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The Auto Dealer's Covenant with Eric Flow · Auto Collabs

• 0:00
  Does anyone know what their grandfather did for a living? [upbeat music] This is Auto Collabs How about your great-grandfather, actually? I'm gonna go there. Yes. My grandfather, yes. What did he do?
• 0:17
  My grandfather was primarily with P- P&G. Um, so if you know Procter & Gamble- Proctor & Gamble... they make, like, all, half the world's, like, disposable- Everything... goods for your family. Package goods, yeah, yeah.
• 0:29
  Right, package goods and stuff. Um, he spent years and years with them. Um- Doing what? Just everything. I mean, he was a, a, an engineer. Okay.
• 0:38
  Um, so he worked across the organization on a ton of different P&G projects. Um- And your great-grandfather? So my great-grandfather was...
• 0:49
  There's, like, stories about, like, a lot of people in my family, uh, on the, on that side and, and- [laughs]... they all get mixed up. Um, but m- more of my, the stories are my uncle, my uncles. Mm-hmm.
• 1:02
  Um, like one of my uncles worked on the candy coating of the M&M- [laughs]... which is kind of crazy. Yeah. Mm-hmm. My great uncles, my great... Or my great, yeah, my great uncles. So yeah- Oh...
• 1:13
  that's, like, that's all, all I know about my family. It's kind of legendary, but it also reminds me of, have you ever seen National Lampoon's Christmas Vacation? Yes.
• 1:20
  Chevy Chase, his character, he talked about the crunch enhancer. Oh, yeah. Well, it's a non- [laughs] It's a non-nutritive cereal varnish. [laughs] That, you know what I mean? [laughs] How about Cirilo?
• 1:29
  Guys, my, my head kinda hurt... Well, first of all, my grandfather, um, was, he worked for a utility company when he immigrated to Canada. Before that, he was a farmer and a soldier in Italy. Uh- Hmm...
• 1:44
  my father fought in World War II, or my grandfather fought in World War II for the whole duration of that war, uh- What?... for Italy. Yeah, so we know how that started and how it ended, right? Yeah.
• 1:54
  [laughs] And this- My other grandfa- But this is why my brain started hurting, because I'm like, "Wait a minute, I got two grandfathers, but then I got four great-grandfathers." Wait, oh yeah. Did you? That's right.
• 2:07
  And then I got- Weird... eight great-great-grandfathers, and I'm like, "Well, now I don't know what I'm doing." Hmm. Right? But my, the ones I do know about, so let's see.
• 2:16
  My other grandfather, my mom's dad, was military police and a police officer in Portugal. Of course, they were neutral during the war.
• 2:24
  Uh, and then, uh, his dad, I don't know, but my other grandfather, great-grandfather, was a tailor. He made suits. Hmm. Well, here's, here's what, what I know.
• 2:34
  This is the only thing I know about grandf- great-grandfathers and grandfathers, is Paul and I know something about a great-grandfather in this story, and
• 2:44
  we're talking to Eric Flo today, and our challenge to you is to get the answer to the question about a great-grandfather. So if you so accept it, we hope that everybody enjoys this conversation with Eric Flo.
• 2:59
  [upbeat music] Eric, thank you so much for joining us. It's great to have you for the first time on Auto Collabs. Thank you, Paul. Uh, excited to be here.
• 3:11
  Really excited to, uh, get to know you guys better and appreciate you having me.
• 3:16
  So, um, I have to say, there, there are organizations around the country that you look at and you kinda know right out of the gate that they approach the people side of the business with a different level of intentionality, and your group is definitely one of them.
• 3:31
  Can you just tell us, like, what you focus on as your center point for your culture? Yeah, so I think, you know, for us, um,
• 3:42
  both the focus on intentionality around the customer and the employee, 'cause they're hand-in-hand, one doesn't happen without the other, has been part of who we've been since the very, very beginning.
• 3:53
  So if you go back to organization, um, to the late '50s, you know, we started, uh, my grandfather started a business and it was a used car lot, and he only sold fully reconditioned cars, and every car came with a warranty, which in the '50s was unheard of.
• 4:12
  Unheard of. Unheard of. And so- Right, and we're talking about fourth generation dealer already, but- Yeah, so like- You, you are, but wow...
• 4:17
  this, that level of intentionality, um, around how we're gonna treat people, both externally and internally, has been a part of who we've been for forever. And, you know, we've really fostered that culture.
