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Learning Without Scars

Learning Without Scars

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    Learning Without Scars
    S2 E15•February 28, 2022•55 min

    Floyd Jerkins goes on a Rant

    Send us Fan Mail (https://www.buzzsprout.com/1721145/fan_mail/new) This Candid Conversation with Floyd Jerkins is concerned about how we manage the sales aspects of a dealership. He talks about the parts department and the service department and how we respond to the customers. Our lost sales processes are lacking in discipline. Our prime product salesmen, the equipment or vehicle or engine sales force, are sacred cows and don’t deliver as they should. Don’t miss this timely and extremely pertinent Candid Conversation.  Visit us at LearningWithoutScars.org (https://www.LearningWithoutScars.org) for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers. We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.

    Transcript

    0:22

    Aloha, and welcome to another Candid Conversation. I think today we're going to be in for some fun because Floyd and I were just getting ready, and he wants to rant. Okay, Floyd, what's this ranting all about?

    0:38

    Well, as anybody that's ever known me, I mean, I'm pretty passionate. You know, I don't speak from notes. I speak from what I know, and I speak from the heart. When I was in the training consulting, Ron, some of these things really bothered me and we tried to address it. You know, now I've been six years away from a full staff and an organization. So I'm doing this executive coaching and picking and choosing where I can bring value. And, you know, I continually have talked to some dealers that, you know, the market's hot. You know, they've made good margins. Everything's good. You know, they're hot. But I'm saying, all right, so now is the time. You've really got to narrow down and work on the fundamentals because you're missing key plays inside your operation. And we just talked about this, you know, from a product support standpoint, if, you know, how do we measure a lost sale? Well, that subject has been beaten up, you know, quite a bit.

    1:39

    You know, I remember when absorption rate wasn't something that was new to people. You know, everybody's like, oh, what is that? You know, how does it factor? Well, today, if you've not heard about that, if you've not got that incorporated in your management style, if you're not, then shame on you. You're never going to make it. You're dead from the neck up. But yet, when we look at the sales side of the organization, those are traditionally the sacred cows. You know, I mean, everything that goes wrong is blamed on the service department. We have this interdepartmental friction, but it's never caused from the sales department. It is something that's important because I think we have to look at how are we measuring the performance of our sales department? And, you know, I hear again, I just had this conversation a couple of days ago and it's like, I got off the phone and I'm pacing, you know, my wife says, you're not done with that call.

    2:32

    Were you? I said, no, baby, I'm not. But I was trying to be nice. You know, what can we do to make more money? How do we optimize our situation? How do we put more money to the bottom line? And he's talking about selling more equipment. And I'm saying, well, let's just do a better job with the volume of customers that you have. So if you have a customer that calls in to your parts department and they say, do you have this part? And you say, no, I don't. Okay, immediately we know that's a trigger. You know, we got to start looking at lost sale. But if we have a customer that calls into the parts department and says, do you have this part? And say, yes, I do. And they say, how much is it? And you tell them, okay, thank you. And they hang up. If that call is done five out of 10 times in a day, if it's done 10 out of 50 times, if you've got 60, you know, if you've got four counter people times 10 locations, you've got 40 people.

    3:31

    How many incoming calls come into that operation? And how many are like that? Well, we know that's 50-50. Let's just use that number. If 50% of those are handled that way, is it a lost sale? I contend that it is. It's lost on the counterperson side because they don't know how to ask for the customer's name and number. And then invariably, they never call back. When I was talking to this one dealer about this, Ron, he said, well, Floyd, you don't understand. And I wish I had a nickel for every time I heard that. I've had my own dealership and I understand the pressures of... changing skill sets on the fly, you know, but man, that's my first five years. That's all I did, Ron, was walk and talk with my people. And every time I'd see something like that, I'd wait for that coaching moment, you know, and wait till the customer walked away. The phone was ringing and said, Hey, come take a walk with me for just a second.

    4:26

    What if you would have asked this? What if you would have said this? Oh man, boss, that'd be great. Okay. So try it next time. In the service department, we have the same challenge. We get all these phone calls about how much does it take to make a repair, but yet we're not calling these people back on a prescribed basis. Now, there are some service managers and parts people doing this. I know they are. But is it a pattern? Is it something we can say happens all the time as a course of business? I say, no, it's not, Ron. And then you go to the sales department. We can't affect change there. I mean, You wouldn't run your dealership without looking at a financial statement. I mean, you just, well, you shouldn't. Maybe I should say that way. We run the sales department. Our traditional measurements are more about gross margin, inventory turns new and used, you know, salaried labor.

    5:21

    I mean, all these other variables are financial metrics, but are we tracking how many people they talk to versus how many they close? How many people they write up versus how many people they close? How many times are they getting an incoming telephone call? And how many times are they scheduling an appointment with that incoming telephone call? Because setting an appointment is how you take that customer out of the market, into the dealership, or you go out and make that appointment with them. But when they're not doing that, they're just giving information, you know, because we're in the spirit of customer service. The doors are swinging. I mean. The phones are ringing, Ron. I mean, hell, everybody's covered. We can't get equipment. Oh, my gosh. I mean, you know, how do we handle that?

