Happy Thanksgiving, everybody! Today’s our special Thanksgiving episode of Service Drive Revolution, and we’re going to talk about the top five things we’re grateful for. I have my list of five things, and number five is going to surprise you!
But first, things seem to be opening up a little bit. We’re traveling again, and I don’t really know how to feel about it…
Christian and I are going to Ohio for a great client of ours, a leadership meeting thing, and then we’re going to Nashville for a little research. Then, Christian’s going to one of our clients in Florida for a couple days, then he’s going to hang out with his kid for a weekend, and then he’s headed down to an old client’s brand new store, so really he’s doing four things in six days!
The other thing that happened is that Christian got a tattoo, but not just any tattoo… It was his first one and he went big.
It’s on his left rear shoulder blade and it’s a wolf. A beautiful wolf.
He went all the way to Vegas to get it from DJ Tambe, and he waited a couple months for the appointment. World famous, true professional; and it took six hours in the chair.
It’s really detailed. You can even see every hair on it. It’s incredible.
In case you’re wondering why a wolf, it’s based on the story that Christian admits is cliché by now, but it’s the Native American story about the two wolves that live in each of us – a good wolf and a bad wolf – and the one that wins is the one you feed.
That’s what I love about tattoos nowadays. They’re pretty much modern art and there’s a vision behind it.
We’re also working on a pretty neat concept in our group which is these coins. Think of them like karate belts where you start from white and eventually get to red, brown, and black at the end. So we’re making coins instead of belts and we have a local artist that we use for a lot of stuff.
Think of it as kind of like a spiritual journey, because our coaches literally reinvent themselves. And then the elite group is getting rings that look like world series rings or super bowl rings. It’s a huge accomplishment.
So that’s all very exciting, but let’s get to our Thanksgiving list!
I think everybody listening to this should be thankful for their customers
I think we have the best team we’ve ever had. We got rid of all the narcissistic weirdos, and we’re having more fun than we’ve ever had.
We live in America and Canada
I’d move to Canada. I like Vancouver and Calgary a lot. Toronto’s a huge let down, honestly. It’s the New York of Canada, but it’s not that cool.
There’s so many great books. I have five going right now and I can’t even pick my favorite one.
I feel like we give parts too hard of a time, and I think with every shop we go to, the technicians blame and complain about parts. That needs to stop….
…It needs to stop because the parts manager needs to get out of his office and actually go do something! He’s sitting at their desk, checking email. Parts managers, you don’t need to check your email every day! Check it once a week!
All jokes aside, we’re very grateful for everything that we have. We wish everybody a Happy Thanksgiving, and now it’s time for our questions.
Remember: if we play your question on the big show, we send you a swag bag; trucker hat, coffee mug, T-shirt. The number for you to call in and ask your question is (833) 3-ASK-SDR, and also, it doesn’t just have to be related to the service drive. If you don't know how to spell that on the phone, it’s (833) 327-5737.
“Hey, it’s Melissa at Jeff Wyler in Springfield. My question is, with a multi-brand service drive, I’m finding it hard to maximize or increase my RO account without the Wild West schedule causing issues with customer satisfaction in surveys. I run three separate schedules, have one express lane that is set off of all three and advisors who write for all three brands. Would you suggest one schedule for all three brands or how can I best increase my RO count and maximize everything with keeping the status quo? Thanks so much. You guys are great.”
Christian’s got a good answer for this which is that the equalizer with managing three brands is that all of your advisors can write any one of those three brands. The brands become irrelevant and it’s more about controlling everything. The thing with the Wild West mentality is that you wanted to make sure that it’s free and easy for everybody to come in, but the more structure you have to it, the more your customers appreciate it and the better you can manage it.
The answer here would be to make the schedule for the advisors. Then, if you’re really growing your traffic or you have more traffic, add more advisors. But an advisor should only write 12-15 a day, and then scale it form there. So if your advisors are writing 16 a day, add another advisor and get them down to 11 or 12 and your numbers will go up because they’ll have more time to spend. Good question. Thanks Melissa.
“Hey, Chris. My question is I’m a new service manager of a store in a Metro Atlanta area. Took over about a year ago, right before the pandemic happened. Luckily, I’d made some changes and got things going in the right direction, but now since the pandemic has gone on, my owner seems to be more concerned about RO count than he is about us doing better net profit-wise than we have the previous three years. I just find it hard to wrap my head around doing better form a net profit standpoint without letting anybody go during all this and us being more worried about RO count. Am I missing something there or am I right in my thinking? My name is Holden Scott and my phone number is ***-***-****. Thanks.”
Okay, so a couple of things:
One is you need to understand how to manage your boss. That’s what’s going on here. Most of the time, dealers and general managers come from the front end. They come form sales. They don’t understand fixed ops and the only way they know how to process success is how many units are going over the curb so they revert to RO count. So I would have two different dialogues:
I would agree with him and try to grow your RO count while you’re getting net profit, but you can do both. I would just agree with them and say, “Yeah, we’re trying to get our RO count.”
Listen to what he has to say. Don’t tell him, “Hey, I know how we can get our RO count up.”
Let’s do this like a Christian joke.
“Hey, want to know how to get your RO count up?”
(How do you do that?!)
By selling more cars!
Because if you’re selling cars, the service department’s going to be busy! So yeah, I would just agree with them and listen to what he has to say. But do so with the understanding that most of the time your General Manager or Dealer comes from Sales, so they only know how to measure success by the number of units, so they think RO count.
My best advice would be to learn the financial statement and focus on your net to gross. But the honest answer is that it isn’t a choice between maximizing your profitability or your RO count– you can do both!
Manage up. I’ve always had to do that in my career. Christian even does it to me!
But please, do us a huge favor and have a great Thanksgiving. Eat all the turkey, take a nap, and we’ll see you when you wake up next week on Service Drive Revolution!
This week on the show, we interviewed a TikTok star, which is basically like a celebrity to us. Mia Griggs does great stuff where she role plays as both the customer and the service advisor, and it’s hilarious. She has over 10 million views and, recently, we had the chance to catch up with her and do an interview. Here’s the transcript of how it went, followed up with this week’s questions:
We love your videos and the first question I have to ask you is, when you talk about females in the industry, do you think that it’s changed in the last 10 years, or do you think it’s still the same?
That’s a good question. I think it’s getting marginally better, but that’s only because there have been laws put in place to protect certain marginalized groups, I guess would be the best way to say that without being inflammatory. But I think even with certain laws in place, dealerships, shops, and even customers in general still get away with a lot of really crappy behaviors, unfortunately, and I could go on for hours about that. I’m sure it is getting a little bit better because it’s becoming more common to see women in the field, but it’s still very uneven, I guess.
Yeah, I think – and I think Christian could pipe in here, too, but – I feel like the employers, whether it’s dealerships or shops, have come light years. But I still see quite a bit [of] customers challenging female managers or advisors, and it’s always surprising to me, but I feel like that still hasn’t changed as much. But I feel like [with] the industry as a whole, there’s just so many great female leaders, and some of the top advisors in our group are females, and so I feel like that has changed dramatically, don’t you, Christian?
