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Mohawk Honda on becoming Top-10 in CPO, Dealer Pay CEO on Hidden Payments Costs | Daily Dealer Live
Mohawk Honda on becoming Top-10 in CPO, Dealer Pay CEO on Hidden Payments Costs | Daily Dealer Live
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About this episode
Mohawk Honda's impressive sales success in a small market is highlighted as they consistently sell over 500 units monthly. General Manager Greg Johnson shares insights on enhancing customer experience through innovative processes like a greeter system in the service drive and personalized video engagement for leads. The episode also features Dealer Pay CEO Julie Douglas discussing the financial concerns of automotive CFOs, including the impact of credit card surcharges and the importance of compliance. Key industry trends, including auto loan refinancing and rising EV insurance costs, are also explored.
Topics:
customer experience
sales strategies
video engagement
credit card surcharges
financial concerns
service department efficiency
auto loan refinancing
EV insurance costs
Cars:
Honda Prologue
Today's show features:
Greg Johnson, General Manager of Mohawk Honda
Julie Douglas, CEO of Dealer Pay
This episode is brought to you by:
Lotlinx - Get the best possible market advantage on every vehicle transaction. Optimize operations and boost profits using artificial intelligence (AI) and machine learning. Learn more @ https://lotlinx.com/
Dealer Pay – Designed to increase, productivity and customer retention, Dealer Pay is a "dealer-specific' payments acceptance solution with over 25 years of experience as a trusted payments partner for dealerships across the US. Visit https://dealer-pay.com/ to learn more.
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Honda Prologue
".... They actually did throw out a little bit on the prologue for the first time ever when they were pushing EV..."
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We're doing better as a result of social media presence.
It doesn't do those three things, then it's on the chopping block.
It's in return on investment discussion.
Another edition of The Daily Dealer Live.
I'm your host, Sam Dark.
And back with us co-hosting today is the Yuli D. Martino.
What's up, guys?
Yuli, welcome back.
Thank you.
Good to have you back here on the show.
And for those joining the live stream as always, we are still live streaming across
all CDG social media platforms.
All of them.
Post those comments.
We'll bring them into today's show.
And if we got a bunch of topics that are hot for you today, Mohawk Honda joins
the show today to talk about how they're out punting the market over 500 units sold monthly
in a super small town.
So you want to learn more about that.
Join that conversation.
Plus Dealer Play CEO joins to talk about the top three financial concerns that keep
automotive CFOs awake at night.
It'd be interesting to hear what those are and what to do about it.
But first, Yuli and our audience, let's dive into today's headlines.
So super interesting.
What happens when automotive lending rates go down?
Well, that's happening right now.
Auto loan refinancing surged 69% last quarter that compared to a year ago.
According to Experian, average rates dropped from 10.45% to 8.45% saving borrowers about
71 bucks a month.
The relief isn't evenly shared.
Prime and super prime borrowers dominate the refi market while subprime borrowers who arguably
need it most make up just 12% of refinances despite holding nearly a fifth of all the
auto debt.
Now, some banks are opening up, like Chase, for example, letting non-customers with outside
auto loans apply online to refinance directly through them, a clear attempt to clawback market
share.
Looking ahead, JP Morgan and some Fed officials expect multiple rate cuts into 2026, setting
the stage for even more refinancing demand.
This is part of the cycle of life in automotive.
Rates go up, rates come down.
Any time you see them come down, it's a race to refi and those dealerships, those
auto groups that find a way to meet customers where they are in those refis, will win.
Not so sure how the Chase piece will go, allowing consumers to go refi directly on their site.
I want those customers in my showroom and in your finance office.
Next up today, Jaguar Land Rover, big news from JLR, says a cyber attack has, quote,
severely disrupted its production and retail systems, forcing the automaker to pause
operations while it scrambles to bring them back online.
The attack is impacting both manufacturing plants and retail operations, leaving dealerships
unable to register or deliver vehicles to customers.
Details are sparse at this time, but we're following the story.
We'll bring you updates as they become available.
But super interesting kind of brings back memories of a summer ago when the CDK outage
started and after 24, 48 hours, everybody was scratching their head waiting for that
moment when it would pop up line and it took a little longer, hopefully JLR doesn't end
up sitting out that long.
Next up today, EVs may be cheaper to refuel, but EVs are a lot more expensive to insure.
This according to a new report from Insurify, EV insurance premiums have jumped 16% over
the past year to get this $4,058 annually and now average 49% higher than gas cars,
which costs $2,732 to insure per year.
The primary reason for this is the cost of repairs.
According to Mitchell collision data, EV collisions are 22% pricier to fix than ICE cars and totaled
EVs end up costing about 18% more on average to replace.
Essentially, a higher priced car that's more expensive to repair and fewer places to
fix it is raising insurance premiums.
The problem is rising premiums pile on to already high EV costs just as federal tax credits are
set to expire and without stronger state incentives or lower priced models, affordability will
remain one of the segment's biggest roadblocks.
Super interesting.
You know, it's fascinating to me, EV demand is what it is.
It's going to normalize post all the remakes.
But the big sell of EV was costing a lot and a lot of the data we're getting right
now, insurance premiums more, repair premiums more, cost to replace, cost to repair after
a collision.
So many of those areas that initially I think the appeal was it was less.
It's more.
It's fascinating.
We did the math when all the hybrid powertrains came out.
Do you remember that?
In the late 2000s, the hybrid powertrains were coming out on the big gas cars and
SUVs.
That dollar savings is just not there.
Not like you would think.
And up to today, poor communication is gutting service retention.
This according to Derek Simon's EVP of automotive with NUMA at this year's NAMAD, N-A-M-A-D conference
in Las Vegas, Simon shared that over 80% of service advisor calls go unanswered, 80%
especially on Mondays.
By the way, what is it with Mondays?
