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
Breaking Down Dealer Reviews
Dealership operational excellence has never been more critical than in today's consolidated market. Troy Ottmer, a seasoned dealership executive turned consultant, dives deep into the often-overlooked opportunity of departmental reviews and their power to transform profitability.
The equipment dealer landscape has changed dramatically—where once there were dozens of competitors, consolidation has left many markets with just a handful of dealers. Yet despite this reduced competition, many dealerships struggle to maximize their potential, celebrating modest profits while leaving substantial money on the table. Troy reveals how the average dealership carries a staggering 50-70% dead inventory, directly impacting not just working capital but creating ongoing costs through warehouse space, property taxes, and lost sales opportunities.
One particularly eye-opening discussion centers on the difference between typical parts department performance (8% net income) versus what's actually possible (25% net income). Troy and host Ron Slee explore how lost sales tracking has virtually disappeared from many dealerships, despite being a critical tool for understanding market opportunity. They also dissect the faulty logic behind common "cost plus" pricing strategies for wholesale customers—strategies that often result in actual losses when fixed expenses are properly accounted for.
Beyond inventory management, the conversation tackles the growing talent crisis facing equipment dealers. With projections suggesting that by 2030, half the workforce may lack necessary skills for employment, finding and retaining qualified staff has become an existential challenge. Troy offers practical insights on leveraging technology like e-commerce platforms to address staffing limitations while improving customer experience.
Whether you're a dealer principal, department manager, or OEM representative, this episode provides invaluable perspective on operational excellence in equipment dealerships. Reach out to Troy for operational review services that deliver measurable improvement to your bottom line—because in today's competitive landscape, good enough simply isn't.
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 Candid Conversation. I've got with me today Troy Otmer, who's had a varied experience in dealerships in various leadership executive positions, as well as being a technician, and he has left the corporate safety net and has gone into the world of consulting has the skill set to be able to do that easily. What we want to talk about today is operational or departmental reviews and how that tool can be helpful to dealers. With that as the introduction, Troy, good to see you, Welcome, Hello again.
Speaker 2:Yes, once again, good to be here.
Speaker 1:Without having you be the one to say it. What I'm going to say is that we've had a 10-year delay in generational or leadership of dealerships transfer. More owners are in their 70s than they're in their 50s. True, We've also had a real serious consolidation of dealers, and I'm going to say 50% have changed between now and the number of dealers today. If it was 140 years ago, in 1985, it was 50 in 2005. It's 25 today, correct. Here, most dealers are looking at sales revenue as being a measure of whether they're successful or not. And if they aren't having sales revenue equal to or greater than what they've experienced in the last 20 years, there's something wrong, because they're competing with half as many people. And the illustration I'll use is Canada. There used to be 10 Caterpillar dealers. Today there's two. There used to be I think it was six Komatsu dealers. Today there's one. John Deere Industrial there's one. I mean, all of this stuff is pretty nasty. So, as a consultant coming in with that kind of landscape, how do you get the owner's attention?
Speaker 2:It is, you know, and I'm five, six months into the jumping out of the corporate safety net, as you called it, and really establishing. You know how I want to approach the business and my approach is really more aligned with. Hey, I'm still fresh from a dealer perspective. It's fresh on my mind, whether it's at the local level or if it's at the corporate level and operationally looking at doing, say, a dealer review. You know there's a lot of different things to talk about and you know, obviously you know you've got sales and then if you're rental oriented, then you have the rental aspect and sales could be broken. I'll go back to that.
Speaker 1:Sales could be used, sales and new sales.
Speaker 2:That's two different animals, two different inventory subsets, all the different variables that go with that. Then you jump over to parts and service and you know I know you and I've had some other conversations where absorption is still a key component to running a dealer group. It does, as you said in one conversation, it does come with restraints that limit other things, but it's still a good KPI to reference. But there are other things return on assets, I think in one of the other podcast conversations we've had and that actually has trickled into some conversations recently with a couple of other different dealer groups that I've had some conversations with. But for me I'm thinking in the current state of things and you referenced the last 10 years.
