The Price Point To Move Inventory

April 9, 2024
Getting a car for under $30,000 is like hitting the jackpot for buyers today. It doesn't even matter if it's an EV; if the sticker price is under that magic $30K mark, people are all over it.
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Today, the ASOTU Wheelhouse talks about how price sensitivity is influencing dealership inventory strategies, plus covers what it takes to build a winning culture in 2024. Host Daniel Govaer is joined by new panelists Savannah Simms, Director of Business Development at Simms Auto Group and Jonathan Dawson, Coach & Trainer at Sellchology, along with regular faces Brian Kramer, EVP at Cars Commerce and GM at AccuTrade and Michael Wood, GM at Checkered Flag Auto Group.

Here’s what we cover in today’s episode:

0:00 Intro and Disclaimer

1:39 Around the horn with today’s panel

5:40 Gen Z and Skilled Trades

9:58 Marijuana Testing in the workplace

13:27 The price point for affordability

18:49 A winning culture

26:18 Workforce and recruiting changes for 2024

34:35 Signs Your Dealership Just Isn’t That Into You

Daniel Govaer: 0:00

We'd like to do here a relationship advice for the automotive world. It's a very popular segment and my wife

Brian Kramer: 0:06

thinks I'm an expert on relationships. This is perfect. She

Daniel Govaer: 0:12

wait really?

Jonathan Dawson: 0:15

Until Brian that this is actually an intervention

Daniel Govaer: 0:20

just hang on a second we have somebody else joining in

Jonathan Dawson: 0:24

Brian's mother and father and his wife

Daniel Govaer: 0:32

welcome everyone to another episode on the wheelhouse not just any episode. This is the 20th episode. That's right 19 episodes after the first time somebody said What the heck is that we're still here with even better and more engaging content and a whole new panel of super interesting I promise you people that you're gonna want to hear from so let me first introduce who we've got because our producers Jordan Cox and Nathan Southwick, thanks to both you guys really pulled out a fantastic panel for us today. So Savannah Sims, Director of Business Development at the Sims Auto Group. I realized also a comment I made pre show just want to apologize for that. Jonathan Dawson Coach and Trainer psychology, Brian Kramer, VP at cars, commerce and the GM of Accu trade Michael Wood, who's the GM of checkered flag auto group. So we've got GM GM President BDC, director and a whole new show of the wheelhouse for you guys today. Corner quick remind everybody that we do have our very own disclaimer here on the wheelhouse. It's not very official, but they told us we should at least be saying something like the views and opinions expressed here by the speakers are the speakers their own and do not represent their affiliates, the companies that employ them or affiliates of that company. Now that we've got that out of the way, we usually like to go around the horn and do a 32nd update on things. What are you seeing in your corner of the automotive world, month to date, year to date, depending on how often you're here, Michael? So you know, we'll go ahead and start with you since you know how it goes 30 seconds on the clock for you

Michael Wood: 1:54

go things are looking pretty good this year. So far. We're up in volume on the variable side at both JLR and VW and our net to gross is we're looking really healthy on the fixed operation side despite despite the fact that we're down a few technicians at both stores. We're getting a little bit more our for our overhead excuse me on every single repair order. So we're just getting a little bit better with what we have. So I'm really happy with the business so far in the first quarter through the first quarter of 2024

Daniel Govaer: 2:23

and rough rough life in the world of JLR I understand okay, that's tough. Yeah, we're gonna as you guys aren't an employee break room anymore. Mr. Vana Sam is director of business development, The Sims Auto Group 30 seconds on the clock for you.

Savannah Simms: 2:40

All right, we have about 10 seconds for every week we've been in business so we're three weeks into our first store and things are going well so far. I think the most surprising thing has just been least percentages. We know they're down across the board. But as low as we have been in ever so I think that's pretty much the biggest takeaway from variable side. Fixed things are going very well fleet businesses strong and just got a lot of work ahead of us.

Daniel Govaer: 3:05

What What brands do you have?

Savannah Simms: 3:06

Right now we have Ford and Lincoln we have three more closing in April.

Daniel Govaer: 3:11

Keep us updated. Mr. Jonathan Dawson, who gets to travel and experience dealers all across the country and many of them come to you all so 30 seconds on the clock for you.

Jonathan Dawson: 3:22

Yeah, appreciate it. I would say that it's not to surprise most people watching this that turnover has gone up and a need to quote return to the basics has become ever present in most dealerships conversation. So dealers are wanting their sales team to get back to the one on ones the blocking and tackling as they say, of taking care of the customer tracking your numbers asking for the sale, building rapport. So a lot of my dealers are coming to me and saying John, help my people just return back to basic selling.

