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
Mets Kramer and Ron review the machine ownership and a better use of information to drive equipment sales.
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The Digital Dealership continues in this Podcast. We review the machine ownership and a better use of information to drive equipment sales. We review Mets' blogs of Self Service and Change or Remain. The conversation points at the next step. The impact of the generational challenges of knowledge/experience and resistance to change. The need to have "employees" who understand and can lead the business to understanding this most important item. This is a Podcast that should not be missed.
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. Today we're joined again by Metz Kramer. Metz has been talking with us in the last couple of podcasts about the digital dealership. And we want to continue that discussion and in more of the how-to approach and how he's dealing with his audience and our clients. Welcome, Metz. Good to see you again. Hey, good to see you, Ron. I appreciate everything that you've been writing and doing in the podcast. We're starting to get some traction, I think, with the audience, my followers, anyways. The last podcast we did was kind of addressing the fact that people are worried about losing their relationships with people. And you and I talking about machine ownership and how that changes the sales function. Maybe you just want to give us a high-level recap of what we did the last time.
SPEAKER_01For sure. So in our last discussion, we kind of looked at something that we all have known about for a long time: equipment data, having customer equipment data, and then looked at how that applies to both the digital dealership and what you should be doing with that information. And fundamentally, in kind of a traditional way, equipment data has always been a piece of relationship. It's knowing everything about the people that you want to know well and work with so that you can serve them better. And at the same time, in the digital dealership and with analytics, and we touched a little bit on having analysts in place to make value out of that information. You know, we're in a time when we need to be taking that equipment data and applying knowledge and other information to it in order to better support our customers. And so in the last couple of weeks, I did some writing and I looked at this idea that self-service approach, that we're all being uh become accustomed to be kind of trained by the world around us to serve ourselves through apps that let us uh order our coffee at Starbucks. Um and that that actually doesn't take away from the business, it just enhances it. And then I I think the final piece that um we want to look at is the relationship side. And the relationship side is why we're all in this business. Um, it's what we enjoy aside from the the iron, and it's an important part. And and often what we find is that or people are worried that you know relationship is the most important thing. They think that all this digital stuff is going to take away from it. We just want to show people how that isn't the case, that the digital doesn't take away from your relationship, all it does is is strengthen that relationship.
SPEAKER_00Yeah, I agree. No, no, I I I think that's perfect. And then that kind of reinforces the blogs, the last couple of blogs you put up a couple of weeks ago on self-serve. And and we're in a self-serve world much more dramatically since um Amazon and and got in there, but also the the the need to change. One of the things you and I talked about is this is a generational issue as well. I was I was talking with a good friend of mine, client for more than 30 years, whose birthday is this week, and he's I think 67. Yeah. And I was he's the chief operating officer of a very large dealership, and I was pretty cranky about the fact that they haven't made much change in their technology and use of technology as a dealership. And he said, What do you mean? And then I rattled off 15 to 20 different projects that should be underway, and and actually they're late. And he said, After I'd finished, he said, You know, I don't understand what you're talking about. It's three-quarters of those things. I haven't got a clue what you you were talking about. And I said, That's the problem, isn't it? There is nobody on board. You probably see that much more than most.
SPEAKER_01For sure. I mean, I think you touched on a couple of things there, like right off the top. Uh, one is lack of resources. Um, you know, dealerships tend to be fairly lean operations. So the last couple of years has certainly been very busy. Uh, and so it's hard to focus. Um, I certainly learned that if you're going to focus on certain projects to move the business forward, you need to have dedicated resources. You can't have your parts manager, you know, running the parts department and the same time trying to implement a digital parts strategy that just typically doesn't work. Um you can only have one master, as they say. And and then, you know, the generational side, I think that I kind of touched on that with this self-serve idea. You know, I started talking about how I went to a gas station that was actually full serve. Um and I think to some degree, and then eventually we become self-serve, we just pump our own gas. And one of the primary reasons we do it is because we eventually decide that, well, it's actually faster for me if I just jump out of the car, swipe my card, and then I fill the gas and I'm gone. I don't have to wait for the teenager to run back and forth and do all the work for me. Um, and that is a world that we grow up into, you know, and if we look at generational differences, the some generations are used to having things uh more full service, uh, and younger generations, because of a lot of technology creeping into our world and making things easier, are used to self-service. And and one of the key drivers there is people want to do things at their own pace. You know, and if you have a generational gap there where you know, people like that you were talking to, your chief operating officer, where if his disposition is he appreciates full serve, then even getting involved and understanding customers who want to do things at their own pace in a self-serve world, the the way the younger generations are becoming more accustomed to, that's you know, a lot to stretch, both the technology and the disposition of how they prefer to do things.
