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Why Customer Retention Beats Expensive Marketing

June 22, 2026

Dealership customer retention is one of the most effective ways to drive long-term growth and profitability.

Many dealerships spend countless hours discussing advertising, lead generation, and marketing campaigns while overlooking the customers they already have. The focus often shifts to attracting new business instead of creating experiences that keep existing customers coming back.

Which platform should we use?

How much should we spend?

Which campaign will generate more traffic?

While marketing certainly has its place, retaining current customers is often a simpler and more profitable strategy.

In Service Drive Revolution #364, the conversation explored the difference between traditional advertising and building genuine customer relationships. One of the biggest takeaways was that sustainable dealership growth often comes from creating memorable customer experiences rather than simply increasing advertising spend.

For service advisors and service managers, that’s an important lesson. Strong dealership customer retention starts in the service drive, where trust, communication, and consistency have the greatest impact on long-term customer loyalty.

Customer Retention Starts in the Service Drive

Most customers don’t interact with the dealership every month.

They may purchase a vehicle once every few years.

Service visits, however, happen much more frequently.

That means the service department often has the greatest influence on customer loyalty.

Every phone call, repair update, vehicle delivery, and follow-up interaction shapes how customers feel about the dealership.

A positive experience creates trust.

Trust creates loyalty.

Loyalty creates retention.

Relationships Create Competitive Advantages

Many dealerships assume they need a larger advertising budget to grow.

In reality, customers often stay loyal because of relationships.

People want to feel recognized.

They appreciate being remembered.

Simple gestures can have a bigger impact than many marketing campaigns.

Birthday cards, customer appreciation events, educational clinics, and community involvement all create opportunities to strengthen relationships. These efforts help customers feel connected to the dealership rather than simply treated as a transaction.

When customers feel valued, they’re more likely to return.

The Human Experience Still Matters

Technology continues to evolve.

Artificial intelligence is changing how businesses communicate.

Digital tools make transactions easier.

Despite those advancements, customers still want human connection.

Most vehicle owners don’t fully understand their vehicles.

Many don’t want to become automotive experts.

What they really want is someone they trust to guide them.

That’s where SERVICE ADVISORS become invaluable.

Customers are often looking for confidence and clarity more than technical explanations. A trusted advisor can provide both.

Great Service Departments Think Beyond Today’s Repair Order

Strong service departments focus on more than immediate sales.

They focus on long-term relationships.

Instead of asking, “How do we maximize this visit?” successful teams ask, “How do we earn the next visit?”

That shift changes everything.

Customer communication improves.

Follow-up becomes more consistent.

Recommendations feel more helpful.

Trust grows over time.

As a result, retention improves naturally.

Retention Supports Strong Fixed Ops Performance

Many leaders in Fixed Ops spend significant time looking for ways to increase traffic.

While attracting new customers is important, retaining existing customers is often more profitable.

Returning customers already know the dealership.

They are familiar with the process.

Trust has already been established.

That foundation makes future business much easier to earn.

Strong retention also creates a more predictable service operation and supports long-term profitability.

SERVICE MANAGERS Help Shape the Experience

Customer retention isn’t solely the responsibility of advisors.

Leadership plays a major role as well.

Processes influence customer experiences.

Staff training impacts communication quality.

Department culture affects consistency.

A strong SERVICE MANAGER understands that retention is often the result of hundreds of small decisions made every day.

When teams consistently deliver positive experiences, customer loyalty becomes a natural outcome.

The Bottom Line

Many dealerships search for growth through larger advertising budgets and new marketing tactics.

Those strategies have their place.

However, one of the most effective growth opportunities already exists inside the dealership.

Customer retention.

When SERVICE ADVISORS build trust, SERVICE MANAGERS create strong processes, and teams focus on relationships, customers continue coming back.

The dealerships that win long term aren’t always the ones spending the most on advertising.

More often, they’re the ones creating experiences customers don’t want to leave.

Feel free to explore the linked articles above for deeper insights into each strategy. If you have any further questions or need additional resources, don’t hesitate to ask!

FULL VIDEO TRANSCRIPT

General Manager Milestones & Operational Environment

Welcome everybody to the big show. Today we are going to talk about my experience being a general manager. What I think created the environment that I became a general manager and dealer. What I learned in that process. Also just what we have seen people be afraid of and why they don’t think they can make that jump. Even though we’ve had quite a few people go from our elite group to becoming general managers. Which is an interesting journey. We talk about that. And what else do we talk about? Books, books. Oh yeah, books. We love books. We love books. And much much more coming up right now on Service Drive Revolution.

