Every Dealership Says They Care Until THIS Happens

Steve, Claude and an AI clone 0:00

Steve Shaw: Dave Rogers, what's going on? What's on your mind? By the way, everybody, welcome to Fixed Ops Focus. My name is Steve Shaw, and I'm with Mr. Dave Rogers. How you doing, sir?

Dave Rogers: How you doing, buddy? What's going on?

Steve Shaw: I'm all right. Well, I'm busier than you can imagine.

Dave Rogers: That's a shame. You're independently self-employed, and you should have people doing things for you. But apparently it's you and Claude against the world, huh?

Steve Shaw: Me and Claude against the world. I've got to tell you, I'm about the happiest guy on the planet. My joke a long time ago was that on my headstone I wanted it to say, "Steve was a good tipper, and he never used ChatGPT." I'm a Claude fan more than you can even imagine. The things Claude and I are doing would take days, weeks, months if I had to farm this stuff out. I was laughing because Craig and I were on the phone today reviewing something, and Claude was taking about five minutes to build this document, and I'm yelling at him, "Come on, Claude, get this done." It would take a person a month to do what these AI programs do. And now it's just common. I feel like we're on the Starship Enterprise.

Dave Rogers: That's pretty funny. You go from zero to a hundred miles an hour. You're into it, man. You young whippersnappers are getting good at all this high technology stuff.

Steve Shaw: I'm telling you, there will be a Steve Shaw clone, I'd say within a year. Funny enough, I was at a wedding over the weekend talking to a guy who's a scientist, and he's reaching out to Apple, Amazon and all the big players to collect all the data that's been collected on him, so he can give it all back to his AI. He wants the AI to know exactly what he knows and exactly how he does things, and everybody he's interacted with over his entire life. A young guy in his twenties. That's mind-blowing.

Dave Rogers: That is mind-blowing.

Steve Shaw: So anyway, what else is on your mind?

Two calls, two completely different answers 2:53

Dave Rogers: You know how everyday things that aren't car business related trigger a reaction, where you think, "If we did this, we'd get killed"? I get a notice that my mortgage payment is going up two hundred dollars a month, out of nowhere. The mortgage got sold to a new company. I log in to the account and see they've paid a $3,000 homeowner's insurance policy that I canceled in May. And then they paid the $1,700 policy I signed up for, because my old insurance company went from $1,700 one year to something like $3,100 the next, something stupid like that. So I said screw it, got a better policy from a local company, switched my car insurance, did everything at the same time, all in May. The mortgage company switch didn't take effect until July, so one shouldn't affect the other. But my new mortgage company decided to pay the old homeowner's insurance, and then ten days later they got a bill from the new insurance company and paid that too.

So it got me thinking two things. Maybe I should just send them bills. If they're just going to pay the goddamn things, I should send them a $3,000 bill. I'll make money doing this. Remember people used to do that in the car business?

Steve Shaw: I was thinking the same thing.

Dave Rogers: It was one of the best ideas at NADA. One time a guy ran around the class handing everybody refunds, because half the class's offices had sent money to his Canadian dealership. Anyway, I call the 800 number around six o'clock at night and get a woman on the phone. I explain that my payment went up two hundred bucks, that I see they made about $4,100 in insurance payments, and I figure that's why my escrow went up. Fifteen minutes later she comes back: "Yep, we paid both of them. You need to call and get a refund." I said, "I need to call and get a refund? I didn't make the payment. You did. My payment should go back down two hundred dollars to what it was." She's like, "No, you have to call. Sometimes they reimburse the insured." "But I didn't pay them. You did." Round and round. Finally I said, "Listen, lady, I'm not calling anyone else. Either you help me or give me your manager."