Speaker 2:You know in that last 10 years we've had this thing I don't know if you heard of it called COVID, right, and that that was a game changer and that's five years ago now, right. And you know, and it's, and a lot of businesses have done very well, simply because of the inflationary factors that come with it, there's been an uptick in supply chain. So, hey, now you can name the price you want for it. Customers don't have a method to negotiate because there's supply chain shortage or a perception of supply chain shortage. I think there was a little bit of that going around as well, globally and nationally.
Speaker 2:But for me, one of the things as I start having these conversations and I'm going to approach it more from a departmental review standpoint and I'll go any direction that the dealer principal feels they have pain points through some basic Q&A. But for parts department, for example, you know looking at your parts inventory, evaluating parts terms, obsolescent levels, review, fill rates, stock out occurrences, and you and I've had some detailed conversations on what you should stock and when you should stock it and why you should stock it, and a whole laundry list. And you know, similarly, for the service department, you know analyzing labor rates, labor sales, what's your effective labor rate? Nobody talks about that one a whole lot. You know what is effective labor rate, what, what does?
Speaker 2:that really look like right you have a $300 an hour door rate, but do you really know what your effective labor rate is at the end of the day? And a variety of different things.
Speaker 1:It's kind of fun. Troy, everything you just went through is absolutely true. Let's just take that a different way for a second. Everybody's looking at financial statements Correct, that's how they do the measurement. Let's ask that the dealer give me a financial statement every day Correct? Now the world has changed. I'm not looking at last month, I'm looking at yesterday. Then the next question I want to ask is okay, I got the report and you don't like the number.
Speaker 1:Terrific, what are you going to do about it? That's right. Oh, even more pointed, who have you got available? That's going to be able? Isn't everybody busy? Well, yeah, I think so. Well, who's going to do this for you? And that becomes a problem. And that's kind of where you stick your hand up and say, yeah, I think so. Well, who's going to do this for you? And that becomes a problem. And that's kind of where you stick your hand up and say, well, let me do it for you. Correct, I don't work for you. I've got free time. Well, not free time, reasonable time. It's really remarkable. Dealer, surplus debt inventory you mentioned in your list. What's a number that you're comfortable with that you're going to? If you got out in a plane, you and I went for a plane. We went to a hundred dealers. What's the least dead inventory as a percentage of total inventory that we're going to find? Any idea?
Speaker 2:The least if you, let's say, you have somebody that's on top of their game, you know you're probably going to find some rolling average number of 20 to 25 to 35 to 40%. But the harsh reality, ron, it's you're not going to find a lot of those. It's probably 50 to 60 to 70 percent, honestly.
Speaker 1:So let's just take 50 percent and you and I know that, and the dealer won't be surprised if you create a report that shows that the report that the parts manager created for you from your system without any modifications necessary, because there's reports through which we can do this, yes. What are they going to do with it? It should be a simple answer, but it's not Exactly.
Speaker 2:It's similar to what I just did. I paused for a moment because that's the response you typically get from the dealer principal. They're like, well, how can I be making all this money for the last decade? Yet I'm not. How is this possible? But they don't realize the cost that they're incurring either.
Speaker 1:Well, that's true, but the other how have you been able to make all this money? What you're not saying to me is how much more money you should have made. You're happy with what you got, but you have no idea of what you've left on the side. It's like this is kind of weird, isn't it?
Speaker 2:Yeah, you left a lot on the table and you walked away, basically.
Speaker 1:Yeah, and I haven't met very many owners that like being told that haven't met very many owners that like being told that you know.