Nobody wants to call back on Mondays or is it just they're overwhelmed with calls?
With callbacks taking an average of 23 hours.
So hopefully somebody says that on a voicemail and nearly 40% of those calls are just customers
chasing updates they could have received proactively.
But Simon's argued pay plans often work against retention.
Advisors are often paid on short term profit, managers typically on monthly net leaving
little incentive to prioritize long term loyalty.
And he warned CSI scores can't fix it after the fact.
By the time a customer leaves a bad survey, the damage is already done.
The real opportunity is catching breakdowns in communication in real time, whether with
tighter processes, better tools or smarter compensation.
What's the bottom line here?
Well, service departments don't lose customers because of one bad repair.
They lose them because the customer feels ignored.
Dealers who close that communication gap will keep service lanes full and full future
showroom deals alive.
And it brings me to an interesting quote from an industry spotlight we did.
If a customer has to call a service department for an update, that is a problem.
We need to be more proactive in our service departments.
I agree wholeheartedly.
That's a pet peeve of mine.
Yeah.
So, Julie, we often get requests to come join the show.
Dealers saying, hey, how do I join?
We've talked about this the past many episodes and we want to bring it back up here.
For those dealers with interesting, unique or insightful perspectives on the industry,
we want you here on this show sharing those perspectives with all the audience we get between
five and 10,000 live every episode and then on the podcast and living live online thereafter.
If you want to be part of this show, cdgguest.com, fill out our intake form to be considered
for a future guest spot.
And we'd love to have as many guests as we can get to come be part of that.
It's interesting.
Igor K. says, also tariffs at Lorynkine is what causes the repairs to be higher in slower
shipping and higher cost to ship part.
Bad, baddy meow?
Can Indian dealers participate?
Lorynkine says, does that increase having to do with autopilot liability?
Autopilot liability is interesting, Julie, because we've talked about that in prior
shows, that the liability of a machine making a decision on the OEM ends up going to
the deeper pockets of the OEM.
And so actually insurance companies could be off the hook.
Nate, the truck driver is back joining us today, present and accounted for, Nate, for happy
year back for your dose of the daily dealer live today.
Let's go to those things that keep CFOs awake every night, and it's a fascinating list
when you think about it.
What are the things that could keep a chief financial officer, whether it's a large
group like ours at 41 plus rooftops, or a one or two point.
Let's welcome to the show Julie Douglas, CEO and founder of Dealer Pay LLC.
Julie, welcome to the show.
Hi, thanks for having me.
Nice to see you.
Thanks for being on.
You know what, before we go into, well, actually let's ask it.
Let's ask our banner question, which is, how's biz?
But as you answer that, will you just tell everybody who you are
and what you do in the world?
Sure, absolutely.
Julie Douglas, CEO, founder of Dealer Pay.
We are really the only cutting edge payment solutions provider that's specific to dealers.
So what we've created in this space is something that helps automate processes
while interacting with all the other financial systems to help dealers in all their departments.
OK, and from your perspective as a vendor serving and working with dealerships
across the country, how's biz out there in automotive, Julie?
It's busy.
You guys keep me busy and it's a great problem to have.
We're continuing to innovate as we work through all the changes in the industry,
good, bad, or indifferent.
It's a very exciting place where we're at right now because we're able to listen to some of these things
that you guys identify like you just did, poor communication, slow follow up.
Those are the kinds of things that we take in to make our solutions better for dealers.
All that feedback is fantastic.
And by the way, I'm waiting for the day when one of the vendor partners comes on
and we say, how's business?
They're like, it's terrible.
There's nothing.
There's no business.
I mean, nobody ever is going to say that because that's not the answer.
But Julie, I do know you're out there and you're continually engaging
and interacting with CFOs and large dealer groups across the country.
And there are a few things that you're seeing.
And we'd love to bring you in as a subject matter expert today.
In September of 2025, today, September 3rd, what are a couple of the biggest issues that confront CFOs
that maybe most people don't realize, don't understand, don't see?
Sure.
So, you know, CFOs obviously control the money and they implement or help to implement processes
through the dealership, whether it be fixed ops, variable, et cetera,
to help improve processes except for the piece that has to do with accounting,
except for the piece that has to do with money.
Even some of the biggest groups that I've seen out there are still using very old technologies
to process payments, credit cards checks, you name it, even crypto.
I mean, there's all kinds of options now.
But for some reason, this piece of the process gets left off the priority list.
So, you know, I think where they have concerns are leaks in profitability,
areas where maybe there's compliance concerns and, you know, just overall being more successful
front to back.
So, you're saying that in a lot of cases, an issue that is a real issue gets overlooked
because it's not screaming in front of most people.
So, you say older payment methods.
What are the older payment methods?
What are the newer payment methods?
And what's the transition challenge to the new?
Sure. So, older payment methods, often referred to as just a commodity, a payment's commodity,
are going to be using your bank, just a terminal on the desk,
otherwise known as disconnected system.
So, using a terminal that has a manual batch that requires keys, sometimes even where a customer,
for example, in fixed ops would have to go to a cashier and not interact with a service advisor.
Areas like that, that end up being more manual, taking longer and lose that full customer experience.
Okay. And the solution is to automate it, to digitize it, to make sure that all the different
disparate systems talk to each other.
How do you do that?
Like, what in 2025, September of, what's the best practice there to make sure it's
automated and working to the best of the ability?
Sure. So, I mean, software providers all over the place are integrating the DMS.
I would say that that's the first thing.
You've got to be able to have the data, and the data has to be real time, and it has to be fast.
So, for example, a service advisor's got to be able to pull RO data quickly from the DMS,
and then process the payment within seconds.
Some of the studies we've shown is customers are waiting, increasingly getting frustrated,
maybe there's, you got to go here, you got to go there.