So she puts me on hold, and you remember the old Nextel radios, how it sounded like somebody was underwater? That's what I hear. Charlie Brown's teacher: "Wah wah wah." I think I was calling India. I'm waiting and waiting, and I finally get disconnected. I call back and get a different person, thank goodness. They listen to the whole saga, and fifteen minutes later they've done exactly the same research as the first person: "Yep, we made the payment. I need to transfer you to the insurance department. They handle this." I get a lovely lady in the insurance department. She looks into it again: "You're absolutely right. We made two payments. We did get the notice that you canceled the other one, but we made the payment anyway. It was the switch between the two mortgage companies. They didn't do their homework." I said, "You don't pick up the phone and call? You just make payments?" And then I thought, what difference does it make to them? They'll just pass it on to me. They jacked my escrow up two hundred bucks and didn't give a shit.

She asks, "Would you like me to call, or do you want to call?" "You call." So she gets the old insurance company on the phone, they say they got the check and they're giving a refund, and fifteen minutes later she handles it. And my point, the thing that got me going: two different phone calls to the same company's customer care line, and two completely different treatments. We talk about processes, different ways of doing things and culture all the time. How many times does that happen today at the dealership? I call up: "Hey, Steve, I want to bring my car in for service. Can you get me in today?" "No." If I'm a jerk-off and call back again, maybe I get somebody who says yes. But what normally happens is people go somewhere else.

The whole time, I'm thinking the conversation is recorded, and I wonder if anyone's going to listen, because I really expressed my dissatisfaction. If they had one of those AI tools, it would have escalated it. But nobody's called me back. I did get a survey. I haven't sent it back, because I don't remember the second lady's name and I don't want to trash her. But I really want to slay the first person and let them know how incompetent she is. And I was thinking how many times you hear it in the dealership: "Hey, Steve, I want to bring my car in for an oil change." "Is the light on?" "No." "Wait until the light comes on." Click. Those conversations happen all day long. As a manager, you have to sit out there and listen to these phone calls, or have an AI tool reporting them to you. You have to have something, because the way people answer the phones is critical to the car business.

Sit in your waiting room and listen 9:10

Steve Shaw: It's amazing. I'm trying to process everything that happened to you and think about the things we do. We were talking about how scared we are to go into the waiting room and listen to what actually goes on. I do it all the time. When I'm on site, I'll spend some time in the waiting room around ten o'clock listening to all the nonsense, listening to the presentations. And quite frankly, it's pretty freaking scary to sit in your waiting room and hear the presentation the advisor makes in there. I can tell you that after about fifteen minutes in a waiting room, I know everything about your store. I promise you. And it's scary AF, the things we allow to go on. If you've got five advisors, there are five different presentations going on in that customer lounge.

You and I have been talking about process and documentation. Even on our best day, when we try, I'd say we fail miserably. I'm not trying to be a jerk. But because we're not going in the waiting room and we're not listening to those phone calls, we can pound our chest and say, "Man, I've got a great process." It ain't happening.

Dave Rogers: Right. That's the key to being an effective manager or general manager, whichever you are. Whether you have an outside BDC or an internal BDC, you've got to spend time listening to those phone calls. I've talked to managers about this for years. They have their office in a corner, and the BDC is thirty feet away behind a closed door. Go sit in there. Have your lunch or your breakfast in there, chat with the men and women in that room and listen to what the hell's going on.

We did sign up for one of the AI tools that transcribes phone calls and escalates conversations that don't seem to be going well. It's only a couple of weeks old, but the managers say it's been very helpful. Whether it turns into an actionable item, we'll see. I probably need to get rooted in there a little bit. But the phone is your first line of defense. When I was in sales, and as a GM overseeing the whole building, I believed people use the phone to scratch you off the list. When they're buying a car, they call and grill your salespeople or your BDC with questions, to see if you'll step on your wee-wee and say something wrong, or give them a reason not to come to your dealership and save their time and energy. The accommodating dealership says, "Come on down. Let me take a look at your appraisal. We're going to pay top dollar for that Grand Wagoneer." Otherwise they're hedging their bets: "I don't know what it's worth. I'd have to see it. Hopefully it's not dented. My used car manager's not here today." That shopper is crossing you off the list. I think the average now is that shoppers visit about 1.5 dealerships. Something like that.

