Express Department

Is express a necessary evil? 0:00

Steve Shaw: It's like the cop said to me: "I caught you doing 55 miles an hour in a 35." So what's going on, Dave? Do you know why I pulled you over?

Dave Rogers: How you doing? He pulled me over here. How are you, Steve? Everything's great here, man. Like I say every time, and I'll probably keep saying until spring, it's cold. Actually, I looked at the weather the other day, and we might have 50-degree weather in another couple of days. Fifty degrees in January.

Steve Shaw: Nice. Fifty degrees, you'll be taking your socks off. That's when we put ours on. Break out the flip-flops at 50.

Dave Rogers: That's exactly right. I'm working on my tan.

Steve Shaw: Well, where did we leave off? We were talking about technician compensation last time. We talked about paying our techs flat rate, kind of a hybrid, I think is where we left off. I'm really interested in the express side of the business as well. I love talking express, as well as lube techs and things like that. What are your thoughts on the express side of the business?

Dave Rogers: I hate express. I think it's just the biggest waste of money. I get it, it's a vital part of a lot of businesses. We have pay plans all over the place on that too, mostly hourly with incentives. We offset some of what we pay them based on their hours, offsetting the expense. Overall, I think it's a necessary evil. I don't always think it's the best service for certain cars to give them to kids who don't really know how to look over a car.

An example is when I look at the numbers in some of the shops. The average mileage coming through the store is 75,000 miles right now. It's getting up there. And sometimes, Steve, it kills me: for some of the express advisors, the average miles is higher than the average miles of the cars going through the main shop. The car going through express has 80-some thousand miles on it. And you know why that is? Because the customers have figured out that if I go to that express lane, I'm probably not going to get upsold as much as if I go to the main shop.

Steve Shaw: I have not thought of that.

Dave Rogers: I can tell you, in the Northeast people figure this stuff out. And you can't blame them. That's the path of least resistance, the place they go where they're not going to get upsold so much. That's why I say it's a necessary evil. At 5, 10, 15, 20, 25,000 miles, get the car in, get the car out, change the oil, every other visit do a tire rotation. I think that's important. It's just hard to navigate which cars should go through it.

Customers will give you an hour 3:36

Steve Shaw: I've got to tell you, I have a unique outlook on express. I get it. In today's day and age, we have express writers, and the manufacturers want us to have this. But I think it's a fallacy, number one, that you have to have cars done in 30 minutes. Customers have all agreed they'll give us an hour. We used to call it maintenance and light repair. MLR. So you get the oil changes...

Dave Rogers: Hey, real quick, let me interrupt. If that's what the manufacturers called it, it would be an awesome thing. By calling it express, you're putting an unfair burden on people. That's part of my problem.

Steve Shaw: Well, here's what I believe. The customer has said they'll give us an hour to do the oil change, tire rotation and multi-point inspection. Anything else, and you and I agree on this, if it's a Mercedes and it's a B service, the customer doesn't have an expectation of it being quick. But you can't tell the guy it's going to be an all-day job because it's a Mercedes or a Lexus. They can still have express or faster service. One hour is generally what the customer has said they're comfortable with.

From an express pay plan perspective, and we can get back to why customers come to express versus the main shop, I think we've got to allow our express or lube technicians, whatever you want to call them, to do more than just oil changes. If not, we're going to be carrying them forever. When I used to be on the board of a couple of different schools, I would teach these kids to program radios back in the day, when radios were hard to program, program the phones, do the fluids, do the quick and easy things. And I believe any young man or woman at a car dealer or in a shop had better know how to use those fluid maintenance machines. So we should allow them to do those things so our technicians can earn a living.

And a hybrid pay plan is fine with me. Hourly plus, or flat rate with a guarantee of some sort, and even an incentive for the additional items they sell. There has to be some sort of incentive for them to do better. Where I think we go off the rails is, one, we think the car's got to be done in 15 minutes because the auto manufacturer told us so, which is bullshit. And then we think one technician or two technicians should work on that one car, and that the dealer should lose money. I find that to be a ridiculous scenario. And I love setting up express lanes and express departments with dealerships.

