Nathan Shaver, managing partner at Shaver Auto Group, shares insights on how his dealership successfully pivoted to focus on Fixed Operations, tripling service gross in just 18 months. He discusses the challenges faced by dealers today, including margin pressures and shifting consumer behavior, and emphasizes the importance of reallocating resources towards service. The conversation highlights practical strategies for improving service department performance, customer retention, and adapting to market changes. Nathan also touches on his background in the automotive industry and his innovative approach to dealership operations.
Today I’m joined by Nathan Shaver, Managing Partner, Shaver Auto Group.
We dig into why fixed operations have become the most reliable growth engine for dealerships, what it actually took to triple service gross in 18 months, and where dealers are still leaving money on the table.
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Topics:
02:39 How did family business shape Nathan?
07:18 Biggest challenge and success in fixed ops?
11:26 Best strategy for customer retention?
25:56 Biggest challenge in used car market?
36:42 Final piece of advice?
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"Dealers are facing margin pressure, shifting consumer behavior, and a market where new car profits can disappear fast."
Margin pressure means that car dealers are making less money on each sale because of higher costs or more competition. It makes it harder for them to stay profitable.
Margin pressure refers to the decreasing profit margins that dealers experience due to rising costs or increased competition. This can make it challenging for dealerships to maintain profitability.
"Dealers are facing margin pressure, shifting consumer behavior, and a market where new car profits can disappear fast."
Consumer behavior is how people decide what cars to buy and what they want from dealerships. It's important for dealers to know this so they can sell more cars.
Consumer behavior refers to the trends and preferences of buyers in the automotive market. Understanding these behaviors is essential for dealerships to adapt their sales strategies and meet customer needs.
"Nathan breaks down how his group pivoted to Fixed Operations, tripled service gross in just 18 months, and used technology and discipline to drive sustainable profitability."
Fixed Operations is about the services a dealership offers after selling a car, like repairs and maintenance. It's important because it helps the dealership make money even when they aren't selling many new cars.
Fixed Operations refers to the parts and service departments of a dealership, which provide ongoing revenue through maintenance and repairs. This area is crucial for dealerships as it helps stabilize profits, especially when new car sales fluctuate.
"If you're trying to balance sales, service, and long-term retention, this conversation matters."
Sustainable profitability means making a steady profit over a long time, not just making money quickly. It's important for businesses to stay successful in the long run.
Sustainable profitability refers to the ability of a business to maintain consistent profits over time without relying on short-term strategies. This is crucial for long-term success in the automotive industry.
"...ing my teeth at Huntington Beach, Chrysler Jeep, Dodge Ram. And more recently, my family partnered with Bob..."
The Dodge Ram is a big truck that people use for carrying heavy loads or towing things like trailers. It's known for being strong and comfortable, which is why many families and workers like to drive it.
The Dodge Ram is a full-size pickup truck known for its powerful performance, rugged design, and versatility. It has been a significant player in the truck market since its introduction in the 1980s, often praised for its towing capacity and comfortable interior, making it a popular choice for both work and leisure.
"...but I've been with Stellantis for 18 years. I believe Jeep, Ram, Dodge, there's a really strong branding behind the products."
Stellantis is a big car company that makes many different brands of cars, like Jeep and Dodge. It was created when two companies merged together.
Stellantis is a multinational automotive manufacturing corporation formed from the merger of Fiat Chrysler Automobiles and PSA Group. It encompasses several well-known brands, including Jeep, Ram, and Dodge.
"I believe Jeep, Ram, Dodge, there's a really strong branding behind the products."
Jeep is a brand of cars that are built for off-roading and adventure. They are known for their tough, durable vehicles.
Jeep is an American automobile brand known for its rugged vehicles, particularly SUVs and off-road vehicles. It has a strong heritage and is associated with adventure and outdoor activities.
"...evolve away from the traditional retail car model. I didn't know what that meant..."
The traditional retail car model is how cars have usually been sold, where you go to a dealership to buy one. This is changing with more online options and direct sales from manufacturers.
The traditional retail car model refers to the conventional way of selling cars through dealerships, where customers visit a physical location to browse and purchase vehicles. This model is evolving with the rise of online sales and direct-to-consumer approaches.
"...to measure whether or not a pre-owned car had been smoked in at levels that are dangerous..."
