Latest / Auto Collabs / Applying Farming Principles To The Service Drive To Harvest Customer Retention with Nick Shaffer

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Applying Farming Principles To The Service Drive To Harvest Customer Retention with Nick Shaffer · Auto Collabs

• 0:00
  Cirillo wearing a polo shirt for the first time ever on an Auto Co- Auto Collabs podcast. I'm pretty sure this is a first. [upbeat music] This is Auto Collabs. And no glasses. Paul's getting fired.
• 0:17
  Oh, and sunglasses. [laughs] Whoa. Now he throws on... It's, it's Cirillo Miami. That's my new thing. I just put the word Miami at the end of someone's last name, and it makes it, like, cool.
• 0:28
  But you can go- So Cirillo Miami. No, it's Rillo Miami. Rillo Miami is his rap name. Rillo Miami is better. For sure. What kind of hip-hop does- what kind of hip-hop does Michael Cirillo deliver? Oh.
• 0:40
  Um, m- guys, there's this one episode of Paw Patrols- [laughs] No... where they bring a beat. I, I, I could... You couldn't have given me those two words- No, I think it's like-...
• 0:52
  as, like, ad lib and me known in, like, three years have guessed that. No. Ad lib. I mean, like, pivoting off the Canadian thing, it's like, have you ever heard, like, French hip-hop? It's amazing.
• 1:03
  But that's what, that's what Michael's, that's what Rillo Miami delivers. French hip-hop. French Ca- French Canadian hip-hop. [laughs] Every song would be titled May I Go to the Bathroom, Please?
• 1:12
  Because that's the only phrase I took out of all my years learning French in high school. [laughs] I mean, he, uh... [laughs] I, I, I have no idea how we're gonna talk about today's guest after that intro.
• 1:24
  [laughs] I do like that- No clue... Green Day album where every song is the same chord progression but in a different key. You know? Isn't that every Green Day album? Yeah, that's true.
• 1:33
  Not that Green Day album, it's every Green Day album. [laughs] Oh, my gosh. T- today we're, we're sitting down with somebody new for us.
• 1:41
  I mean, not like we've never met before, but we've never had him on any content, I don't believe. Nick Schaefer- No... of TVI, uh, Market Pro, Market Pro. Um, gonna sit down, talk marketing.
• 1:51
  Um, I'm gonna ask him about his recent move, because I know there was one. So, uh, we'll get into that. We hope you enjoy this interview, uh, with Nick Schaefer. [upbeat music] All right, Nick, here we are.
• 2:04
  You're all the way in Texas. Thank you so much for joining us today. Thank you for having me. You know, one of the, one of the topics of conversation is that you've had a recent move- [laughs]...
• 2:15
  from, uh, one part of the country to another, who is a bit of a, I will call it, a distressed region at the moment. Yeah.
• 2:22
  H- Hou- Houston's in a better way, but I, I'll tell you what, now that I've experienced both, I'll still take hurricanes, uh, hurricanes over earthquakes. They at least let you know they're coming. Yeah. Oh. Right.
• 2:31
  Buddy. All day. So- Yeah. Just moved to Houston from Northern California, um, and enjoying being here so far. That's great.
• 2:40
  So, um, you know, you, you mentioned, we ask questions sometimes in the pre-show notes, and it says you love to mountain bike. Yep. And, uh, Texas probably is not, like, really well known for mountain biking enthusiasts.
• 2:51
  [laughs] No, nuh-uh. [laughs] Nuh-uh. And you know, I, I kind of, in the back of my mind I thought, "Okay, I'm gonna get there, I'm gonna bring my bikes, I'm gonna give it a shot.
• 3:01
  Worst case scenario, it doesn't work out, I can sell my bikes and buy a road bike." Like, it would break my heart to do it.
• 3:07
  No offense to any roadies out there, but, uh, road biking here doesn't appear to be a thing because there's no bike lanes and, uh, and yeah, they're out there coexisting with cars on frontage roads, and I, I'm not sure I'm down with that, so.
• 3:19
  And there's no one to sell a mountain bike to either. That's, that's a fact. [laughs] J- I mean, you just gotta just go one step further from road bike and get- I knew it was coming... a, a man's bike. There you go.