What we're just trying to do is make that process smoother, faster, and everybody's
experience, even the user at the dealerships experience better.
Yeah. All right. I got a question for you.
Something that's become all the rage lately, it seems like an automotive that, you know,
I know we talked about on the industry spotlight, surcharging for credit cards.
So, you walk into a car dealership, you're going to pay for the service repair RO,
and there's a surcharge if I pay by credit card, which by the way,
I think that happens in industries outside of automotive.
Like, I've been to restaurants over this past weekend where there's a surcharge.
I've been to, you know, like stores to buy things or rent something,
and you're getting charged a fee for running a credit card charge.
Why is that? What is that? And why are we seeing more of it right now?
And is it something that you would recommend and endorse, Julie?
Sure. So it's a complicated topic. It doesn't have to be, but it is.
It is very common now. And yes, it's happening in all retail restaurants, you name it.
I mean, people who once absorbed this as a cost of doing business,
now know that they can share the fee with the customer.
Yep. If you were to ask me out of 10 deals that land on my desk,
I would say about seven out of 10 are interested in some sort of surcharge program.
Okay. There's a problem. There's a huge compliance risk with this, right?
So there's lots of organizations, financial institutions even, DMSs even,
they don't have all the boxes checked to make sure dealers are 100% compliant.
So if dealers are willy nilly adding fees here and there to this customer, not this one,
I mean, there are fees and risks to doing that. So, you know, even though it's exciting because
you get to, you know, maximize profits, the biggest piece of it is making sure you're compliant.
So as compliance charging that same fee uniformly across the board and making sure that you can,
that you do that. It is, yes, uniformly, but it is also different by state,
which puts another layer of complication on it. It's different by state. It's different,
even sometimes having to do with taxes. So one of the things that's been just a huge priority
of ours because, you know, these things continue to change is that you keep up with these rules
and regulations so that dealers don't have to worry about it and we just take care of it.
Yeah. So where's a good place to go to find out about the compliance piece of this and
maybe some of the state differences. And then I want to actually transition into
like what if scenarios, if a customer comes in doesn't want to pay it, but
where's a great resource to go to understand more about the compliance of it?
So we, Dealer Pay, our company is very much educated. We have lawyers on staff,
we have accounting resources just to make sure dealers are on point.
We do have states up in the Northeast that are still concerned with the word surcharge.
So there's another program they refer to as cash discount or dual pricing.
So what you got to be, you know, very diligent about is making sure all of your quotes,
all of your ROs and parts tickets, they all have this fee listed on it in the correct manner
where we find a lot of folks with those standalone commoditized terminals is there's
no way they can do that. So we're happy to be a resource. We've also got lots of external
resources that we can recommend to dealers to be a non-biased resource. But trust me,
I don't want anybody using my system if it's not done correctly. I have too much of a
reputation to risk any of that. All right. So let's talk about what ifs.
You've got a great customer, long-time customer to your auto dealership store comes in says,
you know what? I've never paid this. This popped up during COVID. I don't pay these fees.
If you continue to have this, I refuse to do business or you've got to find another way.
Can you remove it from that RO? What are some options to still remain legally compliant,
Julie, in the market in September of 2025? Sure. So if you're going to implement
the program, you've got to implement the program. Okay. So you can say I'm going to,
you know, surcharge Sam, but not Julie or whatever the case may be. It has to be
uniformly introduced into the dealership. There are certain exceptions. Use service
contract payments, right? Warranty payments. There are exceptions with that that have to
be addressed. But here's the thing and you're probably referring to that customer
experience, CSI, how are they going to handle this? A couple of comments on it. First, as you
mentioned, they're seeing it everywhere else, right? They're seeing it in the restaurant,
they're seeing it here. So it's not going to be anything new to them. The second thing is you
can give them some options. Okay. You don't want to incur the surcharge. We're going to
give you the option to pay by a debit card, check or even cash. I know that brings back
some of our non-electronic payments that don't exactly excite people,
but now you're giving your customers an option. So prior to surcharging being a thing,
normally dealers were about 75% credit card, 25% debit card. Now the scales are shifting a
little bit where it's more 50-50. Really? Interesting. You've got customers that don't
have the money in their checking accounts. So they unfortunately have to pay a surcharge
if that's what you've introduced. So how is, are you tracking it and watching the correlation
between the surcharge and CSI? You mentioned CSI. Are there tips and kind of best practice
recommendations for implementing this? I mean, it does help cover a real fee that exists as a
result of running that card. Do you have some tips and best practices for implementing this
so that your CSI is not impacted? Absolutely. Transparency is key. Because of part of the
compliance, you have to put signage in each of your departments, your entryways on your doors.
We recommend before implementing this is to get your signs in place, get your customers asking
questions. But even more is the training of your staff. What we've seen oftentimes fail is,
CFO, controller GM says, okay, we're going to start this program. But they fail to communicate that to
their team or their staff. So when we come to install it, service advisors like, I'm not doing
this. So I think transparency, being up front, making sure we work with them on their talk
tracks. Believe it or not, if all of that is very transparent and communicated to the customer,
you are not going to see a big drop in CSI because it's been properly introduced.
So from your vantage point, a CEO of the company, is this a strategy that you would recommend?
You hate to do something because everyone else is doing it, but it does seem like everyone
else is doing it. Is it something you recommend and advocate for as a line item?
So I've been in this business for 25 years and obviously my career is payment processing
with software. But I do recommend doing it if you 100% believe that you're with a provider that's
compliant, that knows the business, that's going to be on the front end of anything that changes
ongoing. It is a way for dealers to recoup a ton of their profits. But again, it's got to be
implemented correctly. I mean, Sam, we're talking hundreds of thousands of dollars or depending on
you know, huge dealers doing it. And I've got, you know, 50 plus location dealers doing it. So
you know, we don't push it. It's not, you know, something that we, you know, would say, you
know, I don't want your business unless you're doing it. We want everyone's business,
of course, but it's hot and it's a way to really make that bottom line look a little better.
