Christian and I had an interesting exchange yesterday. He thought I was trying to “open a loop” on him, which is an NLP thing. That’s like if I said, “Christian, I know how you can make a million dollars, but first…” and then we talk about something else, so then that loop is still in his mind.
So I’m going to open a loop for everybody right now: the show today is about the 5 Ways to Retain Your Technicians. Is that really what today’s show is about or am I just using it as an example of opening loops? Either way, you’ll have to stick around to find out, and if it does end up being today’s topic, then you’ll stick around to see if you agree with the list or hate it, but that right there is an open loop.
And now, we’re going to do things a little different and start with questions. We announced this last week that the Voice of God has been retired. I know a lot of people are sad, but now we have a hotline at (833) 3-ASK-SDR. For those who are too lazy, that’s (833) 327-5737, but if you have a question, call that number and leave a voicemail. Just ask your question on the voicemail, and if we play it on the show, you get some of this beautiful swag; SDR coffee mugs, a T-shirt like the one Christian is wearing on the show, a notebook, a hat. I don’t know, if the question’s really good, maybe we’ll put in a bottle of tequila or something.
Hey, Chris, I have two techs that complain that they never get any maintenance service work for me. I upsell all those off of oil changes, but neither of these two techs performed oil changes; they think it’s beneath them! How do I deal with these guys? They’re great techs, but I can’t get them to do these upsells. My lube tech is also a regular tech; he’s on the flag right? I have no clue what to do, thanks a lot.
So far, knock on wood, I have never sat down with a technician of this personality and not been able to explain to them how business models work and get them to buy in. But you’ve got to step back a little bit. If it was me, I would call him in or take him for a cup of coffee, something that’s non-confrontational and easy and a neutral ground, right? I would talk to them about how business works and I would tell them, “So let’s say you’re Hewlitt Packard and you’re selling copy machines or printers. How do you make money? Well, you make the money on buying ink.” And then I would just go through different business models and say, “Okay, and so our business model in the service department is we have loss leaders, the loss leaders, like an oil change, is to drive traffic.”
Then I would just explain how the business works and how those loss leaders are an opportunity to inspect the car and make an impression on the customer, and I would just change their point of view so they understand how the business works. It’s not about your feelings or their feelings, it’s the business model. You guys are all in the model, the way that it functions, and oil changes drive traffic, and the traffic is an opportunity. And do we want the opportunity or do we have a better way? Does that technician have a better idea for a model? Chances are that he doesn’t; he just doesn’t understand the system and how much we lose. I often like to explain to them how much money we actually lose on an oil change, to get that lead in for them.
We’re doing it just as much for the techs to get that traffic in, right? So I think treating them like an adult and like somebody who’s running a business inside of a business, and talking about strategy and marketing and business models, has always elevated that conversation to something very constructive. I also wouldn’t expect when you have that conversation for the first time, for them to completely flip around. You’re going to say it, you’re going to be friendly, and you’re going to let them sleep on it. Then, they’ll come back a little different and then you’ll talk about it again, and then it just might be that the person isn’t meant to be a technician and then they’re in the wrong industry. But I always like to start by elevating the conversation because people are smarter than you give them credit for. And when you start talking about it in those terms, they’ll often have good ideas and when their ideas are implemented, they own the system.
One thing, too, is that when you actually reach out to them and you start to talk to them about the business, that no one’s ever talked to them about it before, they get a little bit of gratitude and loyalty as well. At times, when we’ll go into stores and we’ll talk about financials and financial training, and Christian has had a couple technicians sit in on those classes and they’re just blown away because they’ve never seen it before; they didn’t understand how it worked!
We have a course in our On-Demand for technicians that does just that. It talks about best practices, how to be efficient, maximize flat rate and all of that. My real goal with that course was to explain to the technicians what the advisors are doing, and then explain to them the law of averages like baseball.
The closing ratios most of the time are 30%, so if you’re doing a multi-point on every car and you find something on half of the cars, and then half of those end up being 10%, three of those are going to sell, right? So, of the opportunities created in a day if you’re a technician, you might touch some cars that don’t need anything but if you filled out, you added something, or recommended something on 10 cars, most of the time with how terrible service advisors are trained, it’s going to be a closing ratio of 30% of those 10 cars. The whole thing breaks down if you’re not consistently doing it because that throws the ratios out. That was the whole purpose of that course and we’ve had great feedback on it.
And also, when I go into shops, technicians on a couple occasions say, “Hey, I really liked that thing you guys did but I want to know more.” So then we made How Financials Work for Technicians so they would understand what discounting does to the bottom line and lots of fun stuff like that. Elevate the conversation and educate them, and treat them like somebody in a business and you’ll get away from the attitude and all that. Even with the most difficult of personalities, that usually is a good path to chip away.
Hey, Chris, awesome show. Just wanted to say, ‘Glad I found you guys.’ I listen to the podcast on the way to work every day, it’s great. I’ve got to vent: we’ve lost four techs since March. A competitor dealership offered to pay them 40% more an hour on a flat rate, so now we only have five techs. And we’ve been busy and I can’t find certified techs with experience, the shop is still producing the same amount of hours a month after those techs left, and the advisors are going crazy buying time or putting customers in rentals for days because of it. Upper management doesn’t want to pay to get experienced techs and when they do hire techs, they are entry-level techs and after a couple months, they leave for more money.
So how can I convince them not to do that? I feel like we’re losing customers because we can’t get to them faster. We’re booked a week in advance! I’ve been with the same brand for 20 years. It’s been 16 years with this dealership, but I’m thinking it’s time to jump ship, maybe for a better organization that’s willing to spend money to make money. And our parts department also sucks, but mostly just because of the parts manager. Even the fixed ops manager likes to keep the inventory thin and thinks it’s better to order everything once the job is sold, with next day delivery. The good news is that COVID hasn’t affected our sales. We’re up every month from the previous year by about 8% to 12%, depending on the month, but any help would be appreciated, thank you.”
This is a lot of a question, and it kind of contradicts itself… We lost techs but we’re doing the same hours; business is the best it’s ever been, but it sucks?
Listen, the industry is losing tons and tons of technicians. I was talking to somebody from Toyota corporate a couple of days ago, and he gave me the stats. 78,000 technicians quit or retire a year and only 33,000 are coming in, graduating from vocational school. We hear it everywhere we go, “You can’t hire technicians,” but we’ve never not been able to hire technicians and I’ll tell you beyond the shadow of a doubt that the way we hire technicians isn’t one thing; there isn’t one magic pill! The first thing you need to have is an effective labor rate to afford the technicians that are good. The good technicians are worth money and they don’t want to leave where they’re at. The good ones aren’t out looking, and the people that have them know what they have. So if you’re just running an ad, most of the people you’re going to get are the people nobody else wants. It’s rare, unless somebody is relocating, that a technician is out looking for a job that’s really good. Nobody’s letting good technicians go.
They’d almost rather be miserable where they’re working than move their toolbox. It’s not so easy to get them to move so it’s a good thing when we actually do get them to move because that says something about the sense of security they have about moving to a new place. We have to recognize the value of the technician and that we all play a part in keeping techs and making sure we retain them.
It’s a big part of the future because if you don’t have good techs, you’re going to have a rough time in the next 5-10 years for sure. The focus of our industry is going to become fixed ops and whoever has the best technicians is going to win. So you’ve got to have an effective labor rate to afford the best technicians, then you got to have a culture and a system where they want to stay (which is something we’re going to talk about here coming up), and then you’ve got to be good at recruiting them. If it’s not one reason, it’s the culture, it’s what we’ll pay them, the environment, it’s all going to matter.
Then I think the big question in all that is: should he leave? That’s always an odd question. How do we decide that for somebody, especially after they’ve been there 16 years?
I worked as an advisor for a dealership where, to be frank, the ownership and managers were morons and the dispatch was a moron and the technicians weren’t managed. There was no pride for the service department. They would just assume and let it underperform, and if you’re somebody who really cares about customers, it does get to the point where you can’t take care of customers anymore if all of your failing is comebacks. I literally used to have to start calling at two o’clock to tell everybody who’d made an appointment two weeks ago that their car wouldn’t get in the shop. The funny thing with that job was I left and I made almost twice as much money somewhere else with way less headache. So if you’re a good advisor and you’ve got clientele, go! Take them! That’s why it’s important to collect customers more than anything. They’ll follow you anywhere.