Dave Rogers: I do agree with you. I like to bust some chops, because I do think maintenance and light repair is a perfect line for it. We do have technicians who are hourly and spiffed based on the recommendations, and I think we've gotten better over the last few years about express. I think COVID helped, because people started making appointments for that stuff where no appointment is necessary. During COVID, people wanted an appointment. They didn't want to be near anybody, touch anybody or breathe with anybody. That helped us a little bit, because now you can actually schedule and pace it out.

And when you get to these hourly technicians, it is a great training ground for them. I think you're dead on with that. If you can teach them how to use the fluid machines, test batteries, do the small repairs, air filters, cabin filters, wheel balancing, maybe a tire, that type of stuff, it's a great learning curve for them. But what do you think about paying them? Besides a dollar for an air filter, what kind of pay plans have you come up with or thought of?

Paying express technicians 8:03

Steve Shaw: I still think I would pay them an hourly rate or a flat rate, plus incentive, and then I'd look for some kind of security blanket as well. But if I'm going to pay them flat rate, which I believe in, they've got to be able to change the work they're doing. They have to be able to turn 40 hours. They have to be able to turn their time. So we have to have someone in their arena who can help them, guide them and teach them some of those things.

I would not be opposed to, and I'm in favor of, any technician in lube or express MLR doing everything up to two hours, up to a brake job, let's say. They should be able to do it, and if they can't, then they need to be working with someone until they're capable. What do we dealers do? We take somebody and go, "You're a mechanic," and throw them out on the line. Or "You want to be an advisor," and we throw them out at the desk without any supervision to find out what they can actually do. Then we hope they're successful, and then we fire them, or we take them off their guarantee and say tough shit, and then they quit. It's a vicious cycle, and we never give them the proper training.

I know I beat this drum all the time, and obviously I'm a trainer. But I don't know that there's any other thing you can do other than keep giving these men and women the training they need to be successful. I'm not saying hire Steve to do it, but somebody in the facility needs to be able to give them those tools so they can be successful for us.

Dave Rogers: I agree. We used to call it the earn-as-you-learn program. That's how you learn. I used to tell the kids, "We're going to pay you better than college. When you go to college, you have to pay to learn. We're going to pay you to come here, and we're going to teach you." But overall we do a crappy job teaching. I agree with you on that.

You mentioned flat rate. Most of my express guys are clock-hour guys, with incentives to get them as close to 40 hours as possible. But that's not easy to turn on six, seven, eight-tenths a car. I think that's probably the average on the express lane, eight-tenths per RO. We have some stores where the express lane advisors upsell, and it ranges from as low as two-tenths as an average to as high as an hour in some cases. That's a real feast-or-famine business, based on the miles of the car and what it needs.

But it is a great training ground. When you go down to Texas or Florida, you'll see these big behemoth dealerships. You pull in the main entrance, and there's a young girl sitting on a chair asking you, "What are you here for today?" "Well, I want to get an oil change." And she points to the eight bays over on the left side, express bays with the pits in them. And if you're here for a regular service or a recall, you go to the right to the drive-through. Listen, that's a great way to do express. There's nothing better, as far as having the land and the bays to do that. Unfortunately, in the Northeast you don't see that often. I do have two stores with express drive-throughs, but most of my stores don't have an express lane.

Express is how the business grows 11:49

Steve Shaw: I would go along with that. Most stores don't have the setup to do that type of thing. I could default back and say that's why groups are so good, but that's showing my age. I'd also say it's about looking at your business and how we're going to grow it. We all grow our business through the express lane. We don't make a lot of money starting out in the express lane. If you're just selling oil changes and tire rotations, you're not making any money, never mind having an untrained advisor doing express.

It's like McDonald's. If they're just selling hamburgers, they're going to go out of business. They have to sell fries, they have to sell ice cream, they have to sell the extra stuff. So it's important to add that on. Again, it goes back to each individual business. What's your strategy? Are you going to be in the oil change business? If you are, then you've got to sit down and look at how you make money with express. Paying some $50 technician to do oil changes isn't going to do it, because I can't pay him to look over somebody's car. And having a kid who doesn't know how to look over a 100,000-mile car doesn't work. There is a strategy involved in express, MLR, the Quick Lane type of situations that many people overlook. They're rushing to get the car in and out: "I don't want to deal with that. I'm not going to make any money. Let's just get them in and out."

