Learning Without Scars
As a third-generation educator, it is easy to say that teaching and training are in the blood for Ron Slee. From his beginnings as a coach, through his time at McGill University, Ron developed a foundation for the work he does today. From working within dealerships, to operating a consulting company, creating a training business and running twenty groups, Ron has been directly involved in this Industry since 1969. Ron has been known as the industry expert for years, and has brought this expertise to bear through his training programs. Today, Ron provides specialized, job function based internet based subject specific classes, job function skills assessments, as well virtual seminars and webinars. These courses are designed for manufacturers and their dealers, as well as independent businesses in the construction equipment, light industrial, on-highway, engine, and agricultural industries through Learning Without Scars (www.LearningWithoutScars.com). This platform is a continuation of the work begun by Quest, Learning Centers which was established in 1996. This training is aimed at improving dealer parts and service operations through qualified people that are knowledgeable in using operational metrics and current market and operational best practice methods.
Learning Without Scars
Revolutionizing Dealership Security and Marketing
Unlock the secrets to safeguarding your business with insights from our latest episode on data security and its far-reaching impact across industries. You'll meet Stephanie and Mets, our expert guests, who bring valuable perspectives on the alarming frequency of cyber breaches in the U.S. and how to counteract them. Learn how daily backups using Azure's SQL database can be a game-changer in maintaining operational continuity during a cyber incident. We also bust myths about cloud data storage and the intricacies of modern cloud infrastructure, ensuring you're well-equipped to fend off digital threats.
Next, we dive into modern security practices that every dealership should adopt. From containerization to the essential role of AI in monitoring, we cover advanced technologies that can keep hackers at bay. We emphasize the importance of rigorous operational security measures, such as unique device IDs and multi-factor authentication. Plus, we propose an innovative idea: a certification for dealerships that meet high security standards, which could serve as both a marketing tool and a benchmark for excellence in an industry often slow to embrace new tech.
Finally, we address the modern workplace's challenges and effective marketing strategies to retain customers and drive success. Discover the importance of understanding different workforce demographics and the need for meaningful work, especially for younger employees. We share impactful stories from companies like Toromont, illustrating how embedding knowledgeable developers within business units can revolutionize tech solutions. Learn about the critical role of data analytics in customer retention and why a multi-faceted marketing approach is essential for long-term business relationships. Tune in for a wealth of knowledge that promises to propel your business forward.
Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.
We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.
Aloha and welcome to another Candidate Conversation. Forgive the gender, but we've got three wise people here and we've got a whole heck of a lot of stuff we need to cover, starting from the hack last week and the outage for two or so days for equipment dealers.
Speaker 2:Or nine.
Speaker 1:Yeah, some forever, yeah, some forever. And also what Metz is doing with the Grind Marketing Collective with Stephanie, is also of interest. So let's just have a conversation about all of this and, first of all, let's start from where Stephanie and I ended the last podcast we did, which was we have to be aware of what's happening outside our world, a broader perspective on other industries, other businesses, other areas. So with that, do you want to pick that up, stephanie?
Speaker 3:Sure, especially in light of what has taken place within our industry over the last few days. It's no secret, there was a cybersecurity incident that affected a ton of dealers within our industry and outside of our industry, and so to kind of piggyback back off of what we were speaking about the last time. Ron, you know this is not something that's uncommon. It is something that happens every single day, and in the United States it actually happens about 2,200 times a day, maybe a little bit more. So it's something that people need to be aware of. But being aware of how it's impacting other industries can definitely help us to understand how we should be safeguarding our systems and how we should be leveraging the data that we have, protecting the data that we have in a way that we can sustain our own businesses, so that if something happens to somebody that we're doing business with, we're not completely crippled by those incidents.
Speaker 1:What was really interesting in one respect the equipment dealers. Many of the equipment dealers that I work with had their data in the cloud. They had no access to any data. Some of them were using other service providers and were able to get it and bring it down just to be able to give a price. They don't know how to do it. You're right, stephanie. This has been around forever.
Speaker 1:When I started in the 60s, data processing in those days and I'm running a computer shop and the people that were doing security in those days, almost all of them had prison records. Banks were hacked and didn't want to acknowledge it. They lost millions and millions of dollars because they would have jeopardized their whole relationship. But then, as before the run-up to this, what we're talking about, nobody's yet talked about the impact on customers, the customer, the dealer, who's you know. Imagine you're a medical supply company, you're dealing with a hospital and there's somebody on the operating table and you need a scalpel and you're out. Hello, yeah. So what do you do in your system, betts? How do you approach it with your system to secure it?
Speaker 2:Well, we have a couple of different situations, like, we were lucky enough to be able to help a few customers that we provide add-on functionality to their in this case, the CDK platform and we had fairly large backups on a daily basis of all of the core database and we backed those up into Azure's SQL database server and so we were able to print out inventory price lists and rental contract lists and work order lists and stuff, and at least they had something on paper to distribute or an excel spreadsheet to distribute to their people. Some of the tools we offered already on top of that data also helped them get through it, you know. So they could at least give like if someone's looking for a part, do I have one? Where is it in the warehouse so they can look that up? Um, that that's. You know how we were able to help some of the people affected From another approach, like how do we do it?
Speaker 2:You made this comment about all these dealers had their data in the cloud. I think that's a big misnomer, or maybe it's one of the great misunderstood sentences in the industry.
Speaker 1:It's a better way of saying it.
