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LAPIS CEO on Public Groups & Wall Street, Singleton on Biggest Fixed Ops KPI's | Daily Dealer Live
LAPIS CEO on Public Groups & Wall Street, Singleton on Biggest Fixed Ops KPI's | Daily Dealer Live
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About this episode
A deep dive into the automotive industry's current landscape, featuring insights from Todd Blue, CEO of Lapis, and Chris Singleton, managing partner at Mike Terry Auto Group. The episode discusses the impact of Wells Fargo's expanded credit guidelines for dealers, the acquisition of McKenna Subaru, and the implications of the end of federal EV tax credits on electric vehicle sales. Todd shares his journey back into the automotive world and the advantages of private dealer groups over public ones, while Chris emphasizes the importance of fixed ops KPIs and the role of vulnerability in leadership.
Topics:
credit guidelines
dealer acquisitions
EV sales predictions
public vs private dealer groups
fixed ops KPIs
leadership vulnerability
community connection
service absorption
Today's show features:
Todd Blue, CEO of LAPIS
Chris Singleton, Managing Partner at Mike Terry Auto Group
This episode is brought to you by:
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We're doing better as a result of social media presence. It doesn't do those three things, man, it's on the chopping block. It's in return on investment, discussion. Hey everybody, welcome to another episode of the Daily Dealer Live. I'm your host, Sam Darryl.
And welcome to this gathering place for all automotive where we learn share and grow together three times a week, Daily Dealer Live, often imitated, never, ever duplicated. Thanks for choosing to join us here, making this the best community driven show in all the industry. And let's jump straight into today's industry headlines.
First up today in a CDG exclusive, an internal Wells Fargo memo to dealers obtained by CDG news shows the bank has expanded credit guidelines for dealers in its pilot program. Under the new term, borrowers with FICO scores of at least 540 can be approved with loan to value ratios up to 150%. Sweet.
While those with scores between 500 and 539 qualify with LTVs up to 110% in a statement to CDG news, Wells Fargo said it is, quote, committed to responsible lending and providing our customers with affordable solutions for their transportation needs, adding that the bank is continuously testing lending solutions in the market.
This makes sure here well, expanding credit access like this isn't unprecedented and often gives dealers more tools to close deals for credit strain buyers who remain critical to sales and higher LTVs also raise risk levels of economic conditions shift.
And as it relates to Wells Fargo in my own anecdotal experience, haven't seen a lot of them, maybe even since the the O8 recession would love to learn more about this high LTV program and lending right now in our marketplace is where it's at.
Next up today, direct from the CDG bicell tracker, Southern automotive group has acquired McKenna Subaru in Huntington Beach.
This marks its first California location and one of the largest single point Subaru transactions to date, those according to deal advisors, pinnacle mergers and acquisitions.
The deal expands Sutherland's portfolio to four stores and owner Brett Sutherland is relocating to Orange County, beautiful place to base his office at the new dealership.
Sutherland is also pledging to set a new bar for sales volume and customer experience stating, quote, we didn't come here to participate, we came here to lead and we will make this the number one Subaru dealership in America.
Now for my own self interested standpoint, we at Ziggler have four stores competition and automotive makes us all better.
So to Brett, game on, let's go as we compete and try to deliver our best every Subaru customer.
Their goal of becoming number one, our goal of becoming number one, that is what makes automotive sweet plans for the new location include doubling service capacity, stocking more than 500 vehicles, rolling out customers first tech and best of all.
He's creating 75 new jobs with the acquisition.
Next up today, Fretcha, fresh off the CDG recall tracker powered by busy car Stellantis is recalling certain Jeep agonier and grandwagonier SUVs in two separate campaigns.
This for improperly secured exterior trim pieces that can detach and create road hazards, according to federal regulators, by the way if you're driving in certain cities, you're going to get that anyway.
You don't need a recall to have things fall off, but the first recall covering roughly 163,000 vehicles from 22 to 25 involves door trim that may not have been properly secured at the assembly plant.
Oh, the second covering 123,000 vehicles from 22 to 24 involves quarter window trim that may detach due to a supplier issue.
Uh oh dealers will inspect and replace door trim at no charge, of course, but for the quarter window recall repairs are still in development owners will get interim warning letters in November until a final fix is ready.
What's the takeaway here? Well recall work does fill service base with guaranteed manufacturer reimburse label, but rates sometimes fall below what dealership departments could be earning on the retail side usually and that's protected by states.
However, that's changing fast as an example. New Jersey just mandated manufacturers reimburse dealers at retail rates for warranty and recall work joining states like New York and Illinois or in the Chicago and love that and get this.
The law and the books in Illinois has delivered an additional $209 million in compensation to affected service department workers across the state's dealership network to find out exactly which nine models are affected by today's announced recall.
Head over to the CDG recall tracker powered by busy car at CDG recalls dot com. You know, we got all sorts of fun stuff. We got the recall track. We got the bicell tracker.
We got the NADA tracker. It's fun. Uh retail my rights as hello guys. Yes, and we have our own jingle to all sorts of resources. All right next up today.
Leo Jim Farley is weighing in on the end of federal EV tax credits. By the way, today is day one of post EV rebate world that we're going to see what supply does and demand does naturally if that is possible.