And the other thing that drives me absolutely insane, and there might be a thousand people who comment and tell me they hate me, is if I have to make an appointment for an oil change so it can be convenient for you as a dealer. Then you're not in the oil change business, so just forget about it. When I first started with Ford, we didn't even do fucking oil changes. We sent them down the street. Then it was a three-hour oil change, and so on. But I think the manufacturers do help us get into the generation we need to be in, that expeditious, quick type of repair, by pushing it, because that's what the customer wants. So there has to be a blend and a well-thought-out program if we're going to do this appropriately, up to and including how we pay those guys.

Appointments versus walk-ins 14:24

Dave Rogers: Oh yeah, I agree. We've talked about it in the stores that aren't set up for express: express has to happen behind the wall. You've got to look at that ticket and give it to the right guy to get it in and out as fast as you can, because that's really what it's all about. And I agree with you. My philosophy has always been no appointment necessary. You can come in, and I'm going to take care of you. But I'll tell you, Steve, if somebody calls ahead and makes an appointment at one o'clock and you show up at one o'clock, they're going to go in before you. I'm going to try to get both of you done, but you know what I'm saying.

I've been trying to figure out, there's got to be somebody out there doing it like Great Clips, where you go on the app and see what the wait is, because they're all logged into the same system. I think there's a challenge when you have these kids just doing oil changes and tire rotations, trying to beat this hour thing. And when do you take the time to train them to do anything else? I guess in the lulls. That's the other challenge, because we lose a lot of oil change kids. Maybe some of them find out it's not the business for them. Maybe after doing it for a couple of years they don't see the career path. Maybe we haven't given them enough to do. I don't know what the answer is. Everybody's different. But I think you're right. There's got to be a better way of doing this.

The Cardinals' farm system 16:07

Steve Shaw: Okay, so now it's going to be my St. Louis Cardinals reference. I have to reference the Cardinals every episode.

Dave Rogers: Here we go. I set you up for a baseball analogy.

Steve Shaw: I thought about this after one of our episodes. The St. Louis Cardinals have gotten rid of all their big-money players. And what did they decide to do? They decided to spend money on their farm system and grow their people. They dedicated a lot more money to coaches and trainers. I would never have thought that when you get drafted out of high school or college into single-A or double-A ball, there's a whole team of people there to help you develop. There's a coach developing the pitchers, a coach developing the catchers. That's what management decided to do: put a ton of resources into the coaching and development of their players.

Where is that coach or development person for us? We might call them a shop foreman, but how much time does a shop foreman dedicate to growing someone? There's a group out of Ohio that does an amazing job. They have their own tech academy. I've heard of that more and more, where they're training people. They take people off the drive or out of the shop and send them to their academy. It's freaking amazing, and they've groomed so many people that they're placing them in other stores. So there is a way to make that happen. That's just one example of a big auto group doing it.

There's got to be a way within our stores to coach these kids and grow them. We all have that old dog who's going to retire. He's super knowledgeable, and we don't want him to retire, but he just can't cut it anymore. Could we take some of our budget and turn that guy into a technician trainer, a coach, somebody to grow our people? In this day and age, we have to have that, or we'll be talking about this exact same thing 20 years from now.

Dave Rogers: I agree. You're absolutely right. We have guys who get older, and you make them shop foreman or dispatcher or whatever you want to call it, and a lot of them are good trainers once they realize they can't do what they used to do. They're looking for something to do. Their brains still work, but their bodies are giving out. And you're right, there's got to be more to it. The institute, the tech university, whatever you want to call what those groups are doing, is light years ahead of most of us. It's great to hear. I have some guys who are really good at bringing up techs, but I don't think it's as widespread as I'd like to think it would be or should be.

Helpers, apprentices and a career path 19:17

Steve Shaw: That could lead you to a conversation about a technician with an apprentice or a technician with helpers. Then we get into flagging the time with the manufacturers, so it does bring about lots of different challenges. How do you pay the senior guy? Do you pay him an override? How does that work? But there are a lot of creative people out there. When I first started in the business, it always annoyed me, especially at Ford: why does that guy have four helpers? This one technician sits on his ass and doesn't do much, his helpers do everything, and he's getting a big check. But over time, I grew to understand how important that role was, that guy having a bunch of helpers and watching those kids grow into technicians.