But you might have noticed that we’ve been talking about retaining technicians, so I did open up that loop after all… So here are the 5 ways to retain them:
1. Be able to achieve a high effective labor rate.
It’s in your pricing strategy, it’s in the customer experience, systems, consistency, accountability, all of that. Our experience has never had anything to do with the market. It’s the ability to create a customer experience, consistency, and a pricing strategy. So having an effective labor rate that lets you pay the best technicians, whatever it takes. We’ve paid technicians $60+ in Northern Canada where you couldn’t find technicians. In Texas, it’s always like, “Oh, we’re losing all our techs to the oil fields.” All of a sudden, we’re paying more than the oil fields and we had all the technicians we could handle, so it’s a mindset more than anything else. But you got to have the effective labor rate to be able to afford the technicians. If your effective labor rate is $80 and you need to pay $35 for this technician, it doesn’t work.
2. The way the break room looks shows how you feel about technicians.
Anywhere that struggles to retain technicians, you can walk into the break room or where the technicians eat lunch and see how they feel about technicians. Go to where salespeople eat lunch and tell me the difference. If it hasn’t been painted in 20 years, there’s stuff in the fridge that smells like death, the microwave doesn’t work, that says something, right? How much does it take to put in a coat of paint, clean out a fridge, get a good microwave, or put a Nintendo in there, right? We’re not just saying, “Hey, if you fix the break room, that fixes everything and technicians will want to stay there.” What we’re saying is that the way your break room looks tells me how much value and importance you put on technicians. You don’t want to think about the shop as mushrooms where you just keep them in the dark and feed them.
3. Train your advisors.
There’s nothing that runs technicians away quicker than advisors that don’t know what they’re doing, that are disorganized, confused, and writing 40 tickets a day, barely staying above water.
Put a system in place and have a plan for how many cars or truck we’re bringing in every day, and train your advisors how to process customers, time management, all of that. Well-trained advisors will retain your technicians. You’ve got to keep the good advisors and train the ones that you have.
4. Get good at recruiting.
What I was mentioning before is that the good technicians don’t want to leave where they’re at, so you’ve got to be better. You’ve got to have a better story, a better plan, and a better opportunity for them to jump. And so you’ve got to go deep into the psychology of it. In our course, the Technician Tree, there’s maybe 20 ideas on how to get to recruit technicians that aren’t exactly looking to jump yet. You’ve got to go to where they eat lunch, you’ve got to have events, you’re always recruiting, and the worst thing you can do is only recruit when you need techs. It’s a 365-a-year job. I think a lot of old time managers expect that it’s like 20 years ago, and the kids are going to come in and try to sell them. Any more than that, for good technicians, you’ve got to sell us. The power struggle’s flipped. Now, it’s a buyer’s market.
5. Fix your parts department.
No joke. Have a hierarchy of performance and look at your shop as a production facility. So many times, we go into a shop and the culture’s terrible, the technicians are inefficient and nobody is talking about the thing that’s important, which is production. If you’re posting the numbers in the shop all the time, you’re talking about production every day, you’re having little huddles with your technicians, giving accolades and praise to fire up your high performers, but the culture in the shop isn’t about production, then that technician won’t even last two weeks because they get bored.Everything about your parts department, your warranty department, they don’t get flagged on time and it’s a disaster. So you’ve got to make production a priority. You’ve got to flag the numbers quick, don’t have a month’s worth of warranty that hasn’t been processed. They need to get flagged the next day, right away; you need to be on top of that stuff. It’s a production facility and all of those things add up to their mindset and their thoughts on production, and what they’re there to do.
So let’s go over all of those again: 1. You’ve got to have an effective labor rate, and that’s only going to get harder over time. 2. The break room tells me how you feel about your shop, how much you care; it’s very clear. 3. You’ve got to have good advisors and train them. 4. Get good at recruiting; it’s a skill you’ve got to develop. 5. Make sure your shop is a production facility, and there’s a hierarchy of performance; you’re posting a hierarchy of who’s flagging the most hours and who’s winning, but think of it as a production facility.
That was fun, you guys. We’re going to start brainstorming TikTok, and maybe some of you can give us suggestions. We could do that as an exercise for our elite group. Wouldn’t that be great?
Just reminding everybody that Service Drive Revolution is the #1 show in automotive by a mile thanks to all of you listeners! Make sure that you hit the subscribe button so you automatically get each episode, and also an angel in heaven gets their wings so you’re doing God’s work. Get your friends, everybody in your shop to subscribe, spread the word: it’s a revolution revolution, and we’ll see you next time on Service Drive Revolutiooooooooooooooooooooon!
I think I’m in the best shape of my life. I’m having more fun than ever. The only thing going wrong is that I’ll be 50 in a couple years, and 50’s kind of the beginning of the end… assuming I don’t live to be 100. So I wouldn’t exactly call it a mid-life, but I’d like to do something big for that birthday party. Like having a band. Something big and fun, but not too crazy.
What would be crazy would be stealing from customers, which is what we’re talking about today. Is it okay to steal from customers? I always say, if you wouldn’t sell it to your mom…
We’re going to be using a little logic and it’s a deeper discussion than the silliness of the question makes it sound, because it’s very important. People do think that in order to sell more and succeed, you have to over-recommend and oversell. And a lot of what we do, people have assumed because of the numbers our clients put up that we’re stealing!
That’s extremely inaccurate. We would not condone or want to be part of anything of the sort. That’s not our MO. We deeply believe that if you wouldn’t sell it to your mom, don’t sell it. There’s so much stuff that you can sell that you don’t need that kind of short cut.
But first, let’s go to the questions. Remember, we have a phone number for you to call and leave your question as a voicemail at 833-3ASK-SDR. If your question makes it on the air, we’ll send you some swag; like an SDR hat, T-shirt, and coffee mug. You’re going to look good, you’re going to feel good, and people are going to walk up to you and go, “Man, where did you get that shirt?!”
“Hey, Chris. Love the podcast. Can you address the issue of techs recommending repairs that aren’t really needed? The customers get hit with a laundry list and go somewhere else, then find out they don’t need some of it. Thanks so much.”
It’s very important to address the customer’s original concern first. So in our service advisor training, we have two lanes: we have the ‘doctor recommends’ and the ‘super size me’ technique. In either technique, it’s very important that if the customer has a diagnostic concern that we plant seeds for what might be recommended, but you don’t want to put $2000 on an RO and send it in the shop when that could be all the money the customer has. It leaves people with a bad feeling, like we’re just trying to sell them something.
So if the customer has a diagnostic concern, I would plant seeds for other things they would need, but I’ present it all at one time because the best thing for a customer to make an educated decision is knowing all the facts. We don’t want to ask a customer to make a decision about how to maintain or repair their vehicle without giving them all the facts upfront.
“Yeah, hi, I’m a service advisor at a Toyota store in Georgia. We’re often told by the service manager that we need to be selling as much as the top person in the drive, and that there shouldn’t be any reason for the gross gap between us to be too large. However, the top advisor is criminal with what they do. They sell work that’s recently been done. Our shop recommends brake fluid and filters and fuel injection and inductions and all that every 30,000 miles. And the top advisor will sell that work at 30,000 and then again at 40,000. So my question is how can I increase my hours per RO without having to do that? I’d never sell that to my mother, as you say. My CSI is constantly good, and I have good relationships with the customers, but I can’t seem to raise my hours per RO. So any advice? Thanks.”
That was a lot, but I like the question. Thank you for that.
The first thing that I want to say is maybe step back a little bit for a second and let’s talk about this logically. So I know the way I was convinced to do induction or fuel service but not injectors was the foreman took apart the top of the engine, took pictures, and showed me. So even if you had to pay out of your own pocket to bribe a technician on the side, if you let some of these cars go longer than a year, the induction service is just taking off a layer.
So I would say 30,000 miles on some cars is too long, and I would sell it to my mom, gladly. She will notice. My little brother, when he used to write service, would tell people that if they did an induction service and didn’t notice a difference in the performance, he’d give them their money back. Now, I would never recommend doing that, but he never gave anybody their money back. Their induction service was Mach2. BG’s is also good. They really work.