Speaker 2:Yeah, you can have your data in the cloud in multiple ways. You can go to a cloud IT or infrastructure provider and you can buy a bunch of dedicated servers in their data center and they will call that cloud. But that is no different than on-premises servers in many ways If that data center doesn't have its security and you're still on a server that has its known vulnerabilities, security-wise To truly be modern cloud, you know, and in leading Stephanie's point, leading people in the industry, leading corporations, industry that have real new modern products online, their cloud infrastructure is radically different than a bunch of cloud enabled servers.
Speaker 1:And I think that's. Well, go ahead.
Speaker 2:I think that's the language that people need to start to pick apart when talking to their providers and like, when you say cloud, what do you really mean?
Speaker 1:In our case. That's a really valid point because CDK is an example. They're not in the cloud at all, it's just a remote server. You know Exactly. And the interesting thing, stephanie, about this it appears that the hack was at one of the OEMs and it got into the CDK package because of a purchase order or a shipment or some darn whatever it was, which further highlights the vulnerability. Anybody and everybody yesterday we were talking, thursday we were talking about with an insurance guy who's a lawyer and a robotics graduate. He ran IT shops and he characterized things as you've got two pieces with Deva who holds it and who owns it, and the FTC gets involved and forensic accounting gets involved and the FBI gets involved and a whole bunch of people get involved. And you know it's like car insurance and your home insurance. I don't know anybody that reads the fine print, but, as the insurance guy said, you know we're going to look for every single way that we can to avoid pain.
Speaker 3:Yep, yeah. So this is interesting. This is actually a conversation that Nets and I probably had two, three years ago I think the three of us actually had this conversation and it comes down to education. Actually, we've beat this one up quite a bit, but it's still prevalent. And it comes down to you you don't know what you don't know and sometimes you're misinformed and just the two misconceptions that we were just speaking about. Right, like you believe that you're protected based off of the little bit of information that you understand. Where it comes down to, what's the education that should be happening in the marketplace right now so that people can better protect themselves?
Speaker 3:What are the questions that you know? If I'm a heavy equipment dealer, what should I be asking? If I'm evaluating a new DMS provider, should you know? Is it? How are you safeguarding your systems? What do the safeguards look like? Do I really own my data? Do I not own my data? Who is connected to this? Who is hosting this? There's a myriad of different questions. I'm not as well versed in it as Mets is, but I think it comes down to education and being informed.
Speaker 1:I used to have a consulting job that I would do computer system reviews, just like you said, for dealers to evaluate which DMS dealer management system or ERP whatever the terminology you want to go, because most of the people don't know what I'm saying. Now you know, I think medicine and you both have been reading blogs. I'm saying we've got too many people putting profit about people, which means we got too many people doing too much or too few people doing too much work. I think the executive office had their heads in the sand and they're in the clouds and their feet in the manure. They are protecting the status quo. They don't want to change. They're change resistant. They have no clue about what we're talking about. And even with that hack and the broadcasting of it, there was a column written a couple of days ago that's not that big a deal At a major publication and a dealer president called me up and he says what do you think the state sales revenue is going to be in the month of June?
Speaker 1:Or the national GDP is going to be. You know, wait a second. This is an implication that's huge.
Speaker 3:Well, you take it back to the customer, right, like if you're down for nine days. So let's talk about the customer as it pertains to the dealer. You're down nine days and you're pen and paper in it. You're now. Not only are you crippled because you don't have access to information and you can't get that information to your end user, your customer, but now you're also spending a ton of money as it pertains to overtime, because you just elongated the time it takes to actually even process any of the day-to-day tasks that were somewhat automated through this dealer management software, right. And so then it compounds from there.
Speaker 3:Right, these are small incremental dollar amounts that people don't think about on its surface, but has a bigger impact and maybe it's not a huge deal to some people who are looking at millions and millions of dollars or whatever the scope is that they're looking at, but to a two to five to 10 location dealership it's huge. And then you just ruin their credibility with their customers too, because their customers have been blinded or been put out by this situation where either you're not able to sell them a machine or you're not able to rent them a machine as quickly as as it possibly can. So you got to look at okay, what? What is the lost revenue during this outage? For these dealerships as well? It becomes an even bigger issue, for for somebody who might be a small, you know dealership All sizes.
Speaker 1:What we talked about with this insurance guy, the lawyers. They said why don't we have a system outage, a business outage reserve on the balance sheet? And you know, accountants have a habit, a bad habit of taking reserves when they need to make money and give the owners the money or the public the money. But to your point, stephanie, when I went to Finning in 1978, and it wasn't security, but we had a war on one of the platters inside a disk drive and we ran a 53-store $150 million parts business manually for six weeks Nobody knew what the heck to do, you know. So we got some real fundamental issues Database Metz. You and I coming out of the Caterpillar world, we've had database managers since the 50s and 60s. We still don't know how to manage it. Nobody owns that damn data. We've got multiple systems treating the same data field. We've got artificial intelligence coming along that's giving us wonderful analytics.
Speaker 2:The data's flawed well, yeah, and where it goes and who owns it and who accesses it and where it's stored is more and more important, you know, and in one of these situations, let me situations.
Speaker 1:Let me give you just a quick weird one for a second. In Canada, learning Without Scars our training business student data has to be kept on a server in Canada, otherwise you cannot protect student information. I know two of the guys that are on the committee advising the government and we had the same discussion that you brought up earlier. I said, okay, it's in the cloud, where's the server? And of course they can't answer the question. And the cloud's a misnomer. There is no such thing. It's always physical somewhere.
Speaker 2:It is a data center somewhere.