    6:02

    You know, so I think we have to start looking deeper at the performance metrics and managing sales departments, particularly with more information on what they're actually doing with a customer. By the time they start with a customer to the time the sale is done, what happens? We usually only measure that by end result management. How much money did we make? Did we take a trade in? How much did we put in the trade? You know, so all those become those components, but we don't really look at how many goes in between there. You know, if we know that a salesperson selling $5 million is a great salesperson. Well, if you track that person and see that he's talked to 100 people a week or 100 people a month. And, you know, he's only selling to 20 of those, but he's priced 80 more, but he's not followed up with 80. Oh, my goodness gracious. I mean, every time somebody gets a price, they should be followed up with, you know, period.

    7:05

    And we know instinctively as salespeople that the customer is going to tell us a lie. You know, we know that when their lips are moving, you know, sometimes that's, you know. But yet I keep hearing sales managers and owners give a pass to the salespeople and they won't give a pass to a technician. You know, if that tech's only billing 60% of their hours, you know, Ron, we're on that tech. There's benchmark. Why aren't you? But yet when we measure sales teams, we measure them by, again, gross margin dollars turn, but we're not really measuring on the effectiveness. And I've seen a hundred times over and certainly even through my personal work helping businesses like this get better. We can make substantial changes to the bottom line, but we're not increasing our cost to do that. We're improving the effectiveness of our people.

    7:58

    And I'll tell you, when you get a salesperson that's hungry and motivated and you can show him how to improve him or her, how to improve their bottom line by 2%,1%, doesn't sound like a lot. I mean, that's huge. You know, that's in a sales team. You know, if you can multiply that effectiveness by 10,20,40,50, not all salespeople will be able to do that, Rob. I mean, but there's all kinds of strategies and techniques. And then when you get to sales management, I mean, this is what kind of fired me up and caused my rant the other day. And I called this dealer back and said, listen, you know, you got to allocate about 20 minutes for me. He said, oh, he said. What's the matter? He said, did I? I said, well, you know, you gave your sales manager this whole pass because all I kept hearing was your sales manager's not getting the marketing out on time. And I kept saying, so who does your marketing? Well, my sales manager does. Okay.

    8:59

    So you want your sales manager to manage the performance of the sales team, but yet they have to also manage marketing. So I said, tell me about your job description. Why do you have marketing in the sales manager's job description? Well, that's what we've done, Floyd, that it works the best because he knows it best. He knows how much we've got in use. He knows what's going on. He's got the best feel for it. And that was part of the discussion that, you know, we have to teach sales managers to manage performance. You know, I mean, you know, it's the same old thing, Ron. We used to have the technicians, you know, where the service manager with three techs, you know, he had to turn wrenches. You know, that was part of the billing cycle of the shop, you know. But when you get to five, eight,10 techs, I mean, you don't want a service manager, you know, he needs to move his toolbox back home. You know, he never needs to have it out in the shop.

    9:52

    And the same thing with our sales managers. Let's give them the tools and the wherewithal to manage these people's effectiveness. And I just think, you know, the CRM systems that need to be in place. You know, I think that's just so important. But, you know, we've got four kinds of customers. You know, there's new customers, people that have never done business with you before. There's the repeat customer, the person that has done business with you before. Then there's a referral customer. And then there's the brand new business customer that comes out of the blue, you know, that comes through you through marketing. The behavioral mix of that is very atrocious. Because if we're not measuring that, then we don't know what that is, Ron. If I have a salesperson that I know that out of a thousand customers in a year, and I do measure them, that only 20% of their business is coming from referrals. Well, you know, is that good or bad?

    10:55

    Well, I think for, you know, a one or two year old salespeople, salesperson, I think that's great. But if I've got a six year veteran in the chair and they're only getting 20% referrals. If they're only getting 10% or 20% repeat customers, Houston, we have a problem. But if you don't measure that sales mix in that way, then you really don't know. You're only looking at your log sheets saying that they sold this customer. And the second phase, well, we know we sold this customer before, but that's about where it stops. And we have to go a little deeper. Because a sales mix has to be measured differently than just by product mix. It needs to be adjusted based upon behavioral mix of actually what a salesperson does. So, I'm sorry. When I got off the call with this dealer, he said, well, Floyd, he said, I've known you a little bit over the years, but I now know that you can get a little testy, can't you?

    11:58

    I said, well, you want to make all these, you want to invest. thousands of dollars, maybe buy another location. And I get that. I understand expansion of the territory. I get that, why that's important. Maybe some of the pressures from the OEM to do that. But my challenge is, how do you improve the effectiveness of your people? And we got off the call. He said, man, we have a lot of work to do. He said, we're not even thinking about some of this stuff. And he said, all right, you've convinced me. We need to start thinking about this. They have some of the tools. They're using Salesforce. So they actually have a good tool in place, but some of the reporting he doesn't even look at. And I'm saying, well, first, we've got to get the salespeople to log correctly. They've got to be consistent. When they log in a field, it has to be consistent. Everybody has to log it for the same reason.

