30 Days In: How Phil Pecoraro’s 26 Years Are Powering His First Store Launch + Hard Lessons Learned | Phil Pecoraro, Operating Partner of Murdock Chrysler Dodge Jeep Ram
Car Dealership Guy Podcast
30 Days In: How Phil Pecoraro’s 26 Years Are Powering His First Store Launch + Hard Lessons Learned | Phil Pecoraro, Operating Partner of Murdock Chrysler Dodge Jeep Ram
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Concept
OEMs
OEM means Original Equipment Manufacturer. It's a term used for companies that make parts for cars, like the engines or the body, which are then used by car brands to build their vehicles.
Brand
Ford
Ford is a popular car company in the United States, known for making cars, trucks, and SUVs.
Brand
Stellantis
Stellantis is a large car company that makes many different brands of cars, like Jeep and Chrysler.
Car
Jeep Cherokee
The Jeep Cherokee is a type of vehicle called an SUV, which stands for Sport Utility Vehicle. It's designed to handle rough terrain and is great for outdoor activities, but it also has comfortable seating and modern features for everyday driving.
Term
Hemi
Hemi is a type of engine shape that helps cars run better and faster. It makes the engine more powerful by allowing air and fuel to mix more efficiently.
Brand
Toyota
Toyota is a major car manufacturer that makes many reliable cars. They are known for making vehicles that last a long time and are good on gas.
Brand
Honda
Honda is a well-known car brand that makes reliable vehicles. They are famous for models like the Civic and Accord, which many people trust to last a long time.
Brand
Subaru
Subaru is a car brand that makes vehicles known for their ability to handle tough weather and rough roads. They are popular for their safety and reliability.
Car
Ram 1500
The Ram 1500 is a big truck that can carry heavy loads and is often used for work or family trips. It's known for being comfortable to drive.
Term
MPI
An MPI is a thorough check of a car to make sure everything is working well. It's like a health check-up for your vehicle.
Term
video walkarounds
A video walkaround is a video that shows all around a car, helping people see what it looks like and its features, especially when they can't be there in person.
Company
Carvana
Carvana is a company where you can buy and sell used cars online, making the process easier without needing to visit a dealership.
Company
Amazon Autos
Amazon Autos is a part of Amazon where you can shop for cars online, similar to how you would buy other products on Amazon.
Company
CarMax
CarMax is a company where you can buy used cars at fixed prices, making it easier to shop without negotiating.
Brand
Hyundai
Hyundai is a car brand from South Korea that makes many types of vehicles, known for being affordable and reliable.
Term
parts cost
Parts cost is how much you have to pay for new pieces to fix your car. This can change based on what kind of car you have and whether you buy original or cheaper parts.
Term
labor costs
Labor costs are the fees you pay for the work mechanics do on your car. This can include fixing problems or doing regular maintenance.
Term
service contract
A service contract is like an insurance policy for your car that helps pay for repairs. It can save you money if something goes wrong after the regular warranty ends.
Term
calibrated windshield
When a windshield is replaced, it needs to be adjusted so that the car's safety features work properly. This process is called calibration and is important for keeping the car safe.
Concept
sales efficiency
Sales efficiency is a measure of how well a car dealership sells the cars it has. If a dealership sells most of its cars, it has high sales efficiency.
Concept
used car auction
A used car auction is like a big sale where people can bid on cars. Dealers go there to buy cars that they can sell in their own lots.
Car
Chrysler 300
The Chrysler 300 is a large car that offers a comfortable ride and a lot of space inside. It's known for its stylish look and can come with powerful engines.
Term
payment plan
A payment plan lets you pay for a car in smaller amounts over time instead of paying everything at once. This makes it easier to afford a car.
Concept
transparent pricing
Transparent pricing means that the price you see is the price you pay, with no hidden fees or surprises. It helps customers know exactly what they are paying for a car.
LIVE
Today's special guest host, Sam Dark, is joined by Phil Pecoraro, operating partner at Murdoch
Chrysler Dodge Jeep Ram. Less than a month after taking the keys to his first store, Phil returns
to the same dealership where he earned his first GM title 16 years ago, and this time he's calling
the shots. He gives us an unprecedented behind-the-scenes look at how he structured the deal,
his first year playbook for success, and why now is the perfect moment to take the helm.
A big thank you to our sponsors for making this episode possible,
CDK Global, Stream Companies, and Nomad Content Studio. And now let's get into the show.
Hey, Phil, welcome to the podcast. First off, it's exciting to have you here. So why don't you
tell us a little bit about what you do today before we go back in time to the beginning?
Well, today, actually, we are about a week into an acquisition. It's actually part of the Murdoch
family and the Murdoch Group. They've been around since 1925. So they've been four generation owners.
I've been with them for a little over six months, and we purchased a store that I'm
so grateful to be a partner in. So I'm a third partner with two of the other brothers. So
each of us have a third. And today, we're actually working on growing our use car
inventory. When you take over store, the people we bought it from, we didn't have any use cars.
So we pulled some of those cars. Yeah, so zero use cars day one. So we purchased some of our
stores in the valley. We're lucky that we have some close. We got about 30 use cars on the
front line today. Just bought about 10 more from Enterprise. They should be here this afternoon.