Daniel Govaer: 3:53

People can call you John, you told me I had to call you Mr. Dawson.

Jonathan Dawson: 3:56

And it's actually Mr. The Jonathan Dawson the magnificent Is that correct? Okay.

Daniel Govaer: 4:03

Yeah, I enjoy how many times are the in the car business we want to get back to basics or return to normal guys to finance for a lack of trying? Okay. 30 seconds on the clock Mr. Brian Kramer.

Brian Kramer: 4:16

I will get you along that thing. I think that a lot of dealers are either finding out that they haven't been blocking tackling news another buzzword or that they need to get back to blocking tackling and here's here's what I mean by that. As I go into dealerships, I think it's really one of two different camps and sometimes it's the same franchise. Sometimes it's the same location could be right across the street. But as I'm talking to dealers, one dealer will say that times are tough and other dealers say it's not at all. It ultimately comes down to lead handling, how they're communicating, answering the clients questions and not getting not taking things for granted that we took for granted during COVID.

Daniel Govaer: 4:50

Yeah, we are going to take things for granted I will say to the point about like lease payments because I'm you know, beginning of the month going through all the different OEMs trying to figure out what are you know, what our program is going to be and what We should advertise. And I wish they can get all on the same page for what they want their leasing programs like how we could can we get back to leasing? Or is that not something we want to do? Can we just be honest about it? Because a lot of these OEMs are advertising lease programs. I mean, you understand that domestics are domestic OEMs not all but domestic OEMs advertising upwards of $10,000 down on a lease, right. $5,000 cap cost reduction plus tax title and license $10,000 down on leases? Can we just say no, this is just something we don't want to do. Or

Brian Kramer: 5:29

it's coming from Evie credits. It's really not 10,000. And what

Daniel Govaer: 5:32

I'm saying even if it's not easy or net of up like it is so All right. Let's get to some headlines here. We know that America needs more trade skilled workers, we talk about it and a lot of every pretty much every conference that I've been to we talk about how we need to recruit technicians for the next generation. And it looks like Gen Z seems to be answering the call for this and starting in COVID, where we saw a huge uptick in vocational studies, especially enrollments in construction related fields, is auto going to be on their list. And is this seems to be happening independent of what we've been trying to do in the car business and our automotive industry. What can we do to take advantage of this?

Michael Wood: 6:11

I think this is an interesting topic. I have a nephew who is Gen Z. And when he graduated from high school, he didn't want to go to college. He wanted to get into the trades. And specifically he wanted to be a carpenter. And you know, I wanted to influence them, obviously, I was like, Hey, why don't you come check out being an apprentice technician with me, I'll buy your tools, I'll take care of any kind of fiscal responsibility, I just want you to be able to learn the trade. And even with that kind of barrier removed from him for him, excuse me, he didn't have that desire to want to get into the trade. Now, obviously, this is just a one off. It's my one nephew, not indicative of the entire Gen Z population. But it was just interesting, the negative connotation that it still remains with becoming an automotive technician. And despite the fact that the five of us all know that technicians can make a great living today, and it's only gonna get better. I just thought that was kind of interesting.

Daniel Govaer: 7:00

I think it's interesting that you offered to buy somebody tools. I haven't even gotten that from you for all the cars I've sold.

Michael Wood: 7:07

I got a good bottle of wine for you next month at some level.

Daniel Govaer: 7:11

Thank you. But don't technicians. I mean, most of our technicians make six figures, right. But as you know, so why is where's our DIS? Where's our disconnect between where we're at in automotive? And what the rest of skilled laborers seeing? Where's our gap? And how do we start to

Brian Kramer: 7:25

marketing, we don't market it. As best we talk about how much sales people can make. And in talks all this division, the story, we don't do that same thing for technicians.

Jonathan Dawson: 7:35

Yeah, there's bad bad messaging in general, we don't get out into the market and tell people our story. We don't feature and highlight the success stories within our own organization. We don't we don't profile them on our website. You know, we don't make it up. We just don't act like it's important. And so it's surprising, maybe if if you were

Daniel Govaer: 7:54

afraid they're gonna get recruited. That's why we don't put them up on

Savannah Simms: 7:57

serious that they're going over to more high tech as well. And they're going directly to, you know, Tesla or rivian. Are they viewing that as a more promising career because of the benefits that go along with that? Instead of going directly to a local dealership?