Books That Changed My Life Lineup Update

So, we’re not live today because of the fact that I’m recording Books That Changed My Life. And it was on my schedule. I’m actually, while you’re watching this live, doing an interview with Joan London about a book that changed her life. And so, I apologize for that. We’re trying to clean up the schedule, but this is pre-recorded. And so, we can’t respond in the chat or do any of that stuff this time. But in the future, we will be live again. That Books That Changed My Life lineup is getting pretty exciting. Oh, you should see the people we’re saying no to. Like it’s a thing. You know, we had to put out two a week for a while, which was never my intention.

YouTube Subscriber Plaque Milestone and Guest Clips

By the time people hear this, it’ll be over 100,000 subscribers on the channel. So we’ll get the little plaque from YouTube, always fun. But yeah, it’s great. Some of those conversations are so fun, they’re so good, they’re so good. I was just listening to part of the Shawn Johnson clip, the Olympic gold medal gymnast. Yeah, Shawn Johnson. Sobering to hear her talk about reaching the finish line and it was other people’s starting. It’s a fascinating conversation. Her husband’s really cool, too. So then we recorded one with her husband. Then they together because they wrote a book, which is in my queue to read. I was thinking about asking him to come speak at Top Dog, her husband.

Hosting Dinner Events at the Library Hub

That’d be cool. I mean, they’re both really smart, but he was really fun to talk to. I’ve had some conversations lately that just blow me away. The thing we were talking about yesterday. So we’re hiring somebody to rent the library out for events and things like that. And we’re talking about doing a supper book club where we have a chef come in and curate a meal. Then, in between, people bring the book that changed their life and then they talk about their book. I thought it’d be too much to do a book. Kind of how we do the book report with the coaches and that sort of thing.

Internal Coaching Team Book Report Structure

We do a thing internally where we will take a book. Assign a chapter to each person on our coaching team. And then they will do a book report on their chapter. Because it’s really easy for somebody to do a book report on one chapter. Our coaches are super competitive, though, so they’re doing PowerPoint and explosives and whatever pyrotechnics. But the outcome of that is, hopefully, it inspires them to read the book. But even if it doesn’t, they will have learned the book by watching the other chapter book reports. So, it’s easy. But I don’t think you could do that over a dinner because they get long.

Dinner Parties Centered Around Core Literature

You don’t want to cut somebody off on their chapter to five minutes if it’s a long chapter. And it needs 20 minutes. And so I think doing dinner parties where people just talk about the book that changed their life. I was kind of imagining this in my head. You start off the dinner and I’m like, “I’m Chris Collins. This is Books That Changed My Life. Everybody’s brought their favorite book. We have seven personal development books tonight. We have four fantasy, we have…” and just go through the different categories of what they are. It’s funny, that’ll be a cool experience. It’s funny how many of the books are personal development.

Personal Transformation and Overcoming Depressive Chapters

What do you think that says, that everyone’s always trying to continuously improve themselves, insecurities or what? Well, a lot of times, one thing that comes to mind is Susan Lucci. Susan Lucci had a book that changed her life. And the book is a motivational book written very much like easy-to-read. lots of quotes. but really well done. Her husband of 51 or 52 years passed away. And she was having a hard time as her best friend, they were so close. She was depressed, she was really depressed, and this book, she said she sleeps with the book on her bedstand. It really touched her, it helped her out of a hard time.

The Ultimate Impact of Author Connectivity

Words are powerful. Words on pages are very powerful. And the author of that book saw the episode. And then she came on the show and did a book that changed her life. Just asking her, what does it feel like that you had an effect? You know, she sells a lot of books and she does very well. But I think she would trade it all. She was never doing it to be successful. She was doing it because she was going through something and she wanted to share her experience to help others. And the fact that it’s a bestselling book and all that is secondary to that human connection.

Navigating Career Roadmaps and Hollywood Judgement

So much of Books That Changed My Life is about this human connection of this time in your life where you were struggling or trying to figure it out. A lot of times, because we’re in Hollywood, it’s about trying to figure out your career as an actor. Or an entertainer where there isn’t a model, there isn’t a roadmap. It isn’t like you. Just like the thing that I love about the car business, and I’ve always said this because I was in bands: you work harder, you get ahead. Literally, if you just work harder, you get ahead. It’s not like that in Hollywood; the work harder is assumed.