Know your product 13:05

Steve Shaw: I don't know that figure. Funny, I was outside of Boston over the weekend at a wedding, about an hour and a half out, and I left in an Uber to get to the airport for my flight the next day. My Uber driver was amazing, the funniest guy. He's actually this super-duper IT guy. He said, "I'm recently divorced and have nothing to do, so I started driving Uber to meet new people." He does IT for the city, so I know a lot about the finances of Boston right now based on what this guy told me. He asked what I did, and we got into product knowledge. He's got his own company, and he says the first thing in sales is you have to know your product. Your product and your inventory are probably the most important things a salesperson should know.

As most people know if you've been paying attention, my Wagoneer was crashed, no fault of mine. It's now totaled, so I'm in the market. I went on KBB to get my value, which led to people calling me: "Hey, you want to trade your car?" Yes, I have a couple of requirements. I want a Carbide edition four-by-four with Quadra-Trac, so I can tow it behind my bus, which I don't have anymore, but that's what I had. Do the cars you're calling me about have that? "I don't know. What's that? How does that work?" So you're calling me because I checked on this particular Wagoneer. I don't remember which letter in the code denotes Quadra-Trac anymore, but you should know. As the salesperson, that might be an important thing to know.

And by the way, nobody could tell me, I had to figure it out myself: they don't make the Carbide edition in 2026. I have a '25. I was trying to find out why they don't have it, and nobody knew. So I'm thinking, what's wrong with these people? There can't be thousands of people showing up at your store for cars today. It would be a good idea to know the product. Because you're right: if I get one person who knows the product, it's a sale. If I get the internet guy who doesn't know, check, I'm not going there. There's no need to go there if you don't know your product. And then when the guy sends me a blue one, not a black one, now I'm pissed. I specifically said I wanted black, the charcoal. Why do people think they can get away with stuff like that? It drives your customer away.

And now we're just talking about selling a car, not even the service side, where we are absolutely nuts. Depending on the guy we get, what's their experience? Do they know or not? I've said it before: I'm going to buy a hundred-thousand-dollar car, and when I go in for my free oil change, who am I going to meet? The least knowledgeable person in the whole gosh-darn dealership. Does that make any sense at all? But we do it every day.

Dave Rogers: No. It makes no sense.

Half your UIO has never been to a dealer 17:32

Dave Rogers: We have these conversations all the time, and I think people in the business know it. You know who you have on your front line and who you don't. You have somebody answering your phones, your BDC, your express advisor who doesn't know squat, and that's the person the customer sees. That's where I think we fail.

I saw something the other day I haven't gotten into yet. One of the manufacturers has a Market Master tool, and they're starting to do service in it. I'm not going to mention the manufacturer, and it probably doesn't matter. It shows the vehicles in my UIO, and it said about forty percent of them, and I'm rounding, were serviced by my dealership. Then it said two percent were serviced at another dealer, and the rest had never been to a dealership.

You and I talk all the time about manufacturers letting us market to the VINs in our area, and they always said they don't have the VINs. So my question to the rep was: if you can tell me fifty-something percent of these cars have never been to a dealer, you know the VINs, right? I want to market to them. "We're just coming out with that. We think we'll be able to do that soon." Well, there's a grand idea. But it got me thinking: if fifty percent or more of the cars in your UIO have never been serviced at a dealership, whose failure is that? Sales, service or both? It's definitely a failure somewhere, because we're not even getting those customers in once.

Some of these areas had ten, twelve, fourteen thousand VINs. Say we had 15,000 VINs and 40 percent share, five or six thousand VINs coming in. Everyone thinks they're doing great. Wait a minute, what about the other eight or nine thousand VINs that have never been to a dealer? How do I get those customers into my store? It starts with that phone call. I bet if you interviewed those people, they'd say, "I tried to get into your dealership one day at four o'clock for an oil change, and you told me no. I tried to get in on Saturday, and you said no." If you surveyed them, I'm sure a lot of them would tell you they called and you just weren't available when they wanted to come in.

Steve Shaw: Two things come to mind. We're doing our Keys to Communication class this week, so I've been doing some research like I always do. Sixty-four percent of customers are still calling in for an appointment. So over half of our customers are calling to make an appointment, and we've all seen the different models and conversations about how poor dealership phone systems are. You could extrapolate from that against the 9,000 or 14,000 customers who've never been in. A large majority of our people use the phone, so if we have bad phones, we know they've just gone elsewhere.