Daniel Govaer: 8:11

Yeah, if I knew how to work the sound pad that Nathan made me buy, I would give that like 15 Ding Ding dings right there. But I don't. So yeah, because here's,

Brian Kramer: 8:22

also write about software engineers, we lose them on our side to Tesla, because it's a halo brand. And

Daniel Govaer: 8:27

I remember when I said Look how Tesla advertises for talent, look how they recruit, look at all the things that they give you look at all the insurances they paid for look at the clear demonstrated growth that they do try

Savannah Simms: 8:38

Volvo and McLaren dealership and Palo Alto, a block from all the r&d offices, of course, they're gonna go work there, get their dry cleaning, you know, all of these things that you don't get in a traditional dealership, but then they come on board, and they love them.

Michael Wood: 8:55

Yeah. And the question might actually be is, do they not want to become technicians? Or do they not want to become involved with the dealer model? Because of everything they've heard? Whether it be right or wrong, you know, with the vast majority of dealers not being in the good camp? And then the good ones being in the small camp? Is it? Do they not want to work the 70 hours that they hear technicians have to work or get treated to the way that they hear technicians get have to get treated, but then go work for Bob's heating and cooling and work Monday through Friday, weekends off? And all that kind of stuff? Like it? is a sign of this our own doing? Or maybe our our predecessors own doing? Yeah,

Daniel Govaer: 9:28

if we just went around, if we just went around and pulled our friends and said, like, what's the craziest package, you've a total rewards package you've ever put together for like an incredibly qualified technician? I mean, I think we could hear some pretty I mean, I know what I've done. I mean, it has commas in it, like multiples, right? And so I don't really want us to be losing these people to other you know, and Tesla, and rivian aren't technologically more advanced than the cars that we represent in the brands that we represent in the car itself, and the company but in the car itself. Alright, yep. Moving on. A topic that we've discussed with For because we need talent in the car business, we don't have talent in the car business. So I came across an interesting article, and I want you guys to appreciate just how far the wheelhouse goes to research material for the shows it granted used to just be fortune cookies. But we've moved way far past that I read the Georgia Law Review, the actual publication that that they put online anyway, an article in which they give guidance to businesses and their clients in Georgia and to paraphrase, but you can look it up. They're saying, yeah, there's people that so much use in Georgia that people think it's legal, it's not. So you have to remind people it's actually not like that's in the official guidance, remind people just because people do it everywhere. It's not legal. And to that in positions where they're not safety related positions, that you may want to look at what your guidelines are for testing and for hiring people. The Law Review said that the people that review the law, I don't know exactly what that means. But that's what they do. And they said, You don't have to, you might want to reconsider that, are we still losing good people because of old held beliefs.

Brian Kramer: 11:05

I went through this in a public public retailer that I worked out, and they determined it because they're there in most of the states. They determined that it wasn't worth there's enough nerf battles, you're gonna fight that's not the, you know, the war, you want to lose, and you're the hell you want to die on. So they opted to not do that. And specifically, as they were saying, when you're talking about in fixed operations, and it doesn't mean that they're, you know, it's obviously if somebody's impaired on the job in a safety situation. But what people do at home, in my opinion, that's their business. And it's 2024. And we need to start focusing on the things that matter, it'll show up in the results, it'll show up, and, you know, if they're doing that stuff at work, they're not going to be as productive. And it'll all it all shake out, they wreck a car while they're there, then obviously, they're going to get tested. But that's, that's my take on it. But

Michael Wood: 11:56

even that you have to challenge the question of why why are you testing them, the test isn't going to tell you that they're impaired at the time the test is going to tell you that they had marijuana in their system. And so it's like, until we can get some real science behind this, we need to make sure that we're not, you know, killing people out of our industry that are good employees, because they like to go home. And you know, took a joint after work instead of drinking a fifth of whiskey. I mean, what do you I just I have a real problem with this one, just simply because it just doesn't make sense. It fails to say it out loud test. And it's all predicated, in my opinion, and Daniel, probably correct me if I'm wrong on this one. But it's about the federal laws. I mean, we need to get the federal government on board to get rid of the whole aspect when it comes to workman's comp and all that. And then a lot of these conversations go away because the insurability aspect is different for the for the dealers, but it's just it's, it's, it's, it's done.

Jonathan Dawson: 12:46

Well, my philosophy is similar to my philosophy of customer generation, which is your best customers should be your lead generators for your best next customer, we should have a business that's based on referrals. And then the same way when it comes to recruiting and hiring your best employees should be referral generators for your next employee. And so as long as high quality people were attracting and recruiting high quality people for you, you should be fine. It's when you don't have processes that you end up having to deal with the consequences.