And you think that you have a lot of it prepared before you start, but then there's so many things
as far as technical issues, website issues, manufacture, getting everything turned on.
Just trying to make it as seamless as possible for the employees to kind of figure out where
their logins are and kind of go from there. That's a big process. As part of the Ziggler Auto Group
41 stores, we've expanded very quickly recently. And one of the biggest tasks is onboarding
a new store to your point, setting everything up. So I'd love to dive into that in just a moment,
but before you there, why didn't they have used cars? Who did you acquire this from and
was a part of their strategy and wind down or did they not have used cars? No, they had about,
we bought it from the Kengarff Group and they only had it for about a month and a half. So
they purchased from the S? Yes. So they purchased from the Asvery Automotive Group or Larry H. Miller
with two other stores with the Lexus stores, the Linden Lexus and the Salt Lake Lexus store.
And they didn't have a ton of used car inventory. They had about 20 cars and it was kind of,
didn't really get to a number on them. They had just had them right there and I said,
well, let's just bring them in from our other store. So it wasn't a huge difference, but just
getting them up online and pictured and trying to drive some traffic. I gotta ask, why did they
flip that store so fast? Was it because they bought a package and then they just offloading
what they didn't want? Yeah, I think that, you know, when the Garfs are a great group,
60 stores, I think, and it was for everywhere. And this store, we really worked hard because
it's in our backyard. The Murdoch family's been just up the road in Woods Cross since the early
80s. And they just realized that I think that this, you know, fits their portfolio to kind of
offload that to somebody who's in their community mind just like we are. And to have somebody that's
into me with the store and going after the operation, I think it makes a big difference.
So, Phil, you're new to the Murdoch Group. How much you, how did you become a partner? What did
that look like? Like, did you approach KO or the team there and say, hey, I want ownership in a
store or what? How did that happen? So it's kind of an interesting story. KO and Blake Seyir
have had the group until about six years ago, and they sold it to their sons. So Blake, Blake
Jr. and Ben are the owners of the group now. And they had a CFO that used to work at Larry H. Miller
Group. They had left Asbury and Larry H. Miller Group in November of last year. Some of the stuff
that Corporate does doesn't fit my skill set as best. The Larry Miller Group is much more
entrepreneurial and kind of a wide open playing field. More empowerment at the store level.
Yeah. And so that's what I was used to. And I learned a ton being part of a public for about
two years and really grateful for that experience. But when I left, I was just going to kind of take
a year off and figure it out, inquire to a couple of brokers and tried to buy a store on my own.
And nobody talks to you. It was very interesting. And the size of store that I would like to buy
would be big enough to make a difference and grow and possibly purchase a second store.
And so the Larry H. Miller CEO or CFO had been helping the Murdochs and he called me and he said,
hey, why don't you come talk to these guys and tell me what you think. And within one meeting,
around my same age, a couple of years younger, I was excited. And I said, hey, this is what I want
to do. This is kind of my plan. And so for the last six months, I started in March, I was down at
their huge Hyundai and Linden store, a number one store in the Denver region. I'm just the only
store in Utah County, which is a big market and selling about 350, 400 cars and learned a lot
from them, kind of learned their culture. And then this store came available. They knew that I
had a history of this store. And so we just kind of came to agreement and I was super excited.
So Phil, there's probably quite a few people listening to this show thinking, hey, how do I
get into that ownership spot? The barrier to entry is high. It's not easy to your point as a GM.
You go approach OEMs or brokers and it's tough to get a serious audience unless you've got that
financial backing. What did your third costume ballpark?
Well, to purchase the real estate, the real estate alone at this building, this was Larry
Miller, this was a Larry Miller store. So this was a store that I had worked at previously.
And kind of a story is kind of going back home for me. I originally started this store in 2009
as the store manager. And it was a Chrysler store back then.
Yeah. So this was the last store that Larry H. Miller built when he was alive.
Oh, it's got history. Yeah.
Yeah. And so he purchased the Chrysler Jeep store from across town and then Menlove Dodge Toyota,
which was a huge Dodge store. Yes. He said, well, they're selling 100 Dodges, the Chrysler store
selling 100 Jeeps. We're going to sell 200 cars. So we need seven and a half acres, 50 bays.
That's an absolutely huge store. So it was overbuilt at the time.
Still is probably overbuilt for the size. But I mean, it would cost you almost 30 million to build
today, $17 million praise value. So it's a huge stop. So it took a sizable amount of the
net worth, I mean, millions of dollars to be able to do that. But the way that you get there,
Mar-CFO, when I first started as a general manager in 2010, so I went here for a store
manager, then was made the general manager in 2010. The Larry Miller group had a small buy-in
program. It's kind of an as-if share where you can buy into a piece of the store.
And I was able to save up some money and still live in the same,
still live in the same house I did when I was doing finance when I came to this store.
So it was always part of my ambition to own a store. And I was thinking about why.