Farley told a crowd at the Ford Pro accelerate skilled trades conference that electric vehicle sales could drop by nearly half once the subsidies expire.
Farley put it quote customers are not interested in the $75,000 electric vehicle. I wouldn't be surprised if EV sales in the US go down to 5% of our industry from probably this month at 10 or 12%.
So he's predicting it slashes by half for four dealers. The least to buy dealers some time. Farley confirmed Ford will use its financing arm to purchase EV inventory claim the $7,500 credit and then lease those vehicles back out with the subsidy back into the payment at least for a few more months.
Anyway, not a totally unique strategy. We're hearing other OEMs thinking about doing that for four dealers that lease work around could be a lifeline helping move EVs that my otherwise sit on lots once the federal incentive disappears, but longer term Ford is delaying two new EV launches while also investing $2 billion in a Kentucky plant to build more affordable electric models.
Farley is calling it a model T moment betting that family friendly EVs will keep Ford competitive through a turbulent transition and that's a wrap on today's industry news.
Super interesting. What is going to happen to the EV world. I think it's fascinating to see some of these OEMs. I'm on a couple dealer 20 group chats, including CDG's own exclusive invite only 20 group text chain DM YoC for inclusion into that a lot of conversation yesterday as those subsidies go away what different OEMs and manufacturers are doing to keep it going.
Julie welcome back in the co host chair today. What's up. Thank you. Happy to be here.
And as always for our audience joining the live stream a reminder we are live across all CDG social media platforms please push your comments will bring them into today's show.
It changes the trajectory of today's show. Thank you. Retail my ride for saying EV was always niche correction happening now and then elevate three says really appreciate what you guys do.
One of the best thanks for the props and for the comment. Julie we've got a great show Todd Blue CEO of Lapis is coming on the show today he's going to answer the question who's better at connecting with the consumer.
Public or privately held dealer groups that should be an interesting conversation and Chris Singleton managing partner at Mike Terry auto group is going to join talking about KPI check up from the neck up including a little bit about what it means to sell in our new world.
And Julie do you have your NADA ticket yet are you are you confirmed are you in I'm ready. Fantastic I'm going to say I am to even though I haven't seen the official word yet but as we know card dealership guys back with our second annual NADA party happening in Vegas on Thursday February 5th it is the hottest ticket at NADA 2026 with special guests and top automotive personalities to be considered for a formal invite hit the link in the show notes below.
Request to join thought a questionnaire spots are limited unfortunately we can't invite everyone so RSVB today and we hope to see you in Las Vegas Viva Las Vegas Vegas is always one of my favorite NADA's everybody has a good time in Vegas and then when you're done on day three it's like all right.
I'm going to go back and work because I can't stay here more than four days in the row unless that's on that oxygen yes oxygen and bang caffeine and used bang so all right you let's turn to our first guest today CEO of lapis Todd blue welcome to the show.
Hi guys how are you. Thanks for being on the show. Hey before and as we ask you our question we always ask everyone how's biz tell us how biz is and then give us a little bit of background on you and your auto group.
Biz is I think improving for us slowly every day every week every month I'll go into that just grateful to be on your show I just want to get invited to the party in Vegas and be on the text change so.
You are in you are in and and we'll get you into the we'll get you into I'll reach out to you see we'll get you in on the to actually it is fascinating it's a group of dealers across the country bigger dealers and they just share ideas openly and you know like fight club you can't talk about fight club I can't talk about any of the topics on the show but I draw from it in the experience and it was a vigorous convo last night about EVs and what on earth do you do with all these EVs sitting around in fact.
Todd how many EVs do you have left what what do you got on your you know it's interesting not many we're we're pretty healthy in our EV we've got a few fabulous electric G wagons available only probably.
Yeah so we're we're leaning we're ready to go yeah fantastic well so you answered house biz with things are good what's good right now what are you winning at.
You know so for me to answer your question this is a restart for me I was in the car business only from January of 2010 until.
2020 and I sold a business then I had a non compete and I restarted and my first store back is Mercedes Benz of Northern Arizona and Flagstaff Arizona so it's a great opportunity and honor to represent Mercedes.
So for me I'm new and fresh almost like operating an open point from the beginning starting all the way from ground zero and so my perspective for better for worse is a little different I didn't get the luxury to operate during COVID in those euphoric times and so I frame of reference is you know 2019 and before which to me were great years.
You look at bad years I look at 1982 2008 things like that are bad and as we all talk all the time there's people in the workforce that don't even know what those years feel like look like for whatever industry you were in.
Yeah so as someone who skipped that that's interesting by the way when did you sell your group sold my group finally left as CEO I stayed on for two or three years but I left.
Yeah not so coincidentally right in the beginning of kind of in around 2020.
Yeah that's wild literally just sat out exactly those euphoric times.
So here at Ziegler Todd Aaron bought a Mercedes Benz store right as COVID was beginning he closed on it like it was just right there 2020 in the winter of and the first thought was oh no right because
the world was shutting down until we realized we were all essential people and then and then as we know that the euphoria of COVID happened.
So having missed that what advice do you give you've come back in you kind of missed that bubble you're seeing where things are right now.
What are a couple things that you're doing today October 1st of 2025 at your Mercedes Benz store in Flagstaff Arizona to win in this marketplace.
