#25 - Action Items From Convention

Hello and welcome to this episode of the Independent Dealer Podcast. This week, Luke and I are going to share with you our takeaways from the 2019 NIADA Convention in Las Vegas. We just got back last week. The dust has settled. We've had a time to kind of wrap our thoughts around our main takeaways. We've scared the crap out of our staff and employees. I think everyone came back guard up because they knew we were going to be shaking things up with all the information we learned. Right, Luke?

Yeah, man, I tell you, we had a great time out there and it was. It was so much fun seeing everybody and learning and yeah, the staff runs a little scared once you come back, but, you know, you can't implement everything at one time, so that's where. That's where we are now, right?

Welcome to the Independent Dealer Podcast, the podcast for auto dealers to learn and grow together. Here are your hosts, Luke Godwin and Jeff Watson. Exactly. Exactly. One of the coolest things for me, I mean, I just want to say thank you to everyone who listens to the podcast, everyone who came up and said hello to us. I mean, I don't know if we've said that publicly that yet, Luke, but, man, that was awesome. Like, to hear the stories of people who listen to the podcast over and over and over and they've learned something and they put it into their dealership and it's changed the way they ran things, or it helped increase profit or it helped mitigate their headache. Like, that means so much.

It does, I tell you. Just, it was kind of shocking the amount of people that. That, you know, that I didn't even know and never, never had noticed, I guess, and just they came up and say, hello, hey, man, I listen to your podcast and it. You're kind of like, oh, okay. Then also seen on the Facebook page, you know, people. People throwing shout outs out. Yeah, thanks for stopping.

We really, really appreciate it. I mean, we'll keep doing this if no one listens because we enjoy it, but. But definitely, like, hearing back from you guys just means the world. Like, that we've even made any kind of an effect is just. Just blows my mind. I mean, 100%. Yeah, absolutely. Awesome. Well, look, let's get into it. Let's. I mean, I know there's a million things we could go over. I think both of us agree that it is money well spent to go to the convention. I'm sad for anyone who missed out. Definitely plan on attending the next one. I mean, a couple of the people that really Stuck out to me. Maybe we'll just give a quick, quick overview of some of the high points and then maybe dive into a couple of our real solid takeaways. Mean Dave Anderson. I mean, he's amazing, isn't he? He could have taken the whole convention. I would have listened to him three days straight.

I tell you, it's, you know, it's such basic knowledge of process and basic knowledge of accountability that, that, you know, as owners, I think maybe sometimes we're afraid to inject into our organization, but, you know, I think we're doing a disservice by not injecting it, aren't we, Jeff?

Right, right, right. So his three C's work, when we were talking about wrapping it around your employees, your culture, who you are as a business, he talked about clarity, right? Having clarity of what your purpose is, what your core performance standards, job descriptions, what you expect out of your employees, and then having candid feedback. I think that is so key. Like some of us are so scared to sit down with our employees and talk about what our expectations were and how they are over or under delivering. And David said, you're only doing them a disservice, you know, by trying to gloss over it or not address it. You're not building them, you know, you think you're saving them, but you're actually doing them a disservice.

And that's so big. It's just like your kids, you know, if you don't hold them accountable and you don't ask them to do certain things, they're not gonna do them, you know, and you, you're not allowing them to prosper. You're not allowing them to be as great as they can be. And I, yeah, I mean, I 100% agree. You know, candid feedback is something I really need to work on and hopefully I give it most of time. Every once in a while, when you want to give that candid feedback, you do get this lump in your thro, this feeling in your stomach. You just can't do it. So it's something we all need to.

Work on for sure and do it from the right place, you know, don't do it off the cuff or shoot from the hip and you know, passive aggressive comment as you, as you walk past them, you know, sit them down and explain why you're doing it. And again, that doesn't hold at all. Unless you've got clarity on the job description and the expectations for sure, you can't. The third C he had was consequences. So clarity, candid Feedback, consequences, you know, it's the only way to hold them accountable. You know, there's gotta be consequences. And I realized in my own dealership that some of my compensation plans are all upside. They're all upside, you know, And I'm. All I'm looking at is, what did you sell? What did you get paid? I'm not looking at. Whoa, wait. On top of selling, there's five other things that your job description requires. If those aren't done, those have got to be tied to your compensation, too. So I actually had a really, really good. Come to Jesus. Me and my sales manager, we sat down on two salesmen and explained that, you know, hey, things are got to be different. Like, we've got to be dotting your I's and crossing your T's here. I've given you the tools, your CRM, you know, all this stuff. You've got to use it and build a book of business and be a sales professional. And, you know, one of the guys didn't get on board, and we let him go that same day. So, you know, it was coming. It was. It was coming down the line, and it really took the convention to kick me in the pants and say, jeff, you got to pull the trigger.