Well, and Phil, because I want to go back to the beginning and to your why,
but I want to acknowledge how rare it is in automotive for you to get both the real estate
and the equity as a share partner. So that's props to Murdoch, to you, to the other partners
who put that together. You'll hear often about, hey, I'm going to give you 20% operating and no
real estate, not enough share to really make a difference in the operating side. That's pretty
cool. Third, third, third, and then the real estate as well. Third, third, third real estate,
real insurance, basically top to bottom. Yeah. Very cool. Let's go back in time, Phil,
because this is exciting. This is interesting to our audience. You're
big dealership in Bountiful, Utah. Yeah. And it all began pretty humble. You started selling
vacuums. Take us back to that. And how did you get that start? Well, I was working at a hospital
overnight and then I was waiting tables at a TGR Fridays, just me and my girlfriend at the time.
My wife now married for 26 years. I answered an ad that was a $1,600 a month guarantee.
And it said, it didn't really say what it was. And so I kind of answered the ad and they said,
okay, you're going to sell vacuum cleaners. And I did really well. Door-to-door sales,
they $10.99. And I worked my way through the selling vacuum cleaner process to where they had
kind of a graduate scheme to where the more vacuum cleaners you sold, you had an opportunity to
be a corporate trainer. So then I drove all around a corporate trainer and it wasn't really
like just straight door knocking. We had a phone room. So we had a phone that created leads,
made phone calls, created opportunities. And it was a mini car business. And it was kind of a
training ground. We had a phone room. We had to sell our trade ins to different vacuum cleaner
shops to create that. We had to make payroll. We had advertising training every single day.
And that really kind of developed my skills there. And so I was able to be the corporate trainer.
Then I ran the Sandy office for our vacuum cleaner distributorship and had an opportunity for at 20
years old, I had a small dealership selling paper to Beneficial Life, writing the contracts myself,
had basically CITs, had a small thing. And it just got harder and harder to find good people.
And ended up shutting that down at 21 years old on my 21st birthday,
shut it down. And a month later, actually two weeks later, I was selling cars at a Chrysler
Jeep store for Larry H. Miller in in San D. Utah. This episode is brought to you by CDK Connect.
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the link in the show notes below. What pulled you from vacuums into the car business,
aside from just the sales aspect of it? Well, my girlfriend and wife at the time said,
you need a job with insurance. And so I drove by and I went in for an interview and they said,
you sold vacuum cleaners door-to-door and said, yeah, I think you can make it. And so I just
started selling cars, sold cars at that store for about a year and a half and did really well.
Not the best car salesman. Then I had an opportunity to go into finance and I spent seven
and a half years in finance. And it was at that time that I really fell in love with the business.
I fell in love with the customer interaction, building a team. And I had kind of a couple
old dogs that were on the desk, as you would say, back in the day. And so I kind of really focused
on building my team from the finance department, training guys, hiring. And some of those guys
are still with me today. In fact, my log tech, who is my log tech back in the day, he's one of
my sales managers. He's downstairs right now. And that's kind of the cool part is building
that team and then taking them with you when you have these opportunities. That's an unusual
approach to take from the finance chair, because most finance managers don't see themselves as
leaders, per se. They see themselves as employees and individual producers. What caused you to
take that approach of, hey, I see the need to build a team. I see how I can have leadership beyond
just my role as a finance manager, because that's unique. Yeah, I think the frustrating part for
me was I watched the store. We had a couple of senior salespeople. This is early 2000s.
And our store was kind of held hostage by the salespeople. And I wanted to figure out a way to
have a store that wasn't held hostage by any finance people, but may finance people really
good. So I tried to step back at one higher level, and realized that it's an effort meter game.
And they always talk about well, it's a numbers game, it's a numbers game, it's a numbers game.
But then what are those numbers? And how do you make those numbers count? And then how do you
make those numbers work for you? So we're used to say, hey, listen, we didn't sell a car today,
but we created 20 famous for tomorrow. We have these opportunities to make sure that we're
actually tracking those things to where if I worry about how many car deals we sold today,
that may not be a true reflection of what our efforts look like. And so I really stepped back
and started tracking everything. Which is interesting, because again, not traditional
for FNI back in the early 2000s. Not traditional for FNI. Yeah, building that team. Did you have
a sense back then that you wanted to become an owner, that you wanted to become a dealer,
principal, or even a general manager, or were you pretty happy as that producer? Okay. No.
You had that. Yeah. Well, I had a, when I had the vacuum cleaner business, I felt a tremendous
amount of kind of guilt and failure, because I, oh, I didn't succeed at that, right? I had to
shut it down. And so that, and it always is eating at me that I wasn't able to convert on that and
really help push that to the next level. And so I was basically trying to figure out this puzzle
piece of what it looked like to have more effect on the system in which I worked. And so just really
learning all the systems in as far as inventory and advertising and how it really, and I was pushing
my general manager. I want to go to the Larry H. Miller Development Academy. I want to
learn as much as I can and try to hold myself to that standard to get better.
So fast forward to your GM role, Bountiful Chrysler Jeep, the first time.
Yep. Store manager first. Okay, store manager first then GM.
You took that store from a big loss to profit, 1.6 million loss to a million dollar profit in
just four years. Tell us about that. So I think that that is, it's kind of funny because the
Chrysler seems to go through these kind of ups and downs, Stoannis now, and where people get
really concerned about what's going on in the outside world. And depending on their success
depends on the manufacturer's success. But most of the time when you step back and look at it,
your success at the store depends on the salespeople and the technician's success.