The tone that the question comes from gives me the feeling that you’re not really trying to learn, you just have a very strong opinion. I know you don’t want to hear that. You’re probably a fan of the show and now you’re like, “Oh, Chris, you’re a jerk!” but I’m telling you the truth. With some brands and some models, you should do induction services every year; 30,000 miles is too long!
The second thing I would say is to stop watching the guy next to you and just maximize what’s in front of you. Just do that.
Now, we should just get into our subject of: is it okay to steal from the customers? Because let’s just say you’re working at a Toyota dealership. So Toyotas come in twice a year, and let’s say you write up 12 cars a day (which you’re probably writing more because most Toyota stores are burning their advisors out and the Toyotas don’t break as much). If they come in twice a day, how many of those cars are due for an alignment?
They’re due for an alignment every 12; 12 months, 12,000 miles. AAA says that. So half the cars you write up every day are due for an alignment. You could sell it to your mom and feel good about it. Are you selling six alignments a day? I doubt it by the way you’re asking the question.
Opportunity is everywhere. Tire rotations, cabin filters, if you just concentrate on the stuff that customers really need and stop paying attention to everybody else around you, you’ll connect better with customers and work more on your closing skills. Work on customer’s trusting you and creating key throwers. You’ll forget about the other advisors and what they’re doing wrong.
The service industry’s no exception to karma being one of those things that comes back to get you. Two things: one is don’t assume that being unethical is the only way to increase your RO because that’s almost how your question made it sound; that the only way to grow is to do what the other person’s doing. Do the opposite of what they’re doing because, in five years, people figure it out and everybody will come to you instead.
The other thing is the amount of time you’d be spending. If you’re figuring out that somebody’s selling an induction service at 40 that was just sold at 30, how much time are you spending looking at histories of somebody else’s stuff?
Ask your customer a question. Talk to them and get to know something about them instead of getting to know the RO written by somebody else. The way to increase the value of your repair orders is to build trust with your clients. And if you build trust with your clients, they’re going to believe in what you’re telling them. If you watch the induction service being done and you’re presenting that to the customer from the first person like,” I saw this, and here’s what happened when I saw the service being done,” how much more convincing are you?
My brother was actually kind of skeptical about the whole, “if you don’t notice a difference, I’ll give you your money back,” approach but he worked for a manager that did that. They took a used car and had the foreman pop the top off. They looked at it, put it back, and then the next day in the advisor meeting, they showed them and compared pictures. The proof is in the pudding. I’m not one to believe in snake oil and my brother was more skeptical than me, so I was mortified when he said he told people he’d give them their money back. I was like, “Oh my gosh, that’s crazy!”
But it worked, and I’d do it every year on any car I have that’s a turbo, without question. Everybody I’ve had this conversation with, no matter the car line, is now a believer. I just think the whole ethical, standing on a soap box thing is not attractive. Get into it and really try to learn and concentrate on the opportunity that you have.
Like, let’s say you go into a service department and they want to talk about the advisors overselling coolant or whatever. Let’s say it’s a Ford dealership and coolant is lifetime, so it’s going to be 100,000 miles, and they say, “Oh, they’re overselling at 40,000 miles.” If I go through 30 ROs, how many of them do you think I’ll find that are due for coolant but it wasn’t recommended?
There would be a couple of them, but what are we sitting around talking about? Focus on the opportunity that’s in front you. Trust me, you’re missing stuff all day long and your head’s a little sideways because you’re not a technician. You don’t know, you’re judging. Concentrate on being the best you and make everybody else around you better. Lead by example!
I always hate it when Orange County Christians preach religion like, “Oh, you’re going to Hell.” It’s like, you’re out drinking, you’re having pre-marital sex, you’re cheating, and you want to tell me about going to church? Why don’t you lead by example? Why don’t you create a lifestyle that makes me come to you and go, “What is it you’re doing that you’re so much happier and more productive, and you have a zest for life that I want?” instead of just trying to make me feel guilty…
It’s not hard to be the #1 advisor in selling tires and alignments in any service drive just by consistently turning the tires, measuring them, showing the customers, and recommending alignments when they’re due. If you just did those two things, then you could do the whole thing with giving money back if you recommend an alignment after a year or 12,000 miles and it’s not out of alignment. It’ll be rare, like 1 in 200.
So it’s not okay to steal from customers, and most of the time anybody who wants to have that conversation is not getting at the opportunity that’s right under their nose because they’re not doing it the right way! You’ve got to start asking a different question. Stop asking about what everybody else is doing and ask, “How can I get better?”
Build trust. Spend time working on yourself and how you can endear customers to you. Pay attention to customers’ body language, what they’re telling you, how they feel. Ask for feedback.
The thing with our industry is that clients perceive that we oversell, and the only way to get them to understand that we don’t is to educate them.
But yeah, that was good stuff. I know it was a little hard on you, but it comes from a palace of love so thank you so much for the question. Think about it, sleep on it, and you’ll feel different tomorrow, but there’s tons of opportunity in front of you!
Everybody have a great week, and we’ll see you next time on Service Drive Revolution!
How can a service advisor get in the fast lane, the passing lane, and really jump ahead in their career? Today we're going to talk about the top five career moves a service advisor can make!
We've been selling a lot of our OnDemand platform that comes with Service Manager University, the best service advisor training in the industry, along with technician training, pet the dog customer service training, and more stuff that we’re adding to it all the time.
What also comes when you buy it is a free strategy session with me once you’ve gone through Service Manager University. Two reasons why I do this: one is I want to make sure that you understand the progression and that you don’t have questions. Two is that I want to talk to you about our coaching group and tell you the other things that we offer. I’ve been doing a lot of those and when I was doing them yesterday, it came up two times that there’s a company out there charging dealerships to help maximize their warranty, labor, and parts gross. And I’ve heard about this before and I’m guessing that you have also because you’re in the field more than I am.
So why don’t we do that? Because here’s the thing: when we go into any service department, the effective labor rates go up and then it’s easy to do the parts part. So call us if anybody wants help maximizing their warranty gross profit in parts and service. We’ll do that just for being in our coaching group, and we’ll save you a lot of money!
This company out there is charging something like 5-10%, which doesn’t sound like a lot, but it’s that percentage of the increase for a set amount of time. The thing is, that warranty stuff is predicated on customer pay, and we add so much value to what we’re doing on the customer pay that it naturally lends itself to this huge warranty and labor increase. And so this company is chopping at the bit to come after us, but we can do all that without getting a percentage.
I was showing them the ROI, because a lot of times, the warranty rate increases by like $30-40 the first time after we go in. I wouldn’t want a company that’s incentivized to upsell or maximize warranty to their benefit and not the dealership’s benefit. Of course, we want to maximize it, but we don’t want that to be our objective.
So now we’re going to talk about the Top 5 Service Advisor Career Moves. How can you move into the fast lane as a service advisor?
The first one is commission. You want a performance-based pay plan.
That’s right. You get a report card every month. Your paycheck is your pass or fail. I think that if you’re going to be a top advisor, one thing you have to be able to do is assess yourself and how you’ve done honestly. And if you get a big paycheck at the end of the month, that means you’ve done great, and if it’s a crappy paycheck, then what does that mean? When it’s performance-based, you’re not using excuses of salary or anything like that. What you’re saying is that my results are dictated in my pay.
And that’s a thing that I’ll see consistently with most advisors is that they want performance-based pay. They want the reward. They want all the glory for the perfect job and they’ll take the lumps if they didn’t because they know they’ll learn from them.
Understand that the dealership and your manager look at you as a percentage of the performance, so if your performance is up or the department’s performance is up, your pay is going to be up but it’s relative to the increase. So you’re never really expendable because you’re producing what you’re getting paid, right? I mean, 8% or less usually would go to the advisors of the gross.
Quality, not quantity. It’s amazing when we’ll do this exercise with service advisors on how to maximize your pay plan that most advisors can make more money, have a better quality of life, collect more customers, make friends and collect more customers by writing less.
When you’ve got eight ROs a day with 11-hour days, you do the math. You can spend over an hour per person. You know that not every RO’s going to take an hour of your time so on the really, really challenging ones where the customers aren’t used to getting all the information, you’re going to over-communicate with them.