I would agree a hundred percent. I think that there’s something to that, and that’s one of the things I see your videos on most is that customer condescension. And I can only imagine what that’s got to be like for you, after 10 years of dealing with it, right? And I think it’s amazing that I don’t even know all the time if the customers know that they’re like that. I just think that it’s somewhere totally wired into their system that the woman can’t possibly [be] someone that—They have to talk to a man, and I’ve seen it so many times. That thing where [it’s] like, “Can I talk to someone else?” I just want to club somebody. I get it. The frustration and everything like that, but I would like to say from the owner side – at least what we’ve seen – is that they are way more embracing to females. And it’s amazing to me how many times a female will get into a situation that’s all male-dominated and kick everybody’s ass. That happens regularly with us. I think that the performance is helping to change the industry, for sure.
Definitely. I do think the inside of the industry [is] working harder to make strides towards being more equal between the genders, but you’re 100% right. The customer base has not changed really, at all. And it really depends on where you’re working, too; what the demographic of the area is, too. I’ve worked in places where 90% of our customers were elderly people who are maybe a little bit more set in their ways still, and I’ve worked in places that were more yuppie millennials that are my age and they’re a lot more open-minded and progressive, I guess. A lot of that plays into it, but I agree a hundred percent.
You know what’s interesting, Mia, is we have a lot of car clients and then we have truck clients, and it seems like it happens more with the car clients than it does with heavy-duty truck. And you would think, truck would be more guy-ish or whatever. That’s always interesting to me that it’s less there, which I don’t know, some of this stuff never makes sense anyways.
Yeah, I noticed that, too. For sure. I worked for a company that – I’m not going to say the brand because I just don’t want to get in trouble – but they don’t really sell trucks, the manufacturers that I’m talking about, and that was the worst customer base I’ve ever dealt with.
If there’s female advisors out there, in a constructive, positive way, what is it that you do? I see a lot of the female managers in our group will laugh it off, but how do you handle it in a positive way? Or how do you create a positive outcome from buffoonery?
That’s a tough one, definitely. It depended on the place that I worked at, and this sucks to say, but it was really up to the service drive manager and how they wanted to handle it because I’m assertive – I’m an assertive person – and if you are incredibly disrespectful to me, I probably won’t be very nice to you. But I’ve also learned every time I would start at a new shop or a dealership, I would say, “Hey, if this happens, how do you want me to handle it?” And I would just do whatever they said. Some of the dealership managers would be like, “Just smile and just give them what they want,” and so I’d have to do that. If they were like, “Well, I don’t want to talk to you, I want to talk to a guy,” I’d be like, “Okay, Brad, can you come help this sir?”
And then, at my most recent shop – not the one I work at now, but my last job before I got laid off due to COVID – my boss was like, “You’re allowed to stand up for yourself. If they refuse to talk to you because you’re a woman, you can kindly (keyword) tell them they can take their business elsewhere.” And that was amazing to me that they allowed me to advocate for myself. And so I did. I was never rude. I was never mean. I was never yelling or anything, but I would just very kindly say, “You know what? If you’re not going to allow me to help you, I don’t think I can help you further so you might just want to go somewhere else.” And 9 times out of 10, that usually knocked them off their high horse and then they let me help them, and then they realized that I was really good at my job and there you go!
The takeaway [is] they reassess their position in a way?
Yeah, pretty much. When you put your foot down, it – I think – knocks a little bit of sense into them.
You have a really funny TikTok about that, where you pretend you’re the guy advisor and all that. I think that was one of the first ones I saw, and I thought it was hilarious.
The long face thing, too, is great. Where she is the customer in the long face. Those make me laugh.
You’re very funny, by the way.
Yeah, super funny.
Okay then, one thing you have a position on is how do you avoid getting taken advantage of as a service advisor?
That’s a tough one. Are you talking about from a customer standpoint or from an employer standpoint?
I would start with employer.
That’s a really good question. It’s tough because, for a long time, I didn’t know how to advocate for myself and I didn’t know how to prevent myself from getting taken advantage of. I always say, if you’re interviewing for a service advisor position as a woman, you have to ask the tough questions. You have to know exactly, like I said before, how they would expect you to handle a situation like that. And then, don’t be afraid to stand up and speak out when things do happen.
When you’re getting harassed or you feel like you’re not being listened to, you go to HIR and if HR doesn’t do anything, go above them. And I think people nowadays are so scared to stand up for themselves because they’re afraid of backlash. But even if you do get backlash, standing up for yourself when stuff goes south is the best thing that you can do for yourself. And if you lose your job because if it, fine, you shouldn’t work for that company anyways.
Okay, well, how about customers/ What are your top three secrets as a service advisor? Now moving this towards just connecting with customers, I believe an advisor’s role is to collect customers and make friends. And so, what are the top three things that you do, as an advisor, to take care of customers? What is the secret?
The secret, which probably isn’t a secret because I’m sure this has been beaten into our brains over and over, but my number one thing that I value the most is customer rapport. And something that I had to learn along the way was, when you first start at a new shop or whatever it may be, your customers aren’t going to trust you because they don’t know you. And there’s such a negative—the automotive industry in general has such a negative stereotype. You have to learn that building customer rapport can take some time, but once you do, you have customers for life. And I really saw that happen at my last shop, and because I was there for almost two years, and when they come in like, “Hey, how was your kid’s baseball game?” And you become family with these people.
My first piece of advice is: just know that customer rapport does not happen on your first day. It’s going to take some time. You’re going to have to put in the work. You’re going to have to build that trust, and once you do, I mean you’re golden; you’re set!
My second piece of advice is to not take things personally. Also something I struggled with for a very long time, because I’m obviously a very emotional person. I’m very animated, and so I take things personally. When customers would get mad or upset with me, or they would be super angry for whatever reason, I took it upon myself as my problem or my fault and I’d get really upset about it. Not to the customer, but I’d go into the back and be super mad about it. And I had to learn that you have to put yourself in your customer’s shoes and you have to think about why are they mad? The reason that they’re mad is probably valid, even if they’re not treating you with respect. Even if you, as the advisor, don’t think that it’s a valid reason to be upset, they’re upset. As hard as it is, put yourself in their shoes and just be empathetic. And when they are being angry, they are yelling at you or whatever it may be, it actually does help manage the situation a little bit better. And also, [it] helps you calm them down because it’s not just a back and forth of they’re angry so you’re angry, and then it builds up. It’s easier to defuse the situation when you put yourself in their shoes.
And then the last thing I would say is probably… This may not make sense to a lot of people, and it probably sounds bad, but when you’re at work, you’re at work. You’re not there to make friends. And I know a lot of people are like, “Well, your work is your family,” and I do agree with that to a certain extent. But as somebody who [was not] dealt the greatest hand in the industry, I think you have to learn to protect yourself, and this goes for men and women. I’m just clarifying that’s not just women. And, obviously, treat your coworkers with respect and treat them the way you would want to be treated, but also protect yourself. Protect your heart and protect your paycheck. Because, in turn, at least for me, that helps me be a better advisor because I could put more time and energy on my customers, and not trying to deal with drama on the drive, if that makes sense. And just be an unbiased person on the drive and, for me, it made my life a lot easier.
