AI vs a Fixed Ops Expert: The Results Will SHOCK You

Ask the expert: Dave versus AI 0:00

Steve Shaw: Here we are again, Dave Rogers. What's up with you? How are you doing?

Dave Rogers: Fantastic, buddy. How are you?

Steve Shaw: I'm doing pretty good. We've been growing significantly. Our views are way up and our followers are up. And what's interesting is that I'm getting a lot of questions from people who want answers. So I thought, why don't we just answer these questions on our podcast? We'll do a little ask-the-expert episode, but here's the twist. I haven't talked to you about these questions yet. What I did was ask

AI. I'll tell everybody: I asked Claude. I like Claude. Claude's my AI buddy right now. I've used many of them, Grok, ChatGPT, but right now I'm using Claude. So I asked Claude these questions as well. It'll be interesting to see you, the expert, versus Claude AI: your thoughts as a person who actually runs stores, and Claude, who thinks he does.

Dave Rogers: Let's go. Give it a rip.

The biggest lever for service absorption 1:08

Steve Shaw: All right. The AI versus the expert. Question number one: what is the single biggest lever for service absorption that most dealers ignore?

Dave Rogers: I think the part they ignore is their expenses. Absorption is the ability of the fixed ops department to cover the expenses of the dealership, so 100% means you cover all the expenses. I think sometimes we get lax in our business and forget to look at the expenses. What's Claude's idea?

Steve Shaw: I like your answer. That wouldn't have been what I thought of. But here's what Claude said: effective labor rate is ignored. Most dealers pay attention to hours per RO more than effective labor rate. But your answer was pretty good.

Dave Rogers: Claude's been listening to someone else's podcast.

Keeping a technician for 10 years 2:20

Steve Shaw: All right, question number two in the ask-the-expert segment: how do you actually keep a technician for ten-plus years? And it's not just money, but you can use money as an answer if you want.

Dave Rogers: I think you have to give technicians some kind of career path. You've got to let them know what it takes to get from entry-level tech to a master type: what's involved, what they have to learn, what kind of training. I believe very strongly in getting them trained.

And the other thing everyone forgets is giving the guys a chance to stretch their wings without worrying about retaliation. I've had a lot of guys in the past who were afraid to do stuff, because if it came back, you'd hold it against them. So you've got to let them experiment a little. There can't be just one answer for that. Let's see what she says, or he says.

Steve Shaw: Claude says it's actually a three-legged stool. One, a predictable income, so flat rate with a floor or a guarantee. Money. Two, clean working conditions: lifts, parts availability without chasing, and so on. And three, a career ladder, a place to go. And Claude says the dealers who lose techs usually break leg

two or three.

Dave Rogers: I like the three-legged stool. I've used that for years. Three legs, four legs. I like that.

Will EVs crush dealership revenue? 3:56

Steve Shaw: Awesome. All right, here's one I hate, but I'm going to ask you. Are EVs going to crush dealership revenue or enhance it?

Dave Rogers: I think they've crushed the front end of the business, sales. They're not gaining traction. I shouldn't say they're dying out. They're settling into that 3% to 5% of the market. But I don't think they're going to hurt. I think they're going to be a boom for the service department. Those vehicles break down. I've said it before: a lot of the manufacturers can't build window regulators on gas-powered cars, so they're certainly not going to figure it out on an electric car. There's a lot more electronics in

these things, a lot more modules, motors in the wheels. Listen, the repairs are huge when you get them, and I think it's going to be a boom for us. We're going to get some good repair dollars out of it.

Steve Shaw: I think you and Claude are in sync. Claude says EVs are going to be a boost for dealership revenue. It says the average RO on an electric vehicle is $865 versus $517 on an internal combustion engine, and that the dealers who benefit will be the ones who have invested in it, because 300,000 EVs are coming off lease in 2026. So you're right on.

Dave Rogers: This year. I've got some people telling me the used EV residuals...

Maybe some of these sales showrooms will get some money back.

Should dealers follow OEM maintenance schedules? 5:39

Steve Shaw: Awesome. All right, this one is near and dear to your heart. Watch this. Should dealers stick to OEM recommended maintenance schedules? Go.

Dave Rogers: Absolutely not. It's the biggest disaster, and it's been going on for twenty-five years. I've said this more than once: you can't go a year without changing the oil on a car. Whatever the factory says, it's under ideal driving conditions, which don't exist. So cut it in half if it's a year, and make adjustments if it's a little less. We have some manufacturers who recommend 8,000 miles, and I still think that's too far.

The oil might be okay for five, six, seven thousand miles, but I don't think the filters are built to last that long. And when you look at the engine-related failures and recalls going on right now, it's a direct result of improper maintenance. I blame the manufacturers. What's Claude's answer? Maybe Claude listens to my podcast.