• 4:29
  My, my father has driven that and, and I have as well. But, um, you know, it's really something that we talk about from the very beginning, is how we wanna treat ourselves.
• 4:37
  We talk about having a covenant with, relationship with our customers. We wanna treat customers like a guest in our home, and we wanna treat our individuals as, as teammates.
• 4:43
  Did you say a covenant relationship with your- Yeah. clients? That's big.
• 4:48
  So if you read our website, we sort of have our three Cs, which talks about covenant, community, and commitment, and that's really how we think about that relationship with our customer.
• 4:57
  And inside of our, inside of our, um, company with our employees, it's a very similar way, right? And so, um, you know, we think about growing them as whole people. We wanna provide opportunities.
• 5:09
  We think about teach, coach, counsel, discipline, then terminate.
• 5:13
  We think about, um, responsibility, accountability, and authority all being sort of inexorably linked together, um, to help people understand how to grow and what their role is and, and when it's right to hold accountable and when it's not, and do you have authority, are you responsible in that situation?
• 5:33
  And then we, you know, we really think about trying to provide, um... You know, we, we're very cognizant of the fact, like, so if you look at all the data from sociologists, right?
• 5:42
  You look at the amount of time people used to spend in social organizations that weren't work, whether it's church or VFA or the Italian American Club or whatever.
• 5:53
  Those social organizations that underpin American society have really eroded over, since post-World War II. Yeah. Right?
• 6:00
  And so you've got family and you've got work, and that, a lot of people spend more time at work than they do with family.
• 6:05
  And so if you, if-If you have employees that are only showing up for a paycheck, um, it's not gonna be a healthy place. They're not gonna wanna grow and thrive and prosper there.
• 6:15
  Um, and it's not the relationship we wanna have. It's not the company we wanna have, right? Even if it worked economically, which I don't think it does, you know.
• 6:22
  Things can be both the right economic decision and the right moral decision. Um, and so,
• 6:28
  you know, we're really conscious of the fact that we wanna be a place that people can call home, that they can grow with us, and they can be a part of our community for a long time.
• 6:35
  I just, I looked up while you were talking, I was like, "I gotta know," because I've, I, you know, w- I'd use, we use this vernacular in our, in our world, the covenant vernacular.
• 6:44
  And the, the trigger word between covenant and contract, which can sometimes inappropriately be i- ex, uh, interchanged, right? A contract is- Mm-hmm... a legal agreement. It is tick for tack. Right. Right?
• 6:59
  I do this, you do that. If/then statements, right? Yeah. And, and that's what typically, like, if a customer buys something from you, they enter into a contract. That's right.
• 7:08
  If an employee works for you, they enter into an employment contract. The, the key word, and I found it in five different resources, the key word about a covenant is a promise. Yeah.
• 7:20
  It's a, it's a one-way commitment- Yeah... actually. Yeah. Very much so. You know, we, we look at making a commitment to our customers that, uh, we're gonna keep our promises and we can be full of trust.
• 7:34
  Now, we're a human-run organization. Of course, come on. We make mistakes every day, right?
• 7:38
  Um, but you know, I found out early in my career, it's not about if you ever make a mistake, it's about how you handle that mistake. Mm-hmm. And if you try to make up for it, and you try to do the right thing.
• 7:47
  And I've had plenty... I mean, I had a situation, I, I was a young service manager in Charlottesville, Virginia. It was a Porsche Audi, uh, Volkswagen, Mazda location. You know, we had this customer
• 7:59
  with a, uh, 964 911 oil leak, and we fixed it for him, and we didn't fix it for him. And, you know, two, it took me two and a half years and 50 grand to resolve. Oh. [laughs] But we got it resolved eventually, right?
• 8:12
  Um, and they, we spent more money on this car than this car was worth by far. [laughs] But we turned, uh, the customer into a huge advocate for us, right?
• 8:22
  And, you know, we really wanna focus our people on empowering our people to make, to make those good decisions. And- Okay.
• 8:28
  Yeah So I wanna know the, the, the, the dirty part of it, because you grew up in an automotive family. Like, there's no way it was all sunshine and roses when you were growing up- [laughs]...
• 8:38
  and grandpa and dad are in the car business. And like, when was the time where you turned over and were like, "Fine, I'll be in the car business"? [laughs] Or were you, like, tried and true from- You know-... from birth?