Great question blocking and tackling can never be underestimated a lot of good small decisions all the time are critical very very common sense approach again we're not going to be able to control a macro macro economic recession God forbid if there is one.
Card dealers are strong they're tough the resilient those who have experienced up and downs in the auto business or other industries know this is a very cyclical business.
So right now it sounds cliche but recruiting is everything the proper people in place in the right seats are everything building culture is everything and I'm excited to start small because it kind of gives you the luxury to create.
You fresh culture and practice with you know small little baby steps before you are I in my case take the next step of a large acquisition.
So it's interesting you you have multiple franchises and you sold it you sat out your non compute you came back in you have the unique.
Vanage point of being able to like focus on one store and grow that one store what's something for a daily dealer audience having gone from a big group to a single point that surprised you that you didn't realize that you're like hey you know what this is kind of cool or I'm disturbed because I'm at one rooftop now.
Well you have to manage your ego or I have my ego it's it's it's it was fun to always be on the dealer board and walk in and sit at the CEOs table and have a good hotel room now I'm in the bus table in the back of the room.
It humbles you but you know i'm not going to say i'm Michael Jordan playing for the Birmingham baseball team or or you know Steve jobs sitting out of apple for a few years because I would never compare myself to them but it's humbling but at the same time it sharpens your skills.
You can swing right you work on your your stance if it's a sports metaphor and you can fine tune those things and that's what i'm trying to do now i'm excited about it again in a small town but thank god with a great brand in Mercedes Benz.
So Todd we're going to talk about publics versus individual points and this is a great conversation given your background or you came but as you come into that single point and there's humility there although you're Mercedes Benz it's best or nothing let's be honest
It's an incredible OEM right what's what's something that most single point operators miss that you saw running a group and getting all that economy of scale.
That you've been able to leverage running this one Mercedes Benz store and flagstaff is there is there one thing that others could take away from in your transition.
Well I do think we all agree I mean it's no secret brand and brands are critical I think they're more and more credibly each and every day especially with and we're going to talk about EV and all these kind of things but but brand is so critical and their commitment to dealers and our and our commitment back to them the partnership you have from them.
When you have a group I think 10 or 11 brands before all luxury you can since you're diversified or you perceive you are by brand and if if asked in martins down and Bentley's up or Porsche's up and and BMW is down or vice versa it's a nice hedge with with one brand you're all in and you're beholden to their decisions so you better believe in their mission and vision and I do with Mercedes.
And they are fully committed to their dealers they're incredible I think we're getting stronger and they adapt quickly they've done so with electric so I think those are the things you pay a lot of attention to.
So you are now oh go ahead Julie no I was going to say Todd so I've heard great things about it's it's great to finally me I know you know Steve from our CDG recruiting so on the vein of commitment we know that you have some very realistic and attainable aspirations to grow the dealer group again.
How does utilizing something like that you could mention a few minutes back about recruiting and you got to have the right people on the team how do you leverage solutions like that to make sure that you have the right people in place and you're growing and going in the right direction.
So for sure you're in a you know there's no questions CDG recruiting has been great to us I think again goes back to these principles higher slow fire fast.
And you know take your time it is very interesting to see experience and making the decision like hey are you do you have Mercedes experience do you understand what it's like to live in a small town in our case.
In our business in Flagstaff you have to mine customers versus our old stories in Houston when you're in a major metro you're just competing with other dealers in our case you're literally digging for gold and finding customers and so finding the right people has been critical and and Steve has done an incredible job for us and we're reliant upon that because.
Getting yourself on the map in a small town especially you're reliant upon people like CDG recruiting and others and and Steve has been great and have a great relationship with him and he's been incredibly helpful in me turning because we made some mistakes in the beginning and that's normal and now we're correcting those and it's been very helpful.
Yeah so it's interesting you are competing against publics and large groups that are going out and buying you know tens if not hundreds of rooftops but you believe that you have a big advantage as a single point or someone that has several points what's the advantage like where do you win in that battle public or large group versus smaller.
You know I think community brand obviously you know manufacturer it really depends the publics are they have systems they have strength they have incredible scale and I am not going to try to compete with that or be them and I think that's okay I think in our case I'm always been focused on luxury I'm going to stick to luxury or premium and or premium I'm not saying that publics can't do that I'm just saying that.
The luxury customer demands not not even expects they demand connectivity in any cases directly to ownership I've never been shy to give my cell phone number to all customers I love it I love meeting our customers in that space and at the same time I do not think that I probably would be great at some of the brands that public shine and excel in as do by the way large such as such as.
Well I mean I don't want to specifically say but I mean name names I hope I would better maybe is that I would be a Nissan yeah yeah you and everyone else it is interesting there are some luxury brands for are some super high-end luxury brands that shy away from publics for all the reasons that you state right your ability to connect and provide a very individualized experiences unique and automotive what's something you're doing in Flagstaff Arizona you may say he's been store.
To connect with the customer and create a lifelong relationship that helps you retain that customer out and above large groups online publics whoever what would how are you winning in that space well our store in Flagstaff it's a couple of things it is locals in a small mountain town it is college kids at northern Arizona University and then it is the second home buyers which I've experienced before in my.