Breaking Through Gatekeeper Definitions in Industry

You got to network, you have to almost be everywhere at one time. It’s a really hard thing to do. People are so judgmental like you’re too fat, you’re too skinny, you got a big head, you got big eyes. The stuff that people say the reason why you’re not right for a part, or your voice is this. Or everybody wants also to make you that you’re like somebody else. I remember when we would come down from Seattle and showcase here when I was younger. They would be like, “Oh, you’re a grunge.” And I’d be like, “You don’t know what grunge is, huh? You just want to say we’re—you got to put us in a category.”

Categorizing Professional Roles Under Pressure

That’s kind of like when I meet people sometimes and they’re like, “Well, what do you do?” And I’m like, “Oh, boy. It’d be easier for me to just tell you I’m a plumber.” Because I don’t know what I do; I do a lot of stuff. I’m Chris Collins. It’s funny when I call a place and there’s a gatekeeper. And I’m like—they’re like, “Can I say who’s calling?” I’m like, “Yeah, Chris Collins.” They’re like, “Who are you with?” And I’m like, “Chris Collins.” And they’re like, “No, who are you with?” And I’m like, “Chris Collins.” It turns into that. I don’t know. I’m Chris Collins. What do you want?

When the Student is Ready, the Teacher Appears

Plumber. Yeah, I’m a plumber. And then they’re fine. Okay, he’s a plumber. They can put me in a category, they can size me up, it’s that sort of thing. But it’s hard in Hollywood, and so these books come into their life. The other thing about it that’s crazy is sometimes it’s like, Hogi. I know you’re struggling with this, I think you should read this book. A parent or a friend or just a person that you’re having a conversation with recommends a book. and that’s the right prescription for the thing you’re in. That happens.

Shifting Perspectives Through Spontaneous Book Discovery

But with my first book that changed my life, I walked into a bookstore and something magical happened where even the title of the book doesn’t make sense to what I was dealing with, but that book was the thing that I needed. So books just come into your life. There’s this magical thing that when the student is at the highest need, the teacher appears, and that teacher is a book sometimes. It’s just so fun, such a fun thing. It is neat to watch. We’ve talked about this a little bit before, but how many times a guest on the show is like, “Man, I didn’t expect to get this emotional,” or, “Did you research me? I feel like I’m talking to my therapist,” or, “Are you psychic?”

Human Consistency and Personality Commonalities

Yeah, we’re putting a trailer together of just people saying that. That’s great, like, “Are you psychic?” that sort of thing. I can read you like a book. I’m not psychic, but you can just tell. If you know enough about human behavior, you know certain things are connected and personality types. As much as people are different, we’re way more the same than we are. Most of the time, I don’t know who they are. I don’t watch a lot of TV, so the boys will be like, “No, we got to have this person,” and they’ve been right so many times, but I have no idea who the people are when they come in.

Uncovering Shared Vulnerabilities in Star Guests

I know who Joan London is, of course, and I know Susan Lucci and that sort of thing, but a lot of times these guys come on and they’re in a Marvel movie or they’re huge stars, and I wouldn’t recognize them on the street. But we have these incredible conversations about life, all centered around a book. I think that for the audience, when somebody that is admired or respected for their work shares their story, you start to realize that everybody has their challenges and it’s not a straight line. People don’t get lucky; it’s rare that people get lucky. It’s a lot of hard work and perseverance.

Overcoming Roadblocks and Initial Leadership Foundations

They stepped on a lot of rattlesnakes on the way; it’s never a straight line that way. So, yeah, it’s really fun. What would be your book that changed your life? Oh, man, you put me on the spot with this one. What did you say? I forget, a couple different times. I don’t know, we’ll go through the list. What are the choices, what are the two or three? Well, one that you and I share is Dale Carnegie, How to Win Friends and Influence People. That’s mine, yeah. That book changed my life, it had me in tears.

Shifting Away from Managerial Popularity Traps

I had a mentor that gave that to me 20 years ago, and it helped me understand—he was trying to have a conversation with me about customers being right and walking through that whole thing, and gave me that book. So that’s a big one. And then my first—I go back and read it still sometimes today—but there was a book called Countermentor Leadership. It’s actually not that good, but it was kind of my first introduction to what leadership actually was, and it had a lot of good insights into it. There are still a couple key things I quote from it to this day, but I didn’t take in what I thought leadership was and what it wasn’t.