The first one – and I love that you said family – the rapport and then the second one you said empathy, which I love. The third one, I don’t agree with that and that’s one that I’ve had disagreements with shop owners and dealers and managers because to me, I don’t know, I feel like I’m friends with everybody that works for me. And I feel like people end up feeling that way because they’re not honest about things. I feel like people hold things in and then they overreact, but if you’re authentic and honest in the moment, I don’t know, I wouldn’t want to work with people that I don’t feel like are my friends. I would hate that environment. I wouldn’t want to work… I wouldn’t want people working for me that I didn’t like, because then I would feel like my customers wouldn’t like them. I don’t know, but I guess you’re coming from the point of view of an advisor, too. You have to work with whoever’s there so it’s a little different.
Yeah, and just really quickly, I think your perspective is totally valid, too. And I’m not saying that I go to work and ignore everybody and don’t get along with people. I get along with my coworkers, every single place I’ve ever worked at. I’m the person that is very friendly and outgoing, but I still keep people at a distance, because I’ve been screwed over so many times and I’ve been stabbed in the back way too many times by coworkers that, for me personally, I just have to protect myself in order to—I’m not going into it, but there’s been several instances where my CSI bonuses were being sabotaged, and I lost most of my paycheck because of it, and that’s happened on several occasions. And so, for me personally, I just don’t… I guess I’m just jaded – and I won’t even lie – I’m a little jaded and I’ve just had too many bad experiences with coworkers to want to have that family connection with them. And I’m not saying that nobody else should feel that way, that’s just my personal opinion.
I feel like if I worked with you, I’d be laughing constantly.
Yeah, and I’m not with you. I’m naturally a very bubbly person. I’m a Gemini, that’s how we are.
I’m a Capricorn. What does that say about me?
I don’t know, I just know that Geminis are—
Possibly the funniest people on the planet. 100%.
Are you a Gemini, Christian?
Yes, I am.
Biased. Well, we’re huge fans, Mia. Anything you want to talk about in wrapping it up.
No, I just think you guys are great, and I’m really glad I discovered you. And I’m super honored that you guys even talked about my TikToks on your channel. I think that’s really awesome and it’s appreciated.
Oh, we’re huge fans. You’re so funny, and I hope you keep doing it. Everybody, if you have TikTok, you need to go to chaotic_feminist and follower her and watch. And then, she also has a podcast. You started a podcast?
And it’s called Cars, Chaos, & Coffee. That’s a great name. Well, thank you so much for coming on. Everybody, check out Mia, and hopefully we’ll talk again soon. We’ll tag you on TikTok when we start doing them. Thanks, Mia.
That was pretty fun. Now, it’s time to go to questions. Remember: if you call the Service Drive Revolution hotline at (833) 3-ASK-SDR and we play your question on the big show, we’re going to send you swag. People hit me up on Instagram all the time like, “How do I get it? How do I get a trucker hat? How do I get a coffee mug?”
Again, call in with a good question, and if we play it on the show, we’re going to send you a swag bag! If you don’t know how to spell, the number is (833) 327-5737, but if you have any questions, we’re here at your disposal.
Also, you do not have to keep the questions to just service drive-related things. If you need relationship advice, financial advice, I love helping people fix their marriages or, hey, if your girlfriend cheated on you, call in and we’ll figure it out!
“Hey, guys, I have a great situation and question for you. We have a vehicle in the shop. Customer authorized a diagnostic repair of approximately $1,600. He was made aware that the repair may or may not fix their symptom and we would need to go further if not. Customer agreed, we replaced the part, and of course, it did not fix the problem. We spent a little extra time for free, unapplied time, trying to research, remedy the problem, got the manufacturer tech line involved and, long story short, the next repair is replacing another part in the car of about $2,300 repair.
The customer is, of course, very upset and frustrated and they believe that they should not have to pay us anything because it did not fix the problem. And on top of that, they also believe that we’re supposed to remove the part and put the old part back in at no additional charge. Looking for some advice. How would you handle a situation like this? We are at the point of potentially doing a mechanic’s lien. Looking for suggestions and if you guys have ever run into this in your career or any of your businesses that you deal with. Thanks, Bob, from Cuba.”
Bob from Cuba? Communist country with the good cigars?
Okay, Bob. First of all, good question and thank you so much. This is something that I would believe that, if I have been working in service for more than a year, you’ve seen this. I’ve certainly seen this a bunch of times in my career. It’s not unique. I think there’s a couple of lessons in this.
One is in the frame upfront. The customer needs to understand, upfront, that we pay the technicians by the hour and we’re charging for their time, just like a doctor or a lawyer if they spend a lot of time on something. If you go to a lawyer, they don’t guarantee the outcome of what they do, and so that’s always a frame that I’ve used in a complicated scenario like this.
Think of it as like technicians having a degree in working on cars, and it’s just like a law degree or a doctor. They’re a car doctor, in a sense. We use that analogy a lot, and we have to pay them for their time and sometimes diagnosis is more like detective work. It’s not cut-and-dry. And they have to replace one part to find out that it’s another part, and you have to do it through a process of elimination. But that’s something you need to say upfront. It never works as well in the end.
The other thing I would say is, when it comes to repair authorization – and we addressed this last week – is it should’ve gone higher. $1,500 wasn’t going to fix the car. I like to push into the pain a little bit with the repair authorization and say, “I’m going to give myself $2,000 to work with, but it could be more,” and see what they say. Read their body language. Pay attention. They will tell you if you push into that, “Oh, I’m not spending more than $1,300,” or, “I’m not spending more than $1,500.”
And if you’re calling the manufacturer hotline, you’re probably with the brand, so maybe call your factory guy and try to get some goodwill; try to get some help. Even if the car is way outside the scope, sometimes they will help you with that. I would try for that.
And for everybody reading this: remember the words I use because words are very important. When you’re explaining to a customer how we diagnose a car, use the term process of elimination. Because what the customer has in their mind is you’re going to know exactly what it is and that’s going to fix it.
“My name is Ice. I’m from Seguin, Texas. I am currently a service advisor and I’ve been studying for about six months in March when this whole COVID thing happened. I’ve been in the industry for six months now and I haven’t stepped foot before then. I have gradually seen improvements in my work there, but I haven’t been getting the proper recognition. When I started, I got on a pay plan of hourly and now six months into it, I’m not able to progress my pay plan. However, I am now a full-time advisor but still hourly. I have gone to the owner who has then referenced to me back to my managers, who have been denying me of any future profit, growth, anything until a year, and I believe I’ve been working hard enough and I’ve shown my worth there to have a pay raise within my first year evaluation.
I feel like I’ve properly talked to my managers and my owner on how to get this compensation, but I’m not seeing any growth. I am a person of growth so I am currently thinking about stepping away, but it’s hard when I know I need a year’s worth of experience to move from another dealership. If you can help me out with just trying to, I guess, understand how that works or if I am being taken advantage of, like I do feel, that would help out a lot. Thank you so much, I appreciate you all for that.”
That’s a badass nickname, Ice.