Previous markets in Rancho Mirage and and Palm Springs so those are three very different kinds of customers and approaching them and managing them and being available to them is very different their demands are different there are.
Products that they want to buy are different their desire for pickup and delivery are different in their expectations are different obviously we're a spinner dealer and that's a whole other wonderful set up so paying attention to each other needs is.
Is very specific to each one house remote delivery we talked a lot about that on our last show in or not remote delivery the remote service in the bends world it's a significant initiative they actually do a lot of OTA update type stuff what are you doing in the remote service category in a resort town like Flagstaff I believe in everything remote delivery nationwide for that matter for sure in the state of Arizona pick up and delivery for for selling.
In buying cars and then as far as service I think it is critical I mean our closest luxury store let alone another Mercedes stores over a hundred miles away so it's critical for us to pay attention to that obviously I've always been a believer that yes is the answer I mean just if whatever you say just say yes and figure it out later it's it's been a mandate of ours and of mine and in every business I've been in and so we're going to continue to do that and be available to our customers.
Wherever they are and figure it out later so say yes and figure it out later.
So having come again I'm fascinated by the you know you sold the group you're now single point do you want to grow do you want to buy additional points or is this is this the one.
I definitely am going to grow I don't and I think it's okay I don't want to grow for growth sake in a smaller way that public do which again I know they have to manage Wall Street they have to manage shareholders I respect that whole heartedly I think that's good news for privates that want to be something different.
I mean first of all I want to be in communities where I could add value to the community and the customers that are there and by the way who am I I'm not saying that I'm better or worse than the other private deal I'm just saying.
I know the community or connect to the community in a unique or certain way because of relationships or familiarity or the brand or feel like I could add value that's where I want to participate and also I mean I don't have to be in the car business when I very first started in the classic car business way before I was in the franchise business.
I called myself the collectors dealer so my mind was set from being a collector and what would they want and so that's how I built my first business and so in the same way like what are these customers one I mean I remember sitting on the.
Porsche dealer board and they were thinking about getting rid of the manual transmission and I'm like what are you doing like this sets us aside from everything they said.
When we only sell nine or 10% manuals I'm like well that's because you make 10% manuals I'm like yeah I charge more for manual we can charge more for manual yes you can charge more for manual so I think getting away from buttons and manual transmissions and things like this are symbolic of what a manufacturer needs to be careful of in the same way a dealer needs to really plug in so to answer your question I want to only be what I can be to a customer that's unique and authentic and if I can't do that I don't I don't want to do that.
I don't I don't want the business or the community.
I'm curious because you talk again about the exit and then the reentry what caused you to get back into automotive like why not take the the and I'm going to be crab why not take the pile of money go sit on a beach and enjoy the good life whatever that means right.
Fair enough fair enough so I did not come from the car business I came from heavy industry and other industries and so when I sold you can do all these formulas and do a pie chart and
and look at the benefits and the upsides and downsides and debt elimination and security and then what you underestimate when you do all that stuff is your love for the business.
And so I forgot that in the process and that is specifically why I'm getting back in because I love it and want to be involved in it and want to bring that passion and love to the communities and customers and manufacturers with whom I do business.
So you've been pretty public and saying that the public groups overpay for stores particularly for luxury stores that that does impact their ability to provide a return to Wall Street talk to us a little bit about your your your thought on that and then where that gives you an opportunity as the public is you say overpay.
There I want to be careful not politically correct but careful with overpay I would say they have the ability and I respect it because they're public to say to Wall Street which is to whom they are accountable that they were growing revenues and therefore our share price should be more and I think that Wall Street specifically forgets that this is a or they've forgotten that this is a cyclical industry and goes up the down and.
It's impossible to build a business like that long term and not have a major correction again look at the share price of the public's in 2008 when they did that if you look at I think what you know Penske and Asbury and an automation are doing specifically not leaving anybody out I think they're a little bit more conservative in their approach and they're they're looking at things long term and so I just think for a private we have to look at things differently either.
Immediate return on invested capital immediately or are you in it because you feel like you can add value and and and enjoy it and therefore because of that you'll actually have success and I that's what I did before I didn't have a business plan based on Wall Street returns it was.
Because I wanted to go in communities and do things that the public weren't doing and when I started in Houston Texas the other two Porsche stores were owned by a public and the things and we were third and when I got done and when we got done you know we were by far number one and the fastest growing story in the country in Porsche and that was because we did exactly what the public couldn't do in that real connectivity to the customer.
Yeah and I do agree with that like it's tough for the large you become to connect individual and you've got to redouble your focus and sometimes you can see the stock price by the way for all the different public's on the ticker tape down below but in answering to Wall Street sometimes that becomes a you know a backseat concern you mentioned bubble do you think there's a bubble and valuations building up at the foot still some of the public money.
I'm nervous with the word bubble but I hear you it was your word it was your word I respect I respect that I'm nervous with it because I don't ever want to predict predict your economic that but but I think look and I've said this before snow secret 2008 is really the last recession we had yeah you know that's set what is that 16 years ago 17 out of my math 17 years ago.
And basically you know we should have an auto correction every 10 years I'm not pontificating or do I want that to happen absolutely not I just think that it's important to have cash reserves it's important to be careful and disciplined purchasing discipline is critical.
