Dealer Voices: “We didn’t get better. We got significantly better.”

[Music] [Music] i'm excited for today's podcast because we actually are physically in a dealership for the first time since i started these podcasts last year during uh the beginning of the pandemic and uh so i think you might hear some noise of activity going around because we're actually in the store but uh today i want to welcome gary wechsler welcome to the podcast thanks randy it's great to be here and thank you from uh for driving all the way down from the suburbs right to the right to the heart of the gold coast uh and

we're here at downtown honda chicago i'm the general manager and operating partner and and we are only a few feet away from the shop door so if you hear a hammer drop or a tire bouncing i want to apologize in advance the sound of commerce it's great to hear it is it is it is you know i think one of the things that we like to do just to kind of level set here is talk a little bit about the store where you work so tell me a little bit about the store here so uh

our store is downtown honda chicago it's right in the heart of the gold coast just to give you an idea we are in a tower we have no vehicles on site because we need all the room for our service vehicles we service anywhere between both franchises somewhere between 100 160 cars a day they've all got to come in the building in the morning and out by the by the evening so that requires a lot of movement a lot of time it's kind of a skilled process we're literally three blocks away from beautiful lake shore drive

so you can imagine uh there's skyscrapers all around us very very densely populated and it's a whole different environment it's literally vertical selling yep yeah and about how many used cars do you sell in a month on average so between both franchises will sell anywhere from um anywhere from 120 to 2 200 cars a month okay that's great so downtown location uh like you said vertical selling and uh a couple hundred used cars in a month that's right perfect so you know you've been uh a v auto customer for quite a while about eight and

a half years something like that yeah yeah and and you've had great success with fiato is that right i have i have uh i was real fortunate uh i came into uh i can tell you the day it was december 3rd of 2012 i walked into a store that was selling 45 cars a month new and used it was a complete wreck the one thing they had though they had just signed up with this new uh process new uh tool called v auto and i said okay and they had a thing called a performance manager

and i was real fortunate my first performance manager was a previous dealer okay and she was really good terry gonzalez i think she's still with the company actually and she really um uh taught me the process so it's like going to kindergarten right and in kindergarten you have a really good kindergarten teacher and they teach you how to read and tie your shoes and and all the basics right right and then as time goes on they take you through the grade levels and you become better and better and better so um i did really well

with the tool kept us clean kept us out of trouble i always remember fighting her on transactional discount and certainly that won't work and it did it worked perfectly and all the different things she taught me so as time went on and i went to other stores and my career was growing and i had another performance manager who kind of took me to another level and then i came to chicago and uh yet another performance manager and who really had taken us to a whole new level really introduced us to irecon profit time um uas

uh just just new level stuff the guy's extremely intelligent but he's able to really uh engage um with the dealers that want to engage with him so uh i couldn't do without the tool if they took irecon or if they took profit time or provision or v auto away from me tomorrow i'd go do something else it's just that powerful of a tool it takes if you really understand the process it compresses your work day okay it makes things very easy it keeps you from making obvious bad decisions okay and it keeps you on track

and if you really really get inside it you can always find opportunity and continuous growth that's great um but i think that's what's really interesting in our story today is great success using provision and the old calendar-based approach right but yet you've made the switch to profit time yeah so tell me a little bit about what made you make the leap well you know we actually were doing very well here um but um our group and me and our philosophy is you can always do better you can always do better and um i've had record

months here and i got to be honest with you uh there's more and there's more and my uh our our leader our founder of our group is uh one of the most motivating intelligent people i've ever met in my life in any field and and he's the one that really challenges me to do better every single day and i felt like with the auto i i really felt like you know i don't want this to sound arrogant but i think i maybe have been one of the best people in the nation on viato i actually

asked my performance manager hey i'm in am i in that top two percent i just want to hear them say yes you know and uh it meant a lot to me i loved to be recognized to be at the top of my field at that pinnacle and i was there and we're existing we're doing well and he kind of started roll out this profit time i did to me and you know when i first initially he gave me the broad strokes i'm like oh wow that's not going to work i mean who would you know