A pre-owned car is just another way of saying a used car, meaning it has been owned by someone else before. They usually cost less than new cars.
A pre-owned car, also known as a used car, is a vehicle that has had one or more previous owners. These cars are typically sold at a lower price than new vehicles, but their condition and history can vary widely.
"...that project you're referring to in particular is a business called No Smoke. I invented a way to measure..."
No Smoke is a company that checks if used cars have been smoked in, which can make them less valuable and harder to sell. They have a special way to measure this.
No Smoke is a business that focuses on assessing whether pre-owned cars have been smoked in, using a method developed to measure smoke levels that could affect future occupants' health. This innovation addresses a common concern in the used car market.
How did family business shape Nathan?
Biggest challenge and success in fixed ops?
Best strategy for customer retention?
Biggest challenge in used car market?
Final piece of advice?
Select text to request an explanation
We needed to do something different.
The leadership team that I have in Fixed Ops
is a very large part of our success, for sure,
but just deciding to go all in on Fixed Ops.
You know, not trying to juggle every department,
actually reallocating resources away from sales
into Fixed Ops, hitting the gas and really focusing on it
as the North Star for the business for 18 months
is what it took.
Today I'm joined by Nathan Shaver,
managing partner at Shaver Auto Group.
Dealers are facing margin pressure,
shifting consumer behavior,
and a market where new car profits can disappear fast.
Nathan breaks down how his group pivoted to Fixed Operations,
tripled service gross in just 18 months,
and used technology and discipline
to drive sustainable profitability.
If you're trying to balance sales, service,
and long-term retention, this conversation matters.
A big thank you to the sponsors
who made this episode possible.
Lotlinks, Icon Technologies, and Nomad Content Studios.
And now, let's get into the show.
Nathan Shaver on the CDG podcast.
Nathan, welcome.
Thanks for having me.
I'm so excited to be here.
Dude, excited to have you, man.
And excited to have you as a member in circles.
It's a pleasure.
So thank you for being there and being supportive.
It's always great to have great people.
How's your experience been so far?
My phone is getting 200 notifications a day, right?
I leaned all the way in.
So as new groups are emerging, do I go Fixed Ops?
Do I join all the OEM chats?
Besides my core 20 group of people
who got together for the first time last week
on an extended Zoom, and we got to get to know each other.
Overall, it's been great.
It seems like a new era of what a 20 group used to be.
That's more accessible.
It's not somewhere you have to fly.
And this kind of formal thing that you do maybe once or twice a year.
Instead, you can have an ongoing conversation daily
with your peers and learn things.
I've already implemented something in my service department
that I picked up from the Fixed Ops chat this week.
No way.
That's awesome, dude.
That's really cool to hear.
So one dealer told me something cool, which I really liked.
I said, hey, I said, why do you use circles?
Tell me like genuinely, what's the value proposition?
And he said, Yossi, he said, I'll just call him out, actually,
because we're cool like that.
So I'll name drop.
But it was Michael Spiegel from We Auto.
And he said, Yossi, it's like I get a daily 20 group for 10 minutes per day.
So I was like, that's a cool analogy.
Separately, what I'll tell you is as our community is evolving,
there's already hundreds of dealers inside and more are joining daily.
But as it's evolving, one thing I've realized is that there are multiple channels.
And many dealers want to be in multiple channels.
You said there's like a Fixed Ops channel.
There's, oh, we have specific channels.
And it's interesting that I actually encourage dealers to mute the channels
that they don't actively participate in daily.
So like you mentioned, your phone is getting pink 200 times.
I actually encourage that other than your core channel or two channels
that you're constantly checking, the other ones I personally mute.
And then whenever you have time and you designate, you check it,
and you get that download and you share anything you want to share back to the community.
So I'll leave that with you as a little tip if you want to take advantage of it or not.
But that's what I found to possibly be an early best practice.
So with that said, dude, so excited to chat.
I know you came from, you're a fifth generation dealer.
You now are, well, as of recently, two years ago, approximately, you actually split off
and you purchased your own single point CDJR store with a partner.
So you're kind of doing your own things.
I want to talk about that.
But before we get into that, can you give us a bit of background on where you came from,
the Nori Shaver Group, which is where you really had your start in this industry?