• 8:49
  That is a really good question. So I would say this, um, nobody in my family ever said, "You have to be in the car business. This is what you're doing." Ever. Yeah.
• 8:59
  Um, it was always something I really, really wanted to do. It really was. And, you know, it was something I grew up in. You know, I was... It, it snow- You know, it...
• 9:08
  We're in North Carolina, h- headquartered in Winston-Salem, right? So it would snow two or three times a year, like two inches, you know. And I was going with my dad to knock snow off cars.
• 9:16
  You know, in, in middle school, I was going to help wash cars in the summertime, and I wanted to learn to change oil and rotate tires in high school, and paint, paint fenders and things like that. Hey.
• 9:26
  And I liked going, I, my dad would take me to these, um, manufacturer meetings, which by the way, manufacturer meetings in the '90s were fantastic.
• 9:34
  [laughs] Um, you know, different than global financial, pre-global financial crisis, were a ton of fun, right? Yeah. [laughs] And, uh, you know- Okay, tell us about those sto- I'm just kidding. [laughs] Yeah, yeah.
• 9:44
  [laughs] But I always, I always really enjoyed it and, and I knew that's what I wanted to do.
• 9:48
  And I, and I've done some other things, um, that were, I would say, non-career oriented jobs, you know, um, and some internships that were more career oriented between grad school and college and stuff like that, but I, I really always enjoyed it.
• 10:00
  Um, you know, coming out of grad school, there was a time in grad school where I was sitting there thinking, "Do I wanna go straight back in? Do I wanna do something else?
• 10:07
  And have I really committed to this, or was it just something that was... Was it a conscious decision?" And, and like I said, no one in my family ever pressured me, so it wasn't that at all. It was a...
• 10:18
  I, I had, I took a step back to say to myself, "Have I made that conscious decision?"
• 10:23
  'Cause I'm committing to a l- You know, when you're working your family business, you don't leave after five years very often because you don't like it, right? [laughs] 'Cause that's a big risk- Like, once you're in-...
• 10:34
  in a family. Yeah, no. Once you're in, you're in. So I wanted to say, "Listen, I'm coming out of grad school. I've worked in our company post-college four years, um,
• 10:42
  nonstop, really liked it, mainly all fixed operation stuff. Going back in, gonna come out, go run a store," that was sort of the plan. You know, "Is this what I really wanna do?
• 10:53
  And I need to make that conscious decision for myself to say actively yes, not passively yes."
• 10:59
  Because even if people aren't putting that pressure on you, and they weren't, I wanna be clear about that, in my family, it was something that I had just always assumed I wanted to do and had enjoyed.
• 11:08
  And so I took that time to really say, "Yes, this is what I wanna do." And there's a lot of reasons for that. I mean, I'm grateful to our company, it's provided me with incredible opportunities in life.
• 11:17
  You know, I think we have a lot of responsibility to our team members and our communities who we're in. But that alone, all of those things are really true. That alone isn't a reason to do something, right?
• 11:27
  There's a lot of, um... You know, you... I love our business. I love the customers. I love the employees. I also love the challenge every day of getting to use every part of my brain, right? You know, um- Yes...
• 11:41
  my undergrad's in, my undergrad's in business and marketing and Spanish. My graduate degree, I have a m- m- you know, MBA from Northwestern, and my majors were, like, quantitative finance- [laughs]...
• 11:53
  decision sciences, and quantitative marketing, okay? You know- [laughs]... what I do... [laughs] I have a lot of friends that have great careers, but they're pigeonholed into, like, a really,
• 12:05
  really specific- Quantitative finance... focus, right? [laughs] Where it's like, "This is what I do every day." In our business-Hey, you're working on comp plans, you know, a recruiting structure.
• 12:18
  You're working on marketing the next second. I was- Community event, yeah... website meeting yesterday on our relaunch of the website, and this, we're doing the community piece of it.
• 12:26
  We're working on our LMS or, you know, training module. You're working on... You're with the accounting team trying to work on X, Y, or Z.
• 12:34
  And so you're using really, I get to use, uh, every facet of my brain on a daily and weekly basis, and I think that's really, that diversity is fun for me, and it keeps it very interesting. There's never a dull moment.