SPEAKER_00Yeah, it's it's um it's it's getting it's it's getting to be a case where I was talking to another guy yesterday who's heavily involved in technology worldwide. And he was listening to a Kinsey report that looked at 30 different industries over the last 50 years and compared sales growth in those industries with typically a stock market Wall Street type of review. Yeah, and of the 30 industries, the bottom two, the worst one was agriculture, the second to worst one was our industry. Wow. And in both those cases, if you take out the large-scale farming that we have in Canada and the United States, where we've got 25 and 50,000 acres, somewhat in Australia, somewhat in Argentina, the rest of the world is small acreage farming. And there hasn't been the GPS driving the machine with no operator and sensing what the earth is and pumping a seed down 12 inches versus seven based on moisture and dah-da-da. Right. And and he he the the point that was being made to me yesterday is he says if you think about how we've used technology, they're absolutely right. We haven't done anything. Yeah. And your your lean, your comment about population and and headcount. One of the things that strikes me, and I've I've been thinking a lot about this the last three to six months, most of our sales per employee metrics came from the 1980s. Yes, when interest rates were 15 to 18 percent, and businesses adapted because they had to adjust their outflow, their cash. And the biggest variable expense was headcounts, so they dropped the headcount in order to pay for interest, and and we've never put it back. No, and as a result of that, here's some scary things. In the early 80s, when I'm still with a caterpillar dealer, our market share was in the low the early 70s. This is the market share was in caterpillar parts in the early 80s, 82, 83 percent. In the late 18s, 2018, 19, that had dropped in the caterpillar world to a high of 38 percent. So we dropped by 50, we dropped market share by 50 percent as a consequence, in my opinion, as a consequence of not maintaining customer contact or market coverage. You can do only so much, you can only do so much with technology. You still have to have people talking to people.
SPEAKER_01You do, you do, and um I think if you draw it, depends on what you want to drive your business on, what kind of metrics. Um, we talked about it a little bit last week in the last podcast, and that is kind of the complacency that's that's in when you're doing well enough. A salesperson motivated by the total amount that he's earning um isn't motivated to go much farther. Um and this I don't think that I think the same is true for any part of the operation. If you're satisfied with your sales, you become complacent. But if you measure your sales you know based on historic sales and and not based on market potential, that's an easy trap to get into. You may see you know reasonable growth based against historic sales, um, but you may be missing out completely on the market potential.
SPEAKER_00Yeah, yeah, which is which is absolutely factually true. It's and and you you and I've talked about this offline, but um equipment market share, we've got those down to six to ten digits decimal points of accuracy because it's what drives the manufacturer, yes. But nobody's giving us to four to six decimal places or even to five percentage points market share on parts and labor. Labor, it's understandable. The manufacturer doesn't make any money there, it's not understandable from my perspective for the dealership, that's our highest level of profit. But the parts and service people have been given a pass. It's interesting that coincident to this discussion that you and I are having, Ross Atkinson put up a blog on strategic contacts. That with technology, with the digital dealership, we know who to talk to about what, much more. And it's the same line that you've been putting out because we're tracking digital transactions and contacts and orders and loss sales and all of those things. We know who we need to be in touch with, about which subject. And that allows us to more effectively utilize the human side of life.