So Julie, payment processing and that surcharge, that's the hot topic of the last couple years,
right? And many are more adopting it. In your world, what's that next thing that's similar to
it? What's that next thing that a lot of dealers are considering or thinking about? What's
that next opportunity for our dealer body that's watching that they could capitalize on today?
So, you know, you talk about, you know, increasing profits or saving money, right?
There's a lot of those things that aren't like red and flashing in front of you,
which you don't really know because, you know, maybe you've not seen an alternative. It's like
the hidden costs that things associated with those manual processes, the things that are
associated with that poor customer experience. So where we're really pushing is to make sure
all processes are automated, but like I tell anybody with any new technology going into a dealer,
if the users don't adopt it, then you're not getting the full ROI out of what you just purchased. So
one of the things we've done just a ton of work on, you know, especially, you know, the customer
experience, the implementations process, that hands-on approach is just to make sure whatever
we do, even if it's really cutting edge and really modern, is that the user experience is simple and
easy. So that's very important, I think, for any software provider.
Okay, Julie, as we wrap up, just a kind of a rapid fire question for you. What are just a
few hidden costs or inefficiencies that you see in dealerships that, you know, if I'm a CFO again,
thinking about staying up late at night, like the payment credit card processing,
doing it right, that's definitely one. Overall compliance and making sure ease of
transaction and that your people who are taking payments have all the data in front of them,
that's probably two. What are two or three other hidden costs or inefficiencies I might think about?
Sure. So one big one, and we're probably going to get into the season where it's a little more
prevalent, is fraud. You know, a lot of systems, payment systems specifically,
are not mitigating fraud real time. And where we've spent also a lot of resources and making sure
whether it's variable fixed, you know, after the fact before is to control loss. And it's actually
a bigger topic, I hate to admit, it's not the sexiest topic, but at the same time,
it's hugely important. So from a CFO's perspective, they don't want to go to their dealer principal
and say, Hey, you know, we had a $50,000 charge back on a vehicle, you know, I mean, so because
this person was fraudulent. So, you know, I think, you know, when choosing a provider,
you've really got to bring up that topic, because it's a big one.
So Julie, is there, is there a, is there a, I've seen a ton of fraud, we just did an industry
spotlight with a company called Mavsign. And Mavsign actually will, for all these remote
deliveries, remote deliveries are a huge problem right now. They're actually taking a very digital
process. And they're actually making it manual by actually sending a live person out to do a,
you know, a signature, a signing ceremony. So you can actually validate where it's happening,
who's signing, you can do the whole notary all that. Is there a technology or a process in
your world that dealers might think about adopting to help avoid or eliminate that fraud
on the payment processing side? Sure. So there's two kinds of fraud. There's
real fraud, like stolen payment types and things like that or stolen identities. And then there's
something called friendly fraud. So the, the, the real fraud, the bad fraud is using systems,
like for example, we use an Equifax company called count, or we can do real time mitigation on
things like this person's associated with a lot of charge backs, maybe they've been
associated with a fraud, or maybe there's an algorithm that really makes this transaction
look and smell funny. So we're able to say, okay, dealer user, we recommend doing a little more
research on this before you let this transaction process. So that's one of the things you had
mentioned signatures with our DMS integration, we're going to signature on everything, even
if they're not in the dealership, it's all about making sure the customer authorizes the
good services and the payment type that they're using. And we have a signature, not just on a
receipt, but an RO, a parts ticket, a deal, et cetera. Now back to friendly fraud, you know,
this is something where, you know, I've seen ridiculous stuff. Like I didn't like the way
the service manager talked to me. I'm not paying for this, right? You know, there's
certain things like that. Again, I'm going to go back to that signature component. They
did sign off on it. So when it comes down to a chargeback, you've got the ammunition and the
tools you need to submit a rebuttal and probably win the case. Yeah. Yeah. Well, Julie Douglas,
CEO, founder, dealer pale. See, it's awesome to have you on the show to talk about all
things fraud, the different things that keep CFOs up at night. The credit card
surcharging is fascinating. And thanks for reminding us about the importance of
keeping up on that. Just a couple of comments from our audiences. We let you go here,
Igor K, three comments from him. Most dealers don't charge you a service fee for using a
credit card in the amount of $5,000 or less. Most dealers don't want to use a credit card
payment on bills over $5,000. We're actually seeing more of that, I think. Same with dock
fees. You charge all or none, but you can't be selective about it, who you will charge
and who you will not. So I do think, Julie, that's what you spoke to a little bit.
And then Igor says, as a former dealer principal, I'm not in favor of service fees.
Labor and parts costs are already on the rise and that already shifting customers
to independent repair shops away from dealers. But as those things are on the rise,
it's just more expensive. So Julie, we appreciate you being on the show. Appreciate
you joining us and for sharing your perspectives. Julie Douglas, thank you.
Thanks, Julie.
Fascinating, fascinating conversation. You know, have you ever been annoyed to get
surcharged? You know, you're at a restaurant, you're like, really, you're going to charge
me 3% for, you know, 3%? That's not even the one that annoys me. How about when
you're at a restaurant, you're ordering at a kiosk, and they're asking for a 20% tip.
You can get into an interesting couple. But that's a surcharge, right? I'm doing the ordering
myself. This is a POS. I'm ordering myself and I'm going to walk away with my own food.