And when I had an issue, I said, "I'm a Grand Wagoneer owner. I'd like you to pick up my car." They said, "We don't do that in your radius." I said, "You sold me the car, and you promised that." When I talked to Stellantis, or Jeep, or whoever the hell owns Jeep right now, they said, "Yeah, we made those promises. There were ten promises. The dealers don't live by those anymore." Well, why did I buy a Wagoneer, then? "Well, that was old." You sold me a car with ten promises, the Bill of Rights of a Wagoneer owner or something like that, and now you don't have to do it anymore. So why would I buy another one, other than the fact that I'm an enthusiast, as you like to call me? At some point my enthusiasm will wane if somebody doesn't pick up the ball and run with it. And it's not just one store. From two miles down the road to 45 miles down the road, people don't want to answer the telephone. They don't want to take care of their guest, client, customer, whatever the hell you call us.

Dave Rogers: And you're one of the minority. You want the Jeep, you want the Wagoneer. You're a loyalist, an addict. You're really a masochist, because you like Jeeps and you like to punish yourself.

Steve Shaw: I don't know why, but my ego says I have to have a Wagoneer. My buddy bought a Grand Cherokee yesterday. It's a really nice car. But if I bought it, all I'd ever say is, "I used to have a Wagoneer." I can't step down. I've got to buy another one. Anyway, I am a masochist.

One bad experience and they're gone 22:48

Dave Rogers: And that's where the mindset and the personalities of the people in the stores get it wrong. There's this cockiness, this thought that there'll be another Steve Shaw, there'll be another Dave Rogers. I normally don't give anybody a hard time, because I don't like to. I wouldn't normally have given that lady the business. But it was so ridiculous that I had to make a phone call. Who am I calling? I don't know who you sent the check to. I don't even have access to that account anymore. If I try to log in, it says it's canceled. I don't have the account number. And she was so matter-of-fact that it was my job to call.

Managers out there listening to this: how many times does a call come to your desk that really just involves somebody's indifference or somebody being lazy? I had a conversation with one of my managers today about the parts manager in a store, who doesn't think it's his job to be helpful. "Yeah, the ticket's been on my desk for two days." Did you think of saying anything? "No. Nobody asked, so I didn't tell." Has it gotten that bad, that people are so damn indifferent to everything that they don't give a shit? It aggravates the crap out of me. Common sense, common courtesy: it's not even prevalent in everyday life, forget about business.

Steve Shaw: The other statistic I heard was that 33 percent of people will leave after one instance like that, and they won't tell you. They'll just walk. I'm going to walk from one Chrysler store to another. My friend went from Cadillac to Lexus instantly. As soon as the advisor gave her a hard time, she switched brands. She didn't care.

In the case of your insurance, you're sort of stuck. With the cable bill, we're stuck. It's hard to change your cable or insurance company, and they get away with a lot of nonsense because we're captive. I can't get a new power company. I have auto pay with Duke Energy, and every three to five months they call me and say my bill didn't go through. I go on their website, and it's not set up. But I can't change. I have Duke Energy forever. I am capable of getting a different car, though. I just happen to like that one. We have the ability to keep that customer, and the ability not to run that customer off. Our customers can leave us at any time. And you're saying they bought a car and didn't even take the first step to come back. It's not like you sold out of your market area up to New York. These were a significant portion of your owners who never came back into the fold, and that's unacceptable, for lack of a better word.

Dave Rogers: I'd never seen that stat before. Those cars weren't all sold by my dealership. But the data's flowing better than it used to. The manufacturer gets the telematics, and for customers registered to your dealership, they'll give you that telematic information: Steve's maintenance light is on, his check engine light is on. They used to let you market to anybody who was your customer, serviced or sold before, with a flyer, a mailer or an email. But you never had access from the manufacturer to the VINs of people who moved into your area. You could buy it from other companies, but it's not necessarily as effective. If it comes from the manufacturer, it might be a little better. If they're going to start letting us do it, that's great.