Speaker 2:Well, one thing you mentioned just a few minutes ago is who are you going to have to do that? Most businesses today in the dealer world, whether it's automotive, commercial truck equipment, light heavy utility, etc. They're understaffed to some degree and they do it under the premise that, well, we have new technologies that help us work smarter, not harder, and that's true. But are we truly utilizing the technology and or the people, or both we have, properly? And the answer is no. And I would throw a third thing in there Do we have the right people?
Speaker 1:to begin with, Well, the other, you know everybody's concerned about tariffs and let me go over there for a second. And Trump's saying he's doing tariffs to level the playing field and he'll bring more manufacturing jobs back to America. And when China entered the World Trade Organization, 25% of the World Trade Organization, 25% of the American workforce, was involved in manufacturing. Today it's seven. I was saying China is the direct cause of that, but they're a very large cause of that. But what Trump says is I'm going to bring those jobs back. So my problem is okay, you're going to bring these jobs back.
Speaker 2:Where are you? Going to find the people Well, or the skill sets.
Speaker 1:That's what I mean. Yes, and as I talk to people, almost everybody is saying the same thing, and I think you are too I can't find talented people anymore. It's hard, it really is. So. Ed Gordon, one of the guys that writes for us. He's on the Chicago Fed board. He's a PhD in economics, phd in history. He's written 21 bestsellers in the New York Times and his statement to me was 50% of the workforce by 2030 will not have the skills required to be employable, so bring that back into the dealerships. We need talented people to be able to do it. We don't have any spare people lying around.
Speaker 1:A dealer that's smart will say well, gee, troy's offering to do it for us. What the hell? That's a very cheap way of going at it. It's cheap the first time through, when you prove to them how you can actually save them money real time. It's not as cheap although it's free, if you will, for you to pick up all the other pieces, which is why, when you and I talk about reviews, I don't want to do a parts department review.
Speaker 1:I want to do an inventory department review. I want to do a warehouse department review. I want to do a counter telephone sales every single one of them and I'll be able. I can guarantee, and have done this for years. I'll guarantee you'll get 10 times what I've cost you back and if you get more than that, my giveaway. If it's less than that, it'll be free. If it's more than that, I want 10% of the additional savings you get or the additional profits you get. And all of a sudden the guy says well, your price is pretty good, we'll go with that. Because they look at me and say well, if you're going to guarantee it's not a gun, you're pretty confident you must be getting it right.
Speaker 2:Right right.
Speaker 1:So you know, somebody like you doesn't come along very often where you've had the background experience and scars that you've had in the business, starting as a technician. Now the problem is for the dealers to have the cutzpah, the strength to understand that they're not doing everything they could do and that you can affect the change. And there aren't very many of you out there doing this anymore.
Speaker 2:Well, and thank you for that compliment and I would say it this way In my former world last year, if you were to come in, ron Slee would have come into my dealership and while it was extremely profitable, parts turns were up, inventory obsolescence was down. We're clicking on 97 of all the, the metrics right, and we're doing the right thing. Guarantee there are things. Just through the, the normal nuances of business and the flow, you could probably pick out some things of doing a micro review, which is what you just described. As you walk through the warehouse and you pick up on something that, hey, why are you doing it that way, you know, or what's the reason? And there may be a legit reason, may not. But I think all dealer principals, all consultants, you know, as we, you know, and we all came out of the dealer world, you and I and others like us, and you know we bring different perspectives to the table. And you know, here we are 20 some odd years later, you and I, you're still teaching me a few things and then I may teach you a thing or two along the way as well. And you know, and that's part of this evolution and that's what I want to give back, I think, doing, for example, the parts department.
Speaker 2:Yes, that's easy to say, I'm going to do a review of the parts department. We're going to do this long checklist but rather break it down into the micro review of a warehouse the parts counter, front and back, because those two very different animals right Front and back parts counter, and then if you have outside sales, right front and back parts counter, and then if you have outside sales, then you need to look at that as well, and you know. And then from a parts management team, what if? What if you have someone that's in? What if you got a procurement department? That's a whole nother level of the parts department. That's influencing, influencing the productivity and efficiency of a parts department, which would become part of the review, you know.