Confronting the Subtle Art of Realism

What did you think it was, and what is it? I thought it was about getting—well, I guess I thought it was way more management and how people feel and motivating people, more along things of that line, I don’t know, I was lost, I was lost into the trap, really as a young manager, of wanting people to like me, like I wanted to be liked, I thought that was a thing and it was a huge handicap for me, being afraid to make changes because of what the people in the department would think and things like that, and so that was a difficult thing for me to navigate.

Cutting Through Politeness to Deliver Truth

She goes, “Oh yeah, that was not your strong suit, I tried.” She goes, “I tried so many times to give that to you and try to go through all the things, always a challenge.” So I was never really a big reader. I fell into history, kind of going in through those things, but up until really meeting you all seven or eight years ago, I didn’t really start truly reading and expanding my horizons. One of my mentors suggested that I should read that book, and there are a couple other books that complement that one, but it was really because I’m always probably overanalyzing things and looking at that stuff, seeing people for who they are.

Distinguishing Loud Impact from Aggressive Delivery

We sometimes say Midwestern people are always real nice and kind. We super nice and you don’t want to speak the truth, and it’s like, yeah, that’s one thing, I do want to cut through the BS of certain things, but it’s also—I’ve always kind of conditioned myself growing up that there are other ways about doing it, but sometimes that just takes a lot longer. It’s funny, when you’re trying to be polite, you think telling somebody the truth is like yelling at them. I’ll have people say that to me like, “Well, you were—” I think Adam has said that to me before, “You were yelling at me.”

Retaining Lessons Through Physical Highlights

And I’m like, “Adam, I never was yelling, you just didn’t like what I said.” You remember that? I’m not yelling at all. You want to see yell? Imagine me, there’s my trauma yelling. No, I’m just kidding. But it is interesting that through books, it’s a direct correlation within our business, it’s just that continuous improvement loop and learning and challenging yourself. I probably won’t necessarily read a lot, but I’ve gotten into more of the audiobooks. What I do find myself doing is listening to an audiobook, whether it’s planes, trains, or automobiles in the field, but then I go and buy the book.

Utilizing Audio Markers for Direct Mapping

If it’s good, I do, too. And I don’t do it probably as much or as well as I know you do, like writing notes in the book or highlighting certain sections. I started doing that with this last one, well, that was probably several months ago, but I would like to get more in the habit of that because there are certain quotes you can pick out of there. In the Audible, you can set a marker, and so if you’re in chapter three and you’re seven minutes in, you can find that page. Oh yeah, I guess I didn’t really realize that.

Deconstructing Backgrounds to Strengthen Coaching

They usually are the same, though sometimes the Audible is abridged or whatever, and that always messes it up, like it’s edited down a little bit more. Oh, I haven’t come across that. Yeah, because you had Rob Riggle on Books That Changed My Life, and I’ve seen shows, movies, thought it was hilarious. But then I started his book, and I also bought it. I love him sharing his story, and I think that’s probably it. I knew some of those things, but he did all of those things and the way that people grow up.

Demanding Substantive Dialogue Over Small Talk

Honestly, I think it helps us even when we review coaching candidates, and the same way we talk about even potential clients and trying to get to know and build those connections with people on that human level. Yeah, it’s interesting because from someone that really honestly did not like reading or was very specific on reading, it’s opened up books that will open up more of that curiosity to other people. But yeah, it’s fun. I crave deep conversations, I don’t like small talk. So I like conversations about real substance and really understanding.

Trusting Intentional and Intuitive Human Inquiry

I think I’ve kind of always been that way because sometimes people will be like, “Oh, nobody’s ever asked me that.” And I’m like, “Really? How has nobody ever asked you that?” I don’t know, I’m sure you guys feel that way. I ask you questions that surprise you, but to me, it seems totally intuitive. Well, people aren’t used to your fascination with human behavior and psychology and all of those things. You’re so well-studied in that, that you can ask questions that get to an answer most people would take a long way around to reach, it wasn’t such a straight line.

Normalizing Reality Over Pretense in Challenges

I still think about that if I hear you interview someone, just the amount of time you’re there talking at a deeper level; that doesn’t come natural to most people. But I think it was a learned thing for you, too. And I would also say, though, people aren’t used to, in today’s society, people having a genuine curiosity of other people. That’s true, too. There’s this weird thing where you’ll say, “I’m an actor,” or whatever, and then they’re like, “Well, acting—that’s off-limits.” You’re like, “Yeah, you just said you’re an actor, what do you mean that’s off-limits?” It doesn’t make sense.