Speaker 1:Absolutely, Absolutely, and you know. So. That being said, there's a whole host of things. Kevin Landers of Rocketwise said to me the other day that a typical hack takes 290 days before it's discovered. Oh, wow. So because I was getting at well, how quickly, how often, how frequently should we audit things, how quickly, how often, how frequently should we audit things? So he's putting together assessments for the parts business, the servers, for me to put up on our site.
Speaker 2:Stephanie, your comment. How the hell do you know what to do? That's a really interesting point, like how to discover hacks. You know we had this discussion internally as well, and and you just brought up AI as well. You know, one of the things that isn't thought about enough is that you know these security risks are coming from people who are staying current and who are finding vulnerabilities in the old stuff. The people fighting, the people trying to get in, are very up to date, you know, and so by failing to enable your business in current technology, you're giving up all of the potential benefits of that work that the very smartest, you know engineers at Google and Microsoft and whoever else in these data centers are doing to keep people out.
Speaker 2:You know we have things that monitor, for example, our API. The AI is watching the kind of transactions happening on our API. Even for registered and known users to say you know this is outside the norm. For registered and known users to say you know this is outside the norm, you know this. This. It's sort of like when you go and travel with your credit card and it suddenly stops working and the bank calls you up and says, oh, we paused it because it didn't seem normal.
Speaker 2:Well, if, if your software is old and it's not compatible with the kind of tools that are being developed by the data centers to monitor those things, then it's going to miss the kind of tools that are being developed by the data centers to monitor those things, then it's going to miss that. How do you miss a hack for 220 days? Because you can't monitor it? In our APIs, the AI will monitor us every day. This person hit 80% of the API call limit. If they'd hit another 30 times on our customer file record, then we would have said that's not normal and we would have locked that out for a minute. And these are the benefits and these are the reasons that we have these people quoting the benefits of cloud. The benefits of cloud are the modern deployment tools, the containerization, the segmentation of the cloud to make it hard for very smart hackers to work their way in. But you have to kind of take advantage of what's current knowledge in the security sphere.
Speaker 1:From Stephanie's perspective and she opened the door on this the people that are doing the hacking, the penetration, they're as smart as they come and the fact that they're still out there and they're still working gives you an idea. They're making money with this babe, otherwise they'd stop.
Speaker 2:It's a job.
Speaker 1:Yeah Well, example years ago, maybe 15 or something, we're at a Hilton Hotel or Marriott Hotel I don't want to screw up a brand. In London Our bank accounts were hacked before we got back here in Hawaii. We bought a $65,000 CarMax car in Florida. It wasn't us and we reported to the police and the police do their forensics and it's almost impossible.
Speaker 1:What that lawyer was telling me the other day was a lot of people are going to jury trials. We just had the Supreme Court make a judgment on the civil liabilities of a company. You can't avoid bad acting by going into a bankruptcy agreement. They said to hell with this. You're going back. The insurance guy said to me the lawyer you go to a jury trial because the insurance company is not wanting to pay and they're suing the dealer because the dealer got some money. What the insurance guy said to me interesting. He said all you need to do is show them you're making your best efforts to solve the problem that caused the problem. Solve the problem that caused the problem. Talk, solve the issue that caused the problem so it will not happen again. And you had no way of knowing it was coming at you in the first place. So from a marketing perspective, I gotta believe that every damn dealer should use their protection, like Metz just talked about, in a marketing program regularly yeah, almost a marketing minute that goes out every week, or some damn thing you know.
Speaker 3:I don't know. Well, I mean, there's definitely got to be communication surrounding what you're doing. You know, I don't want to claim to be a cybersecurity guru. I did play in that space for a short period of time before entering into the heavy equipment industry, so it's kind of interesting how this has all kind of come to be. But I think it is one of those things that there's a lot of different variables at play.
Speaker 3:Right now, you go back to what Mets just said right, you've got modern technology. Right now, you go back to what Mets just said right, you've got modern technology. And then you've also and you've got AI, and you've got the human aspect of it all and humans that aren't necessarily educated in an industry that's not necessarily up to speed, and so you've got this kind of perfect storm. And let's just be honest for a half a hot second. Be honest for a half a hot second.
Speaker 3:White hackers know that, and 95% of how they penetrate is they're camping out in somebody's outlook, and they camp out for the 290 days, and so it comes back to that being informed in the education piece and internal marketing, internal communications to let people know what are the best practices, and then also safeguarding your systems or putting in making sure that you have up-to-date systems that are going to help protect you. So you have to look at it, you have to go after it, from the human element, which you combat with communication and marketing internally and externally, and then you also have to look at it from a modern perspective in terms of what does your tech stack look like? Is it up to date? Is it compatible with what's going on currently in the marketplace, so that you can mitigate what you can mitigate.
Speaker 1:We've got artificial intelligence. We've got unbelievable technology. If we're looking at leading edge stuff, this industry is not leading edge by any stretch of the imagination. We've talked about that a lot.
Speaker 1:Oh, I know, well, you know. My example is the 1993 BMW augmented reality, where the guy walks up to the car and the hood's up and he puts on glasses and he sees the whole engine compartment and a visual of what he's supposed to do and an oral of what he is to do. And if we went to 100 dealers across the country, we wouldn't find one of them that's doing it. That's 31 years ago. So take that approach and that's what you talked about using artificial intelligence to monitor your hourly, minute, second interactions with your users, the nodes on the network and all state insurance. As an example, every device that you have access to their apps with cell phones, tablets, desktops, whatever it have to be registered with their own unique, individual ID and password. And then we get double. You know, you come in and access, they send you a text to your phone or whatever, an acknowledgement and away you go. And now we're in.