Sure. I was born and raised into the business.
So as a kid, we would go to church, get donuts, and go to the store on Sundays.
And as a 12-year-old, I wanted an iPod color.
And my dad got me a uniform.
Do you remember those, those retro colors?
Oh, yeah.
This one was blue.
I have green one.
Nice.
I would punch in and punch out, pull in plastic off cars.
And I spent my 18th birthday at a DMV, getting my sales license.
So it's something I've known that I wanted to do my entire life.
Don't necessarily consider myself a gearhead.
I do have a passion for beautiful cars.
But really just, I think the family history is special.
And through college, sold cars, spent most of my time in variable, cutting my teeth
at Huntington Beach, Chrysler Jeep, Dodge Ram.
And more recently, my family partnered with Bob Nori.
And it's been such a blessing, what an incredible man and mentor.
And the rest is history.
Bob and Pete Shaver, my father, built a very dynamic, large company that grew quickly.
And they have 14 stores now.
We sold a few.
But at the peak, post COVID, $3 billion in revenue, half a dozen stores, top 10 nationally.
They've really built a special company.
And as I was eclipsing my time as a general sales manager at Huntington Beach Jeep,
I got sent to the worst performing store in the group and said,
hey, go and go figure it out, go fix it.
As you use Carlisle, there's losing some money.
We launched a Stalantis point there.
But it wasn't a long-term fit for me.
And eventually the stars aligned.
I got an opportunity to become a dealer, something I've been working towards my entire life.
I resigned with the family and the executive team at Nori Shaver support.
The same day I got the offer.
And here I am two years later.
How is that from a family dynamic to split off kind of do your own thing?
You know, I typically see there's like, there's two tracks you typically see with
families in the business and, you know, son's daughters.
You typically see either the track where they grow within the organization that that remains,
you know, the leader in certain cases, the mom and eventually chairman, chairwoman,
or you see the track, which you're describing here, which is, you know,
you know the business intimately, but maybe the stars don't align.
You kind of veer off and do your own thing.
Why did you go that direction?
There's a lot of car dealers in my family.
So my grandfather had four kids, three of them are automotive executives or dealers.
My wife's family comes from the car business.
And, you know, there's another portion of our family
in the greater Chicago area that's also in the business.
So, you know, there's more roots.
I think my father and I have become close friends.
I've always considered my mentor and great, great relationship.
When the opportunity presented himself, I think flexibility to adjust to the opportunity at the
time was what, you know, manifested where I find myself today.
But I talk with executives, the Norie Schaver group daily,
still work closely with some of them.
And, you know, it kind of feels like a satellite or an island close by, you know, per se.
So, okay, so relationship is solid.
There's still good communication.
You're doing your own thing with this group.
Tell me a little bit about, you mentioned that you're, you grew up in variable,
which is, you know, that's pretty standard, I would say.
Like variables, the sexier thing, it's easier to get acquainted with quickly,
less technical knowledge.
I also started in variable sales.
What, but I also realized that when I was reading about you and your experience,
what you've done, you know, one of the things that stood out was
you tripled fixed ops gross in 18 months at a CDJR store,
at your CDJR store from $385,000, right?
That's pretty impressive to do in 18 months.
And so, can you tell me a little bit about that, right?
From someone that grew up in variable, you've had some exceptional performance here,
and at least in this one example, and fixed.
Tell us about that story, like how did that even come to be?
I think the most important part of that is adjusting to the
market that we find ourselves in today.
My favorite department in the store is used cars, very comfortable with used cars,
you know, love working a buying center, praising a trade, you know, a desk and a deal,
but- Do you have a buying center today?
Do you have a buying center today?
Right now, it's integrated with our sales department, you know, but
that's not moving the needle.
Stellantis has had some headwinds, you know, it's been a grind,
and used cars isn't getting it done, you know, there's still some opportunity there,
you know, there's always, there's always a little bit more,
but I was able to identify that to grow this company, we needed to do something different.
And the leadership team that I have in fixed ops is a very large part of our success, for sure,
but just deciding to go all in on fixed ops, you know, not trying to juggle every department,
you know, actually reallocating resources away from sales into fixed ops, hitting the gas,
and really focusing on it as the north star for the business for 18 months is what it took.
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So what did you do?
Like, let's get very tactical.