The Value of Therapy and True Analog Connection

That’s just an analogy for what it seems like to me: you can tell somebody’s had a hard time, you can tell they’re struggling with something, and then it seems like the most human thing would be to ask them what that is. It’s like people who are handicapped, right? The thing they hate more than anything is you pretending they’re not handicapped. I see you’re in a wheelchair, why are we pretending like you’re not in a wheelchair? They’ll usually make fun of themselves, and everybody else is uncomfortable. The thing they don’t want is for people to treat them differently; they want to be treated like what it is, and they’re living that reality every day.

Experience Vinyl Sound in the Tech Era

The amount of people in therapy, too, is crazy, and it’s just getting worse. The less human connection we have, the more people are in therapy and the more artificial the conversations are. If you go down in younger ages, the artificial thing is just crazy to listen to, it’s virtual, like a virtual world. Well, we were talking about that earlier, though: we see that things should be going back to more human connection, like even down to the technology, right? People are going more toward the vinyl and music, and not the digital or mostly digital stuff, having those experiences.

Connecting to Musical Roots Without Descriptive Ruin

Earlier, I played a record in our company Monday meeting, but you guys were off of it by then because you were not here. You were on Zoom, but I played the new UHQR ZZ Top album Tres Hombres. I played a song off of that, and I was telling you guys today, it’s vinyl here in the library playing a record. There’s nothing like that experience, you can’t experience that any other way. I told them, because we have a younger group, there will be people that live their whole life and don’t experience that analog sound, that musical thing that touches you in a way you can’t put into words.

Communication Channels for the Deepest Feelings

You can’t explain what that is; you can talk about the guitar, the drums, but what it is as a whole is not something you can explain in words. There isn’t a word for that, you just have to experience it, and I almost think trying to put it into words ruins it. Just enjoy it, don’t even try to do it, just soak it up. Yeah, I agree with that, it’s magical. I read a quote the other day that somebody said, “Music is the conversation with God.” I’m sure at the time they were thinking classical or something like that, but there’s rock, there’s jazz, there’s even electronic music.

Associating Music Collections with Personal Milestones

On Sunday, I put on this Nicolas Jaar and I don’t understand how he communicates, it’s a way of communicating that’s talking to a part of us that we don’t have a dashboard for. Similar to what you were talking about with books, music can find people in the same type of relationship, right? Whatever mood you’re in. We were doing albums that change your life, but it was too much, it’s too much. That’s probably where I connected more with childhood, with music, because my father had crates of his albums and I remember changing the records as a kid.

Unlocking High-School Memory Lanes Instantly

He’d have an 8-track player, too, but it was mostly music, not really books. Music is what I always associated with feelings growing up, but that’s where people are like, “What’s your favorite music?” I can tell you what I grew up on, but I don’t really try to discount anything, I’ll try everything because there’s always some experience with that. Music is an interesting thing, too, because it doesn’t ask for anything back. There are songs that I could put on right now that would just take me back to being 15, I go right back to my bedroom in my grandpa’s house.

Navigating Intentional Leadership Formations Online

That feeling of just hating everything, it would all come back. What do you call that, mad at my parents? Yeah, mad at your parents. Adam listens to a lot of music that takes him to today, like, “Mom, I love you, Mom.” Adam is always sending me these songs and then I’ll put it on and I’m just like, why is he so angry? It doesn’t make me angry, it’s actually a weird sensation. I know, it’s the same with me; I like music that people will be like, “Oh, it’s so sad,” and I’m like, “Oh, really? Doesn’t feel sad to me.” I get it, they’re minor chords so it gives you that sensation.

Shifting from Service Manager to General Manager

Reminder for everybody, we have the Service Drive Revolution Academy where we are teaching how to run a profitable, healthy business. We’re also going to teach you how to become a better leader and how to become a better person, more effective, how to think about things, how to approach them. You can go to chriscollinsinc.com, sign up for on demand, and we will get you access to that. But we’re going to be doing that live, it’s every other week currently. There isn’t one this week, but there will be next week, and then I will pick up and start doing the opposite weeks as Hogi is doing.

Aiming Beyond the Terminal Managerial Benchmarks

I’ll be talking about leadership in that, but super fun. Today we’re going to talk about going from fixed ops, from being a service or parts manager, to being a general manager. I talked about this a little bit in a past episode about when I was a lot attendant standing in the alley of the dealership I worked for with the dealer and the GSM, and asking the dealer, “How much does it cost to buy one of these dealerships?” I think he said like $7 million, and I was like, “Okay, how do I come up with $7 million?” I always thought of myself as being the owner of the thing.