SPEAKER_01Yeah, the most uh admired organizations that we all like to use as examples are acutely aware of any change, any deviation from predicted sales flows, etc. If if a unit is selling at a particular rate and um you know, on an all say on an online store, and that drops a little bit below what the expectation is, there's an immediate analysis of what's causing that change. You know, we admire these companies for how well they've done, how they've grown, how responsive they are, and yet we look at what they do to do it and are slow to adopt the same kind of philosophies. If we how can we sit there and know that we're missing out on a significant portion of part sales and not be able to invest the resources to find out why it's happening? You know, Facebook has a team of people analyzing what what the impact is of how adding an extra row of pixels on a particular screen. You know, if we add another row, it pushes this down too far, and that is that we measure the impact and use that to make it better. These are the people that we we look to and admire for how smart they've been and what they've been able to accomplish. We really should adopt their philosophies then and say, like, we need to understand why this customer is buying 5% less parts than this customer. Is it application or is it just because we're not doing something right to capture their business?
SPEAKER_00Yeah, exactly, exactly right. One of the things that that highlights is that they're making data-driven decisions, and data changes, trends change, just like you're saying, versus the older generation, my generation of leaders in the industry are relying on their experiences. Yes, and you know it's uh their experiences are very powerful, they're very deep, they're very rich, but I've still got a landline phone. My daughter doesn't, my granddaughter doesn't. My granddaughter uses texts much more than uses voice. There's been significant changes in how we communicate with each other over the last X. You know, it's kind of funny. We were getting ready for your blog yesterday. I sent you a little note saying, well, Motorola had the first cell phone in 1973, it became commercially available in 1984 for 3,995 bucks, and it the charge lasted 10 hours. Yeah, yeah. Congratulations, you know. Yeah.
SPEAKER_01And how many sales reps bought them? Because they saw that even at four grand, the value it brought them, and a being able to stay in touch with customers is easier and faster than the role of quarters in their cup holder and a payphone. Yep. And and yet that is quickly adopted. And now we spend, you know, we give them $1,200 phones every two years with big data packages, and we haven't changed the value proposition enough to justify it. Go back to a flip phone if we're not thinking about now that you have all that capability in the field, how are you going to apply that? Uh, and I think sometimes we forget that that's what we've done in the past, that going to that Motorola phone for $4,000 was worth it. And we need to continue to look at what other things can we put in place to support and in my in my blog, I was really focusing on how does that support your relationship? If you say your relationship is so important with your customers, and how can you use these things to better your relationship? I think it's interesting you bring up the the depth of experience, but if you don't have experience in something, then you you can't apply it. Like you most people um cannot out of nothing conceptualize you know deep new ideas on on how to apply a new technology if they haven't seen it. And so at the dealership, if you're running a dealership and you have this depth of experience in the in customers and equipment and relationship, you don't have it in in-house on the technology side, you need to find the people that have it. They may not have the same depth of experience in the business, but they can apply these new technologies that you need to be looking at and buy in that experience. Most of the time, you can buy in the experience, you can make the changes you need to. You may find extra man hours in the rest of your team now and suddenly offset you know the fact that you had to bring someone on temporarily for a year or two to work through these projects. And then you can go back to the the size of the team that you had typically.
SPEAKER_00You know, it's funny, the the um, and not funny in a in a happy way. My example has always been the the transition from a steam engine to the electric engine, and it took a generation. They changed the tool right away, but they didn't change how they used the tool for a full generation, which is roughly 20 years. Yep. And we're we're going through a similar thing. Our industry, if you think about change within the industry, um the first time that really took place, other than just bringing in a computer and replacing a Cardex or bringing in a computer and getting replacing accounting clerks, um, the first time that really started to happen was when we had to start communicating across different stores. So now I got telecommunication that replaced the mail, that replaced the teletype, that replaced then came the facts. And we've been really slow, almost pedantic, and how we've adapted to change. And and as we've talked, as we've discussed, we we really haven't seen much change. The world around us has changed dramatically.
SPEAKER_01And we're giving it away. Go ahead. I would say that that's you know, that example of what new technology is like an internal approach to technology. It's like we bought a typewriter, what should we type? We bought a fax machine, who should we fax? It's it's taking the technology and looking for an application inside the dealership. That's not how we should be approaching it. We should be approaching it from the customer's perspective, who is 20 years ahead of our business, and ask, what does our customer want to do? How do they want to use technology to communicate with us? And then say, okay, then what reciprocating technology do we have to implement in order to meet that expectation? Yeah, you're absolutely looking at like how fast can I find a new piece of technology and figure out nifty ways for me to apply it? We're gonna stay 15 years behind.