Steve Shaw: Well, you nailed it. Claude agrees with you. Claude's been listening to your podcast. Claude says a six-month touch point cadence beats a twelve-month one all day long, every time, for retention, growth and customer satisfaction. Good stuff right there.

Most overrated and most underrated in fixed ops 7:09

Steve Shaw: Okay, let's ask this one. This is a good one: what's the most overrated thing in fixed ops right now?

Dave Rogers: That would be AI.

Steve Shaw: Give me a specific AI.

Dave Rogers: Any of the AI right now, the voice AI. The only one I think has any merit right now and is workable is data mining, although we're getting better at it. Then there are the buzzwords out there. Retention has been around forever. I don't think that's overblown. I think it's a real thing, and people are just writing

clickbait articles on it. But AI... when you hear people say, "Either you're using AI now or you're falling behind," or, "If you don't jump on the AI wagon, you're going to be left in the dust," to me that's just bullshit. Total bullshit. That's my answer, and I'm sticking with it.

Steve Shaw: I think you're correct. Claude said the AI-powered video inspection tool is the most overrated thing. And the reason, you're going to love this, is that dealers only halfway train it and then move on, and don't train their people to use it appropriately. That's certainly a conversation you and I have had many times, and one you're passionate about. That was the most overrated thing in fixed ops. Now, what do you think the most

underrated thing in fixed ops is?

Something we're not caring about, I guess.

Dave Rogers: What would I say is underrated? It's something we talk about all the time: the fundamentals and the basics. Sticking with the basics, writing up a good repair order, getting all the customer's information. I don't think it makes headlines. I don't think anybody's talking about it but you and me.

But we talked to Tyler the other day, and everything they do now is the same as we did back then, the basics, except for the electronics and technology. I can't think of anything else.

Steve Shaw: Absolutely. Well, you're pretty well on track with Claude, though he says the service BDC is underrated. The reason is that a well-staffed, well-trained BDC will handle your lost souls, declined services and customer outreach better than any software out there. It's people-heavy and unglamorous, and most dealers avoid it.

Dave Rogers: I like it.

Steve Shaw: But that goes back to the fundamentals: having those people and then training them how to do it. So far so good.

Dave Rogers: And that's what everyone wants AI to replace, the BDC.

Steve Shaw: It's funny. I used AI the other day when I was working on a marketing report. It's a great tool. But that doesn't mean I can hand that report in. I can't just replace myself with it. But it was a great tool. It saves me days of research time.

Dave Rogers: Listen, I agree. I think AI is great, and I think it's the future. Everyone's jumping on it right now. I told somebody the other day, on a vendor call and in an email, that I have

vendor fatigue from the AI stuff. Everybody's got an AI widget. Everybody's got an AI something. And I just don't think it's baked in yet to where it's going to take over our business, whether it's voice or whatever. I think Claude's right. A good old-fashioned BDC, someone answering the phone, someone making the outbound calls, is probably better. That's a good choice. I like it.

Morning metrics, dispatch and the drive in five years 10:58

Steve Shaw: All right, here are a couple of funny ones. What metric do you watch every single morning? That one actually came from a viewer.

Dave Rogers: The metric I focus on most is MPI completion percentage.

Steve Shaw: Interesting. I put this into Claude, and he said hours per RO trended against last week versus the same week last year. And then MPI discipline, then shop capacity, CSI and gross.

Dave Rogers: Yeah, those are all good. Capacity is another one to look at. When I was running a store, it was a little different. I worried about my loaner cars first thing in the morning.

Steve Shaw: I asked Claude this one, and now I'm going to ask you. This is from a listener.

Conventional dispatch, groups or teams: which one's better?

Dave Rogers: Whatever fits your shop. The reason I say that is with lateral support or teams,

Steve Shaw: That's a cop-out. No, that's a good one.

Dave Rogers: you really have to have the right staff, the right service writers and the right technicians. They have to be willing to work together. There's a lot of personality that goes into it. We have a lot of stores on central dispatch now, because there's a little more control. But the downside is that when you get over ten, twelve, fifteen technicians, it's a high-burnout position. A lot of people can't do it for very long. Years ago, when I was doing ATCON and all that,

it was eighteen months and that guy would burn out. I think it depends on the brand and the shop.

Steve Shaw: Well, here's Claude's answer, and it sort of goes along your lines. If I was running a store and there personally doing it, I'd figure out a way to do lateral support groups. But Claude says the future is a hybrid: a team lane for maintenance and light repair, running as a pod, and then a specialist lane of A-techs on conventional dispatch for diag, internal and complex repair.

Dave Rogers: I like it. Years ago, when I got to the Mercedes store, I wanted to do a triage-type thing with the cars coming in. I wanted one of the foremen out in the drive-through with his little diagnostic tool, like an urgent care before there was urgent care. I wanted to do a MASH unit. That's what I called it.