And at the same time if there is a strategic reason for public or private group to buy store because it's in the market or it's the store that they they want because it's a brand they don't have or I'm all for it if as long as the cash that you have or the liquidity you have is is going to be able to sustain that that and you make it through the process so bubble never want to predict or be negative I am I would say I'm cautious and a little nervous.
About things have been good for a long time it's not a surprise that things could slow down yeah and where you are with a little bit of cash on the sidelines dry gun but dry gunpowder as you say.
Like anybody that has that to your point could capitalize on any type of deals are made yeah so I believe that's how I was raised.
So what's your advice as we wrap here what's your advice to the next generation of luxury dealers who want to compete against those larger groups public who are so well
that they want to capitalize without losing the quote soul of their business and want to preserve and maintain and grow that customer experience.
Exactly what you said don't worry about competing be yourself run your own race don't try to be everything to everybody if you really love your customer and your community and you're passionate about the brands you represent and you want to honor those brands.
You should focus on don't worry about the public's because you're not going to be able to compete with Wall Street money until Wall Street money dries up and Wall Street money dries up when the stocks get hit.
Yeah so we'll stay tuned to see if that happens but a fascinating argument we wish you all the all the best in Flagstaff would be fun to come out at some points your operation and get to get to but we appreciate you sharing your story with us here on the show today Todd Blue CEO of Lapis thanks for joining.
Thanks so much thanks Todd.
That is you know it's interesting and automotive this gets in your blood and it's tough to get out and I hear story after story after story of people who could go do something else could retire could cash in the chips and it's just like it's such a fun industry with so much potential.
And it's simple but not easy but the opportunity just pulls pulls us all back in and what a great franchise he has there in Mercedes-Benz.
Let's talk a lot links you really with lot links dealers win with every then AI power platform uses the most robust then and shopper data to help optimize every vehicle and protect profit.
But take control of your inventory today at lot links.com and for everybody on the live stream you can click the QR code to my side there to get more information if you're listening to the podcast that pushes out daily you can go to the show notes to learn more about lot links whatever the case wherever you are we say thanks for being here and thanks to lot links for supporting the content on today's show including that very cool interview with Todd Blue Mercedes Benz Flagstaff Arizona so thanks lot links.
All right you were going to jump right up next Chris Singleton is mad managing partner at Mike Terry automotive group Chris.
Welcome to the show.
Hello thank you guys for having me thanks for being here we appreciate you we appreciate you joining the show house biz and as part of it tell us a little bit about yourself.
Yeah so business has been has been good you know obviously as a you get to be in a dealer because you always want want more but business has been has been really really good similar to Todd there I'm in a very small town.
My my story I guess to give a brief synopsis was a scene to add in the paper I started I came from selling Kirby back and cleaners and and cut co kitchen ads door to door.
Yes yes for sure so started doing that and then I see an add in the paper that you can make you know two two to ten thousand dollars a month.
And as a teenager 17 18 year old kid I was like man this will be life changing so I got in the car business then and working my way up from the bottom always had a dream of making it to top 40 under 40 which just recently happened and and own in a store one day which which which I now have as well along with my business partner so yeah super exciting times.
All right so we want to talk the ownership of the store first tell us where you are what city state are you in Chris.
I'm in a small town about an hour outside of corpus Christi called referio Texas very cool court Lauren Klein puts in something I agree with cut co cutlery best college gig so my brother sold Kirby vacuums for a while so I get that deal.
And the knives that is real sales right you're knocking on someone's door asking him to buy something they have no interest in and that no desire to do it.
Yeah yeah I think especially as a young kid going into the neighborhoods that I was going into especially the young African American man in the middle of the evening closer to the night saying hey can you let me in your house with a bunch of knives and to me if you can tell that you can tell anything so it was I think I really cut my teeth and sells there for sure.
What was your ability that allowed you to get in that house to your point you set it up interestingly right you said hey you got invited into someone's home with knives what was your talent skill ability that you used that that helped you get that invite and be successful in that gig.
I think one of the biggest keys is you have to be able to develop rapport instantaneously and before I knew the psychological terms of it I knew how to gauge from someone's body language.
What would make them feel comfortable I knew how to make myself smaller in a sense or less invasive to their territory so I usually stood still a little bit further off from the door I smiled I waived.
Things to make myself seem less scary if you will.
Prior to getting to my life demonstration so it was fun for sure.
All right let's come back to the dealership I do want to ask about a quote you gave us in the green room will come to that in just a second about trauma in life how it can sometimes be a breeding ground for success.
But in your role as managing partner there at Mike Terry auto group what's the single most important KPI that you look at every single morning that drives your day in fix stops and why is that.
Okay in fix stops one of the metrics that I think is often overlooked is my additional service recommendations.
And the reason why is because often times people will monitor closing ratio they will monitor how many lines that you're selling per arrow and I believe in addressing the recall of things you can't present anything that wasn't recommended.
So you want to up sell based upon time and mileage you know when a customer pulls on the drive but if you aren't tracking your technicians on their additional service recommendations that is what's going to tailor the presentation of whatever arrow so making sure that the technicians are recommending is imperative before you can see if you're.
So Chris what technology are you using to generate that KPI on a regular basis is there a particular program or tool that you're using a vendor.