Daniel Govaer: 13:11

Yeah, what a great recruiting tagline that would be we want talented people that work hard and we don't care if you smoke weed. I mean, you'd have to polish it up. Probably not putting that

Brian Kramer: 13:19

on the Billboard, throw it into throw it into AI engine and have it spit back out something a little bit more politically correct. 30k

Daniel Govaer: 13:26

is a big topic that we hear about for cars, it's got to cars, new cars got to be under 30 grand to sell it. EVS got to be under 30 grand to sell it. Ice vehicles got to be under 30 grand to sell it is 30 grand just the mark is that just the number doesn't matter if it's ice or Evie. It's 30 grand, just easier to swallow. And at that point, does the discussion of Evie and adoption and charging networks? Is it all fade away? What is 30 grand and tell me what this means for Evie and ice.

Michael Wood: 13:53

I think what it just means is that the customers are looking for affordability. I think that's just the number one word for 2020 fours. Can we afford this vehicle? How does it compare to the last transaction that I did? And how does it compare to the more expensive vehicles but they just happen to correlate to the 30k price vehicles and I think to your point, whether it's evey or not, I don't think it really matters if I've got a under 30 under 25k car it's just not gonna sit as long as the 45 to $55,000 cars will period when the

Savannah Simms: 14:21

interest rates drop I think we'll obviously see the 30k go up quite a bit. But the other thing is the cost of ownership and if that's what matters to the customer also what credits are they getting on that but I think ice or Evie? Just keeping the affordability payments and interest rate are all gonna play a play a big part. It's

Michael Wood: 14:40

almost like 30k is 25k Evie because once you get to that 25 Evie and then you can start getting the Evie tax credit, you know as long as you meet all the stipulations, etc. It's like it's like a little delineation from a 30 day.

Daniel Govaer: 14:52

Till then doesn't matter. I mean, does anybody I'm just gonna say yeah, so it doesn't matter.

Brian Kramer: 14:55

It doesn't matter if you take a look at the algorithms of what the public retailers are Doing the carbon is carbon taxes of the world, there's a distinct shift, and you'll see the franchise dealers at the auction put their hands down. And you'll see all the proxies from all these other public retailers, not not just carmaker Carvanha, but the new car franchisees that are buying those cars, and they're all on their shoulder report talking about what percentage of their mix is within that price band. So like Carvana, for instance, on 30,000 cars, they attribute the fact that they they maintained 55% of their inventory in less than $25,000 price band as to why they only have 30,000 cars 6% of their cars aging, because the Michaels point, that's when all the cars turn. But there's a heavy emphasis on that. And we see it as we're adjusting our AQI trade values to keep up in that price band because there's a distinct uptick on what we do. And we do it for a lot of big public retailers that are our clients. And they said, Look, if it's 25 grand or less, we want to put at least $1,000 More, or in some cases, six, you know, six to 10% more in that vehicle, you know, based on their customized pricing for that reason.

Jonathan Dawson: 16:01

But right so the question, or at least the way I understood it was does it matter if it's an Eevee? Or a nice car at that price point? Does that matter? Or is it really just affordability, which is the price point relative to interest rates and term?

Brian Kramer: 16:13

I think it just comes out in insurance and term I think some dealers do a better job of it than others. I've seen dealers that have a 18 Camry with 50,000 miles on it, customer comes in on it, hey, you know, we can't get there on the payment by the way I've got so they do sets and subsets. And then right next to it is four or five, Tesla's they bought at the auction that they're switching to people on because they can achieve that payment on a little newer Eevee. And ultimately, it is payment to answer your question. But I think that the strategy and how dealers go about it is the key to execution. I

Michael Wood: 16:42

think the only thing I would change my answer I guess now that I think about a little bit is the dealerships attitude towards new EVs. And so if a dealership has a great attitude towards selling new EVs, then I don't think it's going to matter whether it's Evie or ice under 30k Because that staff is going to have an environment. They welcome that conversation. They're able to help the customer and transition them from ice to evey, but in those dealerships that are consistently battling against the idea of Eevee that I think it will matter for them under 30k. As to whether

Daniel Govaer: 17:12

just seems like it's too hot button conversations, and I just wish we'd make up our minds because it's like we got a hot button conversation about under 30 grand we got a hot button conversation about ICER. Evie, right. And it's like now the two of them collide. This is the intersection of the two of them colliding, and then all of a sudden, then we kind of mumbled now we've got oh, well, I'm not sure which one then is the one I'm going to press

Brian Kramer: 17:29

on. Here's the reason why I do because a lot of people will say no, my market doesn't. And each and each market is different. And I'm sure there's an algorithm somewhere. So somehow, if there is you'll find it. I don't have one on this one. But all I can tell you is the same dealers that six months ago told me that EVs don't sell on their market are now saying that EVs price less than 25 grand do sell in their market because the payments and not because they were trying to because they took on it on trade and all of a sudden they kept on selling. So now they're stocking reports as to keep them and it wasn't by strat what most of the time it was. My strategy was by accident, but they came to that conclusion. I

Daniel Govaer: 18:02

mean, just like you were with Mercedes for a while. I just feel like it's like we used to say like any Mercedes, you can lease for 599 people. Now it's like, did he freeze up? Did I freeze up?