The other thing that has to go along with that, and I've written this out for hundreds of dealers, is: what is the plan? What is the plan for me when I show up at your store? I could tell you, as a kid I just wanted to work for a car dealer. That was my whole dream, but I didn't know shit, and I wasn't that good of a tech. I had a couple of guys who helped me out, and I saw my path a little differently. I wanted to go write service. But there are kids like me who are green, fresh out of school, and they have a dream and want to go somewhere. What are we doing to foster that? I think we shit on ourselves and step all over our toes so much that these kids end up leaving and go to work for the city, the state, the county or the docks, because they get paid 40 hours a week, they get a big check and they don't have to use their brains. And we lost out on a good potential employee because we didn't have a path that guy could follow, knowing he'd be making good money in a couple of years.

Dave Rogers: It's true. I think we have to do a better job of promoting it too. We need to let people know there is advancement and opportunity. Maybe being a tech isn't your gig, but there are management jobs and sales jobs. I've seen guys who came in as apprentice techs and became parts managers. I've seen people who came in as apprentice techs and became salesmen or sales managers. Case by case, we have some people in this business who do a good job with it, but overall I don't think we do a great job marketing what we do and the opportunity there. Setting the career goal and the path for a kid like that has got to be more well thought out. If 50% of the people who listen to something like this or read a book like this take it and run with it, it's going to make the business a lot better.

Where does unapplied labor go? 22:10

Steve Shaw: Well, I'll do something. If you have a great pay plan for an express guy, drop it in the comments below. Please feel free to share, and if you want to be on our show and talk about that stuff, we'd love to hear it. I don't think there's a wrong way, but there's a better way of giving a guy an incentive and the security of knowing he's going to feed himself and his family, and that if he busts his ass, he's going to make a living. We've got to come up with those pay plans, motivate our people, and then hold them accountable with those daily meetings every day.

One thing I forgot to say: a lube tech's objective might only be six hours. It might be four hours. They may not hit eight hours, and I may be okay with that if that's what they're capable of, and I'm happy to cover the rest of their time. But here's a question for you. Where do we put the money the guy doesn't flag? We all know the answer. If I don't flag the hour but I've got to get paid, it goes to unapplied labor. And then every dealer sees unapplied labor and goes, "Dave, we can't have effing unapplied labor. Go turn that guy flat rate." That's what happens, and then the guy quits.

So I've always been the advocate of calling it training time. I know it's unapplied, but couldn't I budget for unapplied time, or budget for these guys to train and put the money into training? I don't know the tax implications or how controllers do it, but all I know is if it goes into unapplied, somebody's hot button is triggered, the manager is going to get a call, and it's all over, bro.

Dave Rogers: Well, the general manager is going to go to his 20 group, someone's going to see that line, and the instructor is going to go, "Let's take that dollar amount, divide it by your average cost of your technicians, multiply it by your effective labor rate, multiply that by two for your parts and labor, cut it in half, and that's how much gross you lost by having the unapplied labor." That's the formula. That's what they're going to do.

So I agree with you. I've taken different approaches with hourly people in many different areas. The easiest one: we've put it to service wages other, and we've put it to training, to get it into expense lines instead of unapplied labor, for that same reason. What I liked best was, and I'm just throwing out numbers, if I was paying the kid 15 bucks an hour and he could produce 20 hours a week, I'd put him in the DMS at 30 bucks an hour. My margin went down, but I basically buried the kid's time. Then if he got up to 30 hours, I'd knock it down to 20, 22, whatever the math was, and the margin would go up a little bit. There are plenty of ways to do it. But the general answer, like I told you, is unapplied labor, and it's always the one that attracts the attention.

Steve Shaw: I know, but we spend so much time jacking around trying to hide this money instead of saying, "Let's budget. We've got a bunch of kids. We know they're going to flag four hours a day. Let's put it in our budget and be okay with it," and 20 group be damned.