• 3:29
  I- And then we'll go- You're saying motorcycle... we'll go do a cruise. Yeah, yeah, yeah. Yeah. A bike. [laughs] Fair. Okay. Oh, I know, I know. I just had a, a...
• 3:36
  [laughs] Now that we're going in this direction, let's get back to business, right? [laughs] Uh, you, you've have, you've have quite an extensive history, especially on the fixed op side of the auto industry.
• 3:45
  So I love it that, like, we can introduce you to some new people, and we love it when there's actual dealer experience.
• 3:52
  We think that's the most valuable, just to establish the fact that, like, "I have been on the front line." So why don't you give us a little background, uh, a quick second flyover. For sure.
• 4:00
  So, uh, got into automotive retail in 2005. It's a great time to get in the automobile business. Uh, worked in retail for 11 years. Uh, 10 of those 11 years was with the Hendrick Automotive Group.
• 4:11
  Fantastic organization, great culture, great reputation. Um- Yeah... and I'm proud to have managed service departments for Mr. Hendrick.
• 4:18
  Uh, I started off writing service, became a service manager, director over three stores, uh, and when I left automotive retail to come to work for TVI Market Pro 3, uh, I was a fixed operations director over an 11 store group in Northern California.
• 4:33
  Very cool. That's busy. What, uh, and what was the, uh... Like, did you, had you always dreamed about being a service advisor or being in the auto industry? Or was that kind of like, "I don't know. Let's just do service.
• 4:44
  Write service"? L- like a lot of, like a lot of people, I found the automobile business kind of by accident.
• 4:50
  Um, I was, uh, working out every morning in a gym next to the gentleman who was the general manager, uh, of the auto mall that I first, you know, earned employment with.
• 5:00
  And every morning we would just have banter back and forth, and over the course of six months we developed a good friendship and a mutual respect.
• 5:09
  And, uh, I perceived him to be someone who was wildly bright and motivated and talented, and he saw something in me and asked me if I would come to work for him. Very cool.
• 5:18
  So, I, you know, one of the things that I think our industry doesn't get enough is conversations more broadly with people that have expertise on the, on the fixed op side. Mm-hmm.
• 5:28
  Um, it's, you know, a, a lot of conferences or, or content is derived from variable and marketing. Mm-hmm. Right? Like, those are the places where there's not a lot of HR, there's not a lot of fixed ops- Mm-hmm...
• 5:40
  there's not a lot of accounting in the kind of like content ecosystem. And so learning from people that are...
• 5:48
  E- e- even just, like, taking the experiences that you had there and, and, and putting them into your current work.
• 5:54
  Um, when, when you think of, like, now that you get to see a much more broad, uh, spectrum of the entire retail industry, um-What, uh, maybe like can you point to one or two things that you think fixed ops is doing that, or that you were doing, that maybe the rest of the, the, the industry, especially from like the different portions of the dealership, could potentially learn from, like, that mode of operating?
• 6:23
  Absolutely. So there, there's been a pivot in, um, fixed operations in automotive retail over the last, depending on the manufacturer, one to 10 years.
• 6:36
  Where previously retail dealers were really, really focused on measuring customer satisfaction. And- Mm-hmm... come to find out, customer satisfaction or how a client filled out a survey
• 6:49
  wasn't necessarily a leading indicator as to whether or not they would come back and transact business again with that dealership. Sure.
• 6:55
  So there's been a pivot from focusing on customer satisfaction to focusing on, how do we actually measure whether or not we're actively retaining this client?
• 7:05
  And I think that that's a very smart pivot, but it only seems to be a focus in fixed operations. Does someone, you know, do business with me on a service repair order? And if so, do they come back?
• 7:16
  If not, why, and what can we learn from it? Um, I think that that's an important thing to look at that c- should be focused on in any business, quite frankly, especially retail.
• 7:26
  But I don't see a similar focus on the variable side of things. If somebody bought a car from me, why didn't they buy their next car from me? Now, I get that- Hmm...
• 7:33
  it's a much longer sales cycle, so it's harder to measure with a, a, a gajillion variables.
• 7:38
  But, um, anyways, from, from a fixed ops perspective, that's a focus the industry is taking that I appreciate and hope it continues. And I think it's in the best interest of both the dealer and the client. Dealer- Yep.