Like, how did you make, how did you turn that around or grow so quickly?
Like, what were the steps you took?
And when you say, you know, you mentioned your team, like, what did they do?
Yeah, you have to break down.
More service drive appointments, more flag hours, more CP, more warranty, more internals.
You know, which do you want to dig into?
One by one.
Okay, so with the daily drive appointments, we, our advisors were doing a poor job of
answering the phones.
We would not accept additional cars.
So just by turning those around, we went from 20 appointments a day to, you know, 3035.
That was a big step out the gate, getting more cars into the shop.
And we have since also expanded non-OEM vehicles into our shop.
You know, we accept cars on Saturdays.
We've added on a service BDC, which had never existed at that store before.
But I think-
Is that AI?
Is that AI or human?
I've tried both.
Failed miserably trying to bring in an AI into our service drive for appointment intake,
but something that I'm still researching and I want to try again.
So I went back to Analog.
Cool.
And, you know, I think the foundation of driving growth in fixed ops was getting more
cars into the shop.
So, you know, that's where we started.
And what would you say moved the needle the most?
Like, was there one thing you could point to say like this moved the needle the most ultimately?
Increasing our labor rate.
Interesting.
And what the market just absorbed that?
Like, how much did you lose in terms of revenue or customer base?
We've been fortunate, honestly, you know, for a variety of reasons.
I think my customers have had patients with me that and are willing to give us a chance.
We are having talks internally about, you know, reinvesting some of this growth into
better customer amenities and starting to transition the conversations from just
how much are we growing our accounts or gross to also focusing on retention?
Who are not there yet?
So back to the question you asked.
If you look at the customer's options at the five nearest Chrysler Jeep Dungeon dealerships,
it can take two to three weeks to get in.
And if I have a customer that is going to drive 30 minutes to get their car looked at
in a couple of weeks from when they have their problem at a labor rate that's also higher than
mine, it's been surprisingly low friction.
That's a good insight.
I mean, you're just saying something very true, which is people pay for convenience.
And so if you can get me in today, I will pay a premium for that,
especially when other places cannot.
You know what's interesting?
I just saw there's this viral post about United Airlines and their percentage of
first class seats to economy for the first time ever is disproportionately skewed towards
business class.
So you have more Polaris seats than economy.
I looked at it and I'm just like, wow, obviously it's different than what we're talking about
here, but it's similar in a sense that if there's a market out there, people will pay
for that added convenience and someone is capitalizing on it in a big way.
I don't think we've ever seen that.
I mean, the experience has gotten so a certain pocket of consumers at least that can will pay
a meaningful premium.
It's like, I think it's like eight to 10x more on average than the average economy ticket.
So pretty remarkable how the economy is really K shaped.
And I see you nodding.
Have you seen that deal?
Definitely, in terms of the bigger economic condition we find ourselves in.
But I'm listening to myself thinking this is really relevant for dealership service experience.
If warranty customers in particular, they don't have the choice of going to a dealership,
whether they are enjoying the experience in the amenities or not, which has been
a unique advantage for new car franchise dealers.
But my store in particular, and I think is an industry, let's create a situation where they
want to come back.
Even after that warranty period expires, there's so much, the amount of customers that come back
or go somewhere else, it drops off cliff.
There's a lot of additional opportunity there.
So this first 18 month period, we really focused on growing the company to a position of health.
But I think the next chapter for us is retention and creating us, like you said,
with the example of the airline, a customer experience where they're delighted to be here.
They have relationships with our team.
They trust us and they're excited when they're driving here rather than frustrated.
What do you think are your blind spots?
Like, what are you missing right now?
We can do better with throughput and we can do better with CSI.
It seems like you pinpointed those pretty acutely.
Why do you, like, are you working towards that right now or where are you at on that journey?
I think it's important also to talk about these things because we talk about what we're great at
and the way you get better is obviously talk about where there's opportunity.
I'm curious to know how you're driving towards that and to increase your CSI.
Are you taking any action right now to fix that?
We can do better.
I don't think that we can do everything at once.
If you look at my factory surveys or our Google business page,
there is feedback that shows how we can make actionable improvements.
I think starting in Q3 of 26, the priority is going to be redeploying some of our success
with growth towards the customer experience and making retention a KPI.
But honestly, we could still do a better job.