• 12:46
  Let me ask you. I, this is a pressing question. I'm gonna let Michael talk every, some time before we're done. Um- [laughs] You mentioned, you know, turning wrenches, oil changes, painting fenders.
• 12:58
  What is your, by far, like give me the front runner, what is the best smell in the automotive industry? The best smell? Yeah. Um, I mean, I- I'm judging you... I love new car smell.
• 13:08
  This is a selfish question for me, by the way. Dude, I was like, "New car smell." I like new car smell. It's a great smell. I will say this.
• 13:14
  When we, when I was younger and we were painting cars, you know, we used a lot of brake cleaner. [laughs] Brake cleaner's great. It's a great... It's so bad for you. Oh, yeah. I...
• 13:23
  [laughs] But I'm saying, like, like, there's, there's, like, new tires- Yeah... there's brake cleaner, there's detailing chemicals. There's- Yeah... you know, like reducer. There's all kinds of things- Mm-hmm...
• 13:33
  that just are... Bondo, Bondo dust. Yeah. You just, there's a lot of very unique smells. These are all reasons not to die young, by the way, but, yeah. [laughs] Yeah, yeah. There's a lot of really unique smells.
• 13:41
  And you know, I'm glad to say our industry from a safety perspective has continued to improve and improve. Massively.
• 13:47
  But boy, you walk through some shops, and I'm not implicating any of ours, but you walk through some shops and you see people and you're like, "Oh, boy." [laughs] "Can you put those gloves back on?" Oh, yeah.
• 13:57
  "Do you need to eat the sandwich right now?" Dipping your hands in the reducer to clean it. Like, no, you know that stuff's- Oh, I used to clean my hands with brake cleaner, you know? Oh.
• 14:05
  [laughs] That's what everybody told me to do. Oh, no. Sorry. It's all right. We're gonna- I think we're past the statute of limitations on that, but- Yeah, yeah. [laughs] How does, how does all of the...
• 14:15
  So I mean, th- this, I, I'm just, the boys will tell you, I take notes. I, I'm sitting here, I'm just so enthralled with this. Um, I, I'm kind of curious about the DNA of the organization, where this all started, right?
• 14:30
  So you, you're third or fourth gen. So our company was started by my grandfather. Okay. So third generation. My great-grandfather was a Chevrolet dealer back before the Depression. Okay.
• 14:42
  Got out of the business during the Depression, did some real estate development, did a number of other things. My grandfather, um, was in the Army at the end of World War II, so he's 96 now.
• 14:54
  So he's pretty young for that generation. He's still with us, doing great. And, um, he was stationed in Japan at general headquarters with Douglas MacArthur. Wow.
• 15:03
  And he was actually Douglas MacArthur's courier and aide- Whoa. Wow... for, like, three, four years in, uh, Japan at general headquarters.
• 15:13
  Comes back to America, goes to Wake Forest, wants to get in the automobile business. Uh, gets a job as Henry Ford II's private secretary- [laughs]... um- What?... and assistant. What? Worked, moved to Detroit.
• 15:26
  I mean, I guess one job kind of leads to the other one. Yes. Yeah, yeah, yeah. It was a very close network in America at that point in time, right? Yeah. Yeah. Moves to Detroit, is there for a little while.
• 15:34
  Um, he's from the South. It's cold. It's snowy. There's no EPA. The snow is, like, black, right? [laughs] There for a year and a half or something, says, "I wanna move back."
• 15:43
  Um, becomes a partner in a Ford Store in Elkin, North Carolina. And
• 15:49
  my grandmother grew up, her family was from Arkansas, but she grew up outside of Chicago and outside of New York, and then moved to Winston-Salem 'cause her grand, her, her dad worked for Bell South, which was, had a regional health, headquarter in Winston-Salem.
• 16:01
  So she's in Elkin, North Carolina, which is a small little town. She has my dad. She's, uh, pregnant with my uncle, and sort of like, "Hey, I need to move to a bigger town. Can we move to a bigger town?"
• 16:13
  Um, so they moved to Winston-Salem, um, where he opened the used car lot before we had any new car franchises 'cause he sold out of his partnership in Elkin.
• 16:24
  And, um, actually, my grandfather, when he was opening his first store in Winston, got my great-grandfather, his dad, who had retired and had been a dealer way back, to come be a service manager for him when he opened his store.
• 16:37
  That's so funny. Like, "Hey, Dad, can you come help me out?" sort of thing. So what, what...