(And hey, if you have a little spare time, make some TikTok videos and send us the links.)
Sell cars for two months.
Christian’s advice is that he would want to do it fairly early in his advisor career, and the first thing to understand is that being a service advisor isn't’ a sales trap. Just selling cars lets you see, ‘Okay, so this is sales, right?’ You have to overcome five no’s to get somebody to buy a car from you, and you start to appreciate the relationship that you have to build on service in the long-term. It’s really important as a service advisor to see what customers look like when they’re in the ether and understand what their expectations are when they buy a car, along with what their service experience is going to look like.
I think, too, that one thing to appreciate is the salespeople that have to go get customers where they are coming in. It’s way harder to sell cars, just mentally, because most of the time your commission and variant paychecks are crazy.
Think like the owner of the dealership. Nothing will move you ahead quicker in your career than to think about the company and not yourself. Put the company first. Think about the customer’s perception of the company. Think about representing the company, and you’ll become invaluable for them. I think a lot of advisors, even the tone of some of the questions we get, is like me, me, me, me, me!
The big thing is that if you’re starting to think like the owner, you could eventually become the owner!
Avoid parts. You probably weren’t going to end up in parts anyways, but I’ve seen career paths that go to parts. Not a lot of parts managers become general managers.
I’m sure it’s happened, but it doesn’t happen a lot. If you want to move up and your goal is to be a dealer or general manager someday, you want to be somebody who’s more interested in sales than parts, right? Now, I would say if you’re a parts manager or your’e in parts, go write service and sell also. It’s very rare, though. In fact, Gary was one of the only parts managers I ever worked with that had worked in service, worked in sales, and understood the whole picture from a parts manager’s point of view. That’s why he sold so much in his boutique and he was so progressive with what he did was because his context wasn’t just parts, it was marketing and displaying things and he really pushed the envelope on that stuff.
So quick recap: #1. Performance-based commission. #2. Quality over quantity. #3. Go sell cars for a couple months. Learn the other side of it in the circle of life. #4. Think like an owner. #5. Avoid parts.
That was the Top 5 Service Advisor Career Moves. So now, I want to try something else because we get so many questions, it’s getting hard to navigate so we set up a hotline. If you want to ask a question, we would love it if you would call in and ask your question through voicemail and then we’ll play it on the show. Same thing as always, if your question makes it on the show, we’ll send you some Service Drive Revolution swag like a coffee mug, t-shirts, notebook, and we’ve got our own number at 1 (833)-ASKSDR which is (833) 327-5737 if you don’t want to spell it out.
“Hey there, Chris. Long time listener, first time caller. I just wanted to know, how did you become a general manager?”
The funny thing about the story is that I was never a service manager. People assume I was, but I went from being a service advisor to working for a consulting company as an advisor trainer, and then I became a consultant. And for most of my early 20s, I would go into service departments on commission and turn them around, and I would get a percentage of the new clients that I would create. I was going all over the country doing this, but most of my clients were in California. It was a lot of intensive work and I could only do a couple clients a year, but eventually I had a couple people working under me. My deal with the consulting company was that I had to get my own clients, but I would get a percentage out of it.
I knew the key to my success early on, even when I was a service advisor, and that mysterious thing was called the financial statement. I remember it would be sitting on the dealer’s desk in the service manager’s office. Sometimes, if I was in there, I would kind of look at it and try to understand it because I knew that the key to understanding how to make a dealership go was the financial statement. SO when I went to work for the consulting company, I actually traded advisor training for them to train me on the financial.
So I would get $1,500 for a couple days of advisory training in the service drive; sometimes it was $2,000 for a week. Trust me, I needed the money, but I would tell them, “Hey, I’ll go do this advisor training for free if you’ll train me on financials,” so they took it seriously and they trained me on the whole financial, every department! What would happen is as I would go into a dealership and fix the service department, I’d become friends with the dealers because I was kind of the only person they could talk to, right?
That happens to us, especially when you start to get them results and you take an asset. Let’s say they have a department that’s making zero, and you take them. Now, they’re making $3-4 million a year. It’s life-changing money, even for a dealer! Then, they invite you over, you meet their spouse, you become friends. Then, they’d see you as an expert on the financial statement, and then they’ll say, “Hey, I’m thinking about this dealership. Would you look at it and tell me what you can do with it?”
Still to this day, I get excited when somebody hands me a financial, because the financial is a story. You can tell what’s going on in a business with the financial. I can look at all of it and tell if the culture is broken. I can tell if the leaders are good or not. I can tell if they have systems in place.
One of my clients that I had done a pretty good job for and would hang out with was thinking about buying a Saab dealership. Imagine if that would have happened, right? So I did a projection on the front. I built this Excel spreadsheet and I project car sales, F&I, used service parts, the whole thing, and I would say, “This is what I think we could do with the backend.” and I knew it would give him kind of an analysis of the financial statement and what I would look for.
And I knew because my goal was always to be a dealer, that I had to do one of two things: be a general manager or go to the dealer academy. Now, I didn’t work for a dealership so I needed somebody to sponsor me to go to the mysterious NADA academy.
I had this client that I really liked and we became friends. One day, he hired his friend whose dad had just sold his dealer group, and I remember the first time I met that guy. I was there doing my visit in the service department, and the guy came back and said, “There’s some customers out that need help. Why don’t you go out there and help them?”
And I go, “Oh, I’m the consultant. I’m not the service advisor.”
“I don’t care. This customer’s not getting help. You go help him.”
The guy was really short so it was probably a little Napoleon Complex, but I said, “Okay.”
I just didn’t get along with that guy so I went to my client and I told him, “Hey, you need to tell that guy to be nice, or you could run with him for a while and I’ll be back when it doesn’t work out.”
It didn’t work out… After that, the client said, “Hey, I know you want me to sponsor you going to the dealer academy. Well, instead of going to the dealer academy right now, why don’t you come run my stores as the general manager, and then you can go to the dealer academy?
Well, it ends up that if I was running stores and I was the operator of record, I no longer needed the dealer academy, so that’s what I did. I went from service advisor to service advisor trainer to kind of a turnaround specialist to general manager. That was my career path, and then I bought my own dealerships. Eventually, those went away during the downturn of 2009.
To take it back a little, I first started thinking about wanting to own a dealership when I was a lot attendant. I remember looking at the dealership in Seattle, it was Volkswagen, Audi, Subaru, and I just remember asking the general manager, “What does it cost to buy this? $7 million?”
And he’s like, “Yeah, probably 7 or 8 million.”
Then I thought, ‘I could find 7 or 8 million…’ I always thought that way.
Part of our motto is the way that our ROs look are in direct correlation with our results. It’s funny but fixing gyms, doctor’s offices, restaurants, any sort of business to me always goes back to the repair orders. I’m always looking for where the repair orders are first thing because I wanted to know what was going on with the service department. I could tell by inspecting them; I could look at the history and see if they were recommending work. I could tell the quality and the culture by the phone numbers being there.
You can tell a lot, so when I went to run the dealership, my goal was to be #1 in the country in new car sales. That was a common goal, and that goal was probably why I was brought in to some degree. I didn’t have a lot of experience. I’d set up a couple internet departments for sales, but that’s all the experience I had in sales besides selling cars when I was an advisor. But if you have a system, that system would probably apply in any situation. When Christian was a sales manager, he brought over things in his system from being a sales manager over to service.
The big thing is that the system is the star of the show, and people hate to hear that! They feel, “Oh, the people are the most important,” but it’s really system first, people second. It’s all about the system. If you have a system, you can do anything.
“Hello, Chris. Hope all is well. I’m currently active in the military and I’ve received a great job offer to be a service advisor for a large RV and camper company when I leave the army in less than a year. The company’s allowing me to shadow a current advisor in my off time to learn the ins and outs of the game. I’d love some advice on how to make the most of this opportunity. What are some things I should learn or look for? Thanks in advance.”