    12:50

    And then you need to feed reports back to these people so they can start understanding what they're doing with the information. Because information without that is useless. You know, accountability.

    13:04

    You know, it's funny. I wanted to let you run. And I love the term a rant because obviously there's passion there. And you touched on so many things that I want to make one interjection first. And that is that we have financial reports and everybody pays attention to the financial reports. And that's fine. That's history. That's done. It's over. Yesterday, we don't have. or very few people have what I call management reports, which looks and analytically looks at the history and allows you to make conclusions as to what you want to do today and tomorrow. And I had a long chat yesterday with a guy about business intelligence. You and I chat briefly about it before this podcast. We don't have business intelligence. So here's an illustration relative to your lost sales. The guy's on the counter. Have you got it? No. Click. Guys on the counter, have you got it? Yes, I do. What's the price? Click. And nobody pays attention to that.

    14:12

    So I come in as my usual cranky idiot and say, you know, we've got this fantastic internet. It can be a contactless transaction. Your customers are co-producers of the work. They can look up your price, look up your availability. And they look at me and they say, but. Doesn't that take away the personal touch? I said, oh, okay. Yeah, that's true. In the old days, HTML technology, you didn't know where anybody was. With XML, I can follow that cursor wherever they are, however long they take. I know if they looked up a price. I know if they looked up availability. And I know if they placed an order. And if they don't, tomorrow morning, I'll give Floyd and George and Mary and Helen a list of these guys all looked. That's right. And they didn't do anything with it. And he said, really? You can do that? I said, yeah, you can't do that today, can you? He said, no, we can't. He said, why don't we do that? I said, look in the mirror.

    15:09

    Oh, well, it's amazing. We have the tools. Yes. But we're so stuck in the status quo because I believe, as you said, you've heard me say this. We've got people leading the industry that are 55 to 75. They're risk averse. They have never made as much money in their lives. They never expected to make this much money. They don't want to touch anything because it'll jinx it.

    15:32

    That's right.

    15:33

    Now we've got a shortage of equipment. Now we're seeing used equipment prices exploding. So profitability isn't an issue anymore. Right. But nobody's looking at market share. Nobody's looking at market capture. You're for categorizations of customers. It's beautiful. In the construction world,80% of the customers do not have contact initiated by the dealership that do business with you. Right. So is it any wonder parts market shares dropped by half?

    16:05

    That's right. That's right.

    16:07

    You know, so yeah, the rant, I'm right there with you in the rowboat. There's only two of us. Like I used to say, I'm a mule brain in a tin barn. I make a lot of noise. And that guy said, you know, we don't do any of that stuff to you.

    16:21

    One of the things that I've always, I guess, looked at, Ron, is the patterns. My formal education. you know, organizational psychology. I remember sitting in Professor Parrott's class and, you know, he was talking about how do you identify large trends across, you know, a business? He said, now, before you answer that, how do you identify large trends across a southern part of a state? How do you look at it by state? How do you look at that by multiple states? And of course, being young, we were all just like, okay, the first question was easy. You know, that second, third one got a little harder. But yet, when you understand the methodologies, I mean, it's pretty easy. Now, when you look at the equipment industry, you know, we know that there's still patterns there that are evolving and changing. Part of that's based upon technology. Part of that's based upon age. Part of that's consumers. Part of that, I mean, there's just a variety of inputs.

    17:20

    But there's no doubt about it that if we learn how to manage these businesses and increase the effectiveness for our people, then our bottom line improves and it improves easier than going out trying to start another location or whatever that particular thing, you know, even accepting another line, Ron, I mean, from the farm equipment side, I mean, accepting a short line was always a function of the sales department can sell it, but there was never a holistic approach to getting all management involved in that discussion. You know, and sometimes even the accounting people didn't know we were accepting a new shoreline. I mean, but that pattern has changed where now we know that, you know, most dealerships nearly all don't do that. Well, the same thing I think happens here is when we have, you know, if we have 10 salespeople and we know that 25% of who they've talked to over a period of a month is new customers.

    18:24

    OK, then at least we have the first statistic to say, at least we've got 25 percent of who we're talking to are brand new to us. OK, well, you know, so, you know,10 percent,20 percent is referral customers. OK, so we got that ratio. Well, but when we know that we're closing 10 percent of those new customers, you know, well, that that would scare the daylights out of me, you know, because we're talking about 10 customers. that we're closing. My gosh, what are we doing with the rest of them? And that goes back to your point, Ron, the follow-up campaign and the follow-up strategies are knowing what we have on the front end is equally important to knowing what we have to do with it in order to improve it. And when we know that if a salesperson prices something today and the customer says, call me back in a week, You know, eight out of 10 salespeople will call that customer back in a week.

    19:22

    And when that customer and when they call them, you're going to see 30,40 percent of those people say, well, I bought somewhere else. And the salesperson gets ticked off. What the hell? You told me to call you. Well, you know, think like a salespeople, you know, come back. We're 24 hours after that customer. And you talked about that. You need to call the customer. You know, I get emails important. But email is still a tool for a non-conversation. They're going to be braver to you over email and certainly over the phone and what they are in person. But we've got to have that physical contact. And then it's just a conversation. But yet, you know, managers say, well, they don't have time. Go out and get the next one. Go out and get the next one.