• 7:50
  Agreed... to focus on providing the client a better experience, fair pricing, and being transparent. Um, and in return, the dealer earns the loyalty, which is, of course, going to be financially beneficial. Yeah.
• 8:01
  Yeah, and not just that, but as a percentage, the number of people that fill out a survey, whether it, telling you whether or not they enjoyed their experience compared to the overall volume of people that are continuing to return, is dramatically disparate.
• 8:17
  For sure. Right? A fraction of a fraction. And so a fraction of a fraction. And so if you're focusing on that larger majority of like, are these people coming back in? Am, am I retaining them?
• 8:27
  Do they want to do business with me again? I... That is a massive shift. And I think
• 8:33
  that shift is not just happening practically from the OEM perspective, but over the last two and three years especially, the volume of times that I've heard lifetime value of a customer, or retention marketing, or one-to-one service or sales marketing that, like, is intended to bring someone back, has, like, risen at the same time.
• 8:56
  Mm-hmm. Mm-hmm. Are you seeing that? Yes. You're like, "Absolutely." Yeah. Done.
• 9:02
  I mean, it ki- [laughs] Like, the part of that conversation, just like, it gets me back to a conversation we've been having broadly marketing, um, amongst us, is net promoter score. Mm-hmm.
• 9:12
  And it's like, it's so much simpler than people make it, I think. And sometimes the other stuff drives the wrong behavior- Yep...
• 9:18
  and ignores a big, a big part of, like, are you gonna come back, and are you gonna tell your friends this is a good place? Yes. Yes. Well, and
• 9:30
  I mean, just being completely honest, I think that there are some dealers out there that embrace the retention focus. Mm-hmm. And I think there are a lot that are doing it half-heartedly.
• 9:41
  They realize it's important to the manufacturer, therefore it's important to me, and if I do well at it, then my business does well.
• 9:47
  But, I mean, as a marketing partner, w- we have had several dealer partners in the past that thought that they could just push the easy button and pay a marketing company to just market to their clientele in a way that would bring them back.
• 10:01
  But really, they kind of washed their hands- Hmm... of the responsibility of operating a business that had a transparent experience with low turnover. And,
• 10:12
  um, and unfortunately, there's, there is no easy button for, you know, for retaining your clients. It requires everybody to do the right things at every step.
• 10:21
  Um, and, you know, the dealers that are, that understand that and are fully vested in doing the right thing at every step, they're definitely reaping, reaping the rewards of their efforts collectively.
• 10:33
  But those that are trying to push the easy button and pay a vendor or a consultant to fix it for them- Mm-hmm... th- there's no, there's no easy fix. Yeah.
• 10:44
  Y- y- you know, this is interesting, what, what you just said, because isn't that where the disconnect is? Yes. Most companies' intention is, "I'm bringing you in to fix it."
• 10:56
  That company knows intentionally they don't fix things. Correct. Th- Hmm... they're, they're not a fixer company. They do a thing. Mm-hmm. But it never gets talked about.
• 11:08
  And so now, right out of the gates, relationship is destined for failure because they know what they do, or they know what their expectation is, they know what they do, which is not the expectation.
• 11:19
  And, and here we have this perpetual issue that arises in our industry. Without a doubt. Without a doubt. And at the end of the day, it takes a village, right?
• 11:28
  So our most successful dealers with client retention are those that understand that it takes a village, and they make sure that they develop open lines of communication with all of their employees, all of their vendors.
• 11:42
  Everybody partners together and gets in the boat and rows in the same direction. And it just works so much better in that kind of culture compared to when there are silos throughout. Hmm.
• 11:54
  You've got a marketing company that's sending offers out to clientele, but the service advisors have never seen the offers and don't know how they're strategically intended to touch customers. Oh, it's gotten worse.
• 12:04
  Or, uh, you've got-You know, i- in a larger automotive organization, you have a marketing department that's in some building somewhere that's not attached to a dealership, pushing buttons and pulling levers that aren't getting communicated to the store.
• 12:18
  Um, or even if there is communication, sometimes there's such a high level of turnover, it makes it very, very difficult to keep the message and the vision and the goals forefront in the staff's mind because the staff is different this month than it was last month.
• 12:32
  So there's a lot of challenges, but, um, the, the common thread seems to be the dealers that understand that it takes a village, it takes vision and focus and, and discipline.