I'm going to give me a tip. Well, and I think they use social pressure to try to push you
into my strategy on that is, is if nobody's bringing it to me, delivering it to me,
it's, it doesn't qualify for that. I agree wholeheartedly. And to push back on Igor for a
second, even though even the independence are doing surcharges, I promise you everyone is. At
least every New Jersey, everyone's doing surcharges. Yeah, which is by the way,
yeah, when I hear that, I'm like, that's not a great everybody's doing it. So we should
know it's not a great, but no, let's talk, let's talk lot links. Hey, everybody,
get the best possible market advantage on every vehicle transaction, optimize operations,
boost profits using artificial intelligence and machine learning. Learn more at lotlinks.com,
or you can click on the QR code to my side there to learn more information about that.
Props and thanks to lotlinks for supporting today's content on the Daily Dealer Live show. So
yeah, and in fact, Uli to your point, McDonald's, I've actually, I'm not going to admit that
I've ever had eaten at McDonald's, but I did get a, I did get a twisty cone there once,
and it was just hilarious to me. You can go up, you can order from the kiosk, and then there's like
this little, there's this tip line at the very end. I'm kind of like, wait, how does that, how does
that make any sense? So look, we've teased Greg Johnson, who's General Manager Mohawk Honda,
they're selling over 500 units a month in a town that is smaller than that. You should,
they should never be hitting that volume. So we're excited to learn more about his tips,
trade secret, trade secrets. So Greg Johnson, General Manager Mohawk Honda, welcome to the show.
Hey, thanks for having me. I appreciate it. And sorry for that glitch with my computer, of course,
but once I'm coming on, it shuts down. We don't even know about the glitch. It's all, it's all
gone. That's the way live TV is. So Greg, we gotta, we gotta hit you with the signature
question, man. We're excited for you to be here. And we got to give a little shout out
to your friend later, but not yet. How's Biz? Biz is awesome. I mean, it's great,
it's great to be a Honda dealer. It's great to be an automotive dealer right now.
Things are good and the future is bright. Yeah, well, quantify that for us a little bit,
because obviously it's great to be a Honda dealer. It's great to be a Honda dealer right
now. But where are you? You know, where is Mohawk Honda? And what are you doing?
Sure. So we're in upstate New York. We're in Scotia, New York. It's about 7,500 people.
And yeah, we're consistently doing over 500 cars a month. We just finished up
August 532 cars, 280 new, 252 used. So strong performance for us here in August in such
a small market. Yeah. Now, where does that put you nationwide on the new car side,
CPO side? Sure. So I don't have this morning's report, but as of yesterday for the nation,
we were seventh for certified and 22nd for new. That's, I mean, extraordinary considering your
competition in the Honda market nonetheless and where your competitors are located. I mean,
you know, we've had Brian on the show here, King Kong over at Paragon and you're up in
upstate New York doing big things. We're coming for him. I think he knows you're coming for him.
Give us some tips here. You know, being that you're not in, I won't say it's not the best market
because obviously the best market is whatever market you're in, but you're doing amazing
things in upstate New York. So to me that always leans back to a lot of people making
excuses for where they are or what they're selling or what are you doing differently under
your rooftop. That's you're attributing to so much success. Sure. So the people in the process,
I mean, for me, my biggest passion is customer experience and the customer journey and making
it easy to transact with us here at Mohawk Honda. Some of the biggest complaints you hear from
consumers is, Hey, I already gave you that information. Why am I coming in the showroom
and you're asking for it again? So how do we just make that streamline? How do we make
it easier so that people talk about us in a positive tone and they talk about their experience here
with their friends, their family members and not just all I when it got my oil changed today.
No, I wouldn't got my oil changed at Mohawk Honda and they did X, Y and Z. You have to go check it
out. What's something, what's something that you can point out as far as you know that
experience specifically in the service drive? Sure. So what I did was about a year ago on
Reasonable Hospitality, my favorite book here. I love that. Nice. Yeah. On Reasonable Hospitality,
if you haven't read that book, get yourself a copy. It will change your life. So I had every
single manager variable and fixed read the book and then 20 group style. I had them come present
their best idea of how to increase customer experience and customer journey.
And it was incredible. Everybody bought in. I had some managers that are like,
I haven't read a book from high school and I read this book. So it was pretty cool to get the buy
in from the team. But something that we implemented was a greeter system in our service drive. So
I have two greeters. Every single appointment is on an iPad. And we do, we start the day with
about 120 to 130 appointments and ramp up with the walk-ins. But when a customer pulls in,
let's say it's 9 a.m., they see a red odyssey coming in. Okay. That's Mr. Smith. He's here for
an oil change and a tire rotation. He pulls in. You're great. Mr. Smith, thanks for coming in
today. I see you're here for your oil change and tire rotation. I'm going to get you set up with
Steve, who's your service advisor for the day. And then Steve comes out and he's already got
a pre-write done from the night before because that appointment is pre-assigned to him. So
he comes out, smooth transition. Mr. Smith, you're here for your oil change tire rotation.
And it's just such an incredible process because people have anxiety coming in for service,
especially if they've never been here before. So it's intimidating. They're pulling in. Oh,
my gosh, who's going to greet me? What are they going to say? What's going to happen?
And when it's smooth and easy and just comforting feeling when they come in,
it's pretty incredible. Greg, is there a technology or a tool you're using to help
facilitate that from an organizational standpoint? With as many UIO as units and
operation as you have, that's a tremendous amount of volume coming in and out of your service department.
Sure. So every single customer, we've partnered with UVI. So UVI, I'm sure you guys have heard of it,
if it's an alignment system and it also will do an over the car scan. So if somebody comes in
and there's dents on the roof or the tires are past the manufacturer's suggested date,
it will actually throw those up on a screen. You can review with the customer. I mean,
we have an in-house PDR person, in-house windshield repair person, interior repair,
wheel repair, all of that is internal. So when somebody comes in for an old change,
it's an easy upsell. Oh, you want to take care of your curb rash while you're here. We'll get it
done in a pretty quick turnaround for that. Are you able to quantify that back to an impact
to your service department? I looked at it way back in the early days. I don't know what it
looks like from a pricing standpoint. I assume you probably lease it. Are you able to quantify
that back to an increased dollar per hour increase? I mean, we've seen an increase in
hour per hour with the implementation of the greeters and the UVI of 12 tenths,
which is pretty significant on your body to see an increase of over a tenth of an hour per hour
roll. That's pretty strong. All right. I'm going to ask the question. You don't have to
answer, but what does it cost? What does it run? It's not cheap. It definitely pays for
itself the ROI is there. It's a pretty cool system. You're churning a lot back there on the
fixed side and that's the backbone of everything. So what's your service department look like?