• 16:42
  I, I mean, th- this is actually really interesting to me as I, as I think about this, you know, experience in war, Henry Ford's secretary, D- you know, Detroit, all these moves. And I think about at, at what point...
• 16:58
  See, I, I'm, I'm so intrigued by this, I wanna ask the question right. Because when you talk about covenant, community, customer, you know, the intentionality behind all of those things, who, who's responsible? Yeah.
• 17:13
  So I would say, you know, my grandfather started with that culture, sort of in terms of what I mentioned about used cars and et cetera. Yeah. And then my dad really, really grew that culture in a super intentional way.
• 17:25
  So my father went to University of Virginia as well. Um, I went there, my wife went there, my mom went there, my sisters went there, so it's sort of a whole family thing.
• 17:34
  And post-UVA, before he, um, started with my grandpa's business, my dad's a very faithful individual, went to a college in Vancouver, British Columbia, called Regent College, and he was really struggling about how to live out his faith in business at the same time, and can you be a faith-oriented business?
• 17:52
  Can you be a faithful person? Can you be a person who focuses on doing good in the world and in your community through your business? Yeah. Or do I need to go into ministry to really live that creed? Yeah.
• 18:01
  And really, 'cause he liked business, and it was, no, I can, I can have a company and grow a company and have a vision for a company in a way that serves a mission as well for individuals and for our community.
• 18:10
  And then so I would say my, my father is really responsible for driving the orientation, or formalizing that orientation, growing that orientation, and really driving it in that direction.
• 18:20
  And he's very thoughtful about those things, and they're at the core and underpinning of everything we do.
• 18:26
  You know- That's awesomeWe've turned down lots of opportunities because they didn't fit the way who we are and how we wanna live. Mm.
• 18:34
  And we've made lots of business decisions that, um, you know, some people would argue weren't the right decision for the short run, but we would argue are the right decision for the long run.
• 18:43
  And as I said at the beginning, you can do the right thing because of who you are and how you wanna live, and do the right thing because it's the right economic decision.
• 18:52
  I think most of our decisions that we make, and we would make them either way if it was the right thing to do, but I think m- they're all really serve both purposes.
• 19:00
  I think people wanna do business and wanna work for an organization that- Mm... is mission aligned with, um, you know, in that manner. Yeah.
• 19:08
  And I think actually, this is a, it's a question that we come up a lot on because we, like, our focus is a lot around the people side of the business. Thriving people provide thriving profits. But- Yep...
• 19:18
  the question is always like, how do you turn that in?
• 19:20
  Because, you know, we've been on this podcast for, I don't know, 15, 16, 17 minutes, something like that, and a lot of people could be like, "Oh, nap, nap pods and ping pong tables never sell you a single car," right?
• 19:32
  [laughs] But you don't- Well, so we talk about you have to be high care and high challenge. Yeah. And we're a very high challenge organization, right?
• 19:39
  And we like to say, "Listen, a high challenge organization without care is a meat grinder." Mm. You, you get a certain sort of psychological profile that likes that.
• 19:48
  They're not generally great with employees and customers, and everybody else churns and, and leaves on time. High care only is a therapy session. Yeah. [laughs] Right? Yep. And so you have to have both.
• 19:59
  It has to be high ca- hi- high, high challenge and high care. You know, I think a lot...
• 20:04
  My father played football in college and I played football for a long time, and I think a lot of it's that sports mentality of, "We gotta get this first down, we gotta hit this three, you know, this free throw, or we gotta do whatever, and we can go do it, guys, and we're doing this together as a team."
• 20:16
  Mm. Right? And it's, it's both of those things together. So- But-... how do you transition? Because you all have been, like, bleeding edge, right?
• 20:26
  B- bespoke website platform, uh, like, investor in multiple tech companies in the auto industry. You've grown to 50 rooftops.
• 20:36
  What are you doing right now that is challenging kind of the status quo of, like, moving consumers into covenant clients, right? Yeah. So we're, um, you know, we're really focused on trying to make...
• 20:54
  We're focused on two things, um, simultaneously. One is e- employee training, learning, and building out our LMS, and dealing with the issues of scale, right? 'Cause it used to be a lot easier.
• 21:05
  "Well, let's get all the sales managers together and we're gonna work on this, and we'll do this once a week for the next four weeks." And oh my gosh, that's a lot of people coming from- Yeah. [laughs]...