Like I said, I'd never seen that number before. I see loyalty numbers where we sell a car and sixty percent of the customers come back. That seems to be the going rate. But that doesn't encompass the whole UIO. Two of my Honda stores have a UIO of twenty thousand VINs. That's a lot of cars, man. I've got one with fifteen thousand. So if you can tap into that market... But then again, do you send out a mailer and write a check your people can't cash? Because if the phone starts ringing and your people screw it up, you just chase them away again.

When marketing works and the shop can't keep up 28:08

Steve Shaw: You made me think. I have a really good friend in the marketing business, service marketing in particular. We've been buddies for years. One day he came to me and said, "Steve, I've got a question." He's got a proven process, it's amazing, and he can show you how he drives additional business into your store. He can show you every VIN that's never been in your store: "I captured a VIN. I brought the customer to you." And he says, "Fourteen months later, I get fired." Because the dealership spent all this money to bring in new business, but they never improved by one dollar. He asked why he was getting fired if he did all this great stuff. I said, "Because the dealer didn't have the capacity to take care of any new business." Whether I had 10, 12 or 50 techs, you went out and drove a bunch of business into my store, and I kept the exact same number of people. I didn't grow, I didn't change. I just made my appointment list grow from one or two weeks out to four weeks. Not one new person and not one additional volume number came into my store. That's the other side of it. And as an advisor, why would I say, "Come on down," when I can't get the work done in the first place?

Dave Rogers: Like you said, it's the monopoly: the electric company, the water company, the sewer company. They feel like they've got you. Anybody remember the Takata recalls a few years back? Especially in the volume brands, like Honda, those people got scared to death. They were told shrapnel was going to go through their heart and they were going to die. So the dealers were inundated with these thirty-minute recalls, and they couldn't schedule the normal customers. They lost a lot of regular customers because the manufacturers were crawling up their ass, and NHTSA was crawling up everyone's ass, to get these recalls done. Maybe you weren't working Saturdays or evenings, and you weren't scheduling correctly. You chased your regular customers away, and when the recall was all said and done, you didn't do a damn thing to retain one of those customers. You alienated your loyal customers because you couldn't get them in for an oil change, because the thirty-minute recall was more important.

I had this conversation with one of my Acura guys not long ago. Last year they were doing connecting rod recalls, three-and-a-half, four-hour jobs. They were buried, scheduling them out and trying to fit them in without losing other business. One year later, the numbers are down, the business is down, the warranty work is down. I said, "What did you do to retain those customers and have them come back?" Crickets. They didn't do anything. "Well, you wasted a shot at all these VINs." And he goes, "No, no, you're wrong, Dave. There's a new recall out on the same cars." Great. We can piss them off again. Good job.

Steve Shaw: The Hyundai and Kia engines, same thing. Every Hyundai and Kia advisor got fat on engines: "Why would I try to sell maintenance when I've got a whatever-thousand-dollar engine job?" And we pissed every customer off the same way, because we just did engines and thought that would last a couple of years. And here we go again. What's your GM tip of the day before we run everybody off?

GM tip: listen, then say yes, right now 31:51

Dave Rogers: My GM tip of the day, and it's Steve's advice: sit in the waiting room and listen to customers. Sit out by your service advisors, your BDC, whoever is answering your phones, and listen to what's going on. Get your Spidey senses going. Then start coaching, and make sure you train your service manager, your assistant managers and whoever else is back there to step in. I think some advisors try to chase people away on the phone before they get to the dealership, so they don't have to deal with a bad CSI survey or an angry customer, because they think their time is so valuable. You have to put the kibosh on it. It should be, "Come on down right now. Yes, and right now." And then we figure out how to get it done. That's what you've got to start doing, and sometimes it takes the general manager sitting out there and listening.

Steve Shaw: "Yes, right now." Agreed, agreed, agreed. We've got to build that big beer pitcher, or pitcher of coffee, so we can start filling it up again. Let's get out of here today, and I'll chat with you next week.

Dave Rogers: All right, bud. I'll talk to you.

Steve Shaw: Talk to you.