I mean, that you're able to handle this kind of volume. Sure. It's not as big as you would
think, but we're doing about a million dollars in gross a month in service,
about 3,300 customer pay arrows a month through there, plus all the internals. We're pretty close
one to one as far as new to use. So there's a lot of internal work that goes back there.
It's a very well oiled machine and I got a lot of great support back there.
What's your staffing look like back there? Oh, it's a lot. You don't want to see
my payroll expense. I've got 12 advisors. I've got a service manager and assistant
service manager. I've got 28 techs and a really cool system I've gotten the back is I have a
shop foreman who is basically my in-house instructor who teaches the express technicians
how to progress into the main shop. Everybody knows technicians. There's a huge shortage
of them. So we implemented, he's basically our trainer in-house. They don't have to go
to school. He trains them up. And I'm happy to say I have eight technicians in the main shop
that are now master technicians that started with us in express. And that's all because of him.
So you got to grow your own, build your own bench. For sure. Well, my next question was
going to be and it was going to apply more to the sales side, but how are you training and
retaining or cultivating, you know, top talent and it could be under either either house.
Sure. So what we do in the sales department, generally, we will bring a new hire in as a
delivery coordinator. So we have delivery coordinators go over all the deliveries with
customers. We like to bring somebody in that position to so they can learn our culture,
learn the cars. And then we know if they're really a good fit to progress onto the sales
floor. We do weekly training. I have a floor manager and then a sales manager rotates
through a finance manager to do weekly training with the sales staff. It's mandatory. It's
required. They have to do it. And it's revolving topics based on things that we see as a big need
at the time. So training is a huge thing. We want the staff to be trained to be able to
answer any questions and just to get better. We talk about this all the time with the
newer generation and how the car market has shifted rather the staffing, the people,
the old car guys are phasing out of the industry and the new people are coming in.
What's some of the the carrots that you're dangling to attract the type of people that you want to
fit in? Sure. Yeah, I mean, the days of working people bell to bell and grind into debt, like
those days are over. You got to take care of your people. And a lot of the time,
it's giving them more time. That's a commodity that you don't get any more of. It never
comes back. So what we've done for our top performers is give them a flex schedule. So
if you're the top salesperson for the month, the next month, you kind of get your own schedule,
come and go as you please. And you would think that would come to bite you because, oh,
are they going to show up? Are they not? No, they want to perform. Yeah, for sure. It's
a huge benefit. And these guys always battle back and forth who's going to get the top spot.
But that's been super beneficial for us. And we throw out a lot of Spiffs that are
not money related, but a weekend away with their significant other to a nice hotel and give them
some spending money. That's nice. You can't burn people out. You got to keep them fresh. And we
want them out of the store, enjoying their time, recharging the batteries. It's so important.
And you can't burn them out, but success does create more success, right? So as you
start to have that success and you get the reward of additional time off and trips and
things like that, that creates momentum, which is tough for anyone else to replicate or duplicate.
Absolutely. I have a question about the front end sales piece. So given your volume,
you so far outpunt your competition. Yes. What is your strategy as it relates to
lead generation? Who are your top one or two lead providers? What's your best
way of putting yourself out there to bring those customers in on both new and used to
sell 500 plus units a month? Yeah. With our reputation, we get so much organic traffic.
It's tough to say a lot of repeat and referral customers. It's a ton of word of mouth
just because of the reputation we build. But of course, we're signed up with the
third parties, the auto traders and the cars.com and car gurus, all of those things.
But as far as a lot of our traffic comes through our own website from people that
the leads come in. Oh, I was referred by Joe Blow. He told me to see Brian on the sales floor.
And that's a majority of our business. And I think that's a lot of what leads to our success.
And a lot of people think that when you get to this size and this volume, that you're just
buying deals and you're selling cars to brokers and fleet companies. And no,
our grosses are above the district average. And we're still selling all the cars.
And to the point, success does create more success. So people love to be in that environment
selling in that environment because it creates more success, more deals. So is there a
SPF program or is there a process that you have out there for the sales associates to
kind of reinforce that repeat or referral and bring customers back in?
We don't incentivize the sales consultants. We actually are having a meeting on this
next week as far as, okay, a self-generated lead. Are we going to pay them more on that?
Which I think we should. I think that would be a game changer for the mentality on the sales floor.
We do obviously give bird dogs in New York City. You can give bird dogs. We give bird dogs to
people that refer customers in. And then we do a buy-inual drawing for $1,000 for somebody that
was sent in a referral. So yeah. He says word of mouth does impact traffic. And I love how
you're saying the number one lead source is your own website. Eagercase has any dealership
that can manage to have less than 30% of turnover and staffing. That dealership is doing well.
We don't have any turnover. I mean, very minimal. I mean, there's some of the younger staff that
it's their first job and they're going off to school or things like that. But more people come
in here, they don't leave. They want to be here. They believe in what we're doing. They see
the Mohawk mafia mafia. That's it. And we just have a tough one. I was telling you this the other
day, you battle the, you know, the fun culture in the accountability and finding that happy
medium. And I always, I'm on the side of like, let's have fun. I get the music cranking out
there in the showroom and have the employees tell me, oh, come turn it down like it's too loud.
I don't know. I like to have fun, but he got to have that accountability with it too.
