. And following that, we'll have our interview, interview we had with the Watkins. So hope you enjoyed these two little segments on the end of the podcast and we will talk to you guys next week.

All right, so one guy that's really, he's a really good dealer. He's in Montana. Manzoula, right?

Yes, sir.

Jim Ramsey. And what's the name of your dealership?

Jim deals on wheels.

Deals on wheels. So interesting. I Met Jim probably two years ago in 20 group, probably, I guess, when you first started. And he's in Montana. And for folks that don't know much about Montana, it's big, right?

Yeah. If you, if you want to travel from the west part of the state all the way to the east part of the state in a car and you don't stop for food or bathroom breaks at 80 miles an hour, you'll get across in about 12 and a half hours.

Holy moly. So Jim has three dealerships and they're spread out across the state?

Yeah, Missoula is where I live in the western part of the state in the mountains. And we have a store in Missoula and Helena, the capital of Montana. And that's about an hour and 45 minute drive from Missoula. And then Billings is right in the center of the state and that's about a six hour drive from my house.

What type of logistic problems do you have when stores are spread out like that?

Well, you know, a lot of people will tell you that the key to business is your staff and your people and your team. That just becomes magnified when you incorporate geographical challenges. To the degree that I'm able to build people and build people that build people and reinforce their team, lead their own team and grow that organization, that's the only way to make that work. Because it's just plain impossible for me to literally have a presence in all those areas at once.

How often do you get out to them? How can you say visit those stores.

And those, you know, Billings is more of a new store. We just opened that within the last five months. So I have a presence there at least once every three weeks. Helena is doing really well. We've been there for a little over two years. And so, you know, for Helena, you know, I'm talking with those folks every day. Zoom meetings at least three times a week. But I'm actually in Helena for a day or two, maybe once every month and a half to two months.

That's interesting. So you have to leverage technology for. Because of logistical challenge. Is it Zoom is It. What all do you use to connect those stores while you're doing that?

Well, short answer, I use them all. You know, text messaging is handy because it doesn't interrupt my crew and whatever they're doing and they can get back with me at a later time. Telephone calls are good to get answers to specific questions, and we're on the phone a lot. Zoom is great to talk about ideas. You can see people's faces, you can see their reactions, you can see their intensity. You know, does it replace an in person meeting? Not even close, but at the same point. It's a tool that helps.

Do you ever bring everybody together for meetings?

I love to bring people together. One of the things we do every year is a big Christmas party and we gather folks in from far and wide. Now, with the COVID restrictions of late, this is the first time in 23 years we have not been able to do that. So we ended up breaking it down to a store level. But each store still had a Christmas party and some of them went into January. But getting people together is incredibly, incredibly important.

What about the logistics of the vehicles? Are you reconditioning the central place and buying the central place and sending out, or does each store have to have its own purchasing and recon area?

You know, we're trying to centralize as much as possible, Jeff, just for the sake of logistics and cost. Most of the reconditioning is done at the home office in Missoula, and we do a lot of business with trucking companies hauling those vehicles all over the state and so forth. Also, keep in mind, there's no real major auto auctions in the state of Montana. There's a private sale and billings, which helps. But the majority of our vehicles we buy come from auctions in Salt Lake, Portland and Seattle. So those, those cars are no stranger to a semi truck even just to get to Missoula.

You have buyers in those towns that help you do that, Correct?

Correct. For years and years, I tried to buy all the cars myself and did a fairly decent job when we were at lower volumes. You know, now that we're above 100 cars per month between all three stores, we have independent buyers in each of those cities that attend all the auctions each week. And again, I'm just so thankful to have talented people. They do an exceptional job.

So if you have three stores, how do you decide which car goes to which store? I've always wondered that.

You know, again, I've got an operations manager, Daniel Bellinger. Shoot, let's see. He's Been working with me now for well over eight years, and he's just incredibly talented. And he's the one that is directly involved in. In analyzing the types of vehicles in each inventory, what's coming through the pipeline, what specific stores need. Our software. IDMS helps with that with some specific tailored reports and dashboards that give us a glance view at exactly what type of inventory mix each store has.

That's interesting. I would have a problem with that, Jeff, because, you know, if I knew one store was out before another would I pull cars, I think I would get.

Do you move them between stores?

Yeah. Does that.

Wants the red F150 that's in Billings, do you move it over to.

I don't.

Okay.

I don't.

I imagine that would just be madness.

Well, and it's. There's an old adage, you know, you should sell what you can see, not see what you can sell. And to the degree. Well, it's. It's hard. You know, people want options and p. And a salesperson just naturally wants to say yes to literally almost any question that a customer asks. But you can start chasing your tail, and that's a good way to do it.