Savannah Simms: 18:15

Everybody offloading all this, like pre owned Evie, I think that's gonna play a big toll on those numbers we're gonna see over the next few months. Yeah, cuz

Jonathan Dawson: 18:22

hertz dump, like, you know how many 1000s and 1000s of these cars and they're all available now for 20 grand. So you're gonna see a blip or a block because of that, but But it mostly has to get its affordability. At that point, people are buying the payment, they're not buying the car.

Daniel Govaer: 18:35

That's a lot. That's a full on blocker. Right there. Let me ask you guys, because I consider this panel to have a lot of expertise in this. telling me how you characterize this isn't the next topic. Sorry, I should have said that. How do you characterize a winning culture, something that is sustainable, that's going to win today, but it's also set up to win tomorrow? What characteristics is that culture have? Or how do you characterize it? And Jonathan, I'd love to put you on the spot first. Appreciate

Jonathan Dawson: 19:02

it. So I'm honored to be able to say I work with a lot of very high volume high producing top ranked stores in their market and nationally. So I can say that with some degree of certainty, it comes down to the spirit of the leadership team and whether or not they create an atmosphere that encourages training encourages development that encourages individual empowerment. These are the things that help a dealership Thrive culturally is having leaders who aren't intimidated by successful people. A lot of stores have a manager who won't let anybody get better because they're afraid of losing their job. And so if you have a solid leadership team that believes in developing people and wants to grow them and strengthen their skill sets, that's a cultural phenomenon that will help you win. I love what he said.

Daniel Govaer: 19:50

Great, great. Foursquare for you, Michael.

Michael Wood: 19:58

You know, for me personally, too, I think he has a lot to do. With like the words that you hear around the dealership, do you hear a lot of AI in me? Or do you hear a lot of we and our, and for me, that's a big mind shift change, because then it's no longer, that's my customer that I'm taking care of, that's our customer that we're taking care of. And that's going to bring an experience that's going to create the revenue and the profitability that I want in my stores. And more importantly, it's going to create a culture that's demonstrably different than what's out there in the marketplace. So that I can continue to attract the top talent, and then bring them in and continue to, you know, his point, you know, invest in them, we promote from within, we don't promote, we don't go out and hire managers other than the outside. And so I think once you get them in here, and you have that right culture, they're going to stay and that turnover point that you're making earlier, it just kind of starts to go away. We still have it, but it's not as bad as the industry averages. But I think it's the I and the me versus the we in the our really help out. It's

Savannah Simms: 20:52

interesting recently, we just spent two days in a room with 30 leaders across the stores we've either already acquired or we're acquiring, we have a blank sheet of paper, what is this group going to be? What do you see for the future? And hearing what they thought because I can give you my answer. But hearing what they thought was important in the way that we set up a brand new authors. It was innovation, collaboration, and transparency. And the word family was brought up so much, and so is the word community. And I feel like a family and a community that are both very high functioning, they allow sharing ideas, they actually value shared ideas. And if someone comes forward with a question, rather than saying, Don't worry about it, they're going to educate you on it and bring you into that and make them a part of the decision making process. And from doing that, from day one. It was interesting to see all the different stores come together. And by the end, you had no idea whose idea was whose they were completely in line and the buy in was there. That's

Daniel Govaer: 21:54

awesome. That's not so frantic. I mean, are you gonna do it again, though, 90 days to see how you're tracking.

Savannah Simms: 21:59

It's been an interesting taking all the pages of ideas, and now we're doing small group calls to get there. But yeah, there'll be regular checking. And

Daniel Govaer: 22:07

it's in his family, something that you want included in the description for your group.

Savannah Simms: 22:12

It is not actually something that we've talked about even Auto Group, what's important, and there's a quote out there from another article recently, but it was family is not blood. And family for us succession isn't our family, it's your family. And that buy in for the general managers and being partners and opportunities beyond just a general manager is something we need to really consider moving forward as well.