And Greg, how long have you been there at Mohawk Honda? Because you obviously have contagious
energy. Okay. And how long have you been there as general manager?
About five years.
Okay. Yeah. And when did you first hit that 500 unit mark? When was that?
Oh, let's see. Just before COVID, we had hit 600 once or twice. That was our goal. We got
600. And then COVID comes in, volume drops off, but the past few years, we average over 500
quite a bit. In March, when everybody was knocking out of the park, we hit 650.
And I know that there's a ton of upside potential here. I don't see why we can't do 600, 700, 800
cars. People think, oh, we're at the top in the district. Yeah, but there's so much more
juice in the squeeze. Greg, your energy, your contagious energy and enthusiasm and just the love
of this business, it echoes a little bit of one of our stores, Racine Honda and Racine, Wisconsin.
It'd be cool to connect you up with the GM of that store, his name's Matt, because they're chasing
that 500 units and then the 600 units. And to everything we've talked about, when you hit
a volume like that, and you've got a sales team so dialed in so aligned, it actually creates
more momentum and it creates more excitement. And everybody loves being part of something
that is a winning team. And Matt's created that there within the Ziggler world. You've obviously
created that in your world. I have one last question that back to you, Julie, is co-op.
How important are co-op dollars for you in the Honda world? Do you?
Okay, no co-op. So we got no co-op. That's easy.
They actually did throw out a little bit on the prologue for the first time ever when they were
pushing EVs. So we took full advantage of it, but other than that, no co-op in the Honda world.
What's their strategy on that? On EVs? Yeah, no, no, no. What's their strategy on no co-op
when so many other OEMs try to control the ad spend, the dollar spend? You have to add them.
Honda's big on coupons behind the scenes. Like they never want to rebate,
they never want to subvent it, right? I mean, very rarely, but they don't want to devalue the brand.
And I think that's what they see it as. That's my opinion. But yeah, what's in your world,
it's working, right? So Julie, for sure. Yeah, things are good. Before I forget,
we got to give the shout out to Roland though, because he texted me at midnight last night,
actually at 12, 18 a.m. Roland ended up at number three and number nine Nissan store in the
nation. Roland is a great dude. He is single-handedly dominating that market down there.
Yeah, yeah. And he's got great boots. I'm wondering. So those of you that don't know,
I don't know if it was said, but he was in my NADA Academy class. And every single day,
he would come in with a different pair of boots. And me from upstate New York,
I have no idea about cowboy boots. And he's like, this one is made from a
lizard skin. And this one is my butchering this. But he's telling me about the cost involved with
these things. It's crazy. You're crazy. You're preaching to the choir. I went down and visited
him in Dallas. And I'm like, they actually match the suits. But yes, they do. Oh, yeah.
Sorry, Sam. Go ahead. Just one thought came to my mind. You know, so we have a ton of dealer
principles that are watching this show. Who's the owner operator of Mohawk Honda? Who's the
dealer principle? Sure. So it's two brothers. There's Jeff and Steve Heridan. It's they are third
generation. Their grandfather started in 1919 with a Chevrolet store and carried that through into
the 70s. And in 1970, they Honda came to him approached them. Hey, do you want to have Honda
franchise? And they decided to take the leap and give it a shot. And a few years later,
they shut down the Chevrolet franchise and went all in on Honda. So two brothers, Jeff and Steve
Heridan. That was winning with the great OEM today, right? Their decision was proved out hand over
fist. So one question we get a lot of among the owner operators, the dealers that watches,
you're the general manager. How often do you meet with the owners? And what is that?
What does that back and forth look like? You've created a great result. How much of that is
a conversation between the two of you? Who sets the vision? How often do these interactions happen
in your work? Sure. So the easiest way to say it is they have full trust in me to run the day
to day operations. You're empowered. I'm empowered. And it triggers down for me. I empower the
staff here down to the lot of tendons. Like if they have a good idea, they're not afraid
to bring it to me. And that's something that I truly believe in. Not to get off on a tangent
real quick, but I'm walking through the shop about a year ago. And I see one of the guys down a
little bit. I'm like, what's going on? What can I do to help back here? And he goes,
you want to know something, Greg? I would love some ice cream back here. Ice cream.
Okay. So I went and bought a freezer and I stuck it with ice cream weekly for the technicians
and they love it and something that's simple. I want ice cream. Yeah. You come here. I'll treat
you to an ice cream. Let's do it. But I've got a stock freezer in the back with ice cream.
And just little things like that make a difference. But getting back to conversations
with the dealer principals, maybe if we talk once a week and it's not even really business,
just check it in. Hi, how you doing anything on your radar? But they trust me 100% to run
the day to day operations. And if there's something that they want done or looked at,
they definitely reach out. But there's not a ton of communication. I think that's so critical.
Sorry, Sam, go ahead. Go ahead, Yuli. Yeah, yeah. I think it's so, I think it's so critical to
empower, you know, and it starts from the top down, right? If you empower people,
you get them to care about the surroundings. If someone thinks they don't have a voice,
they don't have an opinion, they walk around with their blinders on. So it's really super
important as much as you have your head on a swivel and you're noticing anything and everything
to have those extra mouths around the store that are like, Hey, I noticed this isn't
just right. Or Hey, you're something that I could do. I think that's super, super smart.
I know we're jumping around a bit, but I want to bring back to so feeding the beast, right? So
you're doing 200 plus use cars as well out of a single point Honda store. How are you
feeding that? What's your acquisition strategy? Are you buying off the street? Are you
incentivizing? What's that look like? Sure. So we a majority of the cars are trades.
We do a phenomenal job at acquiring trades and making sure we're maximizing our take right there.