And so what did we need to do to just scrape it down? And that store,
this store was tough. I mean, we had no salespeople, we weren't selling as many cars,
it was right at the start of cash row conkers, and so we had one car that qualified.
Yeah. And so there was really nothing there. So we just said, okay, listen,
we're gonna sell used cars. So we took it from selling 30 used cars to 80 used cars consistently.
We focused on getting really good at the internet. If you know Balfill, there's kind of a lake on
one side and mountains on the other. So most of the stuff of driving traffic or pulling traffic
from north or south. And so we had to get really good at driving people here. So just really working
hard on the internet process, making sure that we were training our guys to set appointments,
be an appointment driven culture, and just really driving that and then building a team of people
that were young, that were hungry, and they wanted to make a difference. And a lot of those guys
that are with me right now were GSNs, GEMs, used car managers that started just selling cars here
in 2009 and 10. And then we kind of broke it up in 2013 when I left to take an opportunity to
Fordshore. So you've bought back into Stellantis. Stellantis is a brand that has challenges. You
acknowledge in your first stint that that was a moment of challenge as well in those early
cash for clunkers periods, turning that store into a used car operation. What do you say to people
today that talk about Stellantis, the struggles they have and say it's just not that great a brand
and they're struggling and they're not going to win? Well, I think that you have to realize that
if it was the Ford store right now, it would have cost us 10 times what it cost us to buy the store.
You always have to look at it. Some of the stores, I kind of look at the stores,
like if I can read this. I think Stellantis has so much upside because I don't know anything about
it right now. All the salespeople that have been kind of beat up or the people operating the markets
went from a 13% share to a 9% share. And so now they're kind of not feeling as good. They haven't
been taking inventory. And right now, they're just kind of all the salespeople like, gosh,
there's not really that much excitement. I'm excited because I haven't seen that. And I think
everything is moving in the right direction for Stellantis. I think stuff is the new Cherokee is
going to be great. I just got my first Hemi 1500 that people were excited about. Customers were
excited. Salespeople are excited. So I think that a lot of that's mindset because there's still 9 to
10% of those people that want to buy that car. How do we give them a great experience? How do
we make sure we're competitive? And if they don't want that, how do we make sure we give them a
used car and build that brand? Well, to your point, buy low sell high, right? So you mentioned
Ford. It's the most recalled OEM right now, but Toyota, Honda, Subaru, some of those franchises
have large multipliers. You've got a Toyota store next nearby you up there that's just massive. You
think your Chrysler store is big. You pay a multiplier on a big Toyota store that's arguably
overbuilt. That's going to be every bit of a challenge as any other franchise. So is your
strategy today? Is it to do very much what you did then and focus on used cars? And if so,
what are some of your strategies to win in the used car market? Well, I think today when I talk to
sales people today, I talk to my strategy is to make sure that what I learned from the public
and when I was with Asbury is what does the street really look to and provide value? Well,
that's two things. And that is how does your service do? And how do you do in used cars? Because
those two things, the manufacturer can't affect as much. So today, I'm interviewing two technicians
to make sure we're growing our tech talent base. That's one thing, you know, when I started in
the store in 2009, we were 26% fixed absorption and still were profitable. So as we can, I'm going
to focus on growing service, making sure that our services world class, making sure that our
appointment schedulers open, our teams are engaged there. And then the other thing is basically
driving that used car business. And I think that when people think of used cars, sometimes we think
about when we're bidding that car, how much could we make on this car? But it's not about that car,
it's about the four cars or chains that are attached to that car. So what if I, you know,
have a great finance department, sometimes the, I always believe that, you know, market determines
the front end of the car, the front and gross profit, but our talent and our, you know, customer
service to helps the back end profits of the vehicle. So how do we make sure that our customers
are protected there in our system, if they need service work, we're doing it. And then if you
had to go buy future service customers, what would you pay for those? And one thing that I learned
with Ford and how important services, it's, it's, it's like that waterfall effect. If I know that
down the road, 60% of my customers are going to come back to me, and we got to bump that to 70%,
but what is a four year old repair order on a Ram 1500 worth? Okay, well, let's go buy those
customers right now today. When they need their alterations for the first three years, make sure
that we give them great MPIs, make sure we get great video walkarounds, make sure that those
things are perfect and those green checkups on the MPIs are perfect. They know that they can trust
us on a daily basis and we can treat them correctly. And when they come back, they understand that
they're going to buy a car from this feast because we're the guys, we're in this together.