Speaker 2:And one thing we just left out not a lot of people talk about how well is your supplier or your OEM doing? Are they part of your success or your failure? And so there's a lot that goes into this and we, you know we could have multiple podcasts just about the parts department as a whole, but I think, in a nutshell, you know, breaking it down and into, you know it's each particular segment really makes more sense, and that's been my recent approach, as I've continued to establish who I am, both as a consultant and as a former dealer guy. You know how I can better serve.
Speaker 1:You know I'm finding my footing and I'm okay saying that, oh sure, well, you've only been at it for five months and it takes a while to get. I think it took me almost two years when I started to figure out how to make money at this. You know, right. But every single side of this, if you, when I talk to dealers about something like this and I'm going to make it personal for a second not to take it away from you, sure, but I'll sit down and have a couple of cocktails after work and just chat with and I've done that with a lot of guys and Tom Trapp, who was chairman of a family Bobcat dealership, very successful in Cincinnati. We're sitting having drinks and I say, well, what's your net income? He says I don't know. I said, how come? You don't know? He said I do when I'm looking at the financial report, oh, that's last month, what's it going to be this year? I don't know the owners, and I love them to death. They're more peddlers, they want to sell equipment or they're financial guys. They want to make money and there's not a lot of operational people.
Speaker 1:I'll give you a couple of examples. When I started with Caterpillar, the chairman was Bill Blackie, who's almost renowned in the industry, and that's let me call it 1970. It's a little earlier, but call it 1970. So here we are, 55 years later. My not so humble opinion there's only been one other chairman that's worth his weight in gold, and that was Don Fights, correct? I would agree, yeah, and they've had very talented men very well. I would agree, yeah, and they've had very talented men very well. Umpley, I think, has a PhD in economics or something. They're smart people. It's not brains that is required in this world, it's dirty fingernails. Yes, you've got to have done the work. Yes, if you don't do the work, you're not going to understand the little funny things that go on. If you don't know how to deal with customers, you don't know how to handle objections, you don't know what they want. You're dead meat and you don't get that out of a textbook, right?
Speaker 2:That's where your scars are so important, coming out of the dealers two or three of them are so important coming out of the dealers two or three of them Correct and to your point is where I do my best work and I'm very good at analytics and sitting behind a computer, like we are now, looking at spreadsheets, writing different queries and analyzing data. That's an acquired skill set. Where I'm good more naturally is put me in the dealership Right, even at the executive level. I'd like to spend more time in the field with the dealers that I work for or represented or manage the locations, because, being available at the parts counter watching, assisting, coaching, guiding I can cover a lot of ground while doing that and I can enhance the skill set of different people and get them to understand the why behind this. Hey, why aren't you recording lost sales? You know no one. In current times, I'm finding it very hard to identify dealers that capture lost sales anymore.
Speaker 1:So freeze frame there for a second, because I think this is typical of the whole thing. Why is that an issue with dealer management systems? Why does not every supplier of a dealer management system for anybody in capital goods that has a parts business? Why are they leaving out lost sales? Well, I have to rely on somebody putting in. That's not true. Start everything and put it in as an order Correct and you can only get it out of that order queue if you give it a lost sale or a sale Correct. Yeah, it's real simple. How come nobody's done that?
Speaker 2:Very simple nobody's done that. Very simple. It's a piece of information that is critically important to managing what you're ordering and the why. And look, you want to increase your wallet share of what you're getting of your customer. You sell them a tractor, you sell them a truck, but if you don't have the lost sale information one piece of the puzzle you can't effectively take care of that customer because if you don't have it, they're going to go get it. You don't document it, you won't have it next time. You can't fix the problem without that capturing of that debt.