Okay, my opinion is that what you have right now is an opportunity. And you mentioned in there and it sounds like you have a pretty good head on your shoulders and you understand that there’s a price to pay, but you need to be there for a year. In the long run, let me tell you how much advisors make…
You ready? Can I present this like a Christian joke?
What do advisors make?
(I don’t know, Chris, what do they make?)
Exactly what they’re worth! That’s what they make. And so focus on your numbers. Here’s the thing that you have right now: you have an opportunity to put together six months of stats where you can walk into any service department and say, “Listen, this is what I do. These are my numbers. These are the numbers I’m putting up. Would you like somebody this good? Customers love me. I sell.”
I think what you have right here is an opportunity to put together a track record and focus on collecting customers and learning everything you can about the job and beating your numbers every month; every month. But if you can, at the end of the year if you’re putting $120,000 a month in parts and labor, you have high hours per RO, and you have great customer satisfaction numbers, you’re going to make exactly what you’re worth. And if they don’t want to keep you where you are, you’ll go somewhere else.
Chances are, at that point, they’re going to keep you. You have an amazing opportunity. We all had to pay a price in the beginning. I got passed over, I think, five times to be an advisor. I wasn’t paid commission right away. It’s an opportunity. Once you do become commission, you’re going to make a great living. But just remember, it’s about collecting customers.
You’re in luck because, in addition to your swag, we’re sending you the Millionaire Service Advisor book, also! Read that book, immerse yourself, and focus on your results and your numbers, even if you have to eat Top Ramen for twelve months.
I ate Top Ramen at the beginning! I was sleeping in our band room because I had to drive back to my mom’s which was an hour away. There were nights where I’d sleep in the band room and then go to work!
Great questions. Thank you so much. Remember, the number is (833) 3-ASK-SDR. Have a great week and we’ll see you next time on Service Drive Revolution!
Follow and learn more about Mia, aka The Chaotic Feminist:
I thought it was funny yesterday, we were on our bi-weekly call with our coaches that are out in the field, and when we were talking about the agenda for the call, and Christian was like, “I want to talk about menus.”
Because one of the things that we will do when we go into a service department is we will help them redo their menu: parts costs, then the labor, then what we actually charge for it, and then the effective labor rate. And so, we’d seen some inconsistencies in the way because he’s good at sniffing out those sorts of things, but he had some things he wanted to say.
So on the Zoom meeting, he said, “Okay, I’m going to put up some menus, and I want you guys to find what’s wrong with these menus.” So I guess what happened was I kinda forgot that it wasn’t just me and Christian and it was like when you’re in school and there’s always that kid at the front of the room that raises their hand before the teacher even finishes asking a question.
That’s basically what happened. I found things that he hadn’t, but Christian ends up saying, “Chris, with all due respect, do you think we could let the coaches start the exercise now?”
That was hilarious, but I apologized and said that if you put a menu or financial statement in front of me, I get super excited. I just want to go to work and figure out what’s going on!
So today we’re going to talk about the 10 Reasons Why Customers Hate Service Advisors, but before we get to that and questions afterwards, I’d like to thank everybody for tuning into our show because we hit a major milestone: 10,000 followers on YouTube and 1.4 million views! It’s crazy how fast we’re growing!
My goal from the very beginning with our content was, and I’ve said this a million times, I wanted to put out free content that’s better than the stuff anybody else charges for. I know that people play these in their training; our competition will play them in their training, and I know manufacturers will, too!
And so, I think that’s why some of these have so many views. I’m just gonna name some of the top ones here:
I’m noticing a trend here: that the title Service Advisor Training seems to rank pretty good…
Anyway, I have a feeling that going from 10,000 followers to 20,000 is going to happen pretty quick, especially with some stuff that we have coming.
So now it’s the Top 10 Reasons Customers HATE Service Advisors, and this is a list we round-tabled from customers that have never worked in our business, and there were so many things that we had to get it from like 74 to 10. They were really not shy at all; they had a lot to say so it was pretty fun narrowing it down to sort of a Greatest Hits list…
They lie about diagnosis
This one is pretty self-explanatory. Don't do this.
The car is never done on time
That’s assuming that the customer even gets an ETA in the first place. This can be avoided by telling the customer the truth. Most of the time, it happens because the advisor either didn’t tell the truth or they allowed the customer to tell THEM when it would be done.
Not done right
What that video I mentioned earlier that’s part of our top 5, Service Advisor Training: The Circle of Trust. Part of that circle is QC which is one of the most important steps but also the most skipped.
What’s also interesting is that people on the inside would think, “Well, that’s the tech’s fault that it’s not done right,” but that’s not what the customer sees! The customer blames not only the advisor but the whole shop!
So many times the advisor’s called “the mechanic” because that’s what the customer knows them as!
Charge for diagnosis while under warranty
And then lie about it… Nothing starts a relationship with distrust like that.
I have a story that’s in my book, The Millionaire Service Advisor, that was something that stuck with me forever: the true story of when I first got the job as an advisor. There were times where I would get to cover for advisors when they were sick and out and all that, but when I got my advisor number, I wrote service for these Boeing engineers on my first or second day. They had just bought Subaru SVXs which were like sedan sports cars because they thought they were engineering wonders (they were not).
This guy comes in, but nobody wanted to write him up so I walked up to him and said, “How can I help you?”
He goes, “Oh, I have an appointment. I need to drop this off.”
I write it up and it turns out to be a 20-something line RO of rattles, so I turn it into dispatch. Then, the dispatcher calls me down there and he’s like, “You need to get money for this.”
So the car had been in dispatch all day and I had to get money from the guy, and I didn’t know that Subaru’s warranty only covered rattles for the first 12 months. The point of the story is that the customer’s perception is that the car is under warranty, but depending on the manufacturer, the warranty might not cover things like alignment or rattles.
Different price depending on who you talk to
Especially if you call parts directly… I don’t know if it’s still a thing, but it definitely used to be that the parts department over the retail counter would quote a different price than what was quoted on the back counter, which is confusing and causes the customer to not trust us!
Can’t find one
Also known as “the empty desk.” Would you call that an oxymoron? How can you hate somebody you can’t find?
Also, how the hell do they all leave at the same time? That’s especially a failure on the last person. If there’s five people and they all go to the food truck one right after another and you’re the last one, that’s a failure on your part if you go, too!
They don’t call or pick up the phone
This one is also self-explanatory.
They can never hear a rattle
Like they’re deaf… None of the service advisors can detect a rattle.
It’s like the opposite of empathy. A lot of advisors don’t have empathy! They think they’re experts and customers are stupid. It’s like a chicken and the egg where we got customers thinking the advisors are stupid and then the other way around, but the customers are the ones spending money so we NEED to be more empathetic.
They don’t order the parts
In this case, it’s actually NOT part department’s fault, but advisors tend to blame it on parts anyway. I wonder where they’d get that idea…
So those are the Top 10 Reasons Customers Hate Service Advisors. Now, we’re going to go to your questions. Remember, if you call the hotline and we play your question on the big show, we’re going to send you some swag; T-shirt, coffee mugs, stickers, a notebook. It’s great stuff so call us at (833) 3-ASK-SDR. For those of you who don’t remember phone buttons, that’s (833) 327-5737.