Yeah so the first thing is don’t kill your customers, but I’m sure you’ve got that part down already. I think at the heart of everything that you want to understand as a service advisor is that your income and your future all come from the idea of staying in one place and collecting customers. I know there’s people out there that’ll tell you this but service advisors are also sales people; selling in service is the easiest part. Your role is to create key throwers that you have built a relationship with, that trust you, that you’ve always done right by, and you’ve always stepped up when they’re in an awkward situation or running late or broke down or whatever, you’ve always had a solution for them and taking care of them.
So just collect customers, make friends, and understand that the vehicle’s a commodity, and what you bring to the table is your relationship with the customers, not your understanding of the vehicle. You’ll gain the understanding of the vehicle, but product knowledge is not as important as your ability to build rapport and being genuinely interested in people. I think one of the reasons why I did so good as a service advisor is I was just curious about people. People fascinate me. I could meet a stranger and ask him 10 questions and be fascinated.
Read books like How to Win Friends and Influence People. Maybe get on our on-demand platform and learn our pet the dog system and how to build rapport. That’s the most important part. The other stuff like the product knowledge comes easy.
“Hi, Chris. I’m a 20 year old in a small town and I’m wondering, how should I negotiate a pay plan with my local dealer? I was thinking of starting off between hourly and commission, then going to full commission down the line. So I’m more motivated to work hard. I’m ready to jump in and be the best advisor I can be. What kind of mentality should I have in a dealership where some of the advisors and techs are 20 to 30 years older than me? It’s a small town of about 10,000. We’re an hour outside of Kansas City and the dealer sells Chevy and Buicks. Thanks.”
Well, the first thing I would say is if I’m the 20 year old and everybody’s 20 to 30 years older, I’d embrace the speed advantage that you have. Trust me. They’ll take a long lunch, so take lunch at a different time than they do and get there earlier. They’ll be too lazy to write the night jobs. I used to go in on Sundays and write the night jobs.
If I was going to be a service advisor, I would want the pay plan with the highest commission I could get and less of a base. Now, if you’ve written service before or you’re really unsure, you might want to negotiate the base, but I want the commission. And there’s a difference. Some service departments are going to pay you on sales, some are going to pay on gross, and you kind of need to understand that. But at the end of the day, most service departments in a dealership want their service advisor compensation to be under 8% of the gross. So you can kind of have that as a rule of thumb, but I wouldn’t be afraid to ask for the numbers.
When I’m interviewing an advisor and they’re like, “Hey, can I see the numbers?” I always give it to them because I would never interview an advisor without their numbers. So that’s probably the best way to do it, where they’re looking at our numbers and the pay plan.
I’ve gotta get out of LA. It’s like Armageddon here. People keep getting shot; somebody got shot right in the throat two blocks away yesterday! I asked Jeremy where we should move, but he insists on staying in California and he had something really interesting to say about everything going on right now:
With all this chaos going on, you need a car with peak performance and reliability if you need to get out of town right away, and that’s why our customers need to take better care of their cars.
If I owned a shop in Downtown LA, that’s where I’d be staying. I’d do armor plating, bulletproof glass; I’d be selling that like crazy! At least, I think I should get in on that before Tesla does.
Today, we’re going to talk about how to steal market share during this upcoming tire season, or as Christian cleverly put it, ‘turning rubber into glue.’ We have some fun, insightful stuff, and we’re separating it into two categories: the northern shops and the southern shops. Tire season is different for both of them, like you don’t really have a huge tire season in the south like you do for the north; but we have an answer for both!
In the early to mid-90s, we’d see each customer about four times a year. We’d put the oil sticker on; three months, 3,000 miles. Now, some cars only need one service per year. Clients always ask, “Hey, how do we get more business? How do we make calls?”
The spring and fall seasons are great times to get the customer back in the shop, but there has to be great purpose and reason to drum up the old database of customers that haven’t been in for more than a year or two. One thing you can do is get a campaign going that says, ‘Get ready for fall or winter driving!’
Now, there’s a reason why tire season is a way bigger thing in the north, and that’s because they get snow season up there so customers have their winter tires and their summer tires, right? You can charge for it or you can make it a part of the benefit of buying the car, but either way, it’s a retention tool. Often times, two things happen; two objections come to light when we talk about this with the client:
One is, “Oh, we tried that and we lost their wheels,” or whatever so you do have to be organized with it. You need to wrap them in plastic and put the customer’s RO or information inside the plastic so that if it leaks or rains, we still know who those belong to. You have to commit to it and have a system to wrap them so that they’re all together. We’ve had clients that would have one container, like the ones on the back of a semi, and they’d have overflowing; you can’t get in or out of it. You’ve got to put them somewhere where they’re inventoried and you can easily get to them. Then, if you call months out and schedule it, then you have them brought over and you’re ready to go.
Another thing that happens is, “Oh, we have nowhere to store them,” but I’ve never had that be the case. I can find wherever your shop or dealership is and find a warehouse space cheap if I draw a three-mile radius around it. The retention is worth renting a warehouse for a couple thousand dollars a month. It’s simple, stupid! It’s almost your advertising budget. It’s really easy. I’ve yet to find the limit of how much you can charge to store and mount and balance. The most we’ve charged is $399, and there wasn’t a deterrent. When customers say, “Oh, we don’t have anywhere to store them,” I always tell them to just charge more. If you’re storing 200 of them every season – we could probably store 400 if you weren’t an ‘anti-storing them’ machine, but if we charge $250, it pays for itself!
The other mistake they make is, “Whoa, we just get too much in June.” You have to be proactive and tell the customers so you can book them ahead of time; control the input. Call them a month out and plan it; don’t let them all just show up at one time.
You want to plan that out months ahead of time to swap it, but you’re going to sell more tires and you’re going to sell more alignments. Then, they’re going to come in for the other stuff. Also inspect the car or truck when you do change the rims for them.
I don’t know how many clients we’ve had that will do the storage part, but they just have a kid doing it for $8 an hour and nobody’s inspecting! They’re just letting all this opportunity go to waste because they don’t control the input. They don’t control how many are coming in and too often they’re leaving it to chance!
They let customers wait until the very last minute and then they panic. We’ve had a lot of clients up north where they don’t call until after first snowfall because that’s when they get their big rush of tires, right? And then all of a sudden, it’s complete chaos. That’s the big thing with that tire stuff: if you have all their tires – for the 200 or 400 people that you’ve got – and you start scheduling out five a day from mid-September to the end of October, then it’s nice and easy guaranteed revenue.
By the way, your Parts Manager has time to do this. Jeremy will tell you… All joking aside, I find that parts managers are pretty good at figuring it out once they accept the task because they do fight it at first…
One of the interesting things in the states, though, is that some customers might not want to schedule their tires even after that big first snowfall because they’re like, “Well, if it’s still 60 degrees outside, I’m going to burn the tires up. I’m just going to wait until we get snow on the ground.”
But that’s easy to overcome. You just say, “Hey, we need to get ahead of this because when it does happen, everybody will want to come in at one time and you don’t want to be stuck where we might have to have you wait a couple of days.”
Just tell the customer the truth!
Also, if you’re a dealership, every time you sell a new or used car, you could give them a coupon for half off the first storage or even do it for free for the first year. Once they get hooked in and you have one set, you’ve got them. All you need is the wheels. It’s over after that.
It’s always funny to me how I’ll be like, “Okay, how many do you guys store?” and they’re like, “Oh, 50.”
“Well, how many new cars do you sell a month?”
So in a year, you’re selling 1,800 cars? No! It starts in F&I. It starts at the sale and then how many used cars. Why can’t you store them on those, too? It starts up front. You have home field advantage, act like it!
With independents, it can be a competitive advantage if you want to come up with a very unique marketing campaign to steal some of the market share. If you’re not storing tires, think outside of the box and find a place to do it and create that as another revenue string because if you can add 300 or 400 sets of tires that you’re storing, that’s a golden opportunity to do a full inspection on the car and really build a great relationship with a customer when you pull that car out of the dealership.
Now, with our southern dealers, tire maintenance is actually due more often than oil maintenance, which is crazy. Use the change of season as a reason to get them back in for a pit stop; let us check out your tire pressure, top up your fluids, and inspect everything.
I find that probably the best retention tool is lifetime alignments. If you charge $129 for a regular alignment, you can charge $299 for the lifetime, but you’re hooking them in. They’re going to come in for alignments, but then they’re also going to get tires and everything else.