So you have three different websites.

Yes.

Okay. So they don't. They aren't. So that's interesting.

In fact, we try hard to separate those websites just to keep customers from shopping in cities that they don't live.

So how do you do that? Is it like dealsonwheels.com and dealsonwheels3.com.

And what is that? The names are deals on wheels in Missoula and the deals on wheels of Helena and deals on wheels of Billings. Yeah.

Okay.

And they're far enough away that that makes a lot of sense. I mean, people can't expect you to truck a car six hours for them.

So Carmax, huh?

Yeah, that's a good point. But, yeah, you would think our customers would kind of understand, you know, I'm shopping at this store for this thing, but as a salesman, it'd be hard to not. You have that car in stock at the other store and not have that.

Well, Jeff, I think to some degree, it's a decision of what you want to be good at. One of the challenges I found, just as an entrepreneur is figuring out what we want to be good at and what we need to admit we're not good at in order to focus. Okay. And, you know, our focus is helping people pay off their car loans. Our focus is helping people through the service of owning a car. And to the degree that we're shopping all over creation and trying desperately to get that red F150 several hundred miles away. At any given whim, we're less able to really provide that level of service.

Let's talk about the paying off the car note. Do you have a centralized collection agency? Okay, so are there any issues with collecting when you have it spread out like that? Being a smaller dealership like that?

I was worried about that. Luke, when we first started, that was a concern of mine. You know, there's another mentor of mine that said, jim, you need to make sure your aces are in their places. And I've worked with these folks in collections for a very, very long time. Rich, my collections manager, has worked with me for well over 15 years. Another gal that's there, shoot, Missy has been there for well over 10 years. If I was to add up the length of service for our six folks on that staff, I mean, it'd be approaching 45 years. Specifically working for me at deals on wheels. Now, granted, it's taken me 23 years to find all these folks, but they're very, very, very good at what they do. And so to ignore that talent and try to set up satellite collection spots across the state just didn't make sense to me.

No, I agree. I think that's the right way to go. Is there more deals on wheels in the future? Are you growing bigger than three?

Well, I'm trying to be fairly deliberate about this. I expanding. I think that the market is good for it. You know, anytime that there's hardship and there's a constriction to large degree, that opens up opportunity. But at the same point, I'm not interested in growing just for the sake of growth. It needs to make sense. The location needs to make sense, the timing needs to make sense. And most of all, guys, the people need to be there. For each of our stores, I've been able to promote internally. So the folks that. Nicole, for example, that's running our store in Billings, was a previous assistant manager in our store in Helena. And so to the degree that I'm able to train leaders internally to where our staff is ready and prepared to expand into a new area, that's one of the key points.

That's Jeff. I mean, Jeff, Eric Freeman told us the same thing, that when he started his second location, the way he was able to do that was upstaff the first place and then move people instead of having to rehire at that location. So I think that goes a long way to. To making it successful, to doing it. And I think that's. You have that in mind, too, with your new store, right?

Yeah, yeah, yeah. I think that's one of the three plays, right? Either land you've outgrown your current space, or you've got people, you got to grow people.

And that's exactly what Eric said. He said, I was afraid that I would lose people if I didn't grow.

Them or lose them.

Yeah, well, yeah, I think there's some truth to that. Now, granted, I. There's. I don't want to feel like I'm at gunpoint. You know, we're all young here. The chances of somebody retiring working for Me at age 65 is probably fairly low. So if somebody needs to move on, by all means, let me help you do so and write a good letter of recommendation or whatever you need. But at the same point, I do want to provide opportunity for folks, and if it all matches, then I'll move with that. But it can't just be great real estate, and I won't make a move just for one of those three. It needs to be a good match for everything.

Well, Jim, we really appreciate you being here today. We had a great time. A lot of good information there.

Yeah, thanks.

Absolutely. Hope it helps.

Hey, sorry to interrupt the podcast. We are still here in Nashville, but we wanted to let you guys know Dealer RE is a sponsor of the show.

Still a great sponsor, still a great asset to any dealer that's wanting to build wealth, wanting to not give away your money to other vendors, but keep some of that cash for yourself. Right?

Yeah. One of the biggest themes we had this week in our 20 group was tax problems. Oh, man. A lot of us got PPP loans. A lot of us still had pretty respectable years. We all have a huge tax issue right now as we're kind of finishing our tax returns. So this is one of the best ways to preserve that wealth and minimize that tax burden.

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Back to the episode.

All right, so we got some new 20 group members with us. Stephen and Carrie Watkins. Watkins Auto Sales in Mississippi.

Right.

Alabama. Mississippi.