“I have a question about your repair authorization process. I understand it, and it makes sense in some ways. However, what do you do when the customer decides not to go ahead and do the repair and now the technician has his, let’s say, his one hour or so into it? Now, because you didn’t get prior authorization for those diagnostic testing, now you’re out on the hook to internal your technician. Right? That’s my question.
Also, Christian, what happens to a frog’s car when it breaks down?
It gets ‘toad’ away.”
… I can’t believe Christian’s got people calling in jokes now…
So thanks, Jesse, for calling in that question, but listen to me: you’re not understanding what repair authorization is, my friend. The term ‘repair authorization’ insinuates that they authorized the full repair before you did it. Diagnosis would have nothing to do with it. If you say to a customer, “Hey, we’re going to figure out what your coolant leak is. I’m going to give myself $2,000 to work with. If it’s less, it’ll be less. If it’s more, I’ll give you a call.”
They cant decline the work because they’ve signed for $2,000!
And then the thing to think about her is maybe you should have said a higher number because the ideal with the repair authorization is that it’s kind of the worst case scenario. If I’m writing up a BMW and it comes in for a coolant leak, I’m not getting a repair authorization for a hose. I’m getting a repair authorization for the radiator, and the radiator is going to be like $4,000. If it’s the water pump, it’s $2,000, right?
I’m going with the worst case scenario, which is telling the customer the truth…
Another thing is that if you quote $4,000 as the worst case scenario, but then it ends up being only $2,000, then you’re a hero! Don’t be so shy on the number. The lesson here is that you probably needed a higher number to begin with because then the customer might’ve said, “Well, if it’s $2,000, I don’t want you to do it.”
If you only got $1,000 to work with, then only spend $1,000, but they’re still paying diagnosis, my friend. I know I said I’m sick of so many people asking about repair authorization, but we’re still going to be sending you some swag. Thanks for the question.
“Hey, Chris. This is Chris Mioli. I work in an independent shop: Essex County Auto Repair in Middleton, Massachusetts. I got a real question for you. We keep hearing it more and more, and I know we don’t give out prices over the phone; we never do. I need a really good, smooth answer of why, without having to get wordy and trip over my words with people. I need that one phrase that gets people to go, “He’s right. I need to bring the car in. It’s the only way to do it,” so that they understand.”
I think that’s more of a Jeremy thing to not give a price. I never believed in that, but yeah it should be the focus of the call to get them in.
When I was the general manager of a BMW store and nobody wanted to quote prices on cars, I knew back then that the trend was going to online sales and people just wanted it to be super easy. The thing I would try to do is ask questions.
If somebody calls in and says, “How much is a water pump on a 2015 Toyota Corolla?” I would just say, “Okay, let me ask you a couple of questions. So why do you think you need a water pump? Who told you that?”
And then I would say, “We get called on for price quotes all the time, and is this just about getting it the cheapest or is it about getting the car fixed?” That’s what I would ask.
Then, I’d say,” Well, I can get you a quote for a water pump. I’ll have to put it together and call around.”
You could ask them how much they were quoted by somebody else, and say, “If I beat that, are you bringing it in?” because you can get it in and recommend other stuff.
There’s tons of things you can do, but I think asking questions and then putting them on ice and calling them back with the quote is the way to go. Because a lot of times, if it’s just about price, you can find a cheaper part somewhere. If it’s just about price, you could find a used part. I know that’s a terrible idea because there’s no warranty, but I think it’s more about understanding what the customer needs and asking more questions. At some point, people just want an answer and you’ve got to give them an answer.
The answer is finding a way to build value in your shop and create doubt in the other shop. Nobody ever wants to call the cheapest plumber.
That’s it with this week’s questions. Thank you so much for watching Service Drive Revolution and getting us to 1.4 million views! If you aren’t already one of our 10,000 subscribers, make sure you click the bell icon on the YouTube video so you don’t miss out. If you have a question you’d like to answer on the show, remember to call (833) 3-ASK-SDR and leave a voicemail.
For special deals on our books and training, head over to offers.chriscollinsinc.com. I hope you have a great week, and I’ll see you next time on Service Drive Revolution!
So last week, we talked about the first half of my eccentric marketing book list, so today we’re going to finish it out. I’m sure people are going to learn some things, and others are going to be like, “What? What is he talking about?!”
To recap, we had an online coaching meeting where we were talking about the future of marketing, driving customers into the service drive, how to create loyal customers, retention, the psychology of it, and in the feed, some of the managers were asking, “Hey, what marketing books would you recommend?”
My mind locked up because there’s so many, so I spent a little time going through the office. These aren’t even the ones I have at home, but marketing comes in so many different applications because marketing is your reputation; it’s the customer experience, it’s the science of advertising.
Anything by David Ogilvy
So that first book with the pubic hair isn’t actually the first entry in this list… That would be David Ogilvy’s books. He’s considered one of the pioneers of advertising agencies. One of the books I have in my collection is an unpublished David Ogilvy; a selection of his writings from the files of his partners.
This was handed out at an event so it’s kind of a limited thing. Of his books that are available on Amazon, I would get Ogilvy's On Advertising and Confessions of an Advertising Man.
My Life in Advertising and Scientific Advertising by Claude Hopkins
So they’re doing a new thing where they put two books together, and you can get these two combined on Amazon. What’s interesting is that on the cover of this book, there’s a quote from Ogilvy, who I just recommended.
He says, “Nobody should be allowed to have anything to do with advertising until he has read this book, Scientific Advertising, seven times. It changed the course of my life.”
The legend, David Ogilvy, said that. Order those two books. It’s going to take you a while to read all that, and I don’t believe it’s on Audible.
Propaganda by Edward Bernays
Last time, I talked about how I like propaganda posters because, visually, they get attention, they’re very bold, and they make a strong statement. This book, by Edward Bernays, is all about propaganda. What’s odd about it is that I have two copies of the book, but I couldn’t find it anywhere.
Stealth Marketing: How to Outmaneuver, Outwit, Out-Market Your Most Formidable Competitors Before You Know What Hits Them by Jay Abraham
This next one sells for $1,000 new. I know you’re looking at a piece of paper, but that’s how much it sells for. It’s really hard to find a physical copy of it, but the good news is that you can find it online as a PDF.
The Boron Letters by Gary Halbert
I’ve talked about this one before. At the end of the last show, we talked about Dan Kennedy, and Kennedy worked for Halbert who’s kind of the pioneer for certain types of direct marketing philosophy. A lot of marketers came through Halbert’s office. I know a lot of people that hired Halbert or went to his conferences.
What’s funny about The Boron Letters is that they’re letters he wrote to his son, Boron, from prison. If you get this book and read it, you’ll learn a lot about marketing from a convicted felon.
There’s a website out there if you Google Gary Halbert where his kids still sell some of his stuff. So you can download a bunch of them from their website for free, but here in the office, we have the actual newsletters printed out that they sell. I think it’s like $1,000 for all of them, but they’re great to reference when you need subject lines or you’re writing copy for email or something like that.