Jonathan Dawson: 22:37

And Savannah, if I could add just a piece of wisdom from helping stores established core values and mission statements for years. Now, one thing to do is to take these ominous words, right, you know, transparency, or innovation is a really great idea, buzzword type things to put on a poster. But really what you want to do is ask them practically living that out, what is it? What is demonstrable about that word? What would that look like if we, if we were to recognize it, if we weren't identify it? If we could ever, you know, call somebody and say, Hey, I noticed you lived out this core value, what would that statement and was like, What did you say, will be the way to describe it, I think you can get them to go from a concept to a practical application, how to live out that core value, and get them to articulate that openly in multiple different variations. That's when you will have a solidified idea of what that looks like

Savannah Simms: 23:23

that spot on applying it even to mobile service or a concierge program. applying those to each of those is is where we started getting you know, further down in the process. So I love that. Thank you. Yeah,

Daniel Govaer: 23:36

famous thing that that were taught to us by I think most people in the military will remember that. Family like blood only determines relation. Family is determined by loyalty. And I think loyalty is something that dealership should go for it both from the people that work for the dealership, as well as clients that come to give their money to that dealership. I think loyalty is something to aspire to. I think I completely

Brian Kramer: 24:04

agree with you, Daniel. And the winning dealerships I go into if I see somebody is backing up, the person next to them, and they're not sitting there are they're getting, like Jonathan said earlier, consistent answers and clarity. And they're not saying Well, what I think should happen, versus you know what they say when somebody else is sitting next to them when there's no daylight between coworkers. And they actually trust that person who they say I'm not comfortable signing up with your product without getting the rest of my team on board. I think those are the those are the signs of a winning culture through loyalty and trust. They really do trust the people they work with.

Jonathan Dawson: 24:41

There was a heated debate thing. I think he would have been there for it when Patrick Yvette and I were like waiting at a conference you remember, and it was about whether or not you want loyalty members. And his argument was effectively that he didn't that he argued against it. Now Patrick, for those that don't know, is the number one volume dealership in the state of Georgia and their stores only been open for five years. And he surpassed every other dealership in the state and five years. And his philosophy, which was interesting, and I, and it's really a interesting way to look at it, he said, I really don't want loyal people, what I want is I want people that could be loyal, but not actually loyal in this way. He said, I want to always earn their loyalty. If they're loyal to me, I'll take them for granted. And his fear was, if I believe my people are loyal to me, I'll stop pursuing them and create an environment where they'll want to be loyal to me. And so I thought that was just an interesting way of describing his way of looking at loyalty. Like I don't want them to actually be loyal, I want to always be afraid I can lose them, so that I never do. And I thought that was really interesting.

Daniel Govaer: 25:43

Okay, well, St. Patrick, is he's known is better than, than all of us here. And I do. And you're right. And I do love with him. And it's just like, I aspire to get to his level, where I can be able to say something like that. Yeah. Because that's, you know, that's an amazing thought process to have. I'll also just bring up just as a counterpoint, Patrick doesn't care that your car sells data to third parties, and just know that your car is selling your data, not to your insurance company. So you know, and he said that on this podcast, too, so I just have to point that out. Because as much as I love him, you know, there's that segwaying into changes. What changes are you guys seeing in the workforce in your workforce? In other workforces that you know about in in recruiting? What changes you guys see coming to your organizations this year? Anybody looking at different scheduling types, remote work, hybrid work, anybody? Is that making its way into being more prevalent in our workforce? Or have you seen it working better somewhere else? Tell me

Brian Kramer: 26:41

I'm talking to multiple dealerships that are pursuing four day workweeks. No, Walzer just kicked that off leaderboard, Toyota has been doing it for a few years Jermayne Toyota is in the is in the process of mapping all of that out on a large volume store. So I think that I don't know that everybody wants to do it. You know, I want to be able to work 10 hours straight. But I think that giving people the option to be able to do that to be able to take long weekends and have more flexibility, obviously goes back to the Gen Z conversation from earlier.

Jonathan Dawson: 27:11

Think when you Brian, when you said 10 hours, you're talking about the part time schedule of only 10 hours a day.

Savannah Simms: 27:17

I don't know anyone that can get away with just 10 hours a week.

Jonathan Dawson: 27:22

So I have stores that have been on modified schedules for a long time, especially at earn privileges of schedule release. So for example, I work with in the pinnacle society, we work with, you know, so many high achieving top producing salespeople, many of them just have the they have the internal leverage to set their own schedule. But we have salespeople who sell 30 cars a month working three days a week, a gentleman who sold 64 cars last month only work 19 days, the whole month, that store only has a four day scheduled work week, they have four salespeople sold 143 cars and four people. So it is not about more in the sense of time, it's about efficiency and effectiveness while they're at the store. And if we can help our people build systems around their processes, so they can be successful consistently. The reality is you don't need to be there 50 and 60 hours a week, like the old kind of school thinking was, you can be there four days a week and sell 40 cars a month. And I've got plenty of people who blueprinted that out and prove it every single month. So I encourage dealerships to consider truly developing a work life balance for their employees where they can enjoy that. But in order to do that, you have to build a quality book of business that will create for you that quality of life that you want. And we don't unfortunately, when it comes to like comp plans and the ways that we set up our stores, incentivization structures, we don't teach salespeople how to build a quality book of business. And because we don't teach them incentivize them to do that. And we only measure the quantified metrics, not the qualified metrics. We have salespeople that you know have to be there, Bell, the bell, oftentimes, and that's, of course, we need some turnover. In the state