Jeremy used to do lifetime oil changes which were really successful in the late 90s and early 2000s, but then that’s gone away just like lifetime cabin air filter. We have a dealer group as clients and when we started coaching them, you would hear a lot from the managers like, “Oh, these things are bringing down my averages.” They’re not looking at it as an opportunity or retention tool even though it’s one of the best ways to retain customers. Now, they’re not saying that anymore, and they’re doing way better and selling more.
It always blows me away when I do the math. You can pack it into a new car, you can write it off to advertising, whatever it is. I would rather have the retention and the opportunity to keep customers coming back than losing them forever. When Christian was at his Infiniti store and I came in, one of the first things he thought I was going to say was, “Do away with the free oil change program.”
I think people think that a lot, but then I said, “That’s a great idea! I can’t believe that more people don’t do it.” To his surprise, it was really fair and equitable. They wrote off the costs of the oil change and it was split between parts, service, and sales, and their retention was in the 80s. It’s crazy that you can totally retain 80% if you want, but dealers usually only retain 20-25%!
Jeremy makes a point on the show about why more dealerships and even independents don’t use the Costco membership model and just create an exclusive club, which I think is interesting because I was just thinking the other day about the Ferrari store here in Calabasas. It used to be 50 grand just to join the club and be able to buy a car from them. They were serving Beverly HIlls and all that, and I wondered if there was a model for that.
Turns out, Jeremy’s shop is moving more towards that direction with their VIP program, almost like an extended warranty/maintenance program. What he’s going to do is package the annual maintenance that the car needs into the membership costs so it’s not out of pocket for the basic things, and it would just be different depending on if it’s a Honda or a Ford or whatever.
Look at Fletcher Jones Mercedes in Newport Beach – the largest Mercedes-Benz dealership in the word – and how crazy busy their carwash is. When you pull into their service shop, you can’t tell which line is for service and which line is for the car wash. I imagine that if you buy a car from them, you get a free car wash at any time. That’s great but it might be better to limit that to a certain number per year and make that an exclusive member benefit for a certain percentage of costs, and create a club where it can be more profitable for you than just giving it to everybody.
We did that at Crevier right down the street from Fletcher and the thing was our grosses on the front end were $500-600 more than the market and in the western region. And so, telling customers how often they could come in for it was a really easy thing to pay for. It’s cheaper than free oil changes. We did focus groups on that and what was interesting was that we had Fletcher Jones customers. The thing we learned from it was that most of it wasn’t about the car wash, it was the networking! People would go to Fletcher and hang out in their coffee shop. None of them cared about the putting green, but it was the networking and we realized that and changed our dealership to create that environment where people could hang out socially.
That’s what it is in Orange County; it’s more of a social thing. I don’t know how many luxury car markets you have in the country as good as Orange County. Probably Dallas, Miami– I’m not going to say Manhattan because a lot of the people with money in Manhattan have their own drivers so it’s not the same kind of luxury market. San Francisco and New York are old money while Orange County and Dallas are new money so there’s a way that people act. With new money, you see a lot of chrome wheels, and it’s a lot of image and ‘who I am.’ It’s keeping up with the Joneses on another level.
The point I’m making is that I wouldn’t do the membership tiers because it’s more about the social thing and if you can get them in. The whole thing is to get them to think about the dealership in a different way. If you have art shows or wine tasting where you try to break the pattern of how people feel about the dealership, you’re going to make it up on gross on their next car if they feel like it’s more of a club and you’re part of their tribe. They’re going to be less about price and more about what you can do for me.
In finance, when you bought a car, we’d put a VIP sticker on the inside of your windshield so when you pulled up, they could see that you’re a Crevier customer and you got free car washes. There was a value to that. So much actually that somebody stole some and sold them on eBay.
I’m a huge fan of adding new streams of income, but I’m just telling you that we didn’t need to play with the membership model because of all the money we were making. It’s a status thing. It’s more clique-y. The thing is it’s so easy to please those customers when it’s all about status because it’s rough, it’s ego. The easiest thing to do is feed somebody’s ego. You need to tell them how smart and good-looking they are. Don’t fight with them, let them always be right, and then they’re loyal.
It’s different than a customer that’s buying a price, right? You take a Toyota customer that’s all about reliability and price, that’s a little harder because you can’t just tell them they’re good-looking and smart. Well, you can and it works, but not to the same degree.
That’s it about how you can steal market share this upcoming tire season, and also how you can set up some sort of VIP program that’ll improve your retention so much that you don’t need to worry about the overhead cost. Now, let’s move onto our two questions for this week…
“Hey, Chris. Looking for some advice. I’m a writer at a Chrysler dealership for a very large dealer group in Michigan. I’ve become the go-to guy in service for every other department, causing me to take on too much at times and taking me away from my responsibilities to my customers. I feel like this is holding me back from my goal of being the top writer in the group and ultimately becoming a service manager. I have a hard time telling anyone, ‘No,’ because I take pride in being someone that others can rely on. Any ideas on how I should handle this to get myself to the next level? Thanks in advance for any possible insight. Your books and podcasts have helped me a ton in getting where I am today!”
I think the first thing you got to think about – besides maybe not working at Chrysler or being a Lions or Packers fan – is that you’re not telling people, “No.” What you want to do as an advisor is you want to come from a place of empathy and service, and you want to tell them the truth. That’s the key. It’s not about telling anybody, “No,” it’s about having empathy for their situation; trying to do the best you can for them with the tools you have, and then telling the truth.
If it’s going to take two days, it’s going to take two days. If the quick lube techs are backed up and it’s going to be an hour and a half, I would rather tell them it’s going to be an hour and a half now than tell them in an hour after they thought it was going to be 45 minutes.
I’m guessing what you’re doing here is you’re projecting this weird thing about how you feel and your self image in trying to please people by telling them what you think they want to hear, but telling them what they want to hear is not going to do any good or serve you! I get the empathy thing’s easy for you because you probably have that, but the truth part might be messing you up.
If you have a hard time telling people, “no,” just reframe it. Jeremy’s advice is to say, “I can absolutely help you with that. I just have a question first: What would you do if I couldn’t help you with that?”
When they give you an answer, say, “That’s a great decision. Go do that.” Then, walk on and go do the other thing.
Christian’s advice is to remember at any time the sales department comes back to you that there’s a customer strapped to the other side of that whole request. It’s an opportunity, like a free oil change. If he’s doing internal work for somebody like putting splash guards on a car, he would ask for the customer information and call them up like, “Hey, my name is Christian. I’m going to be taking care of the splash guard installation for you today. I just wanted to let you know when it’s time for your first service that I’m going to be the person that you’re going to be the person that you’re going to take care of as well because it’s really important to us that you have a great ownership experience all throughout the time that you have the vehicle.”
The interesting thing on the show is that we all interpreted the question differently so that’s three different answers. That’s like a coaching call wrapped up in there.
“Hi, Chris. I’ve recently discovered your videos. I think they’re fantastic and insightful. They seem to be centered in doing the right thing for your customer and the right thing will happen for you. Due to COVID, my industry has imploded. Imploded. I really want to become a service advisor, but I’m finding it difficult to get in the game. I think my age is part of the issue but not the sole issue. What do you recommend is a good course of action to get into the service advisor profession?”
I would need more context because I don’t know if you have money in the bank. I don’t know what industry you’re coming from, and I don’t know your experience or why you want to get into it, but I remember my grandfather telling me a story about my dad:
My dad, right after he married my mom, didn’t have a job. So my grandfather tried to get him on at the garbage company in Bremerton, WA picking up trash. They didn’t have any openings and I think they were union, so what my dad did was he went down there and swept their office and around the front every day. It was only a week before he got put on a truck.
So if you don’t know anything about the industry and you want to get a feel for it, I would go to a local shop or dealership and I would ask the manager there like, “Hey, I want to learn this. Can I answer phones and help follow up for a couple of weeks?”
Just see and just volunteer. Put your best foot forward and make a difference. Go in there, learn, ask questions, help customers, and have a passion for it. You give to get. We have that approach here, and it’s the reason why we’re as busy as we are and we help as many people as we do. Our philosophy is: we’re going to put out free content that’s better than what our competition charges for it. The stuff they charge for what’s behind their membership wall won’t be as good as the stuff we give away for free so just imagine what our content is on our OnDemand platform, right?