SPEAKER_00Yep. We should be market-led. Yep. You know, your example at the end of the blog was perfect. You the guy's all proud, he's talking to a customer. I can now make sure I got all my parts to you within seven days, and the guy's laughing, cursing at him. He says, seven days. What are you talking about? It's the other part of that is that you know, the it it kind of indelibly, experiences are what drives this. But I I became a data processing manager at a catapult dealer, and I was put in the job not because I had a background in in systems, although I did educationally, but because I made the most noise about wanting to get better results out of it. He said, Okay, you're you're making all the noise, now go fix it. Yep. And what we ended up having to do was we had to bring departmental people into the data processing world to communicate with the systems analysts, because the systems analysts didn't understand the business, and the business operator didn't understand technology. Well, that might have worked 50 years ago. It did, it was pretty effective. However, that doesn't work today. And and what we came up with, I called it galloping diarrhea. The the people that are working the jobs don't don't really know what they don't know. So we would give them a report, we'd give them a screenshot, and they'd say, Oh, that's fantastic. Can you do this? Because when they saw what was available, all of a sudden they started seeing applications. That's exactly what you're saying. But we haven't reached out to the customers. Mr. Customers, what do you want? Yep.
SPEAKER_01That that goes back to that idea that people don't conceptualize on their own ideas out of nothing if they have no past experience. Most of the things that we see in our business, someone saw somewhere and brought it in, whether we go to a training course like yours, or we go to a trade show, or we worked in another business. If we don't believe something different is possible, we tend not to come up with it. Um, I I've taken my parts staff at one point that ran the warehouse, who thought the warehouse should be laid out a particular way and a very, you know, kind of old fashioned approach to parts management, took them to the Worth warehouse, who supplied our nuts and bolts and other supplies in the shop. And like that's a high volume, high paste. You know, efficiently laid out warehouse with very different logic and where it placed everything in the ware in the warehouse based on how fast it moved, its size, all those things, instead of like, well, I like to have all my injector nozzles on the same shelf here. Well, that's not necessarily efficient for running a warehouse. So we have to change how we think. Um, I I always use this analogy from um Tony Hawk, a skateboarder. Yeah. I may have mentioned it in the past, but you know, I saw an interview with him where he had spent 10 years trying to do a uh 1080. It's like three full revolutions in the air on his skateboard before he lands. And he'd been working on this for almost a decade before he finally landed it. And he said what happened was shortly after he landed it, lots of other people started being able to accomplish the same feat. And the reason that is, is because he had to overcome the barrier of believing it was possible, to proving that it was possible. And it wasn't until he had done that, and then suddenly everyone else who tried the trick only needed to do the technical implementation. They they just need to learn how to do it. They didn't have to believe that it was possible, they knew it was possible. Um, and and it's no different, you know, in in many of the aspects of the dealership. If our people don't believe that it can be run differently, then you need to find people who do and show them and have those people show your teams or take your teams to places that do believe it, um, and then it'll happen. I I ran a service department at one point that didn't believe you could be profitable. No one there really believed that they could make money in the service department. That wasn't the service department's purpose. Um and so they would actually subconsciously um sabotage their own profitability. They would write up an invoice for a perfectly fair piece of work and be like, oh, I don't think that the customer's gonna want to pay that much for it. So I'm gonna take 25% off. And immediately we were unprofitable on that work order. We didn't even try because we didn't believe, you know, and and when I started at the cat dealer, it was like, I don't know we this is how we make money. You know, a fair bill is a fair bill, and we we present it fairly and we get paid and we make money, but they have to believe it's possible.