Speaker 1:That's chapter A, then chapter B, what you said, mitz. All of the interactions have an ongoing interactive right now and have the system freeze you. If I'm proctoring an exam, I've got an eyeball frame and I've got a head frame and if the eyeball or the face moves out of that, the student gets a text message on their screen right in the middle. If they do it a second time, a voice comes when did that come from? And you're told do it again and you're done.
Speaker 3:Yeah.
Speaker 1:And we got to get to that point, then I'd suggest, from a system perspective, you've done everything you can.
Speaker 2:Yeah, operational security yeah.
Speaker 1:And that to me, stephanie, any dealers that do that that to me would certify them as a what do we find a term for this? A protected, a safe environment. It's a good housekeeping seal of approval. Pedal the heck out of that and force everybody into it. We got $8 billion dealerships now. It's not just 50 million, 100 million, like it used to be when I was starting out Buggies and whips. But if you look at systems, let's change the subject a little bit to okay, you're a system provider, mitch. You're providing tools, processes, methods, procedures to dealers to make their life better, more cost-effective, more customer centric, better customer service. All of that good stuff. And you just signed an agreement with Stephanie and a new marketing company. Yeah, what in the heck are you doing that? You know that you pass off all your selling and marketing to Stephanie.
Speaker 2:Well, there are two reasons One, marketing I know enough to be dangerous, as the saying goes, but it is not my specialization and two, we continue to try and push forward this idea of a modern dealership, a digital dealership you the next era of digital operations and I think that makes for a good partnership, because that's our goal is to support dealers in becoming truly digital.
Speaker 2:In fact, one of the conversations we've had is how to take even the implementation and sign up of ERP to a modern process. Like you don't. You know. If you sign up of erp to a modern process, like you don't you know if you sign up for quickbooks or any other modern platform, you don't have to have a sales call and you don't have a six-month implementation waiting period. You click some buttons and at least you're up and running, and then someone contacts you and like let us help you get the more out of this platform, and so I think that makes for a good partnership. Someone like stephanie, who understands as a proven track record and our goal of providing that so my let me translate that stephanie, before you respond.
Speaker 1:I believe smart organizations and smart executives and leaders recognize they don't know everything about everything and they're looking for people that are best in class providers on whatever the subject matter is. So I'm going to call Stephanie a subject matter expert today and maybe it'll be a long time, but let me take it away from Stephanie for a second Dealer management systems providers such as what you do Mets. They're transitory. So what I'm telling everybody who's a service provider is you got three steps in this world. Now you partner with best in class, and that's a short increment, or you purchase them if they don't want to partner with you. That's not going to be a happy moment. And the last step is you produce it.
Speaker 1:When I started in the 60s, we were building business systems with 50, 100 man years of investment and years before it was implemented. And now, Metz, you can probably turn something around in a week with the current tools and technology. So Stephanie's a subject matter expert on marketing and the marketplace and you're smart enough, Metz, to say wait a second, I know enough to be dangerous. I need to have somebody who can lead me, can help me. There's Stephanie and there's Kevin Lander in Rocketwise for cybersecurity, and on we go. So, Stephanie, maybe you can explain to us a little bit more again of the Grind Marketing Collective and what you do and what your audience is and what you're doing with Mets as an example to solidify it.
Speaker 3:Yeah, so long and short of it. We want to help people who really want to thrive in today's marketplace and beyond. It's this notion of leaving a legacy, and what does that legacy look like with digital influences? So you've got to be able to, one, understand how to compete in today's digital environments and, two, how to do it quickly. And so what we've been doing is going in and helping people understand the failures in their go-to-market strategies and then building go-to-market strategies that they can measure and implement or adjust relatively quickly, as opposed to some of the old traditional tactics.
Speaker 3:Partnering with Metz is, I'll be honest, it's kind of one of those things.
Speaker 3:That's a bit of a passion project, right, it's exciting to see what he's building in this space and it worked really, really well, because I'm a huge proponent of this notion of the self-service sales model. I'm not saying that we do away with sales guys completely, but what I am saying is that, as our industry gets up to speed with how other industries are operating, today's buyer they want to do the research themselves and when they're ready, they want to buy themselves, and they want to do it very, very quickly. We've been conditioned to want that, right, amazon did it for us enterprise, her, so on and so forth. We want that instant gratification, and so, with Mets' ability to respond to the marketplace within a few days, of needing to put together something for a dealer and knowing that there are dealers that are out there that are searching for this solution, and building a digital funnel for Mets' team to be able to help that transaction happen quicker, just was a bit of a perfect opportunity for both, I think, for both sides of us.
Speaker 1:So taking that and putting it into words. For my understanding, what you're both aiming at is understanding, seeking what the buyers need and want. And once you know what the buyers need and want, you're going to do whatever the hell it takes to satisfy that. Whether it's manual, whether it's high tech, it doesn't matter. Just I want to satisfy that. And to take that further, you're both creating a tool that people use, because the interactions between two people a buyer and seller since the beginning of time it's time and space, yep and it's about giving those people that are touching customers the data, the information, the systems, the tools, whatever it is, to allow them to cement a relationship. It is to allow them to cement a relationship Because it's the relationship we're after. Whether it's speed of light or let's go to lunch, doesn't matter. I want that relationship so tight that ain't nobody going to leave me ever like your marriage hopefully.
Speaker 1:You know, Is that? Am I getting it right?