• 12:43
  Um, and it's not just a, "I need to do one thing one time." It's, it's kinda like farming.
• 12:48
  You know, if you plant the seeds and sow the, sow the field and water it every day and sing to it every day, and make sure the conditions are right, and you do the right things every day for 12 months, you might have a crop next year.
• 13:02
  Um- You might. Might. And- See, that's why I was never good at farming. Yeah. Because I never sang to my plants. [laughs] I never- I was gonna say, you're full of crap, 'cause you're a music major.
• 13:12
  You're f- [laughs] You totally sang. But that, that- You sang to nothing... that's a big adjustment for car dealers, because most car dealers didn't grow up as farmers. They grew up as hunters.
• 13:23
  They grew up in an environment- Ah... where it's like, "Today I'm gonna go to work." Ooh. "I'm hungry. I'm gonna kill something. I'm gonna eat, and then I'm gonna do it again tomorrow."
• 13:30
  It's a completely different mentality- Gee whiz... to growing a crop. Oh, he went farmers not hunters right there. No, hunters, gatherers, it's like, that is a very clear, like, sales and service mentality. Yes, it is.
• 13:44
  Yes, it is. Look at that. I'll think about that one there.
• 13:46
  But it also ties perfectly into what you said earlier, which is it requires a village, because in the months that the hunter can't eat 'cause there was nothing to kill, they rely on what the farmer sowed in the field.
• 13:57
  Yep. 12 months ago. You got it. Months ago. Ooh. You got it. And sang to. Yeah. Oof. Oof. [laughs] I mean, that's... Everything- The implications of this metaphor are deep. [laughs] I know. I sense- I love it. I know.
• 14:10
  You never know when that's gonna come up. It just kinda happens. Not only that, we just pleased two very diverse demographics. Yeah. Both agriculturalists- [laughs]... and salespeople alike.
• 14:21
  They were like, they were both like, "Yeah." [laughs] There's... We're gonna get a bunch of, like, Dutch potato farmers tuning into- [laughs]... this right now, and we're gonna be like, "Where'd they all come from?"
• 14:30
  Well, what, what, what I'm looking forward to is when anybody who knows me and knows me well watches this, they know that I am just full of lame analogies, and it's a matter of minutes, not hours, before one comes out- [laughs]...
• 14:43
  in conversation. So I'm, I'm sure that at some point in the future- I mean, I've never heard that word in my life. [laughs] A lame analogy. Yeah. That's amazing.
• 14:50
  So at some point in the future, people that know me well are gonna look at this and laugh a little bit. Sounds like a Jamiroquai song. [laughs] Lame Analogy. Goodness. Lame Analogy. I forgot about that band guy-ish.
• 15:01
  [laughs] I have to show my son that video.
• 15:03
  You know, you were, uh, like, just in conversation and in a couple messages, you've kinda shared that, um, you know, you're always, you're always kind of, like, trying to stay on the bleeding edge of what's going on next.
• 15:17
  And, um, I'm- I'm sure that serves your company very well. Right.
• 15:22
  But, um, you were mentioning to us that, that you wanted to kinda chat through something that you're seeing specifically with people that are kinda looking at this mobile service drive- Yeah...
• 15:31
  as an opport- opportunity for retention because, um... Well, and when I think about mobile service, I think of it as the dealer's opportunity to own retention. Mm-hmm.
• 15:40
  Um, where we've historically been reliant on the client to be very, very, like, in the- Mm... driver's seat of whether or not we get to retain them, right? Yeah.
• 15:49
  And, and mobile service has the other effect, because we get the opportunity to be the pursuer instead of, you know, uh, kind of waiting- Yep... uh, for someone to come.
• 15:58
  So what are you seeing in that, that arena that's kind of like t- shifting the game right now? Yep. So you, you're right to say, Cal, that we try to stay at the bleeding edge of technology.
• 16:08
  But I always come back full circle to something that I truly believe in my heart, and I believe it so much that it's in my email signature. And it says- Hmm...
• 16:19
  "The greatest successes were built on the greatest fundamentals." And oftentimes fundamentals aren't sexy to talk about because they're not whiz bang.
• 16:27
  So, um, let me answer your question by telling you a story about someone that I met actually at the most recent ASOTUCon.