And I read something today that Hendrick is redoing 100% of their stores, and they're going to model them after urgent care. I should have done it in 2003. I would have had it. But it's true. I believe exactly that. That's a great way to do it: hybrid, express, teams, lateral support, the main shop and big work on central dispatch. I like it.

Steve Shaw: I love groups. I'm a group fan, and I'd do groups anytime, anywhere. But you're right, we lack those group leaders, and we lack the ability to train them. What I always see happen, and you say it all the time, is the hundred days. A hundred days in, they're off of it and it fails. If we learn the fundamentals by chance, we stop doing them within ninety, a hundred days, and if we don't learn the fundamentals,

it's a crapshoot from day one. But what you just said leads into the next question: where will the dealership service drive be in five years?

Dave Rogers: I think it's just that. That led right to it. You're going to have an express, light repair and maintenance, which I love. Maintenance, I think, is the avenue for the C-level, maintenance-type repair guys and gals, and I'm not criticizing, working that way. And then you have

the A-rate work, the specialty work, which you really do need to separate from the main flow. I see that coming, because it's getting that way now. Unless you're a domestic store with all the specialists they seem to have, you almost have to have the A-rates in their own section with their own work. You can't intermingle this work anymore. It's just too complex.

Steve Shaw: I think I agree with that. I love groups, and there's an argument to be made for both ways. You're probably right that you've got to look at the team in front of you to decide how to structure it. But I love the idea of urgent care. I gave a talk a couple of years ago along the same lines, about where it's going to be, with telematics, where cars come in and tell you what's wrong with them.

We've talked about kiosks. I love kiosks. I'd have kiosks all over the place with a guy helping out. I'd have guys handling the process instead of writing up tickets, and then I'd have one salesperson over it all, kind of like an urgent care or a Best Buy. And then you've got a shop foreman with a bunch of kids. The shop foreman is making all the money, and the kids are making kid money and growing. I think there's an argument to be made for that.

If you said Hendrick is starting to do that, that's pretty wild.

Dave Rogers: I had an idea years ago. I always have these things, and at the time the boss wouldn't let me do it. I wanted to put three or four...

I'm just making up numbers. Three or four young, Enterprise-type college grads, guys and girls, paying them 10 or 12 bucks an hour back then. They were going to be greeters. They were going to meet you at your car, write up the customer's car and take the vitals. You could teach them how to stick a tire if you wanted to. I used to call them Smurfs. They were just going to be happy and take the basic order.

Because writing the RO is really no big deal. You ask a couple of questions,

get the vital information and find out what they're there for. Then behind the scenes, you'd have what I used to call the chef, a guy dispatching the work, and next to him the salesperson. So you separate the functions of service into what you need. I figured you could hire three of these Smurfs for one advisor. You could fill your drive-through, have more of them in the morning when customers are dropping off, and have a bunch of them at night when they're picking up.

Happy, smiling, young, friendly people. They laughed at me. They thought I was an idiot. But I think you could do that in some brands and some facilities, because there's a lot of separation of skills that we try to roll into one person, the advisor. It's not always the easiest thing to do.

Steve Shaw: Like Tyler. A very skilled young man with a lot of tools. He's probably very good at some things. He's very personable. There are probably some things he's deficient in. I'm just making that up, I couldn't tell you, but every advisor has strengths and weaknesses. We roll it all into one, just like you talk about the service manager having to be everything to everybody, instead of piecing it out so people do what they're really expert at. And I was going to say, the one thing

where the kiosk missed, and I'm a big kiosk fan, is that it should have gone to an app. It should be a check-in app, not a check-in kiosk. Every dealer should let you check your car in on their app, then you drive in and drop off. That would be so much better.

Dave Rogers: It's like Great Clips. You check in online, get to the store and let them know you're there. I've been saying that for years. But to give you an idea of the big demise of the kiosk, because I had some of them: COVID.

People did not want to touch that machine after COVID. They didn't want to touch anything. It was amazing. You'd have somebody wiping it down, or wipes next to it. They didn't want to touch the machine, so at that point we just packed them up and shipped them back.

Steve Shaw: I saw a meme recently of a baby being baptized during COVID, everybody in face masks, and the priest had a squirt gun of holy water. So I get that. Here, let's do a couple more real quick. We don't want to end on that note.

Advisor pay plans in 2026 20:24

Steve Shaw: Pay plans: how would you structure an advisor pay plan for 2026?

Dave Rogers: I still believe in the same basic formula I've used for years: 40-40-20.