    20:07

    But if we're not being effective with what we have and thinking that we have a 10%,15% closing ratio, and that, again, from a From an organizational standpoint, that would scare the daylights out of me because we're walking around $100 bills all day long while we're chasing the nickels, you know, because it's about how do we do that better?

    20:31

    It's really remarkable. The first parts and service sales force that existed in the Caterpillar world was in Montreal under my supervision. And the criteria that was... used to determine who were the best ones to do that. One of them was neat handwriting. So they could fill out their call reports, they could fill out their quotations and all the rest. And we went forward and said, yeah, we'll pay you commission. But you got to give us a quote. You don't give us a quote, so we won't pay commission. So the salesmen are smarter. They talk to the people inside, find out who's quoting what, and they start writing up quotes themselves on stuff that they're not even involved with. Okay. Then I had, I think it was eight guys. And I spent one day a week with each people, each person, so that every month I was riding with them all day, twice a month. Can't hide, baby.

    21:33

    And I did that in the consulting work, evaluated salesmen and how they looked at the market. And I'd be reading the call reports in the vehicle while we're going from call to call. So the guy knew somebody's watching. And I'm making notes and sending it to different people. Oh, shoot, this guy is paying attention. And when I did sales evaluations, they gave me a list of customers. And I had the customer list in my hand, but they knew who they wanted to call. It's all pre-set up. I said, hey, we're close to this, aren't we? Yeah, well, let's drop in on this guy. Uh-oh, customer doesn't even know the salesman.

    22:13

    He doesn't even buy from us. They always buy from someone.

    22:17

    And then here comes the next rest of the story. One of the barriers of entry that we had that protected us was information. So 50 years ago,30 years ago, the customer had to call us to get information about a vehicle, about a part, about a labor repair, whatever it was. Today with Google, they don't need to call us at all. In fact, customers are saying to our sales, don't call me. I'll call you when I need you.

    22:47

    Right.

    22:49

    That's the chapter. Close that chapter. Here comes the next one. Nobody trained anybody on sales. Have you got the part? Yeah, I've got the part. How much is it? Is price important to you? I never give a price. Why is that important? Well, I'd want to buy the cheap. You want to buy the cheapest or you want to buy the best? Oh, now I got a conversation going. $10.42. Wow, that's high. Oh, really? Compared to who? Are you sure it's the same thing? How do you know that? The guy called up while I bought it from somebody else. Oh, really? What does he like about doing business with those guys? I mean, we don't know. We don't teach people how to communicate with customers. Right. You know, I tease people in sales training. How many of you are married in here? Let me see a show of hands. All the hands go up. I said, terrific. So we know you can close a sale. How many of you have been married more than once? Hands go up. Twice hands go up.

    23:57

    I said, well, we've got to work on retention, don't we? It's a crazy world. You know, selling isn't easy, but every employee in the dealership depends on the success of that sales force for their livelihood. If the salespeople aren't any good at what they do, their jobs are at risk. And I hate that. And I love doing that to salesmen. Do you realize you're responsible for 100 people back here? Yeah.

    24:25

    What? Yeah. Yeah.

    24:28

    The rant is real and the rant is justified. How do we start to change this?

    24:38

    Well, you know, I think it still starts at the ownership level. You know, they have to create a mandate. about how do we go to market? What's our go-to-market strategy and what does that include? We always have market share numbers, machine population. We always have file of birth to grave, all of that. But maybe we could start adding in NDOC management, next data contact. For every person that comes into our operation, calls in or emails, we're going to follow up, period. We're going to follow up at least three different times. Not every other one. but everyone. And we're going to try that for a period of time. And we're going to measure our results because when we know that we can have a next day to contact and we start that, that thinking, you know, and then we get the management people decide, did you do your NDOC? Have you logged? Then we can start looking at NDOC reports, right? In the systems.

    25:38

    How many people did we can run charts and graphs and say, all right, it looks like there were 20% of the people logged. you know, had contacts. What, you know, what happened? One of the challenges, and it comes back to some of this we talked about, you know, in other podcasts, Ron, I think it's the, it's a dynamics of the culture. You know, if, if I come out and I say, listen, get off your ass, let's get to work. Come on. You know, then I'm creating a, a very tedious, you know, environment, but I say, Hey, come on, let's go. You know, let's take the hill. And we motivate through education, through personal approaches. It's amazing. You know, I've had more times where a business owner tells me, Floyd, that guy, you're wrong. That guy, he's not got a head full of sense. But I said, have you ever asked you to listen to them? Because it's amazing. I've seen ordinary people do extraordinary things more times than I can imagine.

    26:39

    It's when they've got the right motivation and the right tools, Ron. starting the organization with thinking, how do I follow up? You know, when do I follow up and getting that started in a mindset so that, you know, but we might see that in management. I mean, this is obviously we're talking about the sales side, but if we talk about management, we can see numerous false promises made from one man. Hey, I'll get back to you with that information and they never do. You know, I'll call so-and-so and they never do. You know, then those are, you know, my grandma used to say that, you know, a white lie is still a lie. Floyd, I don't care what color it is. You know, it's still a lie, you know, and to build that trust and that integrity, you know, within the organization, we have to live and die by our words and our deeds. And that means we have to, when I say, Ron, I'm going to call you. That means I need to call you.