• 21:14
  several hours away, and they're not in the store and they're not with their families. That's tough, right?
• 21:19
  Um, and so we're working on how to use technology to really help us continually, uh, train and reinforce our culture in the, in sort of those business processes.
• 21:28
  And then we're also really focused on helping our customers do business with us more easily.
• 21:33
  Um, at least the, let's call it the 80/20, where we want customers who wanna do something that's pretty simple with us, whether it's service or sales, be able to do that in a way that's easier than everybody around us.
• 21:44
  And then in so doing, we wanna free ourselves up to have more time with more humans to handle those more challenging cases, right? So, you know,
• 21:57
  hey, listen, there's no reason that I need a human to tell you the value of a, a five-year-old Toyota Camry with 50,000 miles and a clean CARFAX. If I can't do that, something is really wrong in 2025, right? Yeah.
• 22:12
  Now, a, you know, two-year-old $90,000 car with a CARFAX minor incident and a this and that, I think I wanna look at that car and figure out what's actually going on, right? That's right.
• 22:27
  Same thing with the, hey, you got a, you know, pretty easy cash deal buyer, et cetera. I should be able to make that really easy with a customer.
• 22:35
  Hey, credit challenge, multiple cosigners, multiple trade-in vehicles, negative equity, whatever it is, okay, that's where humans shine. Mm-hmm. We get to go solve that problem for that customer.
• 22:47
  And so we're really focused on kind of trying to create multiple pathways for our customers to engage with us in the way that makes sense for their, for their scenario.
• 22:57
  You know, I think one of the, one of the primary ways that we get an at bat anyway is, is on the website, and we know that.
• 23:05
  And, you know, the intentionality behind what we say to customers on our website about ourselves, how the vehicle looks in photos, right? Yep.
• 23:14
  All o- all of those things make a massive difference, and I think they say something about who we are.
• 23:19
  And the partnerships that we have with tech companies, dealers have with tech companies, and the willingness to, like, help you accomplish your goals in that, what do you look for in an industry partner when it comes to, you know, for instance, your website or making things easy- Yeah...
• 23:36
  for the customer to see what you have? Yeah. So, you know, uh, vendor selection is a, is really important for us. And, um, you know, from a merchandising perspective,
• 23:49
  we're not selling anything if it's not merchandised well. I can tell you that from our experience with CDK last year, and it's no shading of CDK.
• 23:55
  I think they're a great organization who had a lot of, you know, more security than any of us will ever have.
• 24:00
  And, you know, they had this unfortunate experience, but I can tell you, if things aren't on the website to sell, you're not gonna sell them in today's world. Right. Pull it behind the barn, right?
• 24:09
  [laughs] And so that's really important. Um, and so, you know, we have to have vendors who can help us have our vehicles online.
• 24:16
  Now, a lot of what we do is look for vendors that can fit within our ecosystem, 'cause we have sort of a different tech stack and ecosystem than a lot of other dealers.
• 24:23
  You know, we have our own DVIM, Digital Vehicle Inventory Management system, that we built back before those existed, and we continue to use, and we've just gone through some changes with it and tried some other things and gone back to it because, um, it's how we price vehicles, syndicate pictures, syndicate descriptions-It's where we bring in external data to help us price those vehicles and create those descriptions the right way.
• 24:44
  And so when it comes to partners, we're looking for partners that can do a couple of things for us. One, um, we want those partners to be providing a product that we wouldn't build ourselves- Mm-hmm...
• 24:55
  because it scales over plenty of clients, so they have enough money for R&D in that product, right?
• 25:00
  Um, we're also looking for partners that are willing to have the off-the-shelf product, and they're also willing to sell us a lot of the data information behind their product through APIs. Mm.
• 25:10
  So, if we wanna take that information and stick it in, in internal product that we have, we can do that as well. 'Cause I think this industry needs... I mean, if you look at the, um, structure of this industry, you know,
• 25:21
  call it 18,000 car dealers or 18,000 franchises in the- new car franchises in America. 93 and a half percent of them are owned by a holding company that owns between one and three stores. Okay.
• 25:32
  So, the vast majority of them are owned by smaller dealer groups. They need off-the-shelf products, right? And there's times we need off-the-shelf products.