And when I talked to, I talked to a customer that I sold cars to last time that came back and said,
Hey, I'm glad you're back. I went into it about a couple of those, but now you're back,
and I know you'll get it fixed. So I was actually nervous about filming the podcast because it's
my first week, we have so many cars, we blinked one day, we had a four car day yesterday, I was
super happy, but the amount of pressure this is putting on me, you know, the tab you check in
six months from now going, well, did you make it happen? Which we will do by the way,
which we will do by the way, because we want the, we want the famous rest of the story, but
it is kind of exciting though, when you think about it, you're coming into a Chrysler franchise,
you're coming into an established store, you've been in the store before in a lot of ways,
it's a blank slate. Like you get to look at this with fresh eyes and make changes right out the
gate that you didn't make the first time and you saw a $2.5 million spin on the first go around,
Delta on the first go around or 2.6. The sky's potentially the limit. So as you're looking
at this right now with these eyes, it's a great lesson for new operators and there are many
looking to get into automotive right now that are going into a Solana store, there's several in
the Midwest or a Nissan store, Infinity making big changes to impact change. So service is one
area you would attack, used as another, right? What other actions are you taking here in the
beginning to ensure a quick turn on this to maximum profitability?
I think you have to keep it simple. And so right now, we're just going to focus on
training really, really hard as far as giving the salespeople to make sure that we have five
salespeople as of right now. Wow, very cool. Yes, the great thing about this, and when I talk to
our two owners, Ben and Blake, which you guys love to talk to, but when I talk to them, I said,
I will go and go back to this store, but I don't want to deal without the Murdoch name.
Because being here since it's since 1982, and you would be surprised just my first week here
of how many people have come by and said, Hey, I know the Murdoch's take care of people. I know
the Murdoch's are good in service. I know they do that stuff. So having that brand recognition
and and the publics have their place, I think they're great. The garbs 200, you know, 60 stores
now, big stores have their place and they can do great things. But I can tell you from my experience,
when you have involvement in the community, and you can and you can look at the owner,
and you know that you look at that technician and you feel personally responsible for him,
and he has your cell phone number, it makes a difference. I think that, you know, when I was
with the Larry H. Miller group and and we knew how much gale you back in the day, Larry Miller
could get talked to by anybody, a grocery store, and he pick up the phone and call you and ask
you about a customer experience. And so that's the level of a check mark check balance. Yeah,
yeah, the that level of accountability means something. I had a text this morning from Blake
senior, who is the original founder, you know, fourth gen, third generation. And he said to me,
hey, I was a gym this morning. Somebody said they had a great service experience. I appreciate you
doing it, keep up the good work. I made my day. Yeah, you know, and so what is that? Yeah, it
means something when somebody's names on the building, and truly, the money that we produce
as profits here will stay in the market. The high schools that we sponsor, the advertising we do
is here in the market. And that's important. This episode is brought to you by full throttle.ai.
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to learn more visit full throttle.ai and see how smart your media can really be. Again,
that's full throttle.ai or click the link in the show notes below. So Phil, what would you say to
the person that says, Hey, this personal touch is important. This focus on customer experience is
important. But at the end of the day, you've got Carvana out there buying Chrysler stores, turning
them into franchises. They bought one in the Phoenix marketplace, Texas, and they've got plans on others.
You've got Amazon autos. You've got CarMax. You've got these large, massive online retailers.
You know, the day of the personal touches over, and ultimately, it's all just going to be online.
It'll be transactional. What do you say to that person? You know, I think that's interesting.
But what I would say that was at the Hyundai store for six months, we did two Amazon deals.
And I actually tried to figure out how you get more Amazon deals. But there was no lever that I
could pull that could create that opportunity. And so I think that I think you have to be world class
on your digital showroom. I think your picture should be great. I think the customer job pricing
should be transparency. I think the customer should be able to enter as much information they
want. And when they come to the store, it's already seamless. That stuff we should focus on.
But at the end of the day, how does that translate? How do we marry those two things together? I mean,
you go to Costco, they have the self checkout line, but the regular checkout line is still full.
Can you do both? Can you be world class and multiple channels of taking care of the guest?
And for me, it's about, okay, what can I control today? That customer that comes across the curb
today? Can I give them a world class experience and make sure we take care of them? Because those
those things will happen. I remember we were at a Ford meeting and I'm with you, Phil. You know,
we've got two Hyundai stores and just haven't done that much with Amazon. I don't know if it's the
geography. It seems a little bit like a much to do about nothing, although now they're expanding
into used cars, right? Everybody seems concerned about it. But it is interesting feel in the
concern and a little bit of the tension of, Hey, it's coming. I think it makes us better.
Because to your point, it makes you deliver the kind of experience that gets the founder of the
organization to get a compliment and then decide to call you when you're at the gym, right? Like,
that's a personal connection. That's a personal experience. You were in finance for seven years.
What FNI habits did you take on that still are profitable for you today in your new operation?
What are you going to implement there that has been successful that you learned back then?
One, I think the biggest thing that you can take back from FNI is
have making sure that you as an FNI manager follow your claims. And what I mean by that is you
really understand that what you're selling to that customer helps them. I've been in a time where
it's a single mom or a family that doesn't have a ton of money and you sell them something and then
that car blows up and needs a motor and they're protected. And so what does it really look like?
I mean, you see what numbers are, what parts cost, what labor costs. I shop door rates or through
the roof. Constantly going up. Yeah, that's crazy right now. And nothing makes me happier than like,
congratulations, you have a service contract. Let's get that covered for you. So I think that
fundamentally you have to believe that you want to make sure that that guest is in a situation to
where it's kind of selfish, but I want to sell you a service contract because I don't want you to
have to come back in six months and be like, you sold me a lemon because I want you to make sure
that I can figure this. And there's so much better stuff now. I mean, a tire and wheel,
when a customer has a car for two weeks and they curb ratchetire there, that's the happiest customer
they use. Come and say, cool, you got a tire and wheel, we're going to buff that out for you.