    27:38

    That doesn't mean I need to make an excuse. You know, those people, that's effectiveness. So it comes down to the sales side also is that when that customer says, oh, don't call me for a week, we know we should call them anyway. But we can't have that reason being my boss said to call you or, hey, listen, we got a lot of pressure to sell. These units are coming up on, you know, you can't do that. The reason has to be geared to the customer's benefit. Now, if we can get an organization starting to say, okay, I understand NDOC is important. We're going to start doing that. But now, man, how do I do this better? That's the questions we want to hear from our staff. Because then that's when training, coaching, you know, they've got people with, I worked with a large, large cattle organization for about a year and a half. Just finished up. And, you know, when I was going through this, we got to get your people to think how. Not should I, why.

    28:37

    I mean, we got we want them to start thinking how they had some people within the organization where we created a training team that around those guys and girls were just rocking, man. You know, and it ended up being that we had to get more of a budget to put more people into the team because the need grew so big. You know, now, once you identify that need, you know, the money's there. It's not in the competencies are there. They don't. You know, I used to tell dealer owners all the time, you know, you can't depend on us for all of your training needs. We're not that company. We have a wide bandwidth, but we can't do all these things. You've got to do that internally. And we'll even help you train the trainer, you know, if that's what's needed. Because as you grow in size, you know, an outsourced company can play a role, but they're not the dominant tool in the toolbox.

    29:34

    And the same thing today is that there's people that want you to get this, what I consider to be common sense. If I told my grandma and grandpa I'm coming out to see you on Friday, but I don't show up, well, they're worried about me. Well, here if I talk to a customer and spend two hours with them and we get along pretty good, we end up pricing, but they have their typical You know, I got to go home and think about it or I've got to talk to my banker. I've got, you know, all the objections that come around because we know objections are predominantly artificial. You know, part of what they're saying is you haven't convinced me well enough today. I've got to go home and or I've got to compare, you know, because I've got four different salespeople talking to me. Well, just imagine, right? You know, I used to say that's on a lost sale.

    30:28

    If I can show you how to make more money on a lost sale than the salesperson that sold it, would you be interested in learning what that technique is? Well, yeah, sure. Same thing in parts and service. It doesn't matter. When that customer buys somewhere else, your first objective when you know about that, generally it's over the phone. That's mostly where that's found out at. If you're the selling salesperson and you get mad about that, shame on you. because it's your fault. Don't blame the customer. I mean, accept responsibility. But then ask them if they've taken delivery of that run, the deal's done. You know, oh, I wish you would have called me back. I could have made that deal better by 10 grand or I could have. All that's negative selling. You know, that does not work. Look at what the customer psychology is of that. Oh, geez, I don't want to have to call Ron back, you know, because I know he's not going to be happy, you know, that.

    31:26

    So when you call him, And they go, Ron's on the phone. He's going, oh, shit. I got to answer that call. Yeah, hey, Ron, just want to let you know that because we got along, you know, we had a relationship, you know, but I ended up buying somewhere else. It's just as simple to say, listen, congratulations on making a good decision for yourself, Ron. I really appreciate the opportunity. Now, you as a customer, seven out of 10, six out of 10, maybe eight out of 10 of those customers go, wow. That was different. You know, I mean, Ron said, good decision. I mean, wow, that was, that was strange. Listen, Ron, listen, if there's anything else I can help with in the future, just let me know. But then you go back and ask for a referral. Ron, I hope that the reason you purchased somewhere else wasn't nothing against me personally. Now, if he says, well, yeah, Floyd, you did, you upset my wife.

    32:19

    You know, you kept looking at her knees or, you know, whatever the issues are, you know, most of the time you've had a good relationship. And you ask for a referral. And if the referral doesn't come about you, stop. Now, the second thing there, Ron, is calling that customer back in three to five days. We know statistically that the salesperson that sold the unit probably has not called back. You know, that's just the statistics. And I hate the numbers. I hate it. And I kept thinking Evolutionary, that would be one of those organizational changes, Ron. That would get better. Well, it's not. I mean, that same thing is occurring. But imagine the salesperson that didn't sell it calling you back five days later and saying, hey, I just want to check in. How are you doing with that new piece of equipment? Hope everything's working. And they're going, you're the guy that didn't even sell it to me and you're calling me back.

    33:10

    And if you'll do that in 30 days and then another 30 days and about every four or five months based on need, it's amazing how you can outsell the salesperson that sold it and make more money when you're doing it. But it's the lack of next day contact. It's a lack of having that. They have the tools, you know, the phone's there, the computer's there. You know, it's a management psychology that has to change. And it's an ownership psychology to put this as an important factor. You know, and if we can make our sales team 10% more productive and close more deals in less time, we're going to make more money. You know, bottom line, we make more money, but money isn't money is the secondary aspect because Ron, I agree totally with you that managing the financials is end result management. Everything goes into that bucket and ends up on the financial statement.