We do buy cars at the auction. And we do buy a ton of cars off the street through our
Kelly Blue Book ICO program that nets us between 30 and 50 cars a month, the Kelly Blue Book
program. And we probably purchase at auction, maybe about 10 to 12 cars a week. Okay, what's
the record for trades? Can we put some dollars on this, you know, on the use car side? Like,
what do the grosses look like front, back? What are you spending and reconditioning? I mean,
how are your ICO cars comparing with, you know, your regular trades? I mean,
it's just something that you have top of mind. Yeah, I mean, obviously the trades
in the ICOs are higher grosses. The auction purchases, by the time you get them here,
you pay the transportation, you pay the fees, like, yeah, that affects your front gross.
Our average recon on on use cars is just north of $2,600 per car. So we don't cheap on anything
when it comes to assertive. And but it pays pays itself forward, like my policy,
my comebacks are super low. In the reputation, people come here, they know the car's gonna have
new tires, it's gonna have new brakes, like, they're not going to come for their first service.
And you're like, Oh, you need tires, you need brakes, you need this and that.
That kills everything. It kills the CSC for service. People don't want to.
That car should need nothing for 12 months other than oil changes. I'm with you. I'm shocked,
though. Honestly, I mean, that's probably twice as high as I figured for a Honda store.
I figured you were somewhere in the 1400 1600, even like, you know,
reconditioning the hell out of it. Oh, you know, that's, I mean, that's great.
Props. So it's up there. But you know, you get the money back in.
I agree. I agree.
Greg, do you sir? Do you surcharge borrowing from our conversation earlier?
It's so funny you say that I've looked into this so many times, because I go to my 20 group
meetings, and about half of my 20 group does surcharging. Half does it. New York laws are very
strict. So it's difficult in New York state, but it's been a topic of conversation because,
you know, we're spending about 30 grand a month in credit card.
That's a lot of money. It can't be a source of profit from familiar with what it is in New
York. It can't be a source of profit because I believe it's the same as New Jersey.
You can just claw back some of it. I know in New Jersey, at least it needs to be offered kind of
as dual pricing. So it's everything is disclosed up front as this is our cash price, you know,
with your cash down payment of $5,000 or, you know, the cash price for your breaks is XYZ.
And then, you know, you're disclosing the with signs everywhere saying, you know,
credit card is a two and a half or 3%, you know, convenience fee.
Yeah. So I'll go ahead.
No, I was just, I've thought about it many times over several years.
And my controller actually brought it up yesterday morning was like, hey, we probably should look
at this again. So it's definitely at the forefront of our minds.
So as we get towards wrapping, just one last question again, as successful in
operation as you have as good a retention as you have as many units you sell,
your CPO ranking, all that. What's something that you're thinking about
over the next six months, whether it's something that kind of keeps you up at night
or just a business practice, you're trying to figure out and hone in like, what's this,
what's the next evolution for you of success over these next six months?
You know, I believe that we have so much upside potential in our sales department.
And when it comes to customer experience, the one thing that I've really been pushing the
team on is personalized dynamic engagement with our customers when they're not here.
And what that means for us is we're sending a customer a video of a car.
If they inquire on a Civic that's on the lot, we're going out there.
Hey, Joe, I'm here in front of your Civic. Thanks for inquiring. I know your hot
buttons were the heated seats into this. Just wanted to send this over.
Oh, send it. Because nobody else is sending their sales customers videos.
Personalized dynamic to the car. I was talking to Yuli about this.
And I think that I don't have the facts in front of me, but our closing ratio
on leads that we send a video to versus just a regular text call or email is probably double.
So why not do that for everybody in the feedback from the customers is incredible.
Oh my gosh. Thanks for sending a video like that's incredible.
What technology Greg, are you using to deliver the video?
Sure. So we're shooting the video right on our iPhones and we send it right through
VIN solutions. Yeah. Why do you think it is? So we believe in the video piece, right?
Why is it so blasted tough to get people to just do a flipping video?
Like why is it so hard? They're afraid to get in front of the camera like, oh my gosh,
what if I say the wrong thing? What if I slip up? And I tell them all like,
you just got to do it. I remember my first Facebook live that I ever did.
It was terrible. Absolutely terrible. Like I'm stumbling. I'm stuttering.
Like it was a hot mess. Like I was wanting to delete it, but I'm like,
no, I got to power through. Like I just got to do this and then I do another one.
It's not better. You just have to. You got to do the reps.
You got to do the reps. And you embrace the discomfort, right?
What's on the phone? Is it necessarily bad? You just got to get to the other side of it.
Well, Greg Johnson, General Manager, Mohawk Honda, we appreciate you being on the show.
Sharing your perspectives and your success. We'd love to have you back one day to
talk more about it. So Greg, thanks for being on the show.
Cool. Hey, thanks for having me. I appreciate it.
Yuli, that was a great conversation. That was super interesting to hear all the different
areas that he's focused on in creating this, this high volume Honda store out there. So,
and guess what, Yuli? Guess what today is? It's our 50th.
It's our 50th anniversary. Happy 50th.
So it's not 50th anniversary. Yeah. So this is the 50th episode,
which is pretty cool. If you think about all the people and all the different topics
we've covered over these past 50 episodes, it's, it's the 50th and here's the 50 more.
Yeah. Well, 500 more. I wonder if we could quantify the amount of dollars saved on the dealer level
from just listening to us and growing with us. Because it's like a best practice 20
live every Monday. That's right. You don't want to miss it.
Yeah, I love it. Well, great conversation. And to you who've made this 50 possible,
our loyal listening audience, Daily Dealer Live, thank you for watching the Daily Dealer Live where
we break down and we still break down the biggest moves in the car business as they happen. Please
don't forget we're here live every Monday, Wednesday, and you know, it will be back Friday. So if this
is your world hit like, subscribe, turn on those notifications so you never ever miss a beat.
And we'll see you next episode. Thanks, everybody. Thanks, guys.
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