It's saying care of, we take care of the dancing things. Oh, $1,200 windshield that needs to be
calibrated. It's covered. And they all know that they just have that little bit of peace of mind
to where they're taken care of and they're protected. And being part of that service contract
company, knowing that I try to say, hey, we're pooling the money together so that we understand
we're going to lose some on some and we're going to make some on some, but you're going to basically
in this riskful with us. And so kind of letting them know that we're all in this together.
So three years and running, you were a top 104 dealer, your GM running at that location. Give
our audience those that might be four dealers. What are three things you did to create that top
100 and then things that others could take away, but then also you're going to bring into this
business. Ford is a great manufacturer. The weird thing, it's a family business. I was able,
four chefs go to Ford's General Manager Academy, go back there, you see Henry Ford's house,
you walk through the factory and you learn everything. Any percent of the vehicle sold by
Ford or basically by 20% of the dealers. So that top 100 is almost 80% of the total vehicle sold.
We built a huge Ford store on 17 acres in the south of Salt Lake City Valley. We had the largest
PMA. We were top 100 store, but still not sales efficient. And that's why I got to go to that
store. It was 60% sales efficient when I started. And I think when you go to a Ford store and you're
selling a ton of cars and you're doing okay and the store is profitable, I think we kind of get
into a mindset like everything's fine, but you're still leaving so many vehicles on the table. I
remember my first, the president of our company, he would say the toughest stores to fix are the
ones that are already making four or $5 million a year, but they're leaving $10 million on the
table. Right? Yeah. There's not enough pain to make the change. Because you know that you could
sell more cars, but it would take, you might have to have a J curve to where you kind of
break it to fix it. So that for when I went to the Ford store, it was just a mindset. We took
every single cardio. I almost treated it like a Stellantis store when I was here. And so I tell
everybody everything that works at a small store works at a big store. I'm going from, you know,
16 employees to 200. Everything that works having that personal relationship, knowing everybody,
but when you go to a 200 car person store, not all of that works at a smaller store,
just because you can't make as many mistakes, the scales are tougher. So I think that being small,
you know, it's okay to try to drive and be that big store, but then realize that if you still
treat it like a small store, you'll be much more successful. So as the owner partner in this
organization, what does your daily cadence look like? You're a lot into mindset. You're a lot
into connecting with employees. You've built successful organizations. What does an average
day look like for Phil at Murdoch Chrysler in Bountiful? So I guess when I try to swim upstream
of where my problems are coming from. So what does it look like and what do we need you to make
sure that today's successful? So I always talk about not working on yesterday's business. So
if you don't make sure that that credit apps tied on the first time, if you only choose to submit
to the bank correctly, if you don't collect the steps, you're working on yesterday's business.
So how do we use numbers? How do we use analytics? How do we use all those tools that we have to
make sure that we're setting our stuff up for success? So I try to run every single department
the same way. So whether it's service or sales, I try to use the same reporting or even parts
across those things. So we'll have the the heat sheet or meeting on the same cadence. So
every three days, the car's got to be diagnosed, make sure it's looked at deals have to be approved
and by a bank within three days within five days, it has to be approved and customer has to be let
know same thing with the thing and parts need to be ordered in seven days. It's got to be
re-contract and sent off the bank in 10 days. It's got to be picked up or the deals got to be
funded. So how do we teach our guys across those tools to make sure that they know what that cadence
looks like on a daily basis? And so yeah, try to reduce it to the ridiculous so everybody
understand my biggest failure when I started at this store was when I drove up, everybody kind
of waited around to see what I cared about that day. What does Phil care about today? What's he
want to do today? And when I went to the fourth store, I realized that I wouldn't be successful
if I tried to run it that way. Because it was too big, right? It was too big. Yeah, I couldn't
muscle it. I just couldn't muscle it. So when I came back, I said to myself, I want to be more
strategic. And so we started building processes to make sure that we were more strategic to pull
levers to have outputs that we wanted. So started tracking everything from write-ups to phone calls
to tech to emails and just tracked everything and then found out what stores and what people
needed help within those things. So we track tech hours, you know, you'll track tech hours per day.
And then they'll have a forecast of how many hours they want to do that, they'll roll up into
that advisor and his team to see how many hours he needs to produce. And then we'll chunk that in.
So at this store where we don't have a ton of hours, but at the end, we were doing 10,000 hours
and a million dollars in service gross out of our fourth store. But you can't do that just, well,
hey, we'll figure out we have a whole bunch of advisors. So each advisor has to be responsible
for his tech. If everything's not diagnosed by noon, then the shop foreman's got to look at it.
Then you have a separate fleet guide, then you have two mobile bands that you're running to.
So but everybody has to understand how they contribute. And they got to know the forecast.