Speaker 1:So you just open up another subject and think of it this way what is the parts and service consumption of a machine operating in the field at 1,000 hours a year? We know the data. We have that from the manufacturers. It's accurate, it's there. Why don't we use something like that? That's right.
Speaker 1:Yeah, and so, if I know, my potential for this customer is $100,000 this year and I've only sold 20,000, what the heck's my salesman doing? That's right. He doesn't know that because we don't give him that information. Why don't we? Why don't we have that in our damn systems? Again, I'm pointing at the system suppliers now, not the dealers, but the dealers aren't asking for it, quite frankly, because they don't know what to ask for.
Speaker 2:Well, one response on lost sales I received recently. It's not the first time I've heard this. Well, we track it by the number of emergency orders we put in and I'm like do you realize how grossly inadequate that is to ascertain what you're missing in the marketplace, to ascertain what you're missing in the marketplace.
Speaker 1:What that's a reflection of is how poor their inventory service level is. It's gone up. I can be really successful at that one. I've got a large amount of emergency orders. That proves I've got all kinds of lost sales. Yeah, because you're blowing 30% of your revenue because you don't have the partner.
Speaker 2:That's right, and with the advent of daily stock orders, that has been around for 20, 30 years or whatever.
Speaker 1:Stop with that one. Okay, what's really fun most of the dealers you're going to go to have more than one major supplier. Correct, correct, yes. So basically, if it's not Caterpillar or Deere, they're somewhere around 60 to 70, maybe 50 to 70 percent of their business comes from one brand, but that means I got 30 to 40 percent coming from somebody else. And now that mix of things becomes even more problematic.
Speaker 2:Right, Well, and the 30 to 40% may be representative of 10 different OEMs. Exactly so it scales in complexity and it's almost like a snowball going downhill, gaining mass right, yep.
Speaker 1:So as a consultant coming in, you have all kinds of opportunities because you know, just take that 30 to 50% dead parts inventory. You know, just look at interest rates. I'm going to pay 5%. It's not interest rates. How much is it costing you a square foot If 50% of your inventory shouldn't be there? 50% of the warehouse isn't required.
Speaker 2:Well, that, and so your property tax on the building, aka warehouse property tax on parts on the shelf.
Speaker 1:Oh, and all obvious to somebody who's more an executive level further up the food chain, looking down, and they're making 32% gross profit on parts and they got 14% expenses. So they end up with 8%, or whatever the number is, of net income and they say, well, that's darn good, well, it is. What should it be? Should be 25% net income. Well, how the hell are you going to do that? Now we can start to talk. Finally, I got a rise out of the guy. I said well, wait a second, I don't believe you. Okay, no, but seriously, troy, I troy, I'm gonna look and say, well, if I can prove to you that that's true, will I get the job? It's kind of like having objections in a sales call because I say, almost on the first one, if I can overcome that objection, troy, you're going to give me the order. And the answer is no, well, I got to work a little harder. The answer is, yeah, well, I just saved a whole bunch of steps, didn't I?
Speaker 2:Well, and to your point, I would translate that into, as I'm teaching myself in this new role I'm in, I have to ask for the sale.
Speaker 1:Big time often.
Speaker 2:Often, and it's not that. I didn't do that as a dealer, executive or general manager or any of the positions. I'm used to doing that, but again, this is a little new, so I'm no, look you're doing well.
Speaker 1:You're still alive, you're still making money, you still got a family. Nobody's mad at you. Yeah, this is cool. Yeah, but fundamentally, the people that are going to buy your services have to understand that there's a problem, or change that, that there's an opportunity.
Speaker 2:Well, and one of the recent just you know conversations again looking at who are you doing business with right and you and I kind of have the same thought here is we don't just look at the P&L and make our decisions, that we want to look at transactional data. I think that tells more story than anything the CRM or a P&L will tell you is what are we selling? What's the why behind it? Youodity codes, critical code it's a dear term and the critical code nature, but every OEM has their version of that. But who's buying what? And, more importantly, let's break it down into two subsets. You got traditional customer, your retail and dealers forget. They do a lot of wholesale business as well.