    34:09

    You know, well, I want to affect change before it gets to the end result sale, you know, and if everything we can do as coaches, as trainers is to help them think and to really begin to take that. and use it before a sale happens, we're going to make happier customers. We're going to make happier employees. You know, we've talked about this last time. ESI equals CSI. You know, the employee satisfaction, you know, we can increase that, you know. And this whole deal about resignation, I mean, you know, that's another discussion that we've had a couple of times. So that's, you know, my rant is, like I said, I get a little fired up when I hear how, We can't do these things. And they're as simple as tying your shoe. Now, they're hard to implement, right? I mean, we could talk about this conceptually, you know, and I can drill it down and say, here are the behaviors you're looking for out of your people.

    35:09

    But to take that to a practical application, to actually start seeing it and doing it, you can't give lip service to it. You know, if I told you I could do 50 pushups, Ron, I might be able to sell the concept to you. But then you're going to sit back and say, ah, Floyd, jump down, give me 50. You know, if I can't physically do it, then, you know, it's lip service. And we never make more money. We never improve our customers that way.

    35:35

    Everything you're talking about is about communication. Absolutely. Once we open the lines of communication, the channels of communication, you know, you mentioned a bunch of things in there. There used to be a company called Equipment Data Associates that provided reporting. on any machine that was purchased with financing. So it was UCF filings. Randall Publishing purchased them. I used to get that report very regularly, and I would send a postcard to every customer that bought a machine that wasn't my brand. And a year from then, I sent them a birthday card to their machine. And it was aimed at...

    36:26

    the market that said statistically people have bought a machine in 2020 other than warranty parts would not buy any parts 44 of the customers would not buy any parts that's shameful it's embarrassing it's it's a whole bunch of things so so here we have one of our colleagues and contributors in podcasts is dale hannah foresight intelligence And he deals with things that he calls the speed of text. You make a phone call, take you 90 minutes to get a response. Same thing with an email. You make a text, it's 90 seconds. So he's got devices that facilitate communication on a work order. Anything that happens on the work order, a text goes to the customer automatically. No employees involved. It's automatic. So the machine arrived. Click. We did the inspection. Click. Here's the quotation. Click. We moved it into the bay. Click. Here's a picture of your machine in the bay. Here's George who's doing click. All of that stuff.

    37:38

    Here's all the parts arrived. Here's a backorder. So now we've got the parts department. You placed an order two days ago. The backorder is scheduled to come in day after tomorrow. If you have any other questions, give us a shout. So we're eliminating the need for time. And if you think about it, the customer calls in and wants to find out a status of a work order, status of his car in the bay or a machine in the bay or engine in the, whatever the heck it is. The guy's busy. He has to call him back, leaves a message. 15 minutes,20 minutes, the customer gets called back by the service guy. Customer's not available. We have two or three of these things going on,15,30,45 minutes gone out the window. The text is automatic.

    38:21

    That's right.

    38:22

    Why isn't that happening with everybody? Oh, gee, you know, it's it's a rather remarkable circumstance. Communication, one, two, knowing how and what to communicate about. And then one thing that you mentioned twice now that really gets me when a customer goes somewhere else and gives them your business or when the customer tells you that they didn't buy from you or they got a complaint. Don't take it personally. Relax. You just happen to be the one they're talking to. You're the one that's nearby. Get over it. I used to, people would go crazy with me. The customer would rant. They'd run all over the place. They'd take a breath and I'd look them in the face and say, do you feel better now? And everybody around me had a hard time not laughing. The customer looked up and he continued on. I said, do you feel better yet? You know, that's my purpose in life, George. I'm here to make you feel better.

    39:21

    At the end, the objections are all emotional, completely dysfunctional. Don't get anywhere towards resolving anything other than making the person feel better at the expense of somebody else. It's remarkable. I used to travel a lot, as you know, and I'm a Canadian citizen by birth. I'm American by choice. So I had two U.S. passports and a Canadian passport. I'm feeling frisky one day going back into Canada. And they say, what's the purpose of your visit? I said, vacation. I'm coming up to see family. I said, oh, that's terrific. Let me see your passport. I took out all three and I found them. I said, which one do you want? He didn't think it was funny. I went into the penalty box. Communications is critical. So the owner's perspective, what are we here for? What are we trying to do? We're trying to satisfy customers. We're trying to improve the customer experience. We're trying to protect the employees that work here.

    40:20

    That's what we're trying to do. So every contact with the customer has to have a conclusion, has to have an action, next day of contact, lost sales, all those things. The owner, you're right, he has to set the stage. Mergers are easy. Acquisitions are easy. Mergers are not. Culturally melding two companies together, very difficult. Departments. Sales department's always right. Service department's always wrong. Wait a second. That stuff is old. That's gone. That's the old days.