Yeah. You know, two years ago, July 5, two years ago. Right on it. We got rid of our number one salesperson. And it was because, you know, we'd come back from the convention and, you know, certain things are being done and certain things weren't being done, and we had those expectations. We written them down into your job description. You didn't do them. You know, so it's. It's not on us. It's definitely on on them. It's on us if we don't call them on it. And you're exact. Exactly right.

Mm. What else did you. What other, you know, speakers or breakout sessions or things really, really stood out to you, Luke? Anything that comes on to mind?

Well, you know, I really enjoy fixed ops, and we've had our fixed op operations, service department going for about five or six years, and it's on the cusp of being really great or just being an internal type situation. And we've always done customer pay, but we finally have gotten to the point where we're 50. 50. 50% internal. 50% customer pay. Nice. Yeah. That's where you need to be. Well, that's where you need to get to. You know, then you probably need to force it to 70, 30. And the one thing that I was missing maybe were some matrix for processes and what I should be charging. So I was able to go to Joe McCloskey's class and if y' all don't know Joe, Joe, Joe's an amazing guy. McCloskey motors down in Colorado, if you haven't, you hadn't heard about his operation or seen what's going on, just check him, just check his website. The gas sales, 100 plus cars a month, huge service operation. And he had a class really built on matrix and what you should be on metrics, I should say, but also matrix, where parts matrix and things like that were in there. But he really went over, you know, industry leading numbers that you should be hitting and what you should be charging and how you should be doing things. I struggle with time to line and I think everybody does. Oh yeah, and, and there was something in the, you know, something he talked about in that, in that thing that I'm gonna start hopefully implementing that will reduce my time to line. That's, that's one of the things that I, you know, went out there to discover is how can I get my cars ready faster, how can I get them on the net faster? So those metrics from that class really helped. The next thing with fixed ops that, that I thought were great. Marshall Zoner, if y' all don't know him, Freeman Motor company in Oregon, he put on a, essentially a sales class for fixed ops. And I don't know how many people out there have a service department, but what I got from that class and Marshall and I are really good friends. And it's funny, you talk to, you're really good friends all the time, but maybe you don't listen to what they're talking about unless they're teaching you. But the thing was we need a sales process just like we do for cars, for service. And I didn't have that. I didn't have a greeting, automatic greeting. I didn't have the walk around. I didn't have these things that have to be done in order to make your service department successful. So I'm in the process now of writing a manual for sales and service. And we're going to start the process of getting things done the right way. Interviewing customers the right way for, for, you know, their car. Because you sell them a car, you need to service their car, right? And there's still money to be made on both sides. So I think, I think that's the biggest takeaway I had was writing it down, writing the sales process, making sure we're hitting the matrix we're supposed to be hidden and doing Service the same way we do sales and making it successful too.

Yeah, I mean that completely just blows my mind and it shatters the paradigm I had that my shop is a straight expense, that I only have it for make ready. I mean and it's only four bays so maybe I can't even, you know, again, that's my limiting belief. I don't think I could do retail out of it. I don't know how. I got two mechanics and four bays. Right. There's no space to have four mechanics with four bays. I don't know how I would do it.

But somebody would tell you to run two shifts.

But yeah, and that's the other thing. You're right. Why can't I have a guy that works Saturday nights? Why can't I have a guy that's here friggin 10pm to 6am I could find it, right? I could find someone to work a graveyard and they're doing heavy engines and everything's lined up for them and I mean could you imagine have a 24 hour service shop? I don't know man.

There's place. Yeah. There's places in the country doing that. Yeah.

And I'm a tiny little. How cool would it be if I was like you drop your car off with us at 5 o' clock at night and we're gonna have it ready for you by work in the morning. You know, I mean that's game changing and I don't see why we don't do that. Speaking of, you know, talking to someone too much and not really appreciating their expertise until you get sat down in front of them and they teach you. A guy named Luke had a really great breakout session on maintaining our online reputation. I got a page full of notes, you know, thanks man, I appreciate it. Which will be a future podcast episode I think if we get everything okay with the rights. We're gonna post that here in a couple weeks. But you know, great takeaways from that. You know, making sure that you're making it part of your staff members compensation. Making sure you're addressing the negative reviews. I got a negative review literally the day I got home from a situation that happened while I was gone. I jumped on and I used, I used your friggin advice to respond to it, you know, the exact way. Like hey, you know, very diplomatic, very contact me. Let's figure this out. So great information there along those lines of customer service. One of my big ones and one that I know has been talked about in the, on the Facebook page recently. Is Carvana.