Speaker 1:They don't really realize that it may be wholesale, I don't A hundred percent. And one of the things that I used to do and every mechanic that comes in, are you an employee of that company or are you a subcontractor? Are you an employee of that company or are you a subcontractor? And I used to do some stuff that was pretty dirty, pool type of thing. But I'd get somebody ordering parts and they needed a fair amount of help at the counter or wherever the hell they were getting the help.
Speaker 1:After I serviced the customer and they'd left the dealership, I called the customer. I said you know, george was just in here and he spent about a half an hour trying to figure out what he needed. What are you having him do? What do you want him to do? Like I'll help you figure out whether he's okay or not, like I helped him, but what are you expecting him to give you? And now the guy's got it. You know there's a couple of things that come in mind there. Why, oh my God, what you know, does he know what he's doing? Well, I think, of course, that's my intent. You know it's called pucker power, correct?
Speaker 2:Right? Well, you're sending a subtle message by making that connection the way you did, and I've done that. I wouldn't call it dirty pool by any means. I think it's just being a responsible business owner or business manager and supplier and supplier and fulfilling that relationship. But circling back to the wholesale side of what goes across the front counter, how many dealers are offering deep discounts that are either approved and, more importantly, not approved, right? So, hey, the only way we're going to sell this account. They don't buy any labor, they have their own technicians.
Speaker 2:So how do we get into this account? Well, I'm not saying it's right or wrong, but you may have to go to an account. Now you're selling at cost plus 10, for example, and so if you're not paying attention to what, what those parts are, how they're, how they're flowing in and out, you know, and then your margin is slipping. So let's say, your net effective margin at the end of the day, all in is, is 36 percent. That was quoted to me recently. I think, wow, that's pretty solid. Right, and I said so does that include?
Speaker 2:everything. Well, no, we split out the wholesale. I said, well, what qualifies as wholesale? And then they laid it out to me it's customers that we sell at a reduced rate. And I said, well, what's the criteria and who decides what that threshold is? And it was silence, yep. And then I said so, when you take your 36% and you bring the wholesale together, what is your net effective margin? And they said I don't know. And I'm like well, why are you separating those two? It's good that you have them separated.
Speaker 2:That's great, but you still need to look at the big picture on the P&L, and it was for some reason it was calculated differently.
Speaker 1:Yeah, and you know, going export to me in the definition is anything that's outside my territory. Yes, and a number of years ago some of the manufacturers basically stood on dealers that were shipping outside their territory. It's a crazy game, but you know. Go back to discounts. Did you know how I do this? If I got a part that's selling prices $100 and I purchased it for 70 bucks, I'm making $30 gross profit. And then, if I go by standards, the parts department has a 10% expense. So I got $10 of expense against $30 of gross profit. I make $20 of net income and then, you know, we say cost plus 10. So my cost is going to be 77. I just gave away $23 from my normal selling price.
Speaker 1:When I make $20 net income, does that mean I'm losing $3 every time I make one of those transactions? Yes, it does. However, the principal, or somebody who's advocating that position, says well, I'm getting $10 more than I would have got otherwise. It's a false premise, is what it is that's used all the time. And then, you know, take simple things, troy, where our system suppliers aren't helping us. How come a technician doesn't order the parts on a computer by himself in the field?
Speaker 2:Well, when they worked in my dealership they did I know.
Speaker 1:But get in a plane. And how many do you find that do it that way? Very few. And why is that true? You know you go through all of this stuff. That's why those reviews are so valuable. And you know you're going to call 100 guys and you might get three that'll buy it. It's okay, you got to call them. I tease people about 7Up. The guy that created that died at 6Up. He didn't realize how close he was.