I Want to Spend the Rest of My Life Everywhere with Everyone, One-to-One, Always, Forever, Now by Damien Hirst
We talked about Damien Hirst last time with his Warhol book. This one is a great book with lots of pictures, but he makes you work for it sometimes. Some of the stuff he writes backwards, upside down. It’s kind of interactive. You’ve got to pull little levers and do little things.
But you don’t become one of the top selling artists of our time by accident. He understands the human psyche, and I’m just starting to understand his process and the amount of research and work he goes to; it’s marketing! One of my favorite quotes of his is something to the effect of, ‘You’ve got to get them to pay attention before you can get them to care,” or something like that. If you can’t get them to pay attention, you can’t get them to care!
Theories, Models, Methods, Approaches, Assumptions, Results, and Findings by Damien Hirst
I like this one, too. It shows you the amount of research he goes into for stuff. A lot of it is about death so it’s not a real cheery book…
On Being An Artist by Michael Craig Martin
This isn’t quite a marketing book, but I love his art. What’s interesting about this book is that he was Damien Hirst’s professor in college so he talks about Damien in here.
I have a couple of his pieces. I actually just bought another one of his pieces in an auction (which I stole…). Many people are selling their art right now, like crazy.
Introduction to Color by Josef Albers
This one is kind of six degrees of my marketing books because Michael Craig Martin was a student of Joself Albers at Yale. Albers was part of the Bauhaus art movement from Germany and he came over here after World War II. Somehow, Yale convinced him to teach a course on color, and he did. After a couple years, he made these books as a gift to Yale that they screen printed and sold.
What’s an interesting takeaway about this course is understanding color and how colors interact with things. The premise is that color is perceived differently by everybody; the way the color interacts, the way the light sines on a color, the texture of whatever the color is put on. All of those change the color! I often referred to this book whenever I did my bulldog paintings. Also, Yale recently made an app only for iPads that goes through this.
So in there, he teaches you how to make three colors look like two and what colors go together or what colors clash, that sort of thing. The first thing that he would do is show everybody a red Coca-Cola can. Then, he would show 30 different reds and nobody could ever pick what the red was once the Coke can was gone, because it’s in your imagination!
And so I think that understanding marketing and understanding advertising is understanding how the human mind works and how interacting with things changes our perception.
Newspaper Design: Editorial Design From the World’s Best Newsrooms
I love these sorts of books. Just understanding how copy works, how the eye moves, what a headline should look like, when you should bold something, how things should be structured, the architecture of all that is very, very important.
Visual Journalism: Infographics from the World’s Best Newsroom and Designers by Gestalten
This second one is also great. Christian and I have looked at this book together because we were trying to figure out how to explain the financial statements in an easy way. It helped to look at all the different, crazy designs and ways that people present information so you can understand it. There’s an art to that!
What’s the Big Idea by George Lois
The rumor was that the show, Mad Men, was kind of based on George Lois’s work because he was pretty much the original marketer. I have a bunch of his books, probably every book he’s done. This one is probably my favorite one. It’s interesting. He did the logo for Midas in there. He also did all those Esquire covers, like the one with Muhammad Ali and the arrows going into him.
But his advertising agency did tons of crazy ads that were really, really effective. In this book, he shows inspiration for different ads that he created. You might not know that he created the ad, but you’ve definitely seen his work!
One thing I learned from him in another book is that he lives in New York and would go to the Met there every Sunday, so I’ll try to go to LACMA once a week and just look around and absorb it. It’s amazing, but it’s not open right now because of COVID.
The Art of Advertising: George Lois on Mass Communication
Same thing. Just his ads, but they’re legendary. Tons of different ads, magazine covers, ads for big businesses, logos, all of that. Everything he’s done in here is great, and you start to understand how a lot of things that you take for granted like logos and the way things are laid out have a purpose or meaning behind them.
My next little batch here that we talked about in the coaching meeting: it’s not about the commodity, you’ve got to tell better stories. Stories endear the customers to us, and some books from this publisher help with that.
First, we got Alchemy and Mysticism about understanding how people buy into fables and the visuals from different eras, but it’s genius.
Next, we’ve got The Book of Symbols. These are all from the same publisher, but there isn’t really an author. This one just goes through different symbols and what they all mean. Like, what does an egg mean to the subconscious? These sorts of things really matter. It’s broken up into different sections like creation and cosmos, light and darkness. It’s fascinating to see the subconscious meaning of all these things like a lake or burying somebody in the ground, because it kind of insinuates a rebirth.
All these different symbols along with the analogies and metaphors really help. These books are a great insight into that.
Man and His Symbols by Carl Jung
Same thing. I’m sure you’ve heard his genius referenced often.
An artist that I think does metaphors and uses words in a unique way that changes how you think about words and art is Ed Ruscha. He’s a famous artist from California. In one of his books I have, it says, “Howdy, Chris.” It was already signed when I bought it, and it’s just a happy coincidence that he signed it out to a Chris, but I’ll take it!
This one’s a classic. I like referencing these sorts of books about metaphors and fables when you’re writing emails or copy or a book or trying to tell a story, because these stick. The reason why these stories have been around so long is because they stick and they have a higher meaning. When you start to understand stories and fables, you start to understand that there’s a meaning.
For example, do you know the meaning behind Jack and the Beanstalk?
We all more or less know how it goes, but at the end, the giant chases after Jack and falls down the beanstalk to the ground, where he belongs. The metaphor is that you have a higher self and a lower self. Your higher self is the better part of you, the good part of you, the confident part of you while the lower self is the mean, old, angry giant. So sometimes your fear and negativity mixes with your better self and you have fear of failure, that sort of thing, but it’s an illusion! So, he cuts down the beanstalk and it comes back down into his lower self.
So that’s it with my marketing books. I hope you all enjoyed that, and that I sparked some interest. This is really just scratching the surface, but you can kinda see how eccentric I am, right?
I also promised a couple documentaries, so on marketing, I would watch The War Room which you can find on YouTube, and it’s about Stephanopoulos and Carville getting Clinton elected. The lesson here is that they had one mantra: “It’s all about the economy, stupid,” and how you get a president who was caught cheating on his wife to beat a sitting president, which rarely ever happens.
Then, there’s another documentary called Our Brand Is In Crisis. This one was made into a movie, but this is the documentary we’re talking about here and it can be hard to find. Watch what they do in Bolivia. They take a candidate who is polling like 10% to win in less than 60 days, and then it starts a revolution because they agitate everybody so much.
There’s also this seven minute video by the illusionist, Darren Brown, that you can usually find by Googling “Darren Brown advertising” and it comes up. Basically, the premise is that he gets two gentlemen from an advertising agency in London to create a campaign for a fictional business. And then, the campaign is exactly what he wanted them to create and how he got them to think that way and how our subconscious mind pays attention to everything. It’s funny, at the end of it, he says, “You have no idea how much work I put in to get this outcome.”