SPEAKER_00I I couldn't I couldn't agree with you more. It's it's a uh it's a trap of low expectations. You know, with the uh the associated equipment distributors, we used to do surveys every five years on customer wants, needs, beliefs, positions, etc., trying to give us some guidelines and and directional basis for for thinking. In the caterpillar world, 1965 was the last year that they had a caterpillar employee interview every single customer on the planet, asking back and forth. About a month ago or so, I was talking with a vice president of uh marketing for a major manufacturer who related the story of a distributor in India owned by a husband and wife, and they talked to every customer every month and reviewed the past 30 days, then talked about the next 30 days. And you know, whimsically, I'm asking everybody I talk to and telling them that story and saying, What would what would be the result in your business if you were able to talk to every single customer every single month and review what you just did the last month and what you need to do in the next month? Would it be better, worse, or the same? And to a person, they all say it's better. Yep. And and so that galloping, uh your your point is is well made. We need to bring somebody in from outside who doesn't necessarily know this business at all, and have them look and see and and let them ask the question like, why do you do it that way? Well, what do you say? What do you mean? What would you like to do? Well, how about this? Oh, we can't, you know, the response, you know what it's going to be. We can't do that. Can't do that here. Yeah, it's it's a it's a remarkable thing. Now, the the the the penalty on this one, if you look around the marketplace in the last 20 to 40 years, we've seen the results of it, we're seeing consolidation. You know, in Canada, there's two caterpillar dealers now, one's Toramont, the other's Finnny. There used to be 10. Yep. Now, is that because they didn't make enough money? Is that because they didn't advance to the satisfy the customer needs? What is it? Nobody's done that pathology yet.
SPEAKER_01I think it's no doubt a contributing factor.
SPEAKER_00No question about it. No question.
SPEAKER_01I think that proves it's possible.
SPEAKER_00No question.
SPEAKER_01Therefore, anyone who's running out of money or isn't seeing the kind of margins they expect to see, they need to be looking at what's causing that.
SPEAKER_00So if we were to translate that in your blogs in our last podcast, I think have been pretty effective messengers. We need to have machine ownership driving us. How that machine is being used, how many hours, what's the job application, et cetera, is going to drive the life of that machine. It's going to drive the consumption of parts and service. So that's a key element. Then asking the customer, what do you want? is another key element. Bringing outsiders in who don't necessarily know the business but do know the technology is another element. What should a dealer do next? If they're just embarking down this path, we give them a little bit of a roadmap. Do you want to expand on that a little bit to help them? Obviously, pick up the phone and call you. And I'm not joking, there aren't very many people out there. When I started in consulting in 1980, there was hardly anybody out there other than major consulting organizations that were doing parts and service consulting, trying to help dealers get better. True. There still aren't very many. Exactly, because there's not many people that want to put up with that kind of travel. I mean, today it's especially with the pandemic, you're not going to do it. But yeah. So what what's what's the next step for them, Miss?
SPEAKER_01So as I've tried to outline more and more clearly, uh, even in my own head, you know, how how do you define the digital dealership? And I keep coming back to the key pieces information. And so you listed um equipment data, customer data, obviously. Um, that that's information. And in instead of we're a transactional business, we're a reactive transactional industry. We sell a part when it's needed, we fix a machine when it breaks, we we buy a new machine when it makes the most sense for our business. We tend to be a reactionary industry that that deals in transactions, but uh, what knits that all together and and what brings the logic or the decision making into it is always information. We all say we like it, we use it in different ways. Um but we need to stitch it all together. We need to have a singular kind of information model that says like just like the service department used to have the equipment list because they serviced the machine, and the parts department didn't have it because, well, they weren't talking to the service department. You know, we need to start looking at those kind of information objects and what's related, and then look at the whole business, and then just decide and then understand when and where that information needs to pop up. It's like it's like the life blood. It's it's like the blood in your body needs to get to all the right places at the right time. Um, we we don't have separate blood systems in different parts of the body. So at the same way, the the dealership needs to look at information more holistically and then determine where it needs to be and when. If I'm a sales rep and I'm going to talk to my customer, what is it that I need to have? And yes, it's good to have customer account data and open work orders, but I'm going there to bring value to my customer. What other information do I have to have? What makes me more valuable to be there? And then how do I, as an organization, provide that information? Um, in my one of my posts that I mentioned you in actually this week was from a good friend of mine, um, Kevin Paschuk, who's the CIO at one of the universities up here in Canada. And one of his rules was around the IT department. The IT department, he says, should never say no, they should always say yes and put a price tag on it. And that was his rule number seven. You can you can look up his blog there. And that's really kind of the approach that we we need to have. We need to be looking at the different parts of the business, and IT's job and technology's job is to say, yes, all of it's possible. We do a lot of software development. My favorite question is, can you do? And I say the answer is always yes. It's just how much money does it take to get there. And that's the kind of approach we need to have with information in the dealership is how do we what information do we need where and how do we get it there, and when what's that going to cost? And typically we find a way that we get a value balance there. So that I I think that would be the best approach to stitch all of the things that you listed together, like equipment data and the self-service model and and that couple of hands.