Unlocking Cross-Departmental Business Models Intentionally

I never thought of myself as just becoming a service manager and that’s where it would end, which is a different experience than most people. Most people think becoming a service manager is the accomplishment, and what I have been very passionate about is trying to encourage really high-functioning, performing fixed ops managers to think about being the one in charge, to think about being the general manager and the one running things. There’s always this kind of stigma of the unknown, like, “Yeah, but sales,” assuming that it’s harder than what they’re doing. I’ve always thought about being the one in charge.

Developing Internet Sales Divisions From Scratch

Middle management was never the end, and if you’re happy being a manager that’s okay, too, but you also might be missing out on some experiences and growing. I went from lot attendant to general manager to then car dealer, so I owned my own dealership. When I was fixing stores and learning financial statements, I was paying attention to the other departments. I would help my clients in my off-time set up a BDC, then that led to setting up an internet sales department, and I probably set up 10 internet sales departments when it was new because nobody understood it and I did.

Mastering the Complete Dealership Financial Ecosystem

Even when I was a service advisor, I tell the story in The Millionaire Service Advisor, I sold cars in the sales department while I was writing service because I always just wanted to understand how other things work. I’m very curious about business and different business models. If I meet somebody and they’re in an industry that I don’t understand, I want to understand what’s going on. So, when I was fixing service departments for dealers, I also was learning about sales, learning about the financials, and asking a lot of questions.

Confronting Industry Bias and NADA Barriers Directly

I would spend a lot of time with dealers going to lunch, going to dinner, hanging out at their beach house, and in those moments, I would be asking them how things work. My goal was always to be a dealer, though everybody would tell me I’m never going to be a dealer because I’m a white male. I dare you to tell me I can’t do something, so I was kind of dead set on becoming a dealer. I learned from brokers who buy and sell dealerships that they would hire me to go in and fix a dealership before they sold it.

Bypassing Theoretical Academy Certification via Sponsorship

I asked one well-known broker what I had to do to become a dealer, and he said I just had to go to the NADA Academy. That program is developed for second-generation kids, and I’m not second generation; I don’t have dad or mom to send me. So I asked a client that I had fixed stores for and was really close with to sponsor me. I think it was like $12 grand for the year, and I said I’ll pay for it, I just need a sponsor. He said no problem, so that was my plan. Thank God I didn’t go because I don’t know that it’s anything more than a piece of paper.

Transcending Middle Management via General Management

I wouldn’t have known how to run a dealership coming out of that; you really have to experience it. What that did is it opened up that client to understand that I wanted to own a dealership, and so I ended up becoming a general manager for him, which was the other way to get there. If you’re the operator of record for a couple years in a successful dealership, then you can buy your own dealership. He said, “Why don’t you just come run my stores and then we’ll buy stores together?” Going into that, I had to think about it, and it took a huge cut in pay.

Breaking the Silo Mentalities Across Departments

It took me 90 days to unwind all my clients, but going into it, I already understood sales and the financials because I’d asked so many questions and picked the brains of successful dealers. I had a pretty good idea of what I was stepping into, whereas I think a lot of people in fixed ops think of sales as a foreign country to them. They don’t want to learn it, and there’s almost a weird sense of pride in that, like you’ll hear service managers talk about how sales is the flashy, sexy up-front thing that always gets the marketing dollars.

Unlocking the Unfair Advantage of Fixed Ops

Instead of looking at it as the next step, it’s looked at as, “I’m thankful I don’t have to be a part of that,” which is a weird relationship with that side of the business. But each department acts in that similar fashion, whether it’s sales guys or service. We see it all the time, even a general manager will just really be in charge of sales. They might get paid on the overall net, but they’ll tell you they don’t really know fixed ops. We ran into that recently where the GM comes in and says, “I’ll just stay over here and not impede on that.”

Injecting Structure and Shift Meetings into Sales

But being a general manager that knows fixed ops is an unfair advantage because you understand it and can drive so much profit. The things that make you successful in fixed ops don’t exist in the other departments. And if you apply them, the leverage is ten times—it’s a force multiplier. My experience with the sales department was people came and went as they pleased; there was no shift meeting, there was no structure. If there was a shift meeting, it was really like, “Go get them, Tiger, remember to pull your pants up.”