We’re the only ones in the industry that don’t feel like the content is the treasure! The treasure is the relationship more than anything else so if you really wanted to get into it, I would go volunteer. I don’t know in different states how feasible that is, but if I was a service manager and you came to me like, “Hey, my industry imploded. I was a bartender, and I want to become a service advisor. Can I answer phones, make appointments, clean up paperwork, file, whatever it is?” then you’ll get an opportunity.
When I was a porter, I was dying to be an advisor and I got passed over I think five times, but I wrote all the internals that they would let me write. Anybody called in sick, I would write service. I would answer the phones if they were ringing and everybody else was busy. Writing the internal ROs made it so when I did finally have a customer in front of me, the only difference was the pay type. I knew how to use Reynolds and Reynolds. I knew all the codes. I knew how to do it because I had opened and closed so many internals.
I didn’t get paid for it. I’d stay late on my own time to do it, but part of the gap in being an advisor sometimes is just knowing how to write a repair order in the DMS that they have. That’s the hardest part.
The other thing too right now is that places are apprehensive of hiring people who lost their job due to COVID, especially if it’s an industry that’s going to come back, because they don’t want to invest in somebody that’s going to go back to what they were doing when this all blows over – if it does…
Jeremy’s suggestion is to do something totally different which is to make a video, get it out there, and show the world why you want to be an advisor. Then, pick the car line you want to work in. Jeremy knocked on 43 dealership stores before he got his first job, and part of it was figuring out which one he’d be a good fit for. If you’re passionate about it and you break the mold, you’ll find a spot.
Remember: give to get. Put your best foot forward. We hope that you have a great week and we’ll see you next time on Service Drive Revolution!
Today's show is about something that could be touchy, but that just makes it more exciting. Some of you might not be able to put away your preconceived, blind faith following CNN or Fox News propaganda, but we're gonna try to talk about which candidate, Biden or Trump, is better for the industry.
Also, Jeremy tells us how to put a customer in timeout, but before that, he starts off the show with how he tried presenting a repair authorization and it backfired miserably! Understandably, he didn't take it too well when I acknowledged that it might've been the way he presented it, but you be the judge after this story…
A first-time customer comes in – male, mid-50s contractor – with a Ford F-350 that's got 200k miles on it. It looked good from the outside, but it had a 6.0 power stroke that was smoking and had a misfire with the check engine light on. He says, “Hey, can you diagnose my misfire and why my truck's running so bad?”
Jeremy says, “Well, sir, here at Freedom Auto Repair, we do things a little bit differently; we're experts at what we do. Let me take a quick look at your truck and I can probably tell you in a nutshell what it's going to take to get the thing fixed. You're more interested in getting it fixed rather than diagnosed, right?”
The customer is with him so far, but Jeremy also has past experience with the 6.0s and how much money they cost the shop because of the long and messed up repair process. Basically, it's going to be a large bill if you put the customer first.
Long story short, he goes back to the customer and says, “Well, you obviously have [this issue], [this issue], and [this issue], and typically on these 6.0s, [this] is what you're looking at doing. At this point in time, with your mileage, it's best to replace the entire engine. We'll go ahead and I'll give you the price for a complete running engine with new injectors, new turbo, [this] and [that]. You're looking at about $26,000. How does that sound?”
So that's not a typo. That's twenty-six thousand dollars to pretty much replace the truck's engine while still keeping the old body when the truck itself is only worth $15,000! That's an oversell at best!
Using my skills as a certified interrogator, I can read below the surface here. Jeremy basically wanted to tell the guy, “I don't want to work on your truck.” He knew it was going to be a mess and a little past what he wanted to endure.
But this whole thing doesn't mean repair authorizations don't work. One thing about this scenario is that Jeremy presented it like he had already diagnosed it. I mean, the way he talked about it after the fact, it sounded like he did already know what was wrong with it. The way I would have done it is, “I'm giving myself [this] amount of money to work with. If it's less, it'll be less. If it's more, I'll let you know,” and I've covered this before on our episode about the service department's free secret weapon.
When we did that episode, Jeremy apparently felt like independent advisors were going to have trouble understanding repair authorization because it's not as easy as taking a dollar amount and attaching it to a concern or a code like when you're at a dealership. Independents live in diagnostic land all day long because there are so many more variables with the age of cars, past history, and all that, so consider what I just said earlier as some extra clarification.
We sell peace of mind that comes with a well-maintained and operating vehicle. We're the ones that think in ‘labor time and parts price‘ while the customers think, “When am I getting my car? Will it be fixed right? How much is it?”
And so, we project our business model on the customer in just about everything we do. Like, “Hey, we need an hour to diagnose it, but we're not going to fix it, but we got to call you, but we don't have a time to call you because we're so busy.”
It's a disaster!
Jeremy's shop is definitely not short on customers, and they have a great system of communicating with customers. If he gave himself not $26,000 but a little bit to work with, it would save the phone calls, the back-and-forth, and it also gives his technician more time. It would cut down on comebacks, too, because a lot of times you would put in an injector, then test drive it only to find out that it's something else, but then the customer's like, “Oh no, I thought it was the injector.”
Another thing that we didn't talk about as much as we should is that the first thing on this is trust. You have to have a relationship built. You have to have that confidence, and the client has to have confidence in you that you're trustworthy and that you'll take care of their $2,500 budget. You have to connect with the customer on a deep level first, so presenting a repair authorization might not necessarily be something you'd want to do with a first-time customer you've never met before.
Now, it's time to move onto our main topic…
Why do they say not to talk politics? I always tell people I'm happy to talk politics, but then they say, “Don't talk religion, and don't talk politics!”
I'm always of the opinion that I don't know it all so you can change my mind. People get super polarized like, “Oh, you're wrong, and you don't know what you're talking about,” but then they lack any insight that isn't from TV, right? And so, I want to be careful when we talk about what candidate would be better for the industry that it isn't about, “Oh, they're going to take your guns,” or whatever the latest little fear factor is. We're talking about actual business; what's better for the industry, not which candidate we like more.
Politics aren't that polarizing for me. I think it's ridiculous that anybody would be polarized like they think they're in the White House getting briefed by the CIA and they know everything that's going on. When it comes to politics, we know what they let us know, but if you go back and read old CIA or watch the documentary on Obama from last year, they talk about how everything we knew was carefully managed. I think that these sort of things are way easier looking back in four years than they are right now because our decisions now are made emotionally.
Personally, neither one of the choices for President represent how I feel so it's a pretty curious thing why we only have two choices…
Those of you that have been hearing about Jeremy's political views on the show might be shocked that he not only feels the same, but also that he believes overall that Biden will be better for our industry. How he explains it is that the one word with Trump is ‘chaos.' The economy could take off again, but there's a lot of fear based around him getting re-elected from the masses compared to the very stable economic models in place during Obama and Clinton's terms, so that might repeat itself with a Biden presidency.
Christian claims that he's not educated enough on politics to be able to have a really, really good discussion with somebody about it, probably on purpose, but back when he got into the industry in the 90s, he never felt like he needed to personally thank ‘Slick Willy' Clinton for his paycheck. To him, the president never determined his paycheck so from Christian's point of view, there's so much opportunity for success in our industry no matter who is running it!
We can only do what we can control, right? We can control the customer experience, we can control our attitude, how hard we work, our focus, and our adaptability. I really feel, especially living in California, that I don't have any effect on the presidential race whatsoever because it's going to vote Democrat anyway. I will say living here in Los Angeles that the Democrats running California are terrible leaders. I'm sure in history it's happened before, but in my lifetime, I've never experienced leadership so bad and so blind. It's insane what's happening down here with crime rising and people looting…
But it's kind of the same thing with Republicans. There's this book, What's the Matter with Kansas?, about how the Republican Party doesn't represent the people that actually vote Republican. People in my family would vote Republican because they're diehard Christians, but Republican policies don't help them whatsoever. The thing with politics nowadays, and I've experienced it firsthand watching people that I know, most of what's happening in government doesn't represent the people. It's big money. Like the PACs and all that. It's huge money, and if you want to be a Senator or Congressman, you have to play all that so you're not really representing the people that vote for you very much, if at all.