Speaker 3:Yeah, you are, I think. I think the only thing that that I might tweak in that, ron, is just we're going through a generational shift as well. These, these tactics that we're presenting, they're commonplace and it is what people want. People are salivating for this right now, and so it's this notion of, yes, you got to put all of that in play and those steps, but you got to make it quick, because people want quick and easy. So it's got to be those two things or it's nothing.
Speaker 1:Yeah, and your comments are really valid. We've got demographics right now that are really crazy. Society is being segmented in so many ways, some of them really negative, like politically. But if you look at the population general population 10% of the population is extremely there. We don't need to worry about them. They're smart, they can figure it out, they're disciplined, they work hard, they're happy in what they do and statistically, in the United States, 70, 72% are living paycheck to paycheck, and work truly is a four-letter word for them. They don't like what they do, they just go to get it done because they need the money. And then we've got 20% in the middle that don't know which way to go.
Speaker 1:And as we look at a dealership, then we've got this age demographic People in my generation. Typically they're riding out to the retirement day, but they don't know what retirement is going to be, and that's nasty kind of discussion to have. Then you've got the next generation that's waiting to take over leadership, that are being frustrated because they're not becoming leader fast enough. And then they got the let me say 40 and down, who don't give a damn about any of that stuff. If they're not leaving, they're gone. It's not about money anymore, it's about worthwhile work, it's about recognition, it's about a culture. Again, that goes back to relationships, doesn't it? So here comes SAP, oracle, infor, microsoft Dynamics, cdk, constellation, texada, metz. Some of those don't have anybody in their business that understands the customer that they're dealing with.
Speaker 1:It's amazing to me how this has happened in the last 20 years. Nobody knows the parts business, the service business selling market coverage, any of that stuff. Matt, you've seen it.
Speaker 2:But I've seen it. I mean it's one of our mantras is like we bring in people who have worked in the dealerships. Another good reason to work with Stephanie she sat in a chair. She knows all the people inside. She's gone through the pain of systems integration and what that takes and costs. So I think it remains relevant to be able to understand what the customer is trying to accomplish and being able to bring modern solutions to it.
Speaker 2:I got my start in this business through Tormont and one of the things that I loved what they did, especially in their early program of software development, is find really intelligent software developers who could speak to people and they were largely embedded on a one-to-one project with the business.
Speaker 2:So you would take someone, they would sit with the business unit, they would talk about what they learn, about what they were trying to do, you know, come to understand it and then apply that to them so that developer actually writing the platform and you know that allow them to build some really great tools because the developer understood what they were making.
Speaker 2:And when you look at more modern or other software providers, they have a bunch of developers working off a bunch of tasks that were created by some analyst who doesn't really understand the business and breaks it down to these little tasks and you get a bunch of stuff that sort of looks like what people wanted but it doesn't actually work the way they need it to. And that's been one of my joys is like to be able to have this conversation with the, with the dealer and people in the operation who say, oh, I wanted to do this like this, like, okay, I get what you're trying to do, but what about this aspect of it? And like, when this changes in your business, how will your idea of how to implement this be affected? What if we do it this way? Because I've seen enough places to be able to draw that through and coach that through to the final design what you're doing, meds is.
Speaker 1:I started in consulting in 1980 and the typical consultant comes in, does a study, does a report and leaves and nothing happens. And the reason that I think we were successful to the point that I could live is that I would give them the report, I'd do the research, the study, I'd come up with alternatives, but then I'd tell them do you want me to do it for you? And that's what made the difference. That's exactly what you're talking about. So I'd go into a dealership every second week for about six months. Here we go, let's go, and then maybe once a month, you know, for the next six months and maybe quarterly after that. And it's a two or three year enterprise. And we were out three years, schedule wise, I couldn't get sick, nothing. And we were out three years schedule-wise, I couldn't get sick, nothing, you couldn't have anything happen. And over 40 years I think I'd missed two appointments. One was a damn airplane door closed in my face.
Speaker 1:And the other where the airplane had an accident on the way I was going from Cincinnati to Toronto and it was a Good Friday match and they were at work. They all came in Saturday. I felt like hell. The other was a speaking engagement in front of 250 people and I didn't show up. The next year I did it for nothing, obviously, and I get up there and I look at my watch and I said I think I'm a little late.
Speaker 2:Nice intro?
Speaker 1:Yeah, but you know, we don't have people anymore. And Stephanie, I don't know that. Marketing to me is anything and everything that influences a buyer to do something with you, period. Everything. Too many people think marketing is trade shows and conventions and brochures and all the rest of that crap. Am I reading it wrong? No, you're.
Speaker 3:They also think Richardson hats. That is the number one.
Speaker 1:Yeah, and God bless you yeah.
Speaker 3:Yeah, yeah, no, I, it absolutely is, and I think that's honestly, if I'm I'm pretty candid, because I'm a candid person. That's been. One of the challenges is getting people to think differently about marketing. Marketing is not a cost center. Marketing helps to promote ROI when it's done correctly, and that's where we like to go in. And, similar to Mets, we want to partner with people.
Speaker 3:It's not one of these things and when Mets and I first started talking about what our partnership would look like, it's not something that things start to happen quickly, but they don't happen overnight and if you want to be able to have sustained success, you've got to integrate the right people onto the team and then be able to measure it across the way and then make adjustments as you see that the customer base is changing.
Speaker 3:And sadly, I think that a lot of people just get complacent and comfortable and think, okay, this is working or it was working, and it's not just marketing. People get complacent and comfortable across the board and that's probably what was happening with some of these folks that were making decisions as it pertains to what's going on with their data management. You're comfortable, you don't want to feel stupid, so you don't ask questions or you don't bring somebody else in to help you understand and things change, and at the rate in which things are changing not just for marketing but for technology in general these days that's where you have to have the right partners and the right providers to help you stay in the know and feel like you're capable of taking on tomorrow.