Instilling CRM Discipline into Loose Operations

You just see these salespeople come in at 9:00, at 9:30 somebody takes a breakfast burrito order. At 10:00 they’re all in the lunchroom eating burritos, and it’s noon and nothing’s happened. When a service department doesn’t have work for a tech and the first hour the tech stands around. They never get momentum the rest of the day—how you start is how you finish. That’s how the sales department was. They have a CRM but nobody uses it. They just use it as a meeting talking point to say they are modern. But it’s a tool you’re supposed to use.

Uncovering Operational Process Through Deal Jackets

The systems are super loose, the paperwork, all of it. If you go through a stack of ROs and you go through a stack of deal jackets, it’s exactly the same experience and it tells you everything. It tells you how tight things are run and what the process is, or the lack of process, which is more the case. There are so many different softwares and programs, and advertising is a funny one in the dealership because they spend so much money. There was this NADA talk workshop titled “50% of your advertising works, 50% doesn’t, you just don’t know which.”

Shifting Focus to High-Velocity Factory Markets

That’s how it felt for me, meeting with this marketing agency every week that never asked how many cars I sold, but instead wanted me to spend more to get invited to a party or get a free cruise. Also, the people you are interacting with from the factory on the sales side are completely different than the people you interact with in fixed ops; you’re interacting with the market manager who can make decisions right now. It’s a completely different game because the top of the food chain is sales.

Driving Car Volume to Feed the Fixed Machine

Nothing happens until you sell a vehicle because that feeds the rest of the machine, so it is the most important part of the whole thing. When you come from fixed ops, you get teased by your managers because they say you went to the dark side. But no, that sales machine is feeding you, and the reason you’re booked out so far is because we’re really good at selling cars. The same approach to fixing a service department was the same approach I had to fixing a sales department, all the while people telling me it won’t work.

Lessons in Strategic Focus from Gene Wilder Dailies

I saw this documentary the other day about Gene Wilder, who was unknown when he was cast as Willy Wonka. The director shot a quarter of the movie and played it for a movie studio executive who said, “Replace that guy, nobody knows who he is, you need a real star.”, the director argued that it was really working, but the executive refused to give another dollar until he was replaced. The director agreed to replace him but never did, and stopped sending the executive the daily footage until they were too far into the film to reshoot everything.

Tricking Dealership Leadership into Scaling Success

That has been my experience so many times in the auto industry where a dealer thinks he knows everything and says we’re not changing the pay plan, and I say, “Yeah, no, we would never change the pay,” and then we change the pay. You have to trick them into success and agree with them because to argue with them is like talking to a two-year-old. You hired me to fix it and now you’re telling me not to fix it; do you want me to fix it or do you want to argue?

Demanding Financial Literacy via Aggressive Inquiry

What is the best piece of advice I could give to a service manager to open their perception to running the whole thing? Remember, you can’t change people. Don Krevier used to say you either had a lemonade stand when you were a kid or you didn’t. If you ask why someone didn’t learn the financials, they say nobody would teach them. Nobody would teach me either, but I bribed people and was annoying, which is how I got the nickname the bulldog because I was a broken record: “Teach me this, I want to understand this.”

Embracing Independent Discomfort to Map Out Rules

Nobody is going to hand it to you, and it’s okay if being a service manager is the end of the road for you if you take pride in it, but I grew up poor and didn’t want to be poor. I grew up in Mexico as the only white kid and was the poor kid in America, so I never fit in anywhere and stopped trying to fit in. I’m just trying to figure out what’s really going on because I know there’s another game going on that I’m not invited to, and I’m trying to figure out the rules to that game.

Isolating the Elite 1% in Coaching Programs

At every level, nobody invites you in, you have to have that drive to figure it out. In our program, the people who became general managers were always a little different than everybody else in their intentionality; they all made it to elite and held themselves to a different standard. None of them thought they had it figured out or had arrived, they were very humble, and they won the comp really quickly by asking a lot of questions.

Breaking Through Geographic Excuses in Advance

If you win the comp in the first six months, you’re in a 1% category. Two years ago at the elite meeting at my house, I asked how many people bought my leadership book, and only one person raised their hand—and they were someone who had made general manager. These people are very open; when they saw stores hitting numbers they’d never seen before, they didn’t dismiss it as being because of a big market like Los Angeles. Often those high-performing stores are in places like Pocatello, Idaho.

Overcoming Shyness to Build Stage Charisma

They are just open to the mindset that if someone else can do it, I can, too, and those are the people that get results in advance. Looking back, what is the one thing I would do differently when I got to the general manager seat? I would be more charismatic and be a better public speaker because I was deathly afraid of public speaking back then and very shy. I ran things from the background and had my managers go up and talk to everybody.