Carvana.

However you want to pronounce it. The guy there, their. Their chief. What was he, like, the head of technology or something? Crazy smart, man. Crazy like, I don't know how one guy knows the entire business model start to finish, and didn't have a single answer that he wouldn't give us outside of stuff that's not public. So he walks into the lion's den and he's sharing with us, you know, their philosophies, everything short of trade secrets. But, man, what it really drove home for me, it. Honestly, their whole thing comes down to reducing friction and increasing the customer experience. That's what he says. Their CEO's number one thing is customer service, customer experience. You know, something about. They had a. They have a thing on their wall that says, we're not car salesmen. We're like, we're not in the. We're not car salesmen. We're customer service people or something like that, you know?

Yeah. You know, if you look at, you know, the most successful company in the world right now, Amazon, you know, and it's really about, you know, making something easier to buy, you know, not putting up barriers when it comes to delivery or what you want. And it seems like so many times in the car business, we have barriers and we create them ourselves, I think a lot of times. So that is. That's interesting that you brought that. You took that away, because that's really what it's about.

Yeah, I just. I have a hard time when we're. You know, I can say this. I don't have a dealership in my, you know, market. I don't have them very close. Have seen one driving around town that had a car van attempt tag on it. So I know that, you know, people are buying them here, but so I can say, hey, why are we so scared of these guys? Why are we scared of someone? A. They're never gonna get market share to any large degree. No one does or ever has. You should be more worried about car Hop or, you know, drive time, their parent company or some of these other ones. But anyways, big deal, man. It teaches us to be better. So kick and scream and be mad and be upset and say this, that, or the other, or learn from what they're doing and use as much of that as you can in your own dealership to not give your customer a reason to jump online and buy a car from them, you know?

Yeah, you're exactly right. It's. It's. You got to learn from people that are better Than you. And now, hold on. Don't not everybody crucify me that. I'm saying Carvana is better than you. I'm saying their model is very good, and you gotta recognize that it's there. They sell cars in my town every day. Cause I see a tag every day. I almost see a delivery truck every day. So that kind of tells you where we are right now.

Yeah. And so I look at it and I say, you know what? They've done some stuff in the technology side and the customer service side that we could do. We can still do that to a degree. I deliver cars to people outside of my area.

Yep.

They need it. You know, we do that. Not to the scale and these things, but why not implement what you can to make the experience more enjoyable, you know? Yeah.

I mean, pretty much everything's about experience, right, Jeff? Yeah. You know, if you have a. If you have a bad experience doing it one way, you're always trying to find a new experience that does it better, right?

Yeah, for sure, man. I'll tell you what. I spent 12 hours yesterday driving 3 hours away to buy a boat because it's summer, and it was a miserable sales experience. We literally walked up, I went up there, check in hand, ready to purchase a certain brand of boat from this company that I won't name. And it was the worst experience, man. And I learned as a consumer, being on the other side of it, which is salesmen, we have those opportunities. And dealers, we are on the consuming side of the transaction, man. What in the hell, dude? This guy could have locked me down and sold me $120,000 boat that day. But his attitude and the way he worked and his process was so completely broken. We walked.

That blows my mind. That blows my mind. And I hope that never happens at our dealership, but I'm sure it does every once in a while that we put up, you know, fences that are. That are hard for people to get by. And, you know, when that happens, unfortunately, you lose some customers. I. Man, I. That. That makes me shake to think that we do that every once in a while, but I know we do.

Yeah, it was the old, we can't take you on a test drive until we have proof of funds. You know, basically in a roundabout sort of way. And I was like, damn. I'm like, I'm a buy here. Pay your dealer. And I think my guys do this to people all the time. Like, that's. That hurts, man. That's offensive. That's like, care what your credit score is or what you look like. Like if the salesman says that to you, it rubs you the wrong way and you got to word it right, you know, and this guy did not do any of those things. And, I mean, I'm a pretty easy guy to get along with. But anyways, to the customer service point, exactly. Why are we throwing up objections? Why throw up roadblocks?

Why?

Yeah, anyways, what else do you take away?

The networking is so amazing out there. You know, you can learn a ton of things from vendors, teaching classes, from dealers, teaching classes, but where you. The nuts and bolts is sitting and talking to other dealers and what they're doing, and Jack Carter and I, you know, talk for 20 minutes about something that he does that got my interest up, you know, big time. So, you know, it's just, you know, one of those little. One of those little chats can make you hundreds of thousands of dollars if. If you do it properly, you know. So the networking was. Was great, I think. I think you agree with that, wouldn't you, Jeff?