    40:59

    I think that even as my last company, the consulting company, I started it on a whim. I mean, I started it in my basement. And no staff, nothing. And my wife, I just got out of the dealership. So I said, you need to get an office in town and get some staff. And I said, no, babe, the company has to, you know, has to make money. Well, just put some money in the damn company, get out of my basement. You know, she wasn't happy about, you know, I was always gone. You know, now I'm home, you know. And as the company grew, you know, I was able to, because my psychology, I just, the company has to pay for itself. And that was where I was at. And I see the same thing as these companies have gotten larger. They can afford to do different things. So as a business owner, and I don't want to say that all business owners are not attending. I don't believe that to be true, Ron.

    42:02

    I mean, one of the things that I feel like I have learned from my fellow dealers and the clients that I've had over the years, I mean, I've learned more from them than I think what I've ever taught. because I think they're the ones in the trench every day. So I think as a business owner running these things, I think it's, we have to identify, we need someone to champion this message. You know, me as an owner, or if I have multiple owners, we have to, you know, as a board, we have to set that trend. We have to set that pace. Now we have to have a good discussion about that. If it's just me, you know, and I'm the sole owner, well, I've got to make sure I understand the throughput. of all this. And if it does happen, is that really what I want? Because if I'm asking for it and it starts to happen and I want to undo it, ooh, I've made the wrong decision. You know, when you're small, you can pull all your team together in an afternoon.

    42:57

    When you're 500 employees across eight states, that's not happening. But I think you can identify champions within the organization and they can become the people that go around to locations and champions. in a certain message. They're the people that can help identify other champions. And I think that that champion mindset is so critical because the business owner is juggling strategic pieces to the business. So sometimes that can take all day, all week, all month, all quarter of my time and energy. And I don't have time to think about inventory issues or that. But I know that I got my job as an owner, as a business leader. is to keep setting the pace that runs us one year, three year, five year,10 years. So if I don't have that vision set for that five year,10 year, you know, I can get consumed in what I have to do for the company today. But yet my organization is clunky. You know, the structure is clunky.

    44:01

    The processes are clunky because they're mishap. They don't understand what their total mission is. So we have to set that. That's why. The old statement of mission, vision, you know, so important to set, you know, well, it is, but then we have to have these champions that can go out and do these things within the organization so that we can see implementation happen. Because I don't think in a small organization, yeah, the owner is it. The larger it gets, the owner should not be the one that's doing the owner. In this large organization that I was talking about, they were asking about hiring. The owner used to do all the hiring when they were small, and now he doesn't. And he is as personable, Ron. He's just a neat guy. I mean, I enjoy talking to him. He's passionate. He's got rants and raves. You know, I mean, he's got that too. He's just a super neat fellow. And, you know, I said, well, you need to set the culture based upon who you are.

    45:05

    You know, he responded to something I wrote about having fun. You know, and he said, nobody talks about us business owners having fun. Floyd, I said, you kind of hit. And that's what I keep trying to tell my people. We need to have fun doing this. You know, if we're not having any fun, why aren't we? Well, it was amazing how, you know, I challenged him to put a video together so that every new employee gets to see you. You know, simple tool. It doesn't have to be a CBS quality. It could be done at home, sitting, you know, just simple. And he did like two or three of them. He stumbled. He stammered. You know, and I said, I'll tell you what, let's just let's just get on here one time. Let's talk through it a little bit. Well, I was recording him and he didn't know it. And he did such a good job. You know, and I said, if I'm a new employee coming in and thinking this is the guy that's running it. Wow. He's cool.

    45:56

    You know, I mean, he understands who he is. He understands who he's not. He's willing to talk about that. He's willing to talk about. where he wants the company to go, and some of the struggles that we have. He didn't hide from it. How much better can you get? I think these owners, it's back to empowering the next layer of management people. I think this whole thing about the sales department is it's about unleashing the sales department to become the best they can be. Eliminate these constraints that people believe a certain way, but yet It's contrary to what's happening. And if we look at where we're heading, Ron, all this technology talked about, I mean, what I just spoke about in terms of how the management, this isn't brand new. I mean, we did it years ago and got really, really good at it. And I did it in the consulting company and we got really, really good at it. And you're right.

    46:56

    I mean, if someone went to my website, I could tell you who they were, when they were, why they were. you know but we never called them on that first contact but if they if they looked at four or five six times over a period of a couple weeks or they had other people within their organization that's a good sign you know i mean it was a lot of people today say floyd we don't find a lot of marketing on your company you know from 15 years on us because we didn't do it we just didn't do traditional marketing you know we only did it the last four or five years yeah and that's because we got to a point you know

    47:29

    I think everything that we're talking about today relates back to the fact that the business model has to change. Yes. We've been sitting on this same business model for about 60 years. It's primarily financially driven. It's, as you say, gross profit. How we manage the sales force, how we manage the customer experience, those things need to start playing a prominent role in, quote, this business model. One of the things I'm anal about is sales per employee in the parts business. And there's a way to calculate with precision what that should be based on the gross profit you get, the average value of the part, what you pay your people. And so I have a bracket. Here's the standard. It's 100%. At 80%, we have to get rid of people. At 120, we have to hire people and pick a number. I have a number that's generally out there. It's about $750,000 a parts person, not counting the salespeople in the force. This is the people inside the business.