Getting Over Yourself to Command the Crowd

Later on, my buddy Mike told me he was practicing public speaking at an event, and when I told him I was deathly afraid of it, he leaned across the table and said, “Well, you better get over that because I don’t know anybody successful who isn’t good at getting in front of a crowd and telling them a story.” In that moment, I realized I had to get over myself and figure it out. When you take over a business as GM, you can fire people directly and make decisions without asking permission.

Avoiding the Trap of Operational Stagnation

We went from number three to number one in the country and doubled our net because I didn’t have to wait or convince anybody. The flip side is when you go to the same place every day, you get stale, and after two or three years, you become the employee because you start thinking smaller and playing not to lose. That unique outside perspective is pixie dust because it keeps you from falling into the nature of the system.

Navigating Evolving Relationships with Sales Staff

Did relationships change when I became GM? People in sales who used to treat me like I wasn’t important now all of a sudden kissed my butt, but I’m used to that and it doesn’t feed me because I don’t need people to make me feel good. I had to make a lot of changes and move sacred cows, and you have to really increase sales to be able to pay people not to do a job, meaning sometimes I had to step in and be the GSM myself to learn it.

Closing the Feedback Loop in Radio Marketing

Marketing was the hardest part because it’s psychology and nobody tracks it to close the loop for feedback. I became very intentional about our partnerships with radio stations, going live on the air on Kiss FM, and setting up an action vehicle from our in-dealership coffee shop to bring coffee and pastries to businesses where our customers worked. We would go live on the radio from there, which created excitement and a sense of FOMO for people listening.

Shifting Ad Spend from Demographics to Volumes

We also had Howard Stern read our stuff when he was on terrestrial radio, which was very effective, but organic showroom events with other local businesses were huge. Most of our factory advertising was on the golf channel or right-wing radio trying to sell the 7 Series, but the actual volume was in the 3 Series. So I went younger with Kiss FM and Howard Stern, because older people will aspire to be young, but the young will never aspire to be old.

In-Sourcing Ad Agencies to Maximize Retention Data

I figured that out by looking at data and asking every customer how they got to us, rather than doing what the big Mercedes dealer was doing, because the Mercedes client was completely different than ours. The 3 Series could go head-to-head with a Honda Accord on payments because the residual was higher and it included maintenance. We cut our advertising spend from $2.6 million down to $1.8 million by bringing the agency in-house with three direct people, which saved us money and kept our focus entirely on customer retention.

Transitioning Car Sales into Customer Lifelines

We set up simple things like birthday postcards for every customer, which is inexpensive but a huge deal for retention, making repeat and referral our number one source of clients. Bob Krevier used to say, “They’re not trading in their car for tennis shoes, they’re going somewhere else, so why are we not making it a priority?” We made a big deal of letting people take a new car for a day, which built a massive personal connection within the community.

Out-Sourcing Kiosks for Dedicated Liaisons

Things come full circle; video games became so real that now the novelty is pixelated blocks like Minecraft, and marketing with AI is circling back to people just wanting a service advisor they can trust. If I owned a dealership today, a salesperson and an advisor would be the same liaison role. I would give a person 200 clients. They would be responsible for their service and for selling. And be bonused on how many of those people return.

Designing Showrooms around Customer Lifecycles

You should touch those 200 customers every month and give them reasons to come to events like wine tastings or art gallery partnerships. Because local businesses want access to a premium dealership database. By nurturing this, you would see 90% retention on the new car side. Our competition thought we were number one because we gave cars away. But our gross was $500 a copy higher because people who have a relationship with you are less likely to grind on price.

Shifting Homefield Advantage from Defeat to Victory

We used a process in sales that took away decision fatigue, similar to Service Drive Judo, making it the easiest car buying experience people ever had. The average car dealership today loses 85% of their customers after five years because they have five different departments that are not working together. When you meld service and sales together through a single liaison who invites customers to unique community events, you build an unbeatable homefield advantage.

Final Questions and Outro Links

If you guys have any questions about the general manager journey, let us know and I’ll answer them. Nobody asks me about that and much much more next time on Service Drive Revolution. Thanks so much for watching. Make sure you subscribe and click the bell icon so you don’t miss out. Call 833-3-ASK-SDR to get your questions answered on the show, and for special deals on our books, head over to offers.chriscollinsinc.com. I’m Chris Collins and I’ll see you in the next video.

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