• 25:40
  But you also, we have different needs sometimes where we say, "This is really cool. We don't want your whole product. We already have the solution and it works better for us."
• 25:47
  But we want the data behind that product, and we want an API to it, and we're gonna take that information and go stick it in this thing over here, right? Um, and then we need sort of reliability in that.
• 25:57
  I mean, you guys are friends with one of our mutual friends with Carcutter, and they've been a great solution for us, right? It's super flexible, fit within our DVIM.
• 26:06
  Um, great way for us to, you know, be able to have high quality pictures. Um, it also...
• 26:13
  Oh, I'll say this, any vendor that we have that involves store operational people doing something has to be easily execu- executable and easily trainable. Right. Right? Yeah.
• 26:22
  And they've done a great job with that for us. You know, um, we've had photo booths at different stores before, and again, I'm not throwing any shade at those.
• 26:30
  If you have a huge complex with a bunch of brands, it could make sense for you to have that photo booth. For us, you know, we have these clusters in different cities. Decentralized.
• 26:39
  And it's more like- Different people taking different things. Yeah. Right. Are we gonna drive cars over here? And then if you... Well, I have it in this location, but not this.
• 26:46
  So, you know, if you have a centralized website, some of your pictures look great, some of them don't. Yeah.
• 26:50
  We were really looking for that solution that we could roll out enterprise-wide and come up with a, um, really homogenous way for customers to see our cars.
• 27:00
  So they go, "Okay, you have, you know, three Honda stores in 100 miles," and all of those pictures look really good and they all look the same. I think that's- Right? And it's easily achievable.
• 27:09
  I think that's a growing challenge in the industry as groups, small groups turn into mid-size groups, and mid-size groups turn into large groups.
• 27:16
  And single point stores, probably the biggest challenge is single point stores turning to multi-point. Yeah.
• 27:21
  Because until you have to make that first jump of being somewhere else, um, you know, especially the, the push to consolidate used car inventory. That, that really is one of the things.
• 27:31
  And, and there's nothing worse, in my opinion, when you go on a site and you're shopping a used car inventory and you just... It's the same company, right? Like, you expect it when you're in a third party. Yep.
• 27:41
  You expect it when you're on a Cars.com or an Autotrader or, you know, but you don't expect it when you're on a captive dealer used car site. Yeah. And it's, it actually can be very confusing. So we've, um,
• 27:53
  you know, that's a...
• 27:54
  So we, we really wanna come to market as a consolidated company in the same way everywhere, not just in those brand values I talked about at the beginning, but also in practical things to how our customers experience us, right?
• 28:07
  And so there's this struggle there, right? Because we have these individual stores with individual general managers and individual leadership teams.
• 28:13
  And we call them a general manager, but these, some of these stores are big, right? If it was another industry, we'd call them a CEO, you know? Right.
• 28:19
  [laughs] "Hey, I got 165 employees and I'm doing this sort of revenue." Absolutely. That's a CEO. You're like, "That's bigger than most of the other businesses in this town." That's a big business, right? Or all of them.
• 28:28
  Exactly. Yeah. Um, so we want an entrepreneurial spirit there and we want agency. Yet, we want it done a certain way because we're Flow. We wanna come to market as Flow. Yeah.
• 28:38
  So, there's this tension there and this thin rope and this thin line that we walk because we don't ever wanna turn into the big box conglomerate where the people who are at the stores go, "Well, I don't know.
• 28:48
  I don't have any control over that, so I don't care. You know, corporate told me what to do on it." [laughs] That's terrible, right?
• 28:53
  We, and if we, and if you end up in that place, I promise you, you're not gonna be an excellent sales organization, right?
• 28:58
  [laughs] Because sales organizations are inherently p- high agency people who care about what's in front of them and wanna make a difference every day.
• 29:04
  So you're sort of, you know, what we try, we, we have a lot of processes that we create and centralized ways to do things, and then we come up with sort of these guidelines and boundaries where we go, "Here's where you're operating in within here, and you get to pick some differences around there."
• 29:20
  Um, and also, you know, there's, you can request exceptions for different things.
• 29:25
  And we, maybe we have a centralized pricing team or a centralized that team, and those individuals can allow those exceptions or those guidelines for those exceptions, right?
• 29:34
  I, I don't wanna close it down with a dad joke, but I, I can't help but notice- [laughs]... how well the flow from intention and covenants and organization and DNA right through to intention and covenant- Oh, yeah.