SPEAKER_00If if we if we stay with that one, and I agree with that 100%, whatever you want to do, we can do, period. Absolutely now, translate that into our lives. You're as a parent, your child asks you for something instinctively, the answer is no. And I'm not I'm not trying to be smart. No, because I'm obviously not smart enough to say yes to everything like that. When my my daughter's six years old and she wants to go drive the car, the answer is no. Well, that's easy. But then there was a man that I ran around with. There's a he's long since passed. There's a gentleman by the name of Clint Merkison who was one of the wealthiest men in America, owned the Dallas Cowboys. And but his father was one of the founders of the West Texas oil fields. He got a master's degree in mathematics. Yeah. And he he had a bunch of men that went around the world buying businesses for him. And I traveled with one of those guys for about a year, and I not I heard the word no come out of his mouth not once. Never. Now he would say no, but it would take a couple of paragraphs, and you had to be really listening to hear no. Yeah. Now that's a good news, bad news deal. It's good because there's no negatives anywhere. It's bad because it left the impression with the audience that he was saying yes. So communic, so communications becomes the issue on that too. I agree with that rule number seven. If it's technology and you want to do something, absolutely, how much are you prepared to pay? And that takes us to the next question. What are you trying to accomplish? What's the benefit you're trying to get to? You know, if if you if you look at the very first stage of sales, selling, if you want to be successful, is research. Yes. And part of that research is the relationship you have with the customers, the vendors. But the relationship is not just what they buy from you, but in my view, more importantly, what they don't. Yep. So now all of a sudden, I give the salesman, he goes out 20 years ago, he's got his little black book. He knows what the customer is all about in from his perspective, but he really doesn't have a clue. What's painful for me, though, is the company doesn't have a clue about that customer. They knew they have the company has no relationship, the salesman does. Yep. With data, the company owns the data, the company monitors and manages the relationship. I think that's a very significant element in this whole discussion of the digital dealership. That's you know, one of the things a number of years ago, uh, a person was we were talking back and forth. He says, you know, we've got to recapture our market from our customers, and we got to regain control of our business from our employees. The digital dealership allows us to do both. It does. It does.
SPEAKER_01So it's it's powerful stuff. Yeah, I I I love so I had a situation where you you mentioned this idea of not knowing what you or knowing what you didn't sell. And um I worked with some PSSRs and and developed the role of a PSSR uh in one of my past roles. And one of the things we did in our system is look at labor sales, parts sales, and parts through service sales. We separated parts through the parts counter, parts through service. And then with that, and uh a person who was in the service department and knew the customers, we were able to sit through every single customer and understand what they were doing just from those numbers based on the equipment they owned, where they were buying their parts and if they were using our service and how much of the service they were using. And we were able to develop a detailed strategy for every single customer. That wasn't a one-size-fits-all go sell mark contracts kind of idea. It was this customer thinks this way, you can see it via what they're doing. And now we're going to tailor our approach to that customer when we go see them. Furthermore, we're gonna be able to put together some information for the customer that will fit what we're seeing in their activity. And that was 90% effective. We would go out with five customers to see exact strategies of how to approach them, and 90% of the time we got exactly what we wanted, but we wanted to try and sell that customer to change that relationship that we had with them. We saw that they were buying all their parts to the parts counter and none through service. And we came up with a strategy that says, how do we get even a little bit more parts to service that we engage service? And it's it's in having that information and then being able to bring that to the customer that we're using that information, we're improving that relationship and actually capturing a lot more of the business.