Oh, man, I can't. I mean, for sure there's people that, you know, we exchange business cards or since we've added each other on social media, so I'm able to contact them and. And set up other interactions with them that are worth thousands and tens of thousands of dollars in the long run. Just the conversations at lunch, the conversations in the hallway, the conversations between sessions, the. You know, it's just. There's just so much knowledge there, man, just to be in the realm, you know, and to.

And if you do have, you know, if you do. If you do sell a car somewhere else, you got a customer that's escaped somewhere else, you need to repo it or something. You know, making those contacts in all the parts of the country is sure helpful. I've used a couple of them here lately.

Do you got anything else for us before we wrap this up, Luke?

Yeah, I do. And I talked to you a good bit about this when we were standing out there one day, but it's the whole alternative data that's coming out. TransUnion has something. Equifax is trying to develop a product, but this is something everybody needs to get versed in because it's coming. If you've seen Experian has this product out right now, it's called Boost. And essentially what Experian is letting customers do that have, you know, lower credit. They can go to their website and enter in their bank account numbers, their telephone account numbers, and their utility bills, their account information. They can enter in this information and essentially what these companies are doing is they're taking that data and using it to boost their credit score. So let's say you go in with a 650, but you've had utility payments that you've been making for four years at the same address. And you, you know, you hadn't been that far behind. You've had the same bank account for five years. Maybe that gives you 25 points. Maybe the utility bill gives you 25 points. Maybe, maybe you've had the same cell phone forever and you're current on it. That'll give you another 25 points. I think what we're seeing is maybe some data that, that's going to be very useful for you and I in the future. And even bigger, bigger companies, TransUnion guy said that they were, they've been using this data. Micro Build I think is another company that's doing it, but they've been using this data to, they've been sharing it with maybe some other finance companies. And what they said they were able to increase their portfolio by 23% by using this data compared to like 9 or 10% growth they had had. And also their repo, their over 90s had gone down by like 20% as well, even in that using this data. So. And also trending, trending credit files were something else they talked about. But it's interesting that maybe some of the bigger companies are going to start using data that we currently use and maybe we will be able to verify the data we use a little better. Coming soon. So I think it's really something on the horizon that you need to do your research on. You need to know this out there because it's coming and it's going to be a game changer. Yeah.

Yeah, that sounds. Getting a preemptive look at their bank accounts or things that they're doing. You know, those, those little payments say a lot. You know, the stuff on the credit reports, a lot of it's historical and you know, major trade lines and major borrowings and you know, autos and loans and things like that. But yet to know how they're paying their cell phone every month. Yeah, you know, to know, to know how many times they've missed utility bill payment. You know, I mean, that's like, that's some telling, dad. Overall, Luke, it scares me. I don't need another reason not to give a loan.

But, but just think about this. This is what, this is the way I look at it, you know, if you got a customer we've already talked about It a customer that comes in, wants to test drive a car, we go, well, we need this documentation. We need this, we need that. What if we could. If the customers fill out a credit app and. And we can hit one button and we can verify where they really lived and how long they've lived there. You know, that they've had the same bank account for five years and, and that they. This is their telephone number. It's registered to that address. I mean, if it's something that easy, again, it takes down a barrier, takes down something that. That we are using now to qualify that, hey, we may not have to use in the future. Just something to think about.

Absolutely. Awesome. Awesome. Awesome.

Cool. How about you, Jeff? Any last things?

No, I think that's it. I think for me to wrap up. I mean, we met so many great people out there. I've got a page or two long list of guests that we'd like to get on the podcast, ideas that we'd like to educate and just share. So, I mean, going forward, guys, we're going to double down on this. Hopefully we have a lot more content, a lot more educational, entertaining and informational stuff that's going to help you grow your dealership and your personal life and your financial situation. You know, I mean, that's kind of our goal here, Luke and I, just to, you know, share. Share what we find out there and just bring it to you guys, you know, so we really look forward to that.

Yeah, stick around a lot. A lot of good stuff coming. A lot of momentum leaving the convention for us and for. For all dealers. So let's get better together.

Yeah, yeah, absolutely. And I think. I think a lot of the convention sessions, I think they're going to be made available on the. Their naiada website, if I'm correct. Right? Yep. Yeah. So all this should be talked about. All the. All the breakouts and everything. I think you can get access to it. I don't know how that's their situation, but get on their website, check it out, you know, Watch them all, man. Find some time to just to get in there and watch them all because there's a bunch of them. I missed that I'm sad I couldn't make it to.

So, yeah, I got to check that Carvana went out.

Yeah, yeah, that was really good. All right, Luke.

All right, brother.

Got anything else for us?

That's it.

All right, thanks, everybody. We will talk to you next week.