• 29:50
  All the way around... and r- to, to, like, how you implement- It was like this just-... Carcutter and other vendor partners and all of these sorts of things, I think is, is tremendous.
• 29:58
  And I mean, this, this is why we do this show.
• 30:01
  It's to sit down with individuals like you who are in it every day, who are thinking through this at a different level, to differentiate, to, to, um, you know, highlight what's available to all, but only w- the willingness of a few.
• 30:16
  And so, uh, Eric, man, this has been so enlightening. We wanna express our appreciation for you joining us on Auto Collabs today. Well, thank you guys for having me. It's, it's truly nice to get to know you guys.
• 30:26
  I look forward to doing something together and I, and I hope to be able to make it to, uh, Baltimore at some point in time and, and get to hang out with you guys at the, uh, PhotoCon. So, thank you. Oh, we hope so too.
• 30:38
  [upbeat music] Is my math right? Do I have eight grades? He's still on this after that whole conversation? [laughs]I mean, I know you, I know you were there. You did ask meaningful questions.
• 30:51
  [laughs] It was so, I'm so proud of you, first of all, for getting that answer out. You nailed it, and you made it so sneaky, too. Like, it wasn't even on purpose. It was unbelievable.
• 31:01
  [laughs] Okay, but can we just, let's not gloss over the fact, and we didn't while we talked to him, but you ever heard a dealer use the word covenant before? Covenant? Blew my mind. No.
• 31:10
  [laughs] I'm like, immediately like, "What does covenant mean?" The onl- Literally, literally the only, the only times, outside of theological reference, that that word is used- Yeah...
• 31:18
  in modern culture would be some kind of, like, a land covenant. Right. Yeah, right, right. Which is like a... But that's it. I mean, the covenant of marriage, right?
• 31:27
  Marriage is a covenant relationship, but most people still don't- It's a sacred relationship that is, uh, I didn't say that part, but every single source was sacred relationship- Yeah... and involved a promise.
• 31:36
  Like, that is a deep way of thinking about your people that- Tell me that's not a place-... it's hard for-... you wanna work or do business. [laughs] I'm in, like yesterday.
• 31:45
  I, I was thinking about the impact of that word and its meaning on the customer relationship, where for decades it's been like, "Well, the customer's always right," or, "No, the customer..."
• 31:55
  You know, there's always that debate. But it's like- Mm... well, what does it mean to ha- make a covenant to your customers? Yeah. Um- And it's one-sided It's rare. A covenant is one-sided. You're like, pff.
• 32:07
  That's where- Yeah, like regardless of what you do- Regardless of what the client does... I covenant to do this. Yeah. I promise.
• 32:14
  Sometimes that means repairing a car that's not even worth it just to- That's exactly what that means. Yeah. Come on. Hey, you guys wanna know what my great-grandfather did? Yeah. What'd your great-grandfather do?
• 32:26
  I only know one of them. Did he work at Chipotle? No. Chipotle. His name was Joey Amorosi- Hey... by the way. Yeah, just like that, and he was a Finnish- Hey, Joey Amorosi. Prepare to be surprised. Uh-oh.
• 32:39
  He was a Finnish carpenter who also played the mandolin. [laughs] In South Philly. [laughs] Uh, I was like- [mimicking mandolin]... it's gonna go one of two ways. He either lays tile. [laughs] He's a carpenter.
• 32:54
  Finnish carpenter. That's amazing. Through and through. Well, look- What was his name again? Regardless of what your great-grandfather does, we hope you thought about it a little bit or maybe figured it out.
• 33:02
  But more than that, we hope you realize that there is some real depth and substance within the retail auto industry, folks. Yeah, that's right.
• 33:09
  So on behalf of Kyle Mountserre, Michael Cirillo, and myself, thank you for joining us as always on Auto Collabs.
• 33:15
  Sign up for our free and fun-to-read daily email for a free shot of relevant news in automotive, retail, media, and pop culture. You can get it now at asotu.com. That's A-S-O-T-U.com.
• 33:28
  If you love this podcast, please leave us a review and share it with a friend. Thanks again for listening. We'll see you next time.
• 33:37
  [upbeat music] Welcome to Auto Collabs. Welcome to Auto Collabs. [laughs] Why are we recording? Are we rolling yet? Not yet.