Savannah Simms: 28:55

of California, they also make it quite difficult to lean into some of these more creative solutions. We just were at the dealer day for cn CDA. And we were talking about that, you know, I want to make it so that you can be at your daughter's volleyball game or coach your son's baseball team. And so I'm okay with, you know, alternative schedules within my own store for that reason. And typically, like you both said, those top performers are the ones with those more flexible schedules. But the state in California is at least making it extremely difficult.

Michael Wood: 29:24

Because one of the number one things I want to look forward for this year, I was talking to Erica a week ago from the Walzer group about and just asking her, I was like, Hey, can we can you and I have a one on one conversation? Because, you know, I work my schedule, and I want my staff to work their schedule. But unfortunately, if you look at certain positions within the dealership, whether it's the service consultant position, or the salesperson position, they typically seem to be the ones that when I'm approving time cards every two weeks, or logging 100 to 120 hours in that pay period or more. And it's just maddening because you know, when I signed up to work for checker flag, I didn't sign a contract that says that checker flag now owns me, and I'm gonna give them 100% under my time, whenever they see fit, I signed a contract that said for 40 hours a week, you're gonna give me X dollars based on what I can produce. And so you should Austin's point, if I'm more efficient in the time that I'm here, doesn't mean that I'm lazy doesn't mean that I'm, you know, not good according to what the standards have been in the past, because I've heard that before. Oh, Mike just works, the schedule will point out the flaw point out to what I'm doing wrong, or point out to where you're beating me. And I'm happy to put in more time. But just because one works the schedule, and you don't doesn't make them wrong. I just feel to savannas point, like, I want my staff going to their soccer games, I want them coaching their little league teams, so that I can sponsor the team. So they've got the checkered flag logo out on all their uniforms. And I've got a really, really happy bought in employee. That I mean, that's the difference.

Savannah Simms: 30:46

And we were talking about Gen Z earlier as well. But you look at the tech companies and how flexible their schedules are and work from home and unlimited PTO, we all know that unlimited PTO means we're not going to take it. But it's something that we do need to consider as the work life balance and the wellness programs and you go work for an OEM, and they'll pay for all your family planning and IVF and all of that. But I mean, you're at a at a single point dealership, we're not seeing that. So those benefits along with the schedule are things we're going to need to think about with the next generation. And you know, to your point as well, the teaching them how to build the book of business and how hard it's going to be because that demographic likely only knows COVID, where we're taking orders, they don't understand the the harvesting the business nurturing that the box of index cards with all the notes of the family members now that are in Drive centric, or whatever your CRM is, but the hard work.

Jonathan Dawson: 31:39

I would also add non monetary motivations and incentivization are really important to when you're building out your strategy you have to look at and say, okay, not everybody wants to simply see an extra, you know, couple bucks in their checking account. Some of them want to see something more purposeful to what they do. So can you find out within your organization, how you can support local causes, charities, organizations, and create an outlet for people to feel like what they're doing has a greater purpose beyond the actual paycheck. Also looking at unique ways to structure bonuses and other perks. You know, a lot of times what will be it'd be like just some sort of cash incentive. The classic, you know, cliche is, you know, $5 spiff. But the reality is, again, to the average person, if you just give them a $5 spiff that money doesn't get to go to whatever they want. I mean, if I'm married and have three kids and give me a 500 hour spiff, it goes to toilet paper and toothpicks, it doesn't go towards me buying a new TV. So instead, what I've taught stores to do is to do cash equivalency, spiffs, where they can earn an amount of money valued at x, that they can then assign that money to go towards something. So if I, if I'm a newlywed, and I've got two small kids, you know, and I want to take my wife on a weekend trip, and I have$500 that I just won. My wife's not gonna let me spend that on us. She's gonna say no, it goes to the kids. But if I instead of winning $5 In spiff, if I win a certificate to the W Hotel, and a Ruth's Chris, and if I win a night out, I can go home to my bride and say, Look what I want for us. Now let's get a sitter so we can go enjoy ourselves. It's thinking more creatively about how do we incentivize? How do we motivate beyond just throw money at people,

Daniel Govaer: 33:16

you just weren't supposed to say anything when you went to Smith. But anyway, money, what's

Michael Wood: 33:20

like at our VW store, you know, we I haven't set for them, it's every given month, if you sell 16 cars, you have the choice of an additional$500, or you have a free day off, and I don't pay the $500 up, they take the day off.