Speaker 1:This takes on so many different facets. Now there should be a chief technology officer, a chief information officer, in every damn dealership over X dollar amount Below that. Somebody needs to be educated in it. The same thing that Mets went through they made me a data processing manager. I was the general parts manager and the president called me up on a Friday afternoon and said Monday morning I'm meeting at 8 o'clock in so-and-so's office. I said okay, what's that about? He said that's your new job. We had a bit more discussion, but Monday morning I go up there and there's a hundred people in data process and this is the old days key punch and computer operator, programmers, systems analysts, all this stuff.
Speaker 1:And we did exactly what Metz talked about. We labeled one person as a subject matter expert for parts, for rentals, for material and whatever the hell we were. And they couldn't do anything without sign off by the dealers departments. So that's where I come up with my understanding, acceptance, commitment mantra. Everybody has to understand what we're trying to do. Okay, wait a second, that's not that easy to do. Number one, number two everybody has to accept that what we're trying to do is the right thing. And what's missing in most businesses? They aren't allowing people to fight about it. And you got to fight about it because nobody's going to agree on this damn thing coming out of the chute and too many bosses intimidate the hell out of their employees. They're quote quote subordinates. The people that are doing the job typically know how to do the job better than anybody else. Always, if they don't, they're not going to be in the job for long.
Speaker 2:But you've got to give them a voice.
Speaker 1:Exactly, exactly, and marketing in part is internal marketing as well as external. You know they've got to be able to. You know, stephanie, you're walking into an area that is so exciting. A little side story, and I'm talking too much. Lou Gerstner took over as chairman of IBM a long time ago. He came from Kellogg, or one of the major consulting companies in America, in New York. So he goes into his first meeting with all his subordinates about 20 people in the room and he asked the first guy who are your top three customers? Couldn't name them, went two or three down the road, none of them could name them. Meeting's over this Friday. I want you to come back. I want those three customers. They did Imagine that now Every business sector of IBM, the leader of that sector could not name their top three customers.
Speaker 2:No.
Speaker 1:No wonder he's there.
Speaker 2:He took that list and he disappeared.
Speaker 1:He went to visit every single one of those customers before he came back and asked those questions what do you want? What do you need? What are we not giving? Life is simple. It's people that screw it up.
Speaker 3:Man, we could go down a whole. We would probably need another hour.
Speaker 1:We'll have it. Whatever you want, I'll tell you no, we got to get this across to people, Stephanie.
Speaker 3:Well, what you just brought up is one of the biggest pain points.
Speaker 3:That is unraveling, right, like the way, how quickly people will change providers, whether it is, you know, they've been dealing with the same rental house for the last 50 years or they've been buying from the same dealer for the last 25 years. If you fail, once there are so many other people lined up behind you to take on that customer, other people lined up behind you to take on that customer. And so this notion of not keeping people happy or not measuring your retention rates and not understanding how marketing and technology will influence and keep people happy and keep people aware of what they need to be aware of internally and externally To me it's kind of silly, but I live it every day, right Like I for my clients. That's the one thing that I want to know who are the top three customers and how are we staying in touch with them? And if there is an at-risk customer, why are we not boots on the ground having a conversation with them? It shouldn't get to that, but it does.
Speaker 1:We have data. The time stamp between the last two transactions determines the probability of the next event Mathematically, statistically. This has been true since the beginning of time. So if I deal with you once a year, the probability that I'm going to have something with you next year is almost zero. If I deal with you every week, the probability is very high. Nobody, to my knowledge, is measuring buying habits to the point of every day this buying pattern changed. I want you to call these guys. We have customers that stopped doing business. They've gone, They've defected. Nobody called. We don't notice until doing business. They've gone, They've defected Nobody called.
Speaker 2:We don't notice until way later.
Speaker 3:Exactly Stephanie wanted to say something.
Speaker 3:Well, I mean, I smile and I grin, but and I'm kind of going back to my produce days, my ag days, for a half a hot second but we did that. We looked at the data sets every single day and the key indicator bananas legit bananas. We would notice that if one of our retail customers stopped purchasing, or they slowed down the purchase of their bananas, even the frequency, day over day, that they were courting another wholesale distributor. It's different, right, it's clearly different margins, but it's different, right. It's a different product. But that same measurement and that same technique and approach can apply to heavy equipment.
Speaker 1:One of the things that annoys the devil out of me is that I used to run a report when I'm in a dealership Last 12 months sales year over year and anybody whose purchases went down on a monthly basis. There's a rolling 12 months. Anybody whose purchases went down there was a call.
Speaker 3:What happened?
Speaker 2:Did my deodorant break?
Speaker 1:down or did I do something wrong? What's going on?
Speaker 2:here. You know I can take you right back to a podcast we did like two years ago on triggers and data. Yeah, and like that's. The purpose of modern software is that it's running that report internally every day and when someone's sales start to slump, it auto generates that requirement for your sales rep to contact that customer. You shouldn't have to run a report physically and read through it. The system should just have like even now with the AI involved on it, and be like this guy is outside the norm. Bang. That sales rep has a requirement to call that customer and find out what's going on.