Dave Rogers: Part of it, and this is not a knock on general managers, is that these guys are generally paid on the bottom line. When things aren't going great, rightfully so, they're looking at all the expenses, and it's easy to pick these kids off. You've got an hourly kid, and you're not thinking about the future at that point. You're thinking about the month, your commission, the quarter. That's where the problems have always been in this business: short-term thinking. Every time there's been a recession or a downturn, we've gotten rid of service valets, service cashiers and express techs. They weren't selling any cars, but they never fired the sales managers making a hundred grand a year. I used to say, "He ain't selling anything, get rid of him. Let me keep my valets."

Think three years out 26:27

Steve Shaw: I was going to say, the Cardinals decided they're not going to win the World Series for two or three years. Maybe in 2027 they'll be a contender. So they said, "We're going to suck." Now, I don't mean the dealer should suck for three years, but we have to get out of the month-to-month or day-to-day mentality and look at where my organization is going to be three years from now. Obviously we all live on commission. I do too. I get paid when I show up. But we've got to see past that from an organizational standpoint. It goes back to strategy. What is my overall strategy for paying people, and how am I going to charge my customers to compensate for that? I'd bet if I sat down and laid all this out on a wall, eventually I'd come to the right conclusion. And then the hard work comes, because now I've got to go fucking execute all of this shit.

Dave Rogers: Or sell it to 30 service managers. That's the other problem. Or 30 GMs. Let me see how good you are at that.

Steve Shaw: That's exactly it. I love being the third party here on the outside. I get the beautiful outside-looking-in perspective. Hey, I'm the first one to go. We talked about that: times are tough, Steve's the first one laid off. But I would give that up for the organization. My job isn't to be with the organization forever on a monthly basis. I have many clients who have been with me forever. It's a long-term relationship, but I'm not there all the time. My job is to get out of there. If there's a store we're in on a regular basis, I've got to get done, because eventually the dealer is going to say, "We're paying you a lot of money." So we need to help them get on their feet, get off their payroll, let them move on, and then we can visit. Everybody has to look at this as a long-term situation versus tomorrow.

Dave Rogers: I agree. I think those are the groups doing the best, and those are the groups that are going to be left standing in five or 10 years. Consolidation has been happening in this business for a while. We just bought another store today, so we're up to 31 stores. It's happening all over the place. We've got to get better at it, because what's going to happen in 10 years when you don't have technicians here turning a wrench? I think it's going to get better. I think more and more kids are going to tech schools. But what we do with them once they get out of tech school is going to make the biggest difference, because we just haven't been long-term planners.

Steve Shaw: Absolutely. We've really gone long on this one today, but I think it was worth it. We could probably talk for hours and hours on this topic. It's hard for me to say I'm interested in someone else's opinion besides my own, but if somebody's out there listening, and by the way we've got double-digit subscribers now, we're on our way to a hundred, I'd be interested to hear your thoughts. Weigh in on pay plans for main-shop technicians or express guys, or if somebody's doing something super cool, we'd love to hear about it and maybe get you on the show.

Dave, you can chime in, but I've learned a lot just talking to you over these last few months, shooting the shit about this stuff. Some guys have told me they're using it in their training right now, and you said a couple of your guys were using it. So I think we can all learn together. I'll raise my prices. No, just kidding. What do you think, Dave?

Dave Rogers: Listen, I think this is a great way to pay it forward. Teaching the next generation of managers and people to maybe start thinking outside the box. Be a student of the game and learn a little bit. We live too much in a Google world, where we just Google the answer when we need it. Podcasts are a great way, and video is a great way to pick something up in 25, 30 minutes. I love learning. I always question what I hear and see and what the norm is. I love to hear different opinions. I've got chat groups going that I participate in. I love this business, and there's so much to learn. So yeah, man, bring it on. Let's hear the comments. If you've got pay plans out there, let's hear them, and let's get some guests on and talk about it. What did you say, we're in the top 10% now?

Steve Shaw: We're in the top 10% of podcasts right now. We have double-digit subscribers. We're ranked 421,000 out of 4 million, so we're right there breaking into the top 10. All right, that sounds like a good way to stop. I look forward to hearing the comments, and we'll chat again soon.

Dave Rogers: I'll take it. I'll talk to you, Steve. Thanks.