cause basically he was asking me divorce my entire cultural belief about buckets you know my cultural belief age and and and i just didn't know how i could do that especially because the guy that's kind of asking me to do it to divorce these the sculpture and those ideas was the same guy that told me for eight years oh this is the way you got to do it so all of a sudden i felt like dale maybe had kind of flip-flopped on me but i'm thinking to myself okay this tool that was created dale pollock's

the founder of that of that tool he's the dna um i said okay he there's there's a reason why he's moved to this he just didn't wake up one day with an epiphany that you know what i'm gonna do something else he had some logic behind it so i tried to get inside his head which precipitated us to a conference call okay and during this conference call um i'm listening it's all starting to make sense to me okay and i haven't bought in yet but it's starting to make sense and uh i asked dale a

question i said dale what do you really believe because he was the first to say hey these guys are good they got it together they're doing a good job and he said i said what is your belief that you can actually make me better you know i was looking for like you know gary if you do everything right maybe you'll get 20 better maybe there's a 20 shot you'll have some kind of increase and literally in two seconds he said oh gary 100 i said okay well he didn't think about that answer let me ask

it in a different way i said okay dale really i understand you said 100 but what do you honestly think that my chances are of improving really sticking to profit time he goes 100 i said okay this guy's a lot smarter than me i love the tool that he gave me i'm doing great with it now he wants nothing he wants me to he's opened an opportunity for me to completely shift my paradigm and my cultural experience of the way i was operating to a new way i said okay i'm going to do this and

i told my performance manager alex i said alex i'm going to do this and i'm going to hold your hand tight so when i go down you're going down with me okay you're my ring man i'm taking you down first and um and he said i'm in and when i tell you he stuck by my side he was at my store talking to my store every morning every noon every evening and and shockingly 30 days later it was 100 100 100 wow so exactly what dale said happened exactly what my performance manager said happened and

and my gross was better and it wasn't listen we had great grosses sure there's a report that a manufacturer does and i'm not going to go into this but they rank stores on gross profitability we we were by far leaps and bounds at the very very top of that list in our used car operation yeah and i said okay there's no way i can get better i'm the leader in that market and we got better and we didn't get kind of better we got significantly better yeah so you can imagine what that did the profitability

sure in a store that's already profitable yeah so that was exciting what's great about this tool and what's great about v auto is you don't have to be a genius okay you just have to understand that there's a process involved and if you're true to it and you work it correctly you're going to look like a genius yeah okay because you know what they're doing somewhere in that white room in viato there's a bunch of geniuses in there figuring it out for you and um it's worked and i think viato is a growing and living

organism and as long as dale's engaged and involved in the team that he's created i think this thing i have no idea what it's going to look like in 10 years but it's going to be amazing yeah thank you very much for that feedback that's great now the one thing that you mentioned that is really fascinating to me is the culture shift right eight and a half years on turn and age and maybe there's pay plans based on age how did you make that happen with your team well i got to tell you initially initially

um listen i'm a 62 year old guy i've been doing this for 30 plus years so you know you know it's true when you get older you get a little more stuck in your ways right sure um but i've always tried to be young at heart and young in my mind i've always been a guy that has said look always be open to new ideas don't be closed out don't shake your head no because you never know what is around the corner right when the internet came in i was i was in that era the

internet came in the car business i embraced it immediately and it helped me so i always tried to do that so at first i actually when i went to profit time because i committed to do 100 the way i handled it i didn't look at it i couldn't look at the age i would have i'd have crawled under my desk and shivered i just didn't look at it and at the end of the month i looked at it and guess what i didn't have any age vehicles i was more profitable i said okay this is

working this is working so my team when i came here they were very new to v auto and they had it performed horribly before just the group that i'm with mcgowan automotive bought this store and and they embraced the new ownership um our used car director who was the previous used car director we kept him on as these car director he's a very intelligent man he's a good person and he was just looking for process and leadership so the process was we were going to be experts at v auto and that was it we were

going to be experts at provision we didn't have profit time then sure and and he embraced it and we got better immediately so their buy-in was and the performance managers we had was very good and they so they trusted the process they trusted the tool we started listening to the podcast we