Yes so I'm using the X time one of my favorite things about but some they can give me a discount on my bill for the free advertising here but one of one of my favorite things about X time is that there's something called immediate utilization report so I can track how many how many repair orders have media attached to them to be a picture or video because there's one thing to they say that selling is not telling so one of the things that I can do.
Because I can track and make sure that we aren't just telling our customer hey you need a new fuel pump or you need this we're being able to show you via video this is what it looks like under the carriage of your car this is what your cabin air filter looks like this is what something that need to be changed and I think that that's been instrumental in our growth.
So do you have a percentage standard or expectation of the arrows what percent include that media attached to it.
90% and that's and that's given you about 10% leeway in my opinion it should be 95 plus percent.
The only people who shouldn't maybe receive that is that it's just an old change and an air filter and the car has 5,000 miles and you can walk the air filter out there and show the customer but outside of that.
I think it should be analogous with your inspection right.
So when you have that media and when you're tracking that KPI are you able to quantify the result back to fixed ops profitability or how do you quantify that how do you think about hey this is important I'm an insist this happens here's the financial benefit on the other side.
Absolutely so so it's a very simple process.
Everybody's kind of a what's in it for me so I will show my advisors and I track what my average ticket with media attached and my average or without media attached and look at the difference between.
You know that my average or that has has attachments versus not and that difference within itself is usually substantial enough to where everyone in the department see the benefits of.
Chris so I love this and I want to talk absorption and what you see as a target for absorption you're very fixed you're very focused on fixed which by the way we're getting an early jump on fixed ops Friday this week we'll have more fixed ops content.
There's it's unusual to have a managing partner that is so involved in fixed ops so props to you but you you've been holding out on us you're an author the Marion Kane put in and said Chris's book is amazing tell us what's your book.
So my book is called all is fair and love and sales and and simply it was just because the premise of the book the five love languages is because we oftentimes love people the way that we are so want to be love to me sells as an
arguments from that perspective because oftentimes we sell to people the way that we want to be sold to not how our consumer wants to buy.
So it's all about understanding whether you're in a personal relationship the business relationship or in business you want to understand your consumer and sell to them the way that they want to be sold to not how you want to buy so that was kind of the premise of it.
Okay so our conversation here is super interesting we're having a little bit of a challenge with your audio so our listing audience I we're going to monitor this we're going to stick with you as long as we possibly can because I'm curious your answers on this.
What is a realistic target for service absorption today and what are some of the biggest levers you're using you know you told us the KPI you're looking at you told us the benchmark you're generating the videos it's seeing an increase what what what's your target absorption and what levers most quickly impact that.
So fixed absorption I would say that 80% is is a viable target and you have to be able to obtain that from two aspects the only two ways that you can do that is via expense control.
And being able to increase the not just a gross profit of your fix off department but also the net profit of your self support so the biggest levers that I would say that are important is some of these things are so simple one of the biggest things that I've done when I.
Came to this dealership was identical market survey small towns small areas are are sleepy so it may mean that they haven't made some adjustments and some changes to things like their door rate in a substantial amount of time there was about 30 to 40 dollars per hour in our door rate and changing that immediately just to just to be in line with the other dealerships in the area that was one of the thing they gave us a really big boost.
Tracking up sales on the on the drive making sure that people are up selling based upon time and knowledge there's something called the consistency principle it's easier to close people are to convince people of something when they hear multiple times so if your advisors suggest something based upon time and knowledge and then the technician also recommends that same thing then now you just increase your opportunity to actually get a yes and the other thing I would say the third KPI.
The third thing is tech proficiency or you monitor how many hours your guys are clocking versus how many hours that they're flagging and not just your flag technicians but also even your hourly guys because what could happen is that the hourly guys could just say well I'm getting paid the same anyway so now you got these hourly guys that may do a four or five hour job and they may give that to the flag technicians and now you're paying flag.
I was to a flight technician who didn't do the job and you're paying your hourly rate so tracking all of those things that many people were at and where are you pulling that report from just for everybody to dealer principle of maybe listening saying I'm not sure where to go for that.
Yeah, that's a that's a Google sheet that we have that I look at every day that I have my service that I have my service manager put together for me.
Yeah, yeah, that is pretty cool.
Alright, so let's pop out of fixed ops for a second because I want to learn a little bit about how you became a dealer.
You went from you went from cut co knives and vacuums to your a dealer principle.
Who gave you that shot? How did you say, hey, I want to do this and then what did the economics look like?
Well, it was definitely a journey for sure when I got into the business, I would see the guys and the fancy suits and the nice cars and I said, hey, you know, one day I want to do that.
So I worked in virtually every single department and in the in the industry starting from, you know, a washed cars very briefly and then got into selling and finance then then manager.
And finally, after learning the things that I needed to learn into the business, I met Mike Terry at a name at I met him at automotive conference.
One of the things that did out to me about him was that he had a very adroit accounting knowledge and I'm a big nerd.
So anybody that has some some knowledge that I really want to acquire or that I want to get better at, I just kind of link to myself with him and what we had a few conversations because I want to sell training company for a bit and he had expanded really rapidly.
So we talked about creating some infrastructure and some processes within the totality of his organization.