It goes to show you that we’re paying attention to very few things in our conscious mind, but the subconscious is 2 million times more powerful! Just understanding that when somebody comes into your service drive and it’s a mess, subconsciously, they think you’re a mess. They think you’re unreliable, you’re disorganized. They see other people waiting; all of those things feed their psyche and they all add up in their subconscious.
And now it’s time to end with our question for today.
Remember, we don’t read the questions ourselves anymore, so if you want to ask one, please call in at (833) 3-ASK-SDR. If you leave your question in as a voicemail and we play it on the show, we’ll send you some awesome swag; a trucker hat, a T-shirt… And by the way, it doesn’t just have to be about the service drive. It can be about the economy, relationships, your kid’s homework, whatever. We’ll give you the answer! (And if I don’t know it, Christian will…)
But also, there’s way too many questions about repair authorization…
“Hi, Chris. This is Cameron. I was just wanting to make a quick question. I’m 23 years old, I have five years dealership experience, and I have three years service advisor experience, mostly with Chrysler, Jeep, Dodge Ram, but also a little bit of Hyundai dealership experience as well. I just accepted a job with Midas as a store manager. I’m pretty nervous about it because I’ve never had a manager position before. I’m 23 years old. Their longest tech at Midas, he’s been there for 20 years. So, if you could maybe give some tips on store manager in the shop, a franchise shop, and also maybe give – because my long term goal is to one day be a service manager – if you have any tips for how long I should stay at Midas until I become a service manager or anything that I should look for, any type of information at all, I would really appreciate it. Again, thank you.”
Awesome question, Cameron.
So he’s 23 and he’s been in the business five years, so that means he started when he was 1. Right out of high school, I’m taking it.
Okay, the things that I would focus on as a new manager is the financials. If you can, as a manager, increase profits and sales, then you can name your price at the end of the day, really. It’s all about the profitability, which is driven by the customer experience. So you want to focus on really having systems that are scalable and consistent, so spend a lot of time doing things consistently, fixing the outcome of your systems, and making it a great customer experience. That’s easy!
The customers need to perceive that it was easy. It’s easy to do business. What’s hard is accomplishing it as a new manager, but if you pay attention to the customer, we’re either moving them closer or further away from where we want them to be in everything that we do. So make it easy to get in, make it easy to call and somebody picks up the phone, make it easy to get the car repaired, make it easy to get out of there, to pay the bill, find the car, all those little things.
We ruin the experience if they come to pick up their car and it’s gone, or the keys are lost. Those are all systems, or like our friends in Canada would say, ‘the process.’ It’s all about the process.
The thing that I found when I was 24 going into service departments to fix them was that the managers I was working with would be in their 50s or 60s, and they would say something about my age but I would just make it about the systems and the goal. I was 29 when I became a general manager with 400+ employees at a very large BMW/Mini dealership.
I tried to make mutual goals that we’d work on together, and there were a bunch of other things I did that eventually made my age irrelevant in their eyes:
I was fair
I worked harder than them
I showed up
I was serious about what I was doing
I was educated
I was learning
I was open to ideas
I just wanted the results
I didn’t need to be right
I just wanted to win
I wanted to get better every day
Lastly, I wanted them to come on that journey with me. I think it’s important, if you’re too young, to listen and get everybody around you involved in the same goal that you’re doing it together. You’re probably going to have a few people that have to go away, but you’ve got to understand that you can’t’ change people. If you have somebody working for you that doesn’t want to do good, doesn’t care about the customer, and doesn’t want to get better every day, you might not be able to change them and you need to find somebody else and quickly!
That’s another thing I had to learn right away is that I quickly had to move. I had a lot of sacred cows, and I had to move them out of the way. So I gave them offices and big titles, and I would give this speech to everybody new, “Hey, listen, our nickname’s the country club because we’ve had more cars than customers for a long time. We have to have systems and accountability. We’ve got to ask of the sale, and we have to have salesmanship and some sort of funnel to get customers to buy. So when you see them sitting there and not doing anything, I’m holding you to a different standard. You’re not on my team. So if I see you not getting up and saying goodbye to a customer, you’re gone and I’m getting somebody else. I need you to be the first one through the wall.”
It was really easy in the beginning for people to fall into the country club mentality, and those guys had a narrative that, “Oh, he’s young. He doesn’t know what he’s doing. He’s got all these lofty goals.
So funny story: I wasn’t even general manager yet, but people knew that I was going to be announced as the general manager. I get called into this office by one of the sacred cows, and he’s like, “Listen, I just need to know one thing. When you say Santa Ana, you don’t think luxury cars. We don’t have the building, we don’t have the parking.”
He just gave a whole list of why we couldn’t do it because our competition had just built a $40 million building 10 miles down the freeway, but that was not the narrative that won. We did it, but how it worked was that there were people that were untouchable because they were on the life plan so I had to be creative and do things like pay a manager just to be home for three months so he would never talk to a salesperson. Since I couldn’t get rid of him, it was better to pay him to not be there.
But I didn’t sit around and feel sorry for myself. Just enjoy it. People want somebody that’s fair, that will listen, that wants to get better every day. What you’re going to want to do is surround yourself with people that are like-minded. Understand that when you run into somebody who doesn’t want to change and doesn’t care about customers, you might not be able to change them and you just need somebody else. Give them a chance, but understand that there are people I’ve given too much time to, and if I had to do it again, I would have popped them quicker.
Again, great question, Cameron. Enjoy the swag coming your way!
Thanks, everybody, for tuning in. We’re uploading new stuff everyday so make sure you subscribe so you don’t miss out. I hope you have a great week and we’ll see you next time on Service Drive Revolution!
We just had a virtual event earlier this month, people in the chat kept asking me, “What are the best marketing books?” I kind of locked up because I had no answer for that, except that there isn’t really one. If you want to study marketing and really understand it, we’ve got to go through a journey!
Every three months we do our coaching meetings. We used to do them in person, but because of the pandemic, we’ve gone virtual. At our most recent one, the legend, Michael Levine, was kind enough to come on, and I lost count of how many F-bombs he dropped.
I noticed since then, everybody’s been swearing a lot more around the office. I asked a few people via text about the swearing, but nobody seemed to be bothered. Instead, I’ve been getting texts like, “Hey, great meeting, he was unbelievable,” and, “When are we going to put that up on on-demand?”
Michael Levine wrote the famous book, Gorilla PR, and then Broken Windows, Broken Business which has been on the best seller list for like 13 years in a row now, and it’s a great book. Long before I became friends with Michael, I bought many copies of that book and handed it out to many people.
Today we’re going to go through my favorite marketing books, and this is going to be a two-parter because I’ve spent hours and hours going through the thousands of books we have here at the office. I’m going to go through the books that I think will help you with marketing, but they’re not just marketing books! Some are in marketing, some just apply to marketing but aren’t directly about it.
I’m also going to recommend a video and some documentaries, so it’s going to be fun. Some of them you may not care about, but you’ll get a sense for how eccentric I am and how many books I read in different areas that you would never imagine. Something I’ve never shared before.
Usually, when I do these sorts of things, I curate the list for the audience, but for this list I’m doing it for the results. There’s a big difference. I’m not expecting this list to make you go and download the book on Audible because some of these books are out of print or otherwise hard to find. Some of them are thousands of dollars because they’re collectible, but it’s the result that I want you to get.