    48:39

    Throw the manager out. This is the people on the telephone, at the counter, in the warehouse. It's the operational people. And I go into a dealership and I do the calculation. It's very easy. It comes out at a million bucks. I said, well, wait a second. You're short some people. Oh, no, we seem to be okay. I said, really? What's your market share? Well, we don't know that. What's the potential for each other? Well, we don't know that. I said, well, let me have a look at seeing all of the customers that buy filters from you. Engine oil filters. Everybody has to use those things every year, right? Yeah. You got any customers that don't buy any engine oil filters from you? I don't know. Sure you do. You never look. So we go on. And then I say to people, look, hire, keep hiring until the sales per employee does not go up. And when you get there, stop. So I've got one guy who's been doing this with mechanics for years. Here's what our target is.

    49:37

    It's based on sales for a mechanic. Here's how many mechanics we got by store. Here's our pattern. And here's, I said, you know, I need to get you to do the same thing for parts. He said, we've never done that. I said, why not? Well, nobody's ever asked us. I said, I'm asking, let me see it. They put it out there and it shows they need 40 people. They've got 60. They need 40 people. I say, see, now you've got visibility. Everybody's saying, how come you're short 40 people, right? Yeah. Okay, where are you going to put them? Well, that's why I don't have 40 people because I haven't got office space. I said, terrific. There's a lot of strip malls that are empty now. Oh, no, we can't do that remote. I mean, this industry is fraught with can't do that. Doesn't work here. On we go. So maybe the next discussion we have should be a rant about what that business model should look like. What should those metrics be on?

    50:29

    next day of contact, or all those things managing and controlling Salesforce, because we don't today. They control us.

    50:38

    Yeah. You know, I think it's the ability to have a kiosk at the parts area. It's a no-brainer. You know, customers are already sourcing their own parts. I'd rather them source out of my showroom floor than the source at home. What brings them into the dealership? You know, well, what contains them in the dealership? You know, the larger customers send somebody in, you know, they're not doing it themselves. So it's that, you know, does every, do we have a Spanish speaking person on our front line in the dealerships? Should we have, you know, well, yeah. I mean, there's a trend there. Let's say, well, hell, I don't understand what the, you know, that's, that's old hat. You know, we shouldn't. We don't have to think that way. The old methods of how we even did the layout of the dealership. Oh, that's a little archaic today. In the 20 groups, Ron, you know, we say, well, we want to talk about marketing and merchandising. And it's our float.

    51:46

    Who do you have for that? I said, well, I think I've got the best resource that we have. So they said, well, who is it? Well, you'll see. So at the next meeting, I'd have everybody line up to get in the bus. Where are we going? We're going to Walmart. What the hell do you mean we're going to Walmart? Well, I mean, when you look at marketing and merchandising, I mean, they spend millions and millions of dollars. Now, before they go in, I give them a checklist. So here's what I want you to look at. I want you to look at colors. I want you to look at font sizes. And some of you had to explain what a font was. But font sizes, colors. labels, signage, height. You know, when you look at all these things, they have purposely positioned labels and brands at a certain height. They've purposely done that. Now, how do we go back to your dealership? Let's look at what it looks like. You know, are we stepping over things to get through the aisles?

    52:42

    You know, are there shelves that are empty? You know, are there shelves? You know, I thought Deere, John Deere did just a great job. They put such a big push and Caterpillar on that. I mean, they just, they led the brands for a number of years and point of sale merchandising that just, just made a huge swing, you know, in the operations. Then when you go to some of the other brands.

    53:04

    Believe it or not, believe it or not, John Deere's largest commodity of sales is accessories, which is watch fobs, belt buckles, toys, models. Imagine that. And your point's well made. Let's wrap this, but let's have our next one on the business model and all of the different things that need to be included in the business model. We might not have an answer, but we can sure talk about those things that are exposed because we're starting to get to the point that people are going to say, hey, get out of here. I got to get back to work. I love your rant and we need to get more. more of those going, babe.

    53:53

    Well, I appreciate it. I hope anybody listens to this. I mean, I guess I want to go back and listen to it myself again, but you know, I don't think it's all the dealerships all the time. I still think it's a lot of the dealerships, a lot of the time. And it's just about improving the effectiveness and unleashing that creativity with our people that I believe your people on the front line have more answers. Yeah. How to improve and what to do. And we just have to find ways to unleash them and let that happen.

    54:25

    Yep. There's an old great sales line. You got to want to.

    54:29

    You got to want to. You got to want to.

    54:31

    And, you know, I think it shows with you. I hope it shows with me. And thank you, Floyd. And let's set up the next one on the business model. And thank everybody who's been listening. I hope this has been helpful to you. There's an awful lot to do. I look forward to being with you at the next Candid Conversation. It might be another rant from Floyd.

    54:51

    Thank you, Alan. Have a good day. Appreciate

    54:53

    it. Thank you. You too. Bye now. Thank you for listening to our podcast. We appreciate your support. Should you have any thoughts or comments, please don't hesitate to contact us at www. learningwithoutscars. com. The time is now. Mahalo.

    Floyd Jerkins goes on a Rant

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