So in that conversation, he says, man, you ought to come on and be the COO and help me to grow my organization.
So and then we developed a plan because my ultimate objective was to be a was to be a dealer.
So we developed a plan of becoming there helping to to grow his dealer group and then having an opportunity to buy into a dealership.
So it was a little bit of a less than traditional path.
So for those that are saying, hey, I would love to become a dealer. What was the dollar amount you had to put in to become a partner and is equity in the operating? Is it real estate? Is it the whole thing?
Well, I can't get too deep into the.
That's fair. But we got to ask.
I loved it that you guys asked that question. So I can't get I can't get too deep into my business or Mike's business.
So what I will encourage all fire dealers is to save and save substantially.
If I if I knew then what I knew now, then I would have done some things differently.
So I would say to save your money for sure.
And depending on the percentage that you're buying into, then that all vary in the amount that you have to that you have to get.
So if you have someone looking to become a managing partner or a partner with equity, is there anything you would give as advice to avoid?
Like are there pitfalls as you've learned lessons where you would say, hey, make sure you don't partner with somebody that does this or that or whatever.
Yeah, I would say to understand true assets of a dealership.
One of the biggest things is it's to understand what your true network and capital is.
That is the amount of money that the manufacturer said that you have to have in the business bank account.
And understand that if that dips either because you've sold a bunch of cars.
And the manufacturer says, well, now you have to keep this amount of money in your in your business operating account.
Understand that whatever percentage is you have to contribute according to your percentage.
And that's what you have to add to the networking capital.
So one, it's important to have real assets in there. So understand what are my obsolescent parts.
So that's, that's really going to be sold to 25%. So that's a less of an asset and understand a business is uncollectable receivables.
So oftentimes on a financial statement, it'll have the receivables on there.
And that goes into your assets. Some of these things may be old eBE money that you're not actually getting in.
And you've paid for your percentage of these uncollectable assets, which is essentially false money.
So understand the true finances of a dealership.
What real assets do we have? What real life abilities that we have the obsolescence parts cars that are overflored and true money in the bank that we're actually receiving.
And then make an educated decision from there as to what your share price should be.
All right. So as we get to wrapping here today and again, we appreciate all the perspectives you've given.
You've given us great nuggets and fixed ops. Overall business operations.
What it takes to become a partner, managing partner.
You mentioned something in the green room that I just, I found fascinating.
So I'd love to know more about it. You talked about trauma in life and how it can set the path for success.
A lot of people look at trauma and they're like, hey, it's a disadvantage.
What the heck did you mean? I'm fascinated by take us down that road for a minute if you don't mind.
Sure. So when there's a quote that says much trauma is born from or much success is born from trauma.
I'll just use myself as a personal example when you grow up from really humble beginnings.
You may have experienced abandonment from parents.
You don't feel good enough.
And so a lot of times in sales, it's about that instant gratification.
I'm going to prove to my parents. I'm going to prove to my whoever didn't believe in me.
I'm going to chip on my shoulder. I'm going to prove to them that I'm worth something.
Now, there's an aphorism that says what gets you here won't get you there.
So that may be good for performance. It may motivate you, but when you get into executive leadership,
and you want to really align yourself with your team, partner yourself with them,
you have to be able to transition from this kid who had a chip on his shoulder,
who is just all about accomplishment to you.
I would say that I would say it's self mastery.
So understanding where your motivation truly comes from, therapy, counseling, reading books,
part of accountability, accountability, absolutely.
A pillar of emotional intelligence is self awareness as well as social awareness.
So taking a real inventory of how you're impacting others, I think is a very humbling experience.
But it actually helps you to see where your motivation comes from and being able to transition from that.
So did you do an inventory like that with your team there and what were your big takeaways as you did that?
And why did you do that? Like, what caused you to become, I guess, self aware.
Was there an event that happened in your life where you're like, hey, it got me so far and now I need to get to that next level?
There are many conversations, even conversations that I had with Mike,
and I'm sure some of the listeners can identify with this.
Mike and even some of the other conversations that I had, I used to be very overt in my displays of grandeur.
So my first, I drove a red Bentley with a red suit to match.
I had, you know, I always had to wear every pair of jewelry, every piece of jewelry that I had.
And Mike was one of the guys who really asked me why, where did that come from, along with other people.
And I always just said, oh, this is just me. I like how, how this feels.
But through therapy counseling and even some of the other questions, the truth is, I didn't feel like I really belonged in the room.
So in not feeling like I belonged in the room, I had to overtly display some of the things that I had in order to try to prove to myself that I belong here.
And being a dealer, I belonged, you know, some of the counsels that I'm on, all of that.
So really get into the root of that and not being afraid to look into the mirror and make some adjustments.
So now I'm much calmer and I realize that the reality is I suffer from imposter syndrome.
I didn't feel like I really belonged in the room.
So I became grounded therapy, counseling, reading, and it affected how I dealt with my team.
How much more empathy are you able to have?
Listen to other, make space for other people in your mind and in your heart.
When you're not super consumed with yourself and trying to prove to yourself that you're worth something.
So it's one of the biggest foundations.
It's so, it's so strong and, you know, part of these things that happen in our youth, right?
We play to our strengths, but it's so much more impactful to embrace those.