Mississippi.

All right, so what'd y' all think about the first meeting?

Personally, I love. Shows you just how much you still have to learn in this business after being in the business a long time.

Yeah. And that's very interesting. That's a. We've been in business 35 years, and I tell you, I've learned a lot at this 20 group meeting. It's kind of interesting that you don't know what you don't know sometimes.

Yeah. I think that's the famous line of 20 groups. You don't know what you don't know anything that stuck out to you guys, like, big take homes that you're like, this is something that I didn't really see coming.

But my biggest take home is probably how much, how many different numbers and stuff that we wasn't looking at that other people look at. In using this to make sure you're looking at numbers every month, I think might be one of the biggest benefits to a lot of dealers that they are paying attention to all these different metrics.

That is so important. And, you know, like I said, you don't know what you don't know. And then when you compare your numbers and what you're spending in those categories to the other dealers that are like, size, and you say, okay, well, I'm spending way too much here or not enough there. And we just had an exercise on advertising, and I thought was very interesting. Y' all say y' all were new to advertising. That's pretty interesting.

We've never had to advertise because we sold out of cars very often. And a lot of our money or a lot of our business comes from referrals. And, you know, dads that have kids that have cars with us. So we never really had to do anything besides Facebook. And we really don't do any promotions on Facebook. It's just, please, like, and share. You know, we'll give away a free payment Friday or things like that. So the majority of our business comes.

From referrals, but we probably could have sold more cars with advertising five years ago.

Right.

But being about your pay here, you also can sell yourself out of business.

For sure. For sure.

And we were selling all the cars that we could afford to sell. By at least the start of the fourth week of the month, I was raising down payments to stop sales.

Yeah.

So I never really seen the need to spend a lot of money in advertising until I can afford to sell more cars.

So, Kerry, one thing you mentioned is that, you know, coming into this or maybe while you were here, you had kind of a premonition that maybe some of your sales people or some of your employees weren't quite performing. Underperforming. You were overpaying. Did that drive home because you saw people here, or was that kind of.

We had already started talking about it, especially our sales guys and commissions between me and Steven, but hearing what other people getting opinions from other people about pay and expectations of employees. We're definitely taking a lot home. I don't know if it'll be a good thing for some people in our business.

You know, one of those things you talk about at 20 Group and I heard you say this is, oh, man, we're going to go home with a fire lit. Well, don't do that. And that's for everybody out there. It can be overwhelming, and you can take too much home, and then your staff's like, oh, gosh, they're going to 20 group again, this is going to be horrible. But expectations are huge. And it sounds like you have high expectations for your staff coming to 20 group. Did that make them hire?

It did. Sometimes I hold other people to what I expect of myself or what we expect of each other, and you're not always going to get that. But also, we have the problem of letting people go and becoming friends with them, and, you know, they have a family. We feel sorry for them. But at the end of the day, it's not fair to them. It's not fair to our other employees, and it's not fair to us. And that's one thing I've learned is, you know, sometimes you just have to cut those ties, and either they're going to have to come up to expectations or they're going to have to get out.

I think that's a whole podcast, honestly, because I do the same thing when it comes to employees. You want to be friends with them and you want to like them, but where do you draw the line? So that's very interesting that I'm not the only person that has that problem.

And you always have that employee that you know you're going to fire, but it takes you six months to do it.

Yeah, that's where we differ. It doesn't take me six months. It takes me six months to convince him that I needed to do it.

Any parting advice you have for, like, the podcast community guys that you would have, like, maybe opinions on 20 groups or even a takeaway from here that you think, like, hey, this was a real premonition. I'm gonna take this thing home and put it into use at my dealership. Everyone else should.

I mean, I think everybody should be in the 20 group, and it's something that we knew we should have been in. We had a lot of successful dealers that are friends of mine that I've talked business with for years, and every one of them is. It just took us a long time to do it.

What made you finally do it?

Yeah. All right.

So you hear that, NI88? I need a. I need a kickback.

You did. I mean, I. I think you sent me a message or we were talking about something on Facebook, and you said, are you in a 20 group? And I said, no, you know, we really don't know about even how to join one. And you gave us the information on yours, so we appreciate that. We appreciate the group wanting us to be a part of it.

I think it's a good fit.

Yeah, you guys are a great fit.

And just realizing other dealers struggle with the same stuff. You know, what should your salespeople be doing? What should. Should you have a BDC or not? You know, all these questions and just hearing how other people work through getting to that answer.

Yeah. Misery loves company, right?

Oh, yeah. All right. Thanks for being on podcast on that.

Yeah, we can. Thanks for being with us, y'.

All.

All right.

Thank you.

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