Speaker 1:That's modern data management. Yeah, where we started with Stephanie. Everybody wants it at the speed of light. They don't want to have to deal with anybody, they want to do it in their bedroom or their basement or back garage in their car. And so, if we do it right with this analytics, we can send the message, the trigger, right to the customer and say wait a second, you didn't buy your filters yet. What's going on? Wait a second. Your engine's overheating. What's going on? Wait a second. That's a warranty issue coming up. Your warranty is about to expire. Do you want to have an inspection? What's going on? I mean all of these triggers, the bananas that's perfect. That's perfect.
Speaker 1:Bonnie Fagenbaum runs. She's a professor at McGill. She's done two lecture series for us on marketing basic marketing 10 one-hour lectures and social media marketing 10 one-hour lectures. That's two academic credits because it's 10 hours. But social media marketing, stephanie, I got a guy in Bangladesh who does it for us and he posts to all of our platforms. We've got a banner that fits in all of those places. So we're trying to brand it and do it properly, but it takes a long time. Like you say, this is not a sprint. This is not a 50-yard sprint. This is a multi-year deal and Google's SEOs get out of there. You got to get better measures than that. Right, and Google's SEOs get out of there. You've got to get better measures than that, right?
Speaker 3:Yeah, it's interesting Mets, and I just had this conversation the other day. I could literally go on and on and on about the algorithms and social media and social selling, which is another hot topic. There's short-term plays and there's long-term plays as it pertains to marketing. You have to invest in both. There's not one silver bullet that is going to be an end-all, be-all right.
Speaker 3:And today's, like today, june 28th 2024, it takes anywhere from 17 to 20 touch points for a conversion to happen with a customer. That is not 17 to 20 cold calls. It's not 17 to 20 cold emails. That is 17 to 20 unique impressions, meaning you're hitting them via social, you're hitting them via email, you're hitting them via in-person, you're showing up where they're already playing. In person, you're showing up where they're already playing, and so it does take time to set some of this up. But once you start setting it up and you set it up correctly, you can see quick wins that are going to result in a much bigger lift longer term as well. But what it comes back to is understanding where your audience is playing, and I don't have the quote in front of me, but it's something crazy, like 90% of people have recently been quoted saying that they've been influenced by social media to make a purchase, and that is in the B2B space. So it's not just a B2C thing, it's a B2B thing as well.
Speaker 1:So if we're not, investing in social.
Speaker 3:You should be.
Speaker 1:Yeah, just so that we got the jargon B2B is business to business and B2C is business to customer, and it's kind of like in the do-it-yourself world the DIY, the DIY, do it for me, do it myself, et cetera, do it with me. There's again, one size doesn't fit all and you've got to hit them all. You remember the Brick Met in Canada? The furniture company, yeah.
Speaker 1:They had a guy who did advertising on television Stephanie, his voice like you get mad because the commercial is like 10 times louder than the normal volume of a television and it was so successful he ended up owning the company, wow. The guy who ran the ads. I mean, dear Lord, they couldn't do without him.
Speaker 3:That's personal branding at its finest. Right there, you got it, babe.
Speaker 1:You got it absolutely.
Speaker 2:I don't think he ever showed his face even no that's right Now.
Speaker 1:Think back to IBM in the 60s. They had a dress code White shirt, blue, black, red tie, black or blue, that's it. No plaid shirt. You know it was unbelievable. And so they didn't want anybody to see what you were wearing. They wanted to hear the message. They wanted the customer to be concentrating on what you were saying, and that's all. And so how, in the marketeer's world, how you get like? Think about the Visa commercial Everywhere you want to be.
Speaker 1:That was one of the case studies that I got out of Harvard that we used to use in our classes. The guy that created that, he's brilliant, but you could walk around in a dark room with 100,000 people and nobody's going to come up with that line. Boy, is it powerful. What did American Express do? From the other side, they only had one card at that point. Now they got about seven. Duke, on the other side, they only had one card at that point, now they've got about seven. So market segmentation again comes back, stephanie. And who do we want to go after? And how do we go after them? And let's go. And that means you've got to have plans, you've got to have formats, you've got to have tools, you've got to get messages. And you do all of that for your clients, don't you?
Speaker 3:Yeah, yeah, I think it makes me realize.
Speaker 2:Another reason why, like, I'm excited to work with stephanie on this is because, you know, she thinks digital, she thinks modern. It's it's a passion of hers to see dealerships work that way, you know, and those are the kind of people that we want to work with too. The people who want to be modern, who want to be ahead, you know, who aren't scared to try what where the world is going, you know, and those are the kind of people we want to segment our market and focus on and enable to the work that we do. You know, people who just want to keep their stuff in their backyard and sell it on paper, those aren't really our people.
Speaker 1:The market that we're serving is creating a bunch of graveyards. But every 10 years we lose half of the market, half of the dealer market, and I went out and actually did it from 1990. And if you start in 1990 with 200 dealers, by the year 2000, you're at 100. By the year 2010, you're at 50. And now we're at 25.
Speaker 1:So most people look at their success with sales revenue. My sales revenue is up, ron, don't worry about it. I said really that's nice, you better be up if you weren't up. Like you've only got one out of eight people you used to compete with. Yeah, exactly, so there's freeze frame. One Second freeze frame is market share. There's an illusion as well.