This is also relevant for everybody coming out of the coaching meeting because we were talking about how to drive RO count, psychology, your approach to marketing, and how it’s changing the industry. The service drive is becoming the focal point in everything and we’re going to have to learn how to be good marketers, so I’m going to help you with that.
Before I get to that, though, we had time on the show for one question. Remember, if you call in and submit a question and we play it on the air, we’re going to send you some Service Drive Revolution swag; a hat, T-shirt, coffee mug, everything.
“Hey, Chris. My name is Dan. I work over at a trailer dealership here in Bakersfield. I started watching your show to get a little more understanding about the service side of everything. I watched the episode where you talked about how you became a GM and actually owned a couple of stores, and the question I had was, aside from becoming a GM and going through dealer school, what else do you need to buy your own dealership? Who puts up the money? Does the manufacturer give loans for that? How do you do that? My story as well, like yours, I started as a detailer and climbed the ranks. I’m an F&I now, doing pretty good at that. Hope to hear the answer on a show. Thank you, man.”
Thanks so much for the great question! When you’re buying a dealership, you have a couple different things that you’re going to have to finance. So the first thing you’re going to have to finance is just the basic assets of the business, which means the inventory and parts, the desks, whatever. Whether you’re buying the building or not, you’re going to buy the assets, the computers, lifts in the service department, phone system, all of that.
There’s going to be an asset purchase, and with that, you’re going to have a working capital requirement. In the working capital, you’re going to have your parts, payroll, and other things. Usually you can’t finance that. You’ve got to come in with that money. You’re going to have to have probably 50% down on that more than anything.
And the next thing you’re going to have is what they call ‘blue sky.’ So let’s say you have a Chevy dealership that is making a million dollars a year in profit. I’m not a broker, but let’s also say that Chevy dealerships are selling for five to six times earnings so you’re going to pay $5-6 million in blue sky. You’re going to have a couple million in working capital and assets, and then you’re going to have $5-6 million in blue sky.
Then, the next line of credit you’ll need to have is used cars and new cars inventory, which will be $10 million in a second. You can usually do that through a flooring line of credit depending on how financially stable you are in the deal you make. The used cars, you might have to have some cash down. You might not be able to floor all of them, but you don’t have to start with a ton used cars either. The new cars, usually the factory will let you floor them, and you’ll have a flooring line of credit with whoever the manufacturer is.
So often times, you can get a bank to loan on the business to an extent, but somebody’s going to have to come in with a pretty good chunk of change to make it happen. And so often times, there’s dealer groups out there that will let you become a general manager and then buy the dealership from them while they just retain a certain part of it. There’s also investors out there that will invest. In my experience, most banks don’t like to touch first-time dealers so you’re going to need a partner or another dealer that will invest in you. So probably the best path for you is to find a dealer that wants to expand and wants talented people around, save your money, then do some sort of buyout over time.
You used to be able to get a dealership off of a handshake and a smile 50 years ago, but it’s very different now. Banks are very shy because there’s a lot of moving parts, and it’s hard. There’s a joke that the quickest way to lose a million dollars is to buy a dealership.
I hope that all of this helps you because there’s three parts to it. Somebody’s got to come in with a pretty good chunk of change in order to make it go.
So that was the one question from today’s episode, and now we’re onto the first book:
The first book I would have you read if you wanted to understand marketing is a book called Culture Code by Clotaire Rapaille. It’s okay if you have trouble saying that one out loud because I do, too.
Now, there’s a bunch of books called Culture Code, so be careful. This is the one you want with Clotaire, and the subtitle is An Ingenious Way to Understand Why People Around the World Live and Buy as They Do. The story on him was that he was a doctor trying to pioneer a way for autistic kids to learn. His neighbor was the president of Nestle and asked him, “Hey, can you go to Japan and do a study, and tell me why people there won’t drink coffee? He did this, came back, and he said, “You’ve got to make candy and things for kids that are coffee-flavored, and then the next generation will like coffee.”
Then he did a thing for Chrysler where he helped them design a car. It’s all described in the book where Chrysler came to him and said, “We know that our customers want gas mileage, reliability, and safety. Those three things.” He helped them design a car that was supposed to save them, but it turned out it wasn’t very reliable. It got terrible mileage and it was not safe. I’ll let you read the rest of it in the book, but it’s a great one. It’s just about understanding the deeper psychology of what motivates people more than anything else.
I was lucky enough to be in a mastermind with Robert Cialdini for a while, but he wrote a book called The Psychology of Persuasion, and the title of this one is Influence. What I love about this book is it’s just case study after case study after case study after case study. That’s it. My favorite takeaway from it is this one with a piano store.
So they have a piano store, and they take customers to the cheapest piano first, then the grand piano, and then they do it in reverse. Their average sales were higher when they showed them the grand piano first. I thought that was unbelievable!
If you talk about the most successful artists, then Warhol has to be on that list. I have a first edition of A that I kept wrapped in plastic for the longest time, and then I have The Philosophy of Andy Warhol from A to B and Back Again, and if you look at it, he actually signed that copy and drew his famous soup can.
The thing that you want to pay attention to with Andy is his approach, his mindset, but he’s also building a machine. He was one of the first to do screen prints and limited editions, that sort of thing. He had a factory. When you think about art, you think about originals, but he pioneered a different way of doing it and less effort for more revenue.
This one’s by Hennessy and Ingalls. I have a bunch of these in a whole section on my bookshelf of propaganda books. The reason why I like propaganda, like old German, Russian, and American propaganda is because there’s a system to it. There’s a look, there’s a color palette to it more than anything else. It’s a lot of red, black cream. There’s a way people stand, a posture; it’s leadership in a way. It’s marketing at a very, very high level when you’re trying to get a whole country to do what you want.
The last ones I’ll recommend are from Dan Kennedy and I don’t think anybody’s influenced me more than him. I love him. He’s grumpy, but he’s taught me more about marketing than anybody. I love his approach. I had somebody watching his videos the other day, and they just hated him, and I didn’t understand. It surprised me because his work changed my life.
Here are a couple for you to dip your toe into the water: Marketing to the Affluent, The Ultimate Sales Letter:Attract New Customers. Boost Your Sales, and… here’s a mouthful… No B.S. Direct Marketing: The Ultimate No Holds Barred Kick Butt Take No Prisoners Direct Marketing for Non-Direct Marketing Businesses.
Marketing to the Affluent is a great book. He has some courses you can buy on his website. Influential Copywriting is probably his best course. I watched that one maybe 10 times in my life. It’s old, but it’s great. I would buy it and support him if you’re going to do it. I think it’s like $2,500 or something, but it’s worth it. Those are the first half of my marketing books.
Those are the first half of my marketing books. In the next episode, we’re going to get a little deeper, a little crazier, and a little more abstract.
My next recommendation outside of books is a big documentary on Netflix if you haven’t seen it yet, it’s called The Social Dilemma.
It’ll scare you to death. You’ll delete all of your social media after that. Except for Christian, because he’s evidently going to be a TikTok star.
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