SPEAKER_00Well, what it what it really does, which is perhaps one of the obstacles we have to overcome, is it it forces you to rethink what the business is in the first place. The um the most valuable person that we have in the company is the technician. The current thinking is the most valuable person we have in the company is the equipment salesman. Guy sells $30 million worth of product and he makes uh you know 5% gross profit. Um, you know, that's that's terrific. He makes a million and a half gross profit. Well, if you look at the expenses that tie around with that, the net is zero. The technician, if we charge him at $100 an hour, just to be simple, that's $200,000 a year. And typically there's $200,000 of parts with it that go with that. So that's $400,000 that that technician is responsible for. And the combined gross profit in parts and services 50%. Yeah. So that's $200,000 gross profit. Now that's a lot less than the equipment salesman, but the net profit ain't that much different. That's right. So it's it's uh it's it's a very different again, it it forces us to rethink the the business. What every single time there's a part sold across the counter, we've lost labor. If I can, you know, it's the old question. If you have a hundred percent of the parts market, what's your labor market share? Haven't got a clue. If I have a hundred percent of the labor market, what's my part market share? It's 100% because my guys are buying the parts. Yep, which do you want? It's pretty simple. Yep. So so I get, I guess the the overarching and compelling point that you would make to somebody is have somebody inside an employee or a subcontractor who's a pro on digitizing businesses, come in either as an employee or a contractor and look at the business and help the company determine what they need to do to digitize their their dealership.
SPEAKER_01Yeah, either exactly. Either help determine what to do, um, or at the very least, like you know, your friend who didn't understand half of what you said, like, how can you make how can you explain that and make it relevant? Like it none of this stuff is that hard. But once you can explain how it's relevant, what it means in practical terms, um, the technology is just technology. Everyone gets over their technology problems. You know, I I think it's funny that you would have someone in a senior position that says they're not comfortable with technology, they don't know much about digital, but then they'll pull out their phone and play on Facebook. You know, they're comfortable with it as soon as they see the value of it.
SPEAKER_00Yeah, and and and I guess that's another interesting side. They use it personally. Yeah. They'll they'll order things on Amazon, they'll play games on it, they'll communicate with other people on it, but they don't know how to commercialize it.
SPEAKER_01Yeah. Years ago, I loved showing people the Domino's Pizza website.
SPEAKER_00Yeah.
SPEAKER_01When it first came out and they had the order tracker. Now it's pretty standard because of all the Uber Eats and all that. But I love bringing up to everyone the Domino's Pizza Order Tracker. And I was like, this is genius. Like this takes care of you know, communicating so much to your customer about where their order is. It deals with the anxiety problems of like, when is my pizza getting here? You know, it's it's the simplest and and probably most effective use of technology. It's just this little bar that says, you know. Well, why why do you think they invented loader bars and computer software? Because if you don't put a bar on the screen that says, hey, you're 20% loaded, 50% loaded, 90% loaded, people close things, people shut it down.
SPEAKER_00That's um Do you do you have a do you have a service you provide to dealers where you'll come out and and and give them a review of what they need to do, the opportunities on digitizing their dealership?
SPEAKER_01Uh yeah, I have done that. Um, I I work with uh a handful of dealers every day, um, kind of managing that aspect of the dealership's business to grow.
SPEAKER_00Why don't why don't you use that as a platform for your next blog, describing the service you provide to people for the digital dealership, and then use and we'll use that as the next platform for the next podcast in a couple of three weeks to try and simplify, make it easy for people to do this because at the moment they they they don't those that understand, they're already there. Those that aren't, they don't know where to start, and it and it becomes very, very difficult. Does that make sense? Makes perfect sense. Let's let's try and wrap it at that point, Mets. With with with this. And like you said, about the the the first time somebody does something, the breakthrough, the the the hawk, the you know, the same type of thing, the four-minute mile, the 16-foot pole vault, the the seven-foot high jump, uh, all of these things until somebody sees it can be done, my lord. And and once it is, get out of the way. Yep. Make sense. Yeah. Perfect sense. Let's let's let's end it there then, Mets. And I want to say thank you and thank the audience that's been listening to us. We hope that this has helped you and and look forward to continuing this conversation with Mets in the near future. Uh, thank you all for being here. We'll see you next time. Maholo.