Speaker 2:Well, right and Ron, what I've been doing is again establishing. You know who I am and while I'm new on the market, so I'm an unknown quantity in some areas, right, but some people that do know me in the OEM side, you know I'm talking to different OEMs, I'm talking to dealer groups and establishing that, and I feel I'm right on schedule with five months in.
Speaker 1:Oh no, this isn't a reflection on anything other than what? What does what should the dealer be getting in the marketplace? Who are the people example, who are the people consulting in this industry other than you that are trying to help? There's not a lot. There haven't been when I started. Now the advantage you've got is you're domestic. I was doing it internationally and that's a bone crusher. So virtual meetings are going to be very helpful in that respect. But you know, sometimes if you look at a sports team or if you look at an orchestra or a band whatever the heck we want to call it, but if they're good, you see it, you hear it. You walk into a dealership. You don't know whether they're good or bad. You haven't done business with them. You walk in this looks nice. No, it's dirty out there. There's paper all over the place. Look at this, it's dirty. And hell in here. Don't go under the bathroom. You know it's a customer service world, right, and we're in a different place now.
Speaker 2:Well, I know you're not from Texas and I don't know if you've ever heard of Buc-ee's back in the 80s and they are known for these mega gas stations and they're not truck stops. They don't allow trucks in, only consumers. And people go there because it's a novelty. But one reason people go there on purpose is the cleanliness of their restrooms, the cleanliness of their facilities. It is prim and proper all the time. Rooms, the cleanliness of their facilities. It is prim and proper all the time.
Speaker 2:Now smaller fuel stations in the travel routes in this area and now they're in some other states, but it's the same thing at the dealership. A customer rolls up to a dealership and it's dirty, it's cluttered, it's run down, the lights don't work. It really doesn't instill confidence and that is also part of the dealer review. And maybe those are hard conversations because they're about to go out of business and you wonder will you get paid? Maybe. But you know it's how you turn some of those things around and a lot of times it's just getting in front of the right people and understanding what their day-to-day is. And oftentimes you do find a lot of good talent that's just untapped, yep.
Speaker 1:And you're going to find that more often than not, as you're reflecting on it Right, the other thing that comes down is not only is there a small number of people that are doing the consulting side, there's a smaller number of people inside the dealership that have the smarts to be able to know how to implement change or what change to make, and there's a whole bunch of that stuff out there. Dealer business systems have been stuck. I called it paper to glass, if you remember, when we brought computers in, they took a paper form and they put it on a computer and did it faster, but it didn't change the method. Well, making software changes in a large dealer management system isn't the easiest thing in the world to do. As a result of that, not very many of them have done anything. So the number of dealers that allow me to take a parts sales position and have it be done on the internet or have customers place the orders themselves, right, there's.
Speaker 2:There's so many opportunities now with technology, kurt Troy, as you well know, Well, and and that that's one of the things with some of the recent conversations is what, what type of digital or e-commerce platforms do you have and are you able to interact with your customer through that platform? Right, if you're short on staff and I can guarantee you most every dealer group is probably short parts counter staff I'll walk in and I see 10 people at the counter and I see one person helping them. I'll walk in and I see 10 people at the counter and I see one person helping them. Oh, by the way, that same person's answering the phone while they're helping other customers, and you know, and then you know. So an effective e-commerce platform really is beneficial, and I know Cat has theirs and John Deere has theirs.
Speaker 2:Komatsu, you know, and others are coming into that area as well the connectivity to customers. But we, you know I'm not certain it's being rolled out effectively, and I know me and you and others like us, we can't be everywhere and help every dealer all at once. But you know, and where I live in the greater Houston metro market, I can reach a lot of different dealer groups, whether they're big, tier one, oems, or tier two, or independent used companies or rental companies. Had an interesting conversation with a publicly traded national rental account the other day and it just kind of came out of left field and they were asking some interesting questions and you know so it's ever.