So what's the forecast? What are you responsible for? And then when they're responsible for that
and that part of the business plan, they'll deliver that. And then that rolls up to it matters to
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You're teaching and training everyone strategically how to manage their own
area. You're teaching them important KPIs and how to be accountable and responsible for that,
whether you're there or not. But as the general manager, and that's fascinating,
from Chrysler to Ford, now back to Chrysler, what are the top five KPIs you look at every single day?
Whether you put them in an email, you put them in a text, what are the top five most important
metrics that you make sure you're connected with as a GM and as an owner?
Appointments for tomorrow. Yep. Sales appointments for tomorrow.
How many write-ups today? Because if we're not putting them on paper, it doesn't matter.
Service appraisals, everything to do, and then making sure that which salespeople
haven't sold the car for three days. Just so you can kind of touch them and make sure we don't lose
them. Oh, that's good. You can see anybody who's about to drop off. Yeah, that's cool.
How can I help them get a car deal? And the weird thing about the same thing for a tech,
if a tech hasn't turned an hour or for three days, it's not because he doesn't want to.
It's usually because he's having diet issues with a car that's kind of really hard to fix.
Or stuck on a big job or he doesn't have, somebody hasn't dispatched him work.
So I think that those same KPIs, with service, it's video percentage. What's our MPI video
percentage? What are you watching and are you guessing that? You'll see an immediate increase
overnight if you start doing video MPIs. And the key is not everybody's going to be a
media adopter. So how you have to do it is just basically find one or two or three texts that
are on board and celebrate them and then show the rest of the text what it means. And you'll see
that increase and they'll kind of all get bought on and derive that vision of how important it is.
What's an acceptable percent for video MPI in your store? 90%. Yeah. And
here's something I don't get. We struggle with, I think everybody struggles with it.
Why is getting video MPI such a tough thing to do? It's not that hard. The technology exists.
You've got the car. Customers love it. There's a quick return on that activity. You can
quantify it back to a dollar impact, CSI impact. Why is this so doggone tough?
I think that it's a, we let it slide. We just let it slide. Because we have two things going on.
Correct. If it matters to you, it'll manage your people and you've got service guys and he's got
three other heaters and he's got to pick up the phone and this other customer's called in and
he's got a warranty issue coming up here. And so it's just really, really difficult.
And that's where if you just step back and say, Hey, where's the video MPIs for today?
And at the end of the night, there's five things that your service manager text you before he goes
home. And if you're like, Hey, let's work on that tomorrow. And if they have to text it and
I hate the word be accountable, because I think if you have to be accountable, then that's like me
standing behind you with a gun, making a marathon as opposed to your choice in the carrot.
But I want you to want to make sure that you're handling those things and realizing this can
make a difference. So one of the areas and you alluded to it a little bit kind of as we get
towards the end of today, I wanted to get into use car acquisition. It's such a hot topic right now.
You're going to build an organization there at that store that is used,
leaning, right? Given, given the location, the market, given your focus in the market.
What's your story? Where were you going to find these used cars? Where do you get the best used
cars today, Phil? I think you I think you hit say, it's a mindset shift in used cars. So
a lot of times right now, if you I talked to a used from any other day and said, Hey,
what do you think about buying used cars and me going to the auction knowing that I'm going to
buy a car and if possibly lose a thousand dollars, just to just to have the car on my lot.
And I'm okay with doing that. And I said, Okay, I said, I think that's sometimes if you have to
buy the car and they're in your market, you have to do that. Unfortunately, what are you really
trying to accomplish? So I think it's a deeper question that so I'm at a bountiful store. And
if we're going to have a Chrysler 300 that we're going to take in on trade this $12,000, I think
that you can pay whatever you want for that car because the customer is looking for a payment
a band and you're going to be able to sell that car. But I think when we step back and say,
Okay, what's the what's the customer I'm looking for? Have you really dove into doing good guess
sheets of what your last 30 days of customers are trying to buy, and then going out in future
buying those customers for your customer, do you create your customer base by what you stock?
And so okay, I'm going to stock these cars. And before that customer leaves on a new car,
now I'm going to basically plan on losing $1,000 on his trade before he leaves,
overpay for that trade to get a new car, overpay for that trade to make sure your service guys
are busy, overpay for that trade to get your salespeople a car deal, because you know,
then then you have four cars do that. But so many times we get in the mindset of no,
I got to steal this trade, or no, I'm going to walk this customer. But I don't think we're
really looking at what the market is on these cars to realize that hey, we have to step up,
we have to get these cars. And you look at the best used car stores, they got a ton of cars.
And what they're doing is they're turning them very fast, their shop process is great,
their pictures are, I mean, it's not, I mean, Carvana is doing a great job, their pictures are
great, their cars are there, they're transparently priced. And they're just moving them through
the system. And they don't say, okay, I'm going to price it at 102 days. And in 15 days, it's going
to be here, they price on the market from day one. And they do really good. Oh, if a customer shows
up and drops it off, it's a seamless process and makes it easy. Where I think for acquisition,
you have to have a plan to get the car spot, have it on the cars 48 hours pictured on the
front line, and make sure you're really driving that volume through there.
As a new owner, what keeps you up at night over the next six months, 12 months,
whether it's a reality of Stellanus, whether it's market, what, what keeps you up at night?
My wife, like I said, I've been married for 26 years. My wife, I couldn't do this without her.