• 16:33
  So there was a keynote speaker that is the fixed ops director of a big Ford store with a very successful mobile service program that was up there talking about how he does it, where it started, where it grew to, but- Well, that narrows it down to specifically one person in this entire industry.
• 16:50
  Yep. [laughs] So a- I mean, I w- I was fascinated, okay? And after his keynote was over, I was first in line to talk to the guy.
• 17:01
  And anyways, I asked him, you know, as, as a marketing partner to, to our dealers, I wanted to know what did he do to market that department? How did he get the word out? How did he build it through awareness?
• 17:14
  And I was expecting some sort of extravagant, intricate marketing campaign that we just haven't been smart enough- [laughs]... to think about yet. And he's... it wasn't any of that.
• 17:24
  It was the most refreshingly fundamental answer. He said, "Nick, we got the handoff right from the sales department to the service department at the time that the vehicle is sold."
• 17:35
  And I thought to myself, "Hey, if, if you've got that right, you're in the fraction of the fraction of a percent," because- That's amazing...
• 17:42
  so many, so many dealers have tried to get that right and either did and then lost the discipline or just never got it right to begin with. But- Mm. Right... he said, "It's really simple.
• 17:51
  A client buys a car from us, and they are brought over to the service department, and I have a dedicated space in my service department where my mobile van, I have one of my mobile vans on display with technicians constantly doing a maintenance on some sort of vehicle, m- usually a used car, for the clients to just watch the process and- Oh my goodness...
• 18:13
  experience the process- Wow... in the service department. And the expectation is just set"Hey, Mr. Customer, when you're due for your first service, here's how we're going to take care of you.
• 18:22
  We're gonna come out to your work or your home, and this is Billy. He's the technician that's probably gonna service you.
• 18:28
  We have 18 Billys, so it might not be Billy, but it's gonna be someone that looks like us and walks like us and talks like us, and you can trust him or her, and we're gonna do a great job for you."
• 18:37
  And the client got to see it and experience it and envision it being convenient for them to use, adding value to their day. That's, it's literally... Okay,
• 18:49
  that's extremely fundament- fundamental, but also extremely radical all at the same time, right? Since I've been in the car business, I got in in 2009, every single training that I've ever gone into has been,
• 19:03
  when you're delivering the car, part of your delivery is the, is the post, post-sale service walk. Yep. Introduce the service advisor, show the person how to drive in.
• 19:12
  Basically, put their mind in how do they engage with the service department. But now you've got this mobile thing that they can't really dream up. Right. And you just basically create this li-... Oh, my.
• 19:25
  It's right there in front of all of us, and who... I'm speechless. [laughs] Well, this is, this is what I love about innovation. Like, why would you not do that? Yeah.
• 19:35
  Well, this is what I love about the concept of innovation, because it's available to everybody. Yep. They, e- everyone could do this right now. Yep. Uh, and, and in so doing, it creates this n- it, it becomes...
• 19:49
  I wrote down, it becomes part of the experience of purchasing a vehicle. It does. Like, a demo on the service side. No different than going on the test drive.
• 19:57
  I mean, why does the sales manager want the salesperson to get the customer in the car to test drive it? It's so that they can envision their life in that car. Mm-hmm.
• 20:06
  No differently than you take them out to watch the mobile service process at work. It's so they can actually see and envision- Yes... that happening and benefiting their life.
• 20:14
  And then, of course, you know, the next thing that the salesperson does is, "Hey, let's go over to Muddy Soul. She's one of our service advisors.
• 20:21
  She's gonna go ahead and book your first mobile appointment for six months from now." So. Right. Uh, and it's just set up. [laughs] But who were we just talking about this with?
• 20:29
  We were like, "You don't go to the dent- You can't leave the dentist without booking..." Was it not you guys? Must've been someone else. I'm telling you, it's the retention playbook.
• 20:36
  Not, but my dentist is dialed in, man. Yep. That's the, that is the retention playbook. They make a lot of money in the car business. [laughs] I'm telling you, if everybody got that right, it's the retention playbook.
• 20:46
  Schedule the next service appointment. And if you're doing it mobile service, you get to own the appointment. Yep. So- 1,000%. 1,000%. It's just... Yeah.
• 20:53
  Because you don't have to worry about that person having to, like, break their day to come find you. No, what, what needs, what needs to be said is that obviously this dealership is
• 21:04
  investing in the future of mobile service, because they're choosing to have two technicians changing oil in the service drive, not in a customer's driveway, but in the service drive, just so that they can help customers envision what that process looks like.