Forty percent of their income comes from salary, 40% from commission, and 20% from some kind of bonus: CSI, Google reviews, spiffs, whatever the case might be. That's always the way I've structured them. And I do believe you have to give them a salary. I don't believe in 100% commission. I think that's crazy, because we're going to ask them to do things they don't get paid on. And you don't want them treating the new customer who's here for a first oil change or prepaid maintenance like a

red-headed stepchild. That's what I've always told the advisors: "Listen, you get 40% of your money from salary, and that's to do this shit that you're not going to make a lot of money on. So stop and go do it." I think that's fair.

CSI scores and customer retention 21:20

Steve Shaw: Awesome. Last question: are CSI scores real, or is everyone just gaming the system?

Dave Rogers: You know what? It's a game. And you have to know the rules. You have to know what you're allowed to do,

like any sport. An offensive lineman can get away with holding inside on certain plays, but don't get caught with your hands outside the guy's shoulders. On defense, they interfere on every pass play, but don't get caught. With CSI, listen, most customers hate it. They hate the survey. They hate being asked about the survey. They don't want to fill out surveys unless they hate you and are trying to get even.

So it's a game across the board. Do I think you can get some information from it? Sure. Do I think it was started for the right reasons? Absolutely. But it's gotten to be a joke now. I like NPS better than CSI, the promoter score. I think that's fair. But with nine out of ten franchises using scoring systems with twenty-seven questions, giving you a score from zero

to 100, and it's not an NPS thing, it's going to be gamified. It has to be. So to me, it's a game.

Steve Shaw: So retention, then, the last thing. You said net promoter scores. Talk real quick about how you'd handle customer retention. What's your philosophy on it, and how do you grade yourself?

Dave Rogers: It's one of the toughest things to measure. We've been using these numbers for years. It used to be

based on your units sold. You'd take five years of units sold and come up with a formula, and then compare it to your monthly RO count to see whether you were good or not. Manufacturers have their own way of gauging it: one visit per year. I've heard some of the podcast experts online say one visit in fourteen months is loyalty. To me, that's not loyalty. That's not retention. It's a tough formula.

We don't necessarily have the tools in our systems to grade us on this, but I've looked at different metrics over the years. We give away free state inspections on all the cars we sell. So I used to look at the op codes. Say I had a store that sold 100 new cars a month, with free inspections for life, and let's say people keep their cars for four years, just for a number.

I'd look in the system and ask how many of these free inspections we were doing a month, to get an idea. If I sold 100 cars a month

over four years, that's 400 cars. How many free inspections was I doing? If I was doing three or four hundred, I figured I was doing a good job. That's not scientifically proven, but it's what I used to look at. The challenge for us is the reporting mechanism and getting a standard. There is no standard, and the bar has changed. I think 60% is a good number. I think that's what you should strive for, 60% to 70%. But

we're challenged until we get central databases and start doing more with our own data. One of the bigger things you hear about now is CDPs: get all your data from all your sources into one CDP. You have to build a data lake and all this other stuff, but put all your data in one place, and then you can measure your customers. Canada has been way ahead of us for years. They've been at 60%, 70% for eons. The United States used

to be around 35% back in the old days. And most of my stores, when I look at the manufacturer data, are between 55% and 70% with the manufacturers that report it, which I think is okay. But I think we've got to do a better job.

Steve Shaw: Grok actually agrees with you. It says 25% to 60% retention based on your RO count. It gave me a pretty convoluted answer, and I was trying to look through it real quick, but it's between 25% and 60% retention based on your active database and the market area.

Dave Rogers: And the other piece of the puzzle that's tough to balance is that there's a finite relationship. Let's say the customer loves you,

but after four years doesn't love the car. Or you can't put them in another car of the same brand in the same payment range. Or they're going upscale, from Hyundai to Genesis. I lost that customer in the sales process, and there's no real mechanism for the dealership to track that. Sales departments can see a loyalty report. They see the pump-in, pump-out and the defection rates.

But when you boil it down, what is good retention? What is good loyalty? It's very tough in the car business, because it's not like there's only one brand of car you can engage people on. It is a challenge.

Steve Shaw: That's the big fallacy, trying to lump every single person into one metric without gaming it. Because I promise you, I gave both of the dealerships I took my truck to great CSI, because that's what I do. It doesn't mean I'm going to be loyal to one or both of them. Anyway, that was awesome.

Dave Rogers: Well, that CSI survey is held against the employee who gets it more than anything else. That's the challenge, and that's why it's not fair. You could have woken up on the wrong side of the bed. You could have had a bad morning, somebody pissed you off, and you got that survey and let somebody have it. That's not fair. That's why I say you have to game the system to succeed.

Steve Shaw: Exactly. Well, that was awesome: the expert versus AI. Guys, I love the questions. Please text me, send me or comment with more questions for Steve Shaw or Dave Rogers, and we'll do another episode when we've collected a bunch of them. Dave, it's good seeing you. Let's catch up again next week.

Dave Rogers: All right, brother. Thanks. Appreciate it.

Steve Shaw: Talk to you later.