Jonathan Dawson: 33:33

I would add to that, then just if you're going to do that kind of thing. Like I said, consider putting other things on the menu other than just time, that's a great idea for sure. For example, a salesperson may want to see themselves marketed better. So instead of just giving them 500 bucks that goes to toilet paper, toothpaste, put it in a marketing allowance, that you can then help them redirect that marketing into whether it be tchotchke things that can give to their customers, or some Facebook advertising, but show them how to grow their business with what they incentivize through their success. Instead of like I said, just going and bills, basically put

Daniel Govaer: 34:04

your face on paper, and then have the equivalent of that for $500.

Jonathan Dawson: 34:09

Yeah, exactly. And have your team come up with that ask each person hey, if there was a prize, what would be the prize? Let's say there was a$500 level 50 Level? What would you want to spend that money on? If you want it, get them to tell you and then monetize the cash equivalency of time and say, Okay, if you don't win, if you win the $1,000 prize, you can do that or it's this much time. I'm just saying start getting very creative and try to align the behaviors that you want the outcomes that you want with incentives, and motivators that they want. And you'll see the change. That's how you get salespeople to 20 cars or 30 cars a month and beyond.

Daniel Govaer: 34:46

Okay, so segwaying right into a lightning round of what we'd like to do here relationship advice for the automotive world. It's a very popular segment. And my wife thinks

Brian Kramer: 34:56

I'm an expert on relationships because this is perfect. Should

Daniel Govaer: 35:00

she wait really?

Jonathan Dawson: 35:05

Until Brian that this is actually an intervention.

Daniel Govaer: 35:09

Just hang on a second, we have somebody else joining in lager.

Jonathan Dawson: 35:14

Brian's mother and father and his wife signs

Daniel Govaer: 35:17

that a dealership just isn't that into you. Spam up was about

Jonathan Dawson: 35:22

the only about us page, there's no photo of you. There's no staff page, there's no photo, there's no bio, they took down your photo and put a silhouette up instead.

Daniel Govaer: 35:33

Maybe they just didn't want you to get recruited though.

Savannah Simms: 35:36

And then they don't have confidence in their own leadership to be able to share and recruit more business for you. Right.

Daniel Govaer: 35:45

Okay, okay. All right. What are the signs of your dealership? If you're you know, employee to dealership you're listening to this and you've noticed this behavior at your store? Maybe it's time to just look for a new relationship? What's another one? That

Brian Kramer: 35:56

they're looking for somebody in a different department to to their deals?

Daniel Govaer: 36:00

Oh, points originality on now, okay. Or, or the to managers always have the same material every time?

Jonathan Dawson: 36:09

How about this? How about this classic sign that they won't actually invest in any training or development of your skill set.

Michael Wood: 36:18

For the manager maintains all the information because they're afraid to transfer the knowledge,

Daniel Govaer: 36:23

oh, gatekeeping monthly programs. I haven't. If you're in a store, where you get a summary page that someone has done for you of the manufacturer programs, because they think you can't figure out to add a point to manufacture special rates reach out for help operators are standing, or

Brian Kramer: 36:40

they make you call 20 minutes on hold to get a payoff because they won't give you user base level access to Bravo and our dealer track.

Savannah Simms: 36:48

Yes, logins for sure. Holding back on giving you logins

Jonathan Dawson: 36:52

How about they change? How about they change the way that they pay you and instead of giving you a wash out sheet that actually shows the detailed transparent numbers of the deal? They just give you what your what you got paid? Yes.

Daniel Govaer: 37:05

Or just showing the growth

Michael Wood: 37:07

that's a new pack

Brian Kramer: 37:12

new cards for six months, I was just gonna work out. Oh,

Jonathan Dawson: 37:17

yeah, about you don't get your login, or your email about you're still using other people's business cards where you scratched out the last person's name and put in your own.

Daniel Govaer: 37:27

Yeah, and then the name on the office can also be a good giveaway like either the guy that puts the names on the offices either he's there every day, and he's Johnny on the spot because they need him that much or, like the other way around. Like there's still some other names on that office and a bunch of people like you're not the only one type of a thing. But in any event, these are all good, and we're going to do like there's gonna be a great end of the year compilation. I hope anyway, I think it's a good idea that we could do that. But anyway, that's just my suggestion of all those signs that a dealership just might not be that into. Anyway, thank you for joining us for very special 20th episode of the wheelhouse I was gonna say 20th anniversary. It's kind of our anniversary day. We did 20 episodes of the wheelhouse today. Thank you so much to the panel. Join us today. Thank you for those of you that join along to watch or listen and we will see you again in another two weeks for episode of the wheelhouse.

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