But I told her the other day, I said, she said, how are things going? What's
everything? I said, you know, the only thing that I'm worried about is I didn't just buy
a dealership. I didn't just take basically our whole net worth and throw it on the gambling table.
I bought 41 employees today when I left the first time they were 68,
but that's times four. So I bought 500 people that I'm responsible for their livelihood.
And what does that really mean? And then I have a whole bunch of trust to the Murdoch family
for them letting me have their name on the front of the building. So what really keeps me up at
night is the tremendous amount of trust people have put into me and everywhere. I've gotten so
many texts today, being in the market for 26 years, I've got so many texts from so many people that
say, hey, we know you've always wanted this and we're rooting for you. And so I think that right
now what keeps you up is basically me converting on the promise to myself. And so somebody says,
I mean, this is kind of a cool story. You know, if you were to go back and said, you know, 10 years
ago, Phil, hey, you're going to own this store someday. How hard would you work if you knew
where you're going to own it? And if I don't work that hard today, whatever the answer that guy gave
me, if I don't work that hard today, I'm letting that guy down. And so well, it's it for my and
just sort of put a bow on a fill. It's interesting. You think back to the fill who owned the vacuum
distributorship, yeah, had to close the doors and the crushing frustration that that was.
And then the curious finance manager that built a team to GM that turned around a store
to a $2.6 million delta to multiple top four accolades, top 100 accolades.
I'm betting on your team, Phil. Yes. On the win. I'm going to take them every single day too.
So, Phil, we absolutely appreciate you being here on the show and we want to come check in on you
and see how things are going here at 12 months down the road. What's your goal? Do you have a net
goal by the end of the next 12, 24 months? Yeah, I mean, I think that realistically,
we need to make a million bucks next year. But I think that I think that realistically,
it's a three to $5 million operation as far as net profit. And I think that I told everybody
within this group, this doesn't want to be my first one or Murak's first one. And so how can we
really leverage what the car business has given me? I want for everybody. I have an abundance
mindset for that. And so it's given me so much. It's the ultimate meritocracy. It's still a level
playing field. My job is to find talent and then kind of kick the weeds around from the guys and
let the bamboo trees grow as tall on as fast as they want to within our organization,
and then hold myself accountable for making sure that you don't let make sure everybody gets all
the sunlight and nutrients they need to grow within their potential within our organization. So,
that's kind of my goal. Cool. Well, Phil, we appreciate you joining the show. Thanks for
being here. We look forward to catching up with you soon. Appreciate it. Thank you.
All right. Hope you enjoyed that episode. Please give the podcast a rating,
consider subscribing to the show, and check the show notes for links to what we talked about.
Thanks for tuning in. I'll see you guys next time.
About this episode
Phil Pecoraro shares insights from his first month as an operating partner at Murdoch Chrysler Dodge Jeep Ram, reflecting on his journey from selling vacuums to dealership ownership. He discusses the challenges of acquiring a store with minimal used car inventory and his strategies for success, including focusing on service and used car sales. Phil emphasizes the importance of community involvement and personal accountability in dealership operations, while also addressing the competitive landscape with online retailers. His experiences provide valuable lessons for aspiring dealership owners.
Original notes
Today, special guest host Sam D’Arc is joined by Phil Pecoraro, Operating Partner at Murdock Chrysler Dodge Jeep Ram.
We dig into Phil’s first month running his new store — why he’s returning to the same dealership where he earned his first GM role 16 years ago, how he’s carrying forward the legacy of Larry H. Miller’s final store, and much more.
This episode is brought to you by:
1. CDK Global - Tune in October 21 at 11 a.m. CT for CDK’s 5th annual CDK CONNECT, a virtual event packed with insights, innovations, and expert-led sessions. Featuring Rita Case, Sam D’Arc, and more. Register now or watch on-demand @ cdkglobal.com/connect
2. FullThrottle.ai - fullthrottle.ai® is a next-generation AdTech powerhouse. The Automotive DSP™ is built specifically for the auto industry, combining advanced programmatic targeting, real-time bidding, and analytics tailored to drive dealership and OEM performance. With fullthrottle.ai®, marketers can reach the right car shoppers at the right moment and optimize toward real business outcomes like test drives, leads, or sales. fullthrottle.ai bridges the gap between auto media buying and results-driven marketing. Learn more at https://www.fullthrottle.ai/
3. Nomad Content Studio - Most dealers still fumble social—posting dry inventory pics or handing it off without a plan. Meanwhile, the store down the street is racking up millions of views and selling / buying cars using video. That’s where Nomad Content Studio comes in. We train your own videographer, direct what to shoot, and handle strategy, to posting, to feedback. Want in with the team behind George Saliba, EV Auto, and top auto groups? Book a call at http://www.trynomad.co
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Topics:
00:41 Biggest challenge in the new acquisition?
02:58 How did the key partnership form?
07:53 Early sales lessons from vacuums?
11:12 Best team building and leadership advice?
13:37 Key to turning around a dealership?
21:55 Balancing brand and community involvement?
24:17 Digital vs personal customer experience?
27:58 How to achieve top dealer status?
36:56 Best used car acquisition strategy?
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