And I don't even want to call them weaknesses, but to be aware of those weaknesses and then turning them into superpowers.
Because anyone can be good at the things they're good at.
It's how do we get better at the things that I'm, I'm lacking and that's so important.
But, but it is interesting.
You didn't, you didn't prove everyone wrong.
You didn't take your chip on the shoulder and say, hey, I'm going to show you all because you can't do that as a leader as, as a executive manager of a story.
You can't do everything on your own.
You became self aware, took an inventory.
And then you found ways to better connect with your employees to help them achieve and accomplish their own thing.
Like, was that a big revelation for you?
And this business is complex. You can't prove everyone wrong.
You've got to work with everyone, right?
Yeah.
Yeah. No, absolutely.
One of the biggest things is, and Daniel Goldman's book, emotional intelligence 2.0, he talks about how vulnerability is the opposite of ego.
So connecting with your team, connecting with people in general is more about understanding what some of your areas of opportunity or being vulnerable with your team and your mentors and yourself and being able to admit things.
You can't fix a problem that you don't realize is there.
So as a leader, we're always taught, oh, you have to have the answers.
You have to have everything figured out, but be vulnerable with your team.
And now you guys align yourself with the problem.
And the law of reciprocity says the more vulnerable you are with them, the more vulnerable they'll be with you in return.
And it helps you to really build a relationship.
And now everybody, you create an environment where it's okay to be wrong, to get something wrong, to be scared to have all of these emotions.
And now everybody can kind of band together and help each other, lift each other up.
Given your background, Chris, is there anything you have to do on a regular basis?
And what is it if there is to kind of keep you in check on that?
So you don't kind of return to that old, I'm going to prove you wrong world, but rather I'm connecting, collaborating, being vulnerable.
Yeah, yeah, there's a, there's a few grounding practices that I have.
One of them is affirmations.
So on my, on my affirmation list, you know, I have a few things surrounding vulnerability.
I have some things surrounding making sure that I always am operating from a space of leadership is really about serving leadership.
It's really about putting another people ahead of yourself.
And I ask myself the place that I'm, that I'm coming from.
So even if you're giving to someone, there's a type of narcissism called altruistic narcissism.
So it's like the people they give to the homeless people on the street, but they're recording the whole time.
So you're doing something right.
They want to be seen.
So asking yourself, what place does this come from?
Whether I'm giving or I'm doing something positive, what place is this coming from?
And being honest with yourself, I think that's one of the biggest things you can do to constantly keep yourself in trouble.
Yeah, well, absolutely appreciate you coming on the show to share perspectives.
Name of the book again.
One last time.
I'm going to go get it.
I want to check it out.
All it's fair and love and sales.
Awesome.
Chris Singleton, managing partner, Mike Terry out of group.
Thanks for coming on the show to share so many perspectives on all things fixed ops leadership vulnerability and acquisitions.
And congratulations on that dealership.
And we wish you all the luck with Chevy now and down the road.
Thanks Mike.
Chris there.
Thank you.
That's a fun conversation.
When he said that in the green room, he's like, look, trauma could be of, what, how did he say that?
You were there.
The fuel for success ultimately.
It can come from trauma.
Yeah.
Yeah.
I'm paraphrasing badly.
And you know, it's interesting because like in automotive, I think there's no limit to what we can achieve and accomplish.
And in so many ways, so many of us are, you know, it's the island of misfit toys in a lot of ways, right?
Like everybody comes from different backgrounds, different strengths.
And regardless of that background and strength, if you're willing to work hard, the sky is the limit.
And proof of that and so many others are proof of it.
This guy's the limit was my email signature, my last group for a very long time.
We broke another, every time we wrote another record, it was this guy's the limit.
But to push that a step further, the only limitation is the limitations we impose upon ourselves.
True.
So, you know, he said that trauma can be the catalyst and he's so right.
A catalyst, a trauma can also be the excuse.
So life will always give you the opportunity.
An opportunity does not guarantee success.
The opportunity just gives you that fork in the road, right?
And what do you do with it?
Did it happen for you?
And are you going to be the author?
Are you going to be the victim of circumstance and fold?
Yeah.
Kim Seton says Kirby exclamation mark reinforcing his background in the night.
They're raising the vacuums by the way.
Yes.
Yes.
Yes.
And then Marion Kane who's been on the show before says, this is a heavy conversation.
Yes.
Here at the Daily Deal Alive, we go where no one else is comfortable going.
We ask all the questions, including a costume to get in.
Because you know what, a lot of times people are willing to talk about it.
Comfortable to talk about those things.
If you're not, you can decline and move on.
But we have the conversations.
No one else in automotive is willing to have.
So pretty cool show today.
I thought so.
Yeah.
You know what?
We're only halfway through the week.
It's Wednesday.
We're back again Friday and to our Daily Deal Alive audience.
Thank you for watching today's Daily Deal Alive way breakdown.
The biggest moves in the car business as they happen.
We'll see if the producers are ready for this.
Don't forget we're here live every Monday Wednesday and Friday.
So if this is your world, hit like, subscribe, turn on those notifications.
So you never, ever, ever miss a beat.
And to everybody out there to our loyal listening audience.
Thanks for being here.
And we'll see you next episode on Friday.
We'll see you guys.
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