• 21:18
  I mean, that's an expense, right? Now, granted- Mm-hmm... if you're doing it on a used car, someone was gonna have to change the oil on it anyways.
• 21:24
  But someone could argue that those technicians' time is better spent doing something else, but not, not this operator. So I, I applauded his vision and his investment in that. Nick, I'm telling you what.
• 21:37
  Sh- sh- sh- Between farmers and hunters, and the value that you dropped on, like, what to do on a service drive, and then the thought process of moving from, you know, CSI to lifetime value, I think that this has been a v- If someone's listened to this and didn't get, like, three things they're going to write down- Watch it again.
• 21:58
  Right... go back. Try again. [laughs] Appreciate that, Kyle. Thank you. Uh, absolutely a pleasure to hang out with you. And, uh, on behalf of all of us, thanks for joining us on Auto Collabs. Pleasure's been mine.
• 22:10
  Thank you guys so much. [upbeat music] Before, before we get into it, just a note. Okay. Because we record the, this separately than having the interview just now, you have to know that after we recorded the intro,
• 22:28
  our, our trusty production manager fact-checked us on the Michael Cirillo wears polo first time on Auto Collabs. [laughs] It seems as though the very first Auto Collabs recording that we ever did- No, he did not...
• 22:44
  had Michael Cirillo in a polo. That's true. Done muddy. Wait, hold on. Are we allowed to- That does count... bring him on for a second and ask him how- We literally just rolled it in the intro... you found that so fast?
• 22:56
  [laughs] Well, I had a hunch. [laughs] And so I just went with my hunch, and, uh, yeah. We're gonna put the picture up on this now. You just created more work for yourself- [laughs]...
• 23:08
  'cause now we have to show the people what you mean. [laughs] So there you go. Now you gotta put the photo up. Or- He had a hunch...
• 23:13
  you could just go to the YouTube version of this video and watch the intro where there's video evidence- Whoa, scroll back. Scroll back... of Michael Cirillo in a polo. [laughs] Sideways. Sideways. All right.
• 23:24
  All right, fine, Mr. Hunch. The, the funny thing is I think this might actually be the same polo that I'm wearing in that first episode. The difference is- It looks a little baggier... in the times, is a little bit...
• 23:35
  It fits me like a muumuu now. [laughs] I'm too cheap to buy new clothes. Oh, no. Oh, no. Hey, speaking out, speaking of, uh, going out and hunting for new things like clothes, but maybe
• 23:50
  growth and opportunity, uh, Nick- The hunting/gathering thing was on point. Right? It was, it was on, yeah. Right? I, like, had to get stopped in the middle of it. Yeah. Yeah. [laughs] I mean, it's... Go ahead.
• 24:02
  Well, I, I've been just thinking, like, my mind's been spinning on you, you need both, but usually if you're one or the other. If you're a, if you're a, a farmer in this scenario, then you think you...
• 24:16
  So you're prone to thinking you are more valuable than the hunter. And if you're the hunter in this scenario, you g- you're prone to think that you're more valuable than the farmer. But the reality- Mm-hmm...
• 24:26
  is you, you need them both. If you want steak, if you wanna eat steak frites, you certainly do. Right. Well, and if you wanna eat grain-fed beef, you need the farmer. [laughs] There you go. Great point.
• 24:38
  Well, hey, uh, you know, I think that this is a valuable lesson for us, that it's just, hey, look, we need different types of partners, different type of, of people that are engaging in the auto industry that understand what it takes to farm and cultivate relationship.
• 24:51
  Mm-hmm. What it takes to hunt, and go out there and do the diligent thing on a day-in, day-basis to go find, uh, the next thing. So, hey, Nick, thanks for giving us that little nugget.
• 25:00
  And thank you for hanging out with us. So on behalf of Paul Jay Daly, Michael Cirillo, and myself, Kyle Mountsier, thanks for joining us on Auto Collabs. We will see you next time. Drop a verse, MC. Go ahead. Boom.
• 25:12
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• 25:29
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• 25:37
  [upbeat music] Welcome to Auto Collabs. [laughs] Are we recording? [laughs] Are we rolling yet? Not yet.