Speaker 2:I think there's a definite need and you know, at some point when I get so busy I probably have to say no. But you know I'm open to all conversations, including doing dealer reviews, that that would be remote in nature, like we're doing right here, remote in nature like we're doing right here. Um, you know, and and the dynamic of that's a little different where I probably wouldn't be as effective as if I could visit the dealership um, my preference is to do to, to visit in person and to get a feel, because I think I could give you a better work product if I'm there in person as well as in the final review, right?
Speaker 1:I agree with you. The other thing that happens when you get there is many times the employees have suggestions that the owner won't listen to, but they will listen to you with the same thing and it bothers the employees. And I tell the employee I've got to come back and tell you what he said. He being the owner, I'm not assuming it's a male and the other side of things. When we go through it and the owner says, well, gee, that's a really good idea, I say, well, it's not mine. Oh yeah, who is it? It's George, the guy that's been here 35 years that nobody seems to listen to. Because there are people like that all over the place, aren't there, right?
Speaker 2:Correct, there is.
Speaker 1:This is a strange world, and it's not just the equipment world, it's every damn car dealers, boat dealers, engine dealers, washing machine, whatever. We're all the same, you know, hang in there, well. And yeah, I don't know what track you're on or everything, but I'm not worried about what you're doing. You just need to get some people saying yes and then away you go.
Speaker 2:Yep, people say yes and then uh away, you go, yep, any well, and and I, I received a sir, no, go ahead. Oh well, I the other day I had a inquiry on the marine side, you know, and we didn't, we haven't mentioned marine in any of our conversations, but that's another dealer group. Um, and and I'm not a subject matter expert on all things marine, I have a in the years past with John Deere. They were active in the marine industry. So, and from that standpoint, yeah, I'm knowledgeable, but I'm a bit dated and I would have to be up to date.
Speaker 2:But you know, when it comes to parts inventory management, dealer reviews, process management for parts service sales, you know a lot of these, these, let's call it, for lack of a better term, a checklist there's things that apply across the board. You know automotive, light duty, commercial, etc. But you know, I like what I'm doing and I feel really good about the approach and establishing. You know how I view the world and what I'm doing. I feel really good about the approach and establishing how I view the world and what I can offer, and I've had some good interests and by no means am I disappointed or have my expectations been deflated because I use this a lot. I feel I'm right on schedule where I should be for five months.
Speaker 1:No, you're fine, we'll circle this up and break it down. We talked about pretty generic stuff, but also into shorter blocks. I'd like to have a chat with you next time through, if this fits your schedule, on the maintenance that's required for capital goods. Okay, and why it is that OEM dealers have less than 5% of that available market.
Speaker 1:And we know the answers without going very far, but I'd like to have a broader, deeper discussion on that so more people would understand that maintenance is a critical element in any direction, in any repair and maintenance business well, and that's a good good topic for, definitely for next time.
Speaker 2:but just a short statement on that is even though a lot of dealers say, yes, we do maintenance, we do all those things right, we, we advertise it, I don't think that they are maximizing the opportunity. And if they are, are they putting the right people on those tasks? And again, our next conversation will certainly go deeper on that, but definitely something to talk about.
Speaker 1:This one has been different as well, troy, so thank you for your patience with me as we bounced all over the damn place, but this is going to be fun, so any closing words that you want to throw at us.
Speaker 2:No, I would say, as always, thank you for your time and your continued guidance, and it's been a pleasure working with you over the last 26 plus years. I know I say that in every podcast we talk about, but it truly is. You know, you continue to keep me sharp and on my toes and I like those sidebar conversations. They get a little spicy at times, which is good.
Speaker 1:Flattery will get you everywhere. Partner.
Speaker 2:I will, but no other than that, thank you for your time and look forward to our next conversation.
Speaker 1:Okay, and thank everybody who's been listening to us and hope you've enjoyed this. We'll have another Canada Conversation with Troy very soon. Thank you for being with us, mahalo. We'll see you next time.