Speaker 1:Caterpillar and John Deere probably between 60% and 70% of the machines in the heavy and large side of the world. As you come down you bring in Case and JCB and Bobcat and blah, blah, blah. But it's all predictable, it's all relatively static until you go to parts and service Parts market share. When I started, 1969, caterpillar used to survey the world, every customer face-to-face. Stephanie, imagine that every five years and the market share when I started was 83% Parts for a Caterpillar machine came from the Caterpillar dealer. I'm talking at a Caterpillar dealer theme in Biloxi, mississippi, and the head of the United States is in there and I wander the room, as you've seen it, and I had a microphone and a lavalier and I stuck the microphone in the guy's face and I said you know, when I started the market share was 83%. Would you mind telling us what Caterpillar's parts market share is? To Devin and to my amazement he said yeah, it's 38.5%. And I thanked him.
Speaker 2:So you never bought into the parts business, ron yeah well, that's right.
Speaker 1:But you know the market share dropped by 50%. Yeah, and then at the AAD, we surveyed every year a bunch of customers and we found that in labor, 15% market share was the norm, 30% was best in class, maintenance was less than 5%. And now, dealer, if you look at their financial statements, if they're 10% or higher, it's amazing. If you don't get the labor, you don't get the parts. So what are we doing to market parts and service? There's too many people now still thinking that equipment's what we're in. Go ahead.
Speaker 3:So I light up because this is one of my favorite things to talk about because of what you just said, right, one of my favorite things to talk about because of what you just said, right, it's no secret that parts and service should be what covers the overhead expenses of any dealership. Right, we've talked about that at Nauseam sometimes, but people don't remarket to their existing customers in the way that you just outlined, and that's actually something that Mets and I. That is kind of a beautiful moment within our partnership, in that there are post-purchase workflows that you can automate and set up for your customers. You know intuitively, based off of the class size of the machine that you sold them, that once you enter them into your CRM system on the day that you sold them, that once you enter them into your CRM system on the day that they buy it, that there's going to be, based off of how they use it and what the industry is or the application, the wear and tear is going to be at X rate. You can do some mathematical equation and say, okay, if I don't know definitively, because we don't have GPS on it, we still know around about the same time that they're going to either need service, or they're going to need filters, or they need a reminder that, hey, it's time for that 150, 250 hour service, and if you don't do it, you're not going to be within a good standing of your warranty, so you'll be at risk.
Speaker 3:And so then you take that post-purchase workflow, you put that into your DMS, your CRM system, and you start triggering that, and now you don't have to worry about having a PSSR because you have a system that's helping you do that for you, and people kind of want it that way. Anyways, think about your car. Your car notifies you when it needs an oil change. It's a very similar thing that we've all been conditioned to actually want. And so when you show up in their inbox or you show up in their text messages saying, hey, it's time for that filter, people will buy. But then you got to make that workflow even even quicker for them as well. Like, hey, it's time for that parts and service here, you can purchase it here and we'll drop ship it to you, or here you can schedule your service right here. All of that can be automated, all of that can be put into your system to where you don't have to worry about it. It's kind of one of those things you can set and forget to a certain extent, but it can be done.
Speaker 1:Let's use that as a tease for the next one, because that opens up a whole deal. Today, as an example, with QR codes and barcodes on every unit, think about your house, your furnace, your air conditioner, your water heater, everything you just talked about. It's required. Here's how long it's going to take. Here's where they are Set your schedule up. Here's the electronic catalog Place, the order. Here's the bill of material, all the rest of that stuff, that data is all available.
Speaker 1:So let's use that as the springboard to another one, maybe in July, and let's wrap this one up on the basis that I think we beat cybersecurity up sufficiently, do we? Well, I think the way that we're looking at it is two-step verification, number one, and AI monitoring by the second and there needs to be more on that, but that's up to you guys, pardon the way that sounds and then number two, what Stephanie's doing, where enlightened leadership in software and equipment dealerships understand that they don't know everything that they should know about marketing, and it's reach out to somebody who's a pro and Stephanie clearly is a pro and gives us wonderful opportunities going forward. So with that, as my close Metz, how would you like to end this?
Speaker 2:I would say, sort of like Stephanie made this comment about marketing being considered a cost center, and I find way too often that one of the things that our industry and the information systems people in it have trained our customers to think is that information systems are a cost center and they're a pain point. And I think, if you really look at modern organizations, information systems are not a cost center, they're an enabler, they're a way to engage your people in executing what they see needs to happen and automating your business, and so change that mindset that it's not a cost center. Marketing certainly isn't. I'm sorry if I stole your point, but start to think differently about information systems. They're a way to enable your business not just a must have something to keep the accounting done.
Speaker 1:Just as a comment, you might have stolen a point, but marketing is huge, so there's many other points Stephanie can bring us.
Speaker 2:It's foundational.
Speaker 1:People think it's a cost center.
Speaker 2:They think it's hats and T-shirts and t-shirts. It's like if you and I, ron and Stephanie, sat down on next Saturday with a bunch of pizzas and decided to build a digital dealership. You know just from scratch what we're really doing is writing the marketing plan, which is the foundation of everything I mean, and that's I always think it's sad when it gets put into brochures and hats. I agree.
Speaker 1:Stephanie, how'd you like to wrap this up?
Speaker 3:I would encourage people to get comfortable with the uncomfortable. At the rate in which our world is changing, whether it be marketing or technology or operations or how we digest information. Just in general, Stay curious, lean in, because if not, what was old will be old and you're not going to be aware of the new, and that may not be good for your business.
Speaker 1:Yeah, in fact, you put your business at risk. So, everybody out there thanks Stephanie and thank MetzS for their participation here, and I'd like to thank all of you who are listening. I hope you think about what's been said today, because I think there are some very significant and meaningful comments and thoughts that you should be taking advantage of In the meantime. Mahalo, and thank you for listening to this candid conversation. I look forward to the next one with you. Bye now.