I personally think the fix is you have to get rid of all those PACs, and you have to limit what people could donate. Those PACs are anonymous, too, so you don't even really know who's in them. If you eliminated those and cap donations at a thousand or something, then the money that was raised would be more in line with what the people actually believe and you'd have more of a voice. I think most of the people don't have a voice today because it's driven by the commerce and the big companies.
Go back to the founding fathers. What if government went back to serving, or Senators and Congressmen didn't get paid? What if they had to earn their living out in the real world and they just serve their time? You wouldn't have people sitting in Congress for 20 and 30 years. You'd have them go in, do their service, fix things, and then go back to work. It would be a government of the people, for the people and by the people.
Also, the thing with ‘Defund the Police' and all that.. they need more training and resources. We need more police and you need to train them better. Right now, they have like a week in training every year. If you completely take away police presence, there's going to be at ime when people stand up and say, “Enough is enough,” and they're going to take the law into their own hands, and people are definitely going to get hurt when that happens.
That's the part about Biden that scares me. He placates to the far left because that's his side. But who knows, maybe he's only going there to get elected and he won't actually do it if he's in office. What's been interesting about this whole discussion is that not only is Jeremy leaning more towards Biden in terms of which candidate would be better for our industry, I would lean more Trump. Like I said, neither one represents me, but I think Trump's more pro-business and more about the police, law and order.
I'm curious what our audience thinks. Please don't comment if you're so polarized that you can't have a discussion about this because I'm looking for a real discussion that's something articulate and thought out. Tell us how you feel, and maybe we'll talk about this again if we get some good discussions going.
Now that the touchy stuff is out of the way, let's go to the questions:
“Hello, my name is Eric. I've been in the automotive industry since I was 16 years old. Now, I'm part owner of two big European shops in Indiana. The hardest part of the profession is to build good teams, especially finding good techs. I think this problem is both independent and dealers, so my question is: what's the best way to find talented mechanics?”
We have a course called Technician Tree that'll teach you how to do it. It's probably got eight hours of content, and there's no way we could go through all that on the show.
The first step, most of the time, is to stop saying that it's hard to find techs, and start getting good at it.
The other thing I would say is basically do the opposite of what everybody else is doing. All the ads ar the same, the approach, the mindset. If everybody's saying it's hard to find techs and everybody's doing the same thing, then stop saying what they're saying and do the exact opposite!
There's been a couple times where it's been challenging to find techs, which means that we just had to keep trying, but it's never as ‘hard' as everybody thinks it is going into it.
It's always funny to me. I'll be on a strategy session and they're like, “Oh, we can't find techs,” and then I look them up on Google and their ad on Indeed looks like it was written by the HR department. That's a waste of time because Indeed only puts it right in your area, and it's super expensive.
Do everything different. That's the answer. You can buy our on-demand and take the Technician Tree course, and in a week's time, you can completely change your trajectory. Every tech is worth 12 grand a month in gross while our on-demand is $250 a month.
“Chris, man. I love Millionaire Service Advisor. I'm four years in as an advisor, and I love my job for many reasons that you mentioned in the book. I quickly grew to be the #2 advisor through consistency, and I've recently taken the #1 spot and busting my ceiling! I'm also being groomed for the service manager position by my director. The biggest issue I have is I don't know how to slow down. I consistently end the month with 50+ more ROs than anyone else, and it leaves me with little time to have good follow through and regularly update. COVID has made it worse, as we're down at least one advisor so I'm left running circles and most assuredly missing out on sales because I don't have the time. Not to mention, leaving customers having to chase me down. I can't stand for a customer to be on the drive waiting and then I just can't get them. I always ask anyone remotely available to get them, but generally end up falling on the proverbial sword, knowing I'm already overloaded. Any advice on this or do I just embrace the suck and keep making the money that I am? Okay, my excuses are out of the way. I'm going to do everything I can to do as you say, and update regularly. It's always been a weak spot for me. You've shown me– no, wrong word, inspired me to fix this issue and see how much higher I can push the envelope. Now, I'm going to read Irreplaceable Service Manager before rereading Millionaire again. Thanks.”
I wish sometimes that these were call-ins and not questions.
The first thing is, are you on dispatch or teams too? Because dispatch creates a whole ‘nother issue sometimes when you're an advisor.
Jeremy's got three things:
You're never going to slow down because that's just who you are, so embrace the suck.
Get system in place that allows you to communicate proactively with all of your client base.
If I were you, I'd hire an assistant paid for out of my check, even if it's just four hours a day. If you're already producing at that level, you could hire some part time help to come in as an independent contractor for a $1000-1500 a month, and then you can really break through that ceiling.
The other thing I'm curious about is how do you make your appointments? I would spread your appointments out to be every half an hour. It sounds to me like you might be doing them every 10 minutes. Also, pay attention to how many waiters an hour you guys are making appointments for. Limit the waiters to one per hour, per advisor, because that's another thing that throws you off: If you write four waiters in a row, a waiter is harder to deal with than somebody that's gone and at work. You also lower your chance of then adding additional stuff whether they need it or not. If they're waiting, they're gonna be like, “Oh, that takes another two hours? I'll come back.”
And so if the car's there and they're not waiting, you have a better opportunity and you can manage the experience more. I would pay attention to everything like how long it takes you to write them up, or how much of an interval is beteen each appointment. 30 minutes might be the right one for you, because then you can call in between. We usually do 20, but that matters a lot.
All these little details matter; how much you're getting upfront, the repair authorization, what your'e telling customers upfront. If you create key throwers and you have a lot of equity with the customers, you can tell them, “Hey, we're really busy today. I'm going to need it until tomorrow,” and just get that awkward thing out of the way right up front. To save yourself time, tell the truth more!
You got to tell them, “Hey, it's going to be this much and I need it until tomorrow. We're a little bit behind, and we've had a couple of big jobs. Tell the truth instead of always trying to please, because it usually ends up buying you more time. If you have that equity with customers by taking care of them and petting the dog, then you can withdraw from that equity.
The other thing with that is your technicians. When I was an advisor, one thing I would do with the techs is my team lead would diagnose the cars right away. That was kind of his role to check them out so I wasn't waiting until the end of the day to have them checked out. Whether you're on dispatch or teams, it kind of matters how you can set that up. Sometimes, when you say teams, people think the techs are pooling their hours, but it's really lateral support.
Lateral support allows you to take better care of your customers and to create a system that fits your style as an advisor because you're working with them. It's not like, “Hey, we're putting it in line in dispatch and seeing who gets it.” When I was an advisor in a dispatch shop, it was really, really hard for me to take care of customers, and all the advisors would cheat it and say theirs were waiters or had an early out time, and that just imploded for everybody.
I find that shops that have a high rate of just drop-ins is because they allow that. Most customers would rather have a time that's dedicated to them. Most of the time, especially in dealerships, they run shorthanded. The advisors can't even write up the customers, let alone answer the phone, and so you perceive that customers just want to drive in, but you're not making it easy for them to make an appointment. Imagine going to the doctor or dentist or something and not having an appointment. It's ridiculous.
I've had Toyota and Nissan guys go, “Oh, our customers, they won't make appointments,” and then three months later, we're 80% appointments. That's never been the truth! That's their perception, but what they do is make it really difficult to make appointments. For us, controlling what's coming in controls what's going out, and it controls the experience. To say, “Let's just open the doors every day and see what the hell happens,” that's not an approach…
An advisor can write like three an hour and have time to call customers back. You only want one waiter an hour per advisor, depending on the car brands. Get them in early, the whole thing, all that matters. Those little edges add up.
Great question. I think that these things we're talking about are going to serve you as you go up and become a manager. You can start to understand as an advisor how you're a victim to the systems that leadership puts in place. I always felt like, “Hey, now that I'm in charge, I'm going to set the advisors up for success by controlling the appointments, by controlling how much time they have to spend.”
A lot of the times we think in leadership that our advisors aren't very good, but really we've done everything that we can on our end to sabotage them. We think they can write 25 a day – all waiters – and be successful, and that's not the case.
That was a fun, exciting show with great questions. Once again, thanks, you guys, for watching and listening, and we'll see you next time on Service Drive Revolution!