I think our customers would appreciate if we followed up with them better with updates
once their car is in the shop.
Less over-promising and under-delivering in terms of when a car is going to be ready for pickup
and loaner cars is also a customer friction point.
Lack of loaner cars?
Yeah.
Well, look, you got your couple bullet points here.
We'll have to follow up with you on that and see how you make out on it.
Definitely.
And I'm confident we'll be in a better place by the end of 26 with those things.
So how's the store doing, like the zoom it out for a second here.
How's the store doing overall nowadays?
Again, CDJR, we know, I would say you bought, if 2024 is when you purchased this point,
you were sort of at not middle, but maybe like middle to end of the whole transition period
there, close to it at least, with the CEO and whatnot.
Also, there's prices that we're exorbitantly high or we're raised significantly
over the past couple of years.
How is the store overall functioning?
How do you feel about the brand?
I feel great today and it's been a wild ride.
It's been a turbulence to say the least, but I've been with Stellantis for 18 years.
I believe Jeep, Ram, Dodge, there's a really strong branding behind the products.
I think it was a wild ride, but the team that we've built here over the last 18 months,
we've made a lot of progress.
They feel that there's pride there, there's momentum there,
and everyone believes there's lightning in the air.
How's overall demand trending for you right now?
It seems like, again, just reading through circles,
it seems like we're seeing across the board lots of new car gross compression.
And I haven't seen anyone tell me my gross expanded on the new side.
Let's put it like that.
But it seems like that's been adding a lot of pressure to dealers nowadays.
How would you say, how are you trending overall when it comes to the different departments?
I saw your post this morning about the Cox Automotive Outlook for 26,
which mirrors what you just said.
Variable guys, we measure ourselves with how many cars we sell
and what the gross profit per unit is.
And it's definitely been a great lesson for me in patience and flexibility.
It's been hard.
And a lot of the levers that have worked well for me in the past,
or put me in the position that I am in today, they're not working as well.
And I do think that if we focus on the things in our control,
our response time, the quality of discipline in the CRM,
how strong our walk around or the presentation is,
is a salesperson getting up and doing a video on that new internet lead.
There's a lot of things in our control where we can ask ourselves,
are we doing everything we can to drive performance in variable?
We're trying.
But it's harder than it was a few years ago.
You mentioned there was some levers used in the past that aren't working as well today.
What are those levers?
What comes to mind?
Price, merchandising and advertising.
Or the big three, headcounts.
In sales, if I would walk into a new dealership and I wanted to go to the sales department,
the three things that I would look at first is inventory levels, advertising and headcounts.
But focusing on the quality of the photos, the V-rank or the price comparison to similar
vehicles for sale in the area and how much we're spending in advertising,
they're not driving the same incremental improvements that I've been able to pull off in
the past. I read about you that at one point automotive ventures said that in 2022 you had
a startup that was most likely to hit a billion dollars. You've been active in auto tech.
How did you get into that? Can you tell us about that? I'm going to parlay that into just broader
technology trends here in automotive. What was the startup and why did automotive ventures
peak their interest? Tell us about that.
Inside my family as a multi-generational car family, in my early 20s, undergraduate and
school trend as soul search, I always thought my role in the family business would be to
transition or evolve away from the traditional retail car model. I didn't know what that meant
at the time. I still don't know what that means, but with EV, AV, direct sales, AI, all these things
going on, I'm skeptical that I might be able to get out of this, but I'm skeptical that my
children would be able to have a 40 to 50 year traditional automotive retail career experience.
And just having that deep feeling in my guts throughout my 20s and still in my 30s,
I became passionate about entrepreneurship. And there's problems everywhere or opportunities
to do better everywhere inside a dealership. So that project you're referring to in particular
is a business called No Smoke. I invented a way to measure whether or not a pre-owned car had been
smoked in at levels that are dangerous for the future occupants' health. And I do believe objectively
that heavily smoked in cars are worth less money and harder to sell. I realized as a general sales
manager focusing on used cars at Huntington Beach that we were losing deals selling if a car had
a heavy smoke odor. And it originally started as a color changing sticker that rental companies
could use or loaner cars could use to enforce non-smoking penalty fees in the vehicles,
but it eventually became a device that we would measure if there was smoke residue in the
upholstery of a car. And we made a vehicle history report kind of like a car fax that would go over
whether a car had detectable levels that were toxic or not. I shelved that company when I acquired
this business, still have the IP, but the achievement that I'm most proud of is a law passed in
California in 2025 where all homes sold will require disclosure of, it's called third-hand
smoke, but is there toxic residue from previous smoking? And I do see a future where that could
be on a used vehicle history disclosure when selling or contracting a used car sale.
Why is that important to you? That's extremely niche, which is rich is earned in itchers,
as they say, but why was that specific mission important to you?
What started off as an appraisal tool as a car guy? I just realized that there is a global health
issue here. So the more that I looked into the situation and you look into how many people
smoke or with the current rates of smoking in our population and people sitting in an enclosed
space like a car driving for extended periods on the freeway, it's just, I think that team,
that project discovered a legitimate health crisis. But what I'm really passionate about
is finding problems inside dealerships, inventing a solution or tinkering with solutions. And if I
think there's a spark there, incubating it inside the auto group and then trying to roll it out
outside the group, depending on how successful it is. And that's something that I want to use
as a recipe for my entire career. Have there been any other problems that you've identified
within the dealership and solved in some creative way? Yeah, I haven't announced this before coming
on your show, but we use it internally. I've been working on appraisal AI. So most dealerships have
a trade log where they document all the cars that they purchased. A best practice that I use to
manage my sales department's acquisitions of trades, auction cars or street purchases
wherever they're coming from is I reappraise the cars daily and look on a month-to-month basis
per acquisition source, their position relative to MMR to book and how much equity we're going to
have in the ad price, what the day supply is. You do that for a long enough period of time,
you have a robust data set on what a good purchase is. And I stacked on top of that,
scraping publicly posted private party listings on Facebook Marketplace offer up Craigslist
and created an automated sequence where you scrape the vehicle, throw it through
an API with the auto that appraises the car. If it looks attractive, sending an automated text
message to opt in and then it would pass off at the appointment stage to a live agent at the store.
So what was the novel part here? Was it just a customer communication part?
I started experimenting with that in 2021, 2022, I don't know, a few years ago.
At the time, there was more arbitrage opportunity at saying, hey, let's pause, buy less at auction
and try to grow direct-to-consumer purchases.
Do you feel like there's less opportunity today to do that?
I do. If every dealer is talking about street purchases as the name of the game,
it's no longer a trade secret. But use car supplies down, the quality of cars at auction
is degrading. The average car on the road has been on the road longer, it has more mileage,
so acquiring inventory is getting harder and harder. And I do think it's a very important
part to a healthy use car operation to acquire vehicles from consumers and off the drive.
But we're facing headwinds in use cars at my store and we haven't quite figured it out yet here.
How many cars are you currently acquiring from the street and from the drive?
25, 30.
And so do you feel like you've cracked that nut or do you feel like there's still opportunity?
I agree with you, it's a lot more consensus for sure. One could also argue that there's
still a blue ocean out there of plenty of consumers that will need to sell that car
one way or another. But what's your feeling overall? Do you feel like you guys are
excelling at that right now or do you feel like there's lots of opportunity for you?
There's still more equity in street purchases than there are cars from other sources,
so it's like getting more trade-ins. At a certain point, acquisition,
this is the first time I've ever been in this position. I never thought I'd be saying this,
but at a certain point, you don't need to acquire more inventory if you can't turn more.
Two months ago, we completely stopped buying cars at auction.
And wow, that's bold, completely zero, not one?
For two months, no, we haven't. And I thought that it would help me improve our sales volume
or velocity or something. And you could continue to grow street purchases if we wanted to.
We currently use car gurus and we use the drive, but there's additional avenues
to grow that that are available. But I don't need more cars. I need to do better at selling them.
Why did you decide to go that route versus say, hey, only X.5 plus CRs that are X below market
or why set a hard line and not cherry pick? What's your framework there? Is it a focus?
Like I don't even want to deal with that or what is it? I'm used to cherry picking.
If this was a larger use car operation, I think you have to. But for me, in this moment,
when this team made that decision, it was because of aging. And the thinking was,
the aging was based off of the inventory rather than pricing or merchandising. And we're still
trying to figure that issue out. But two months ago, the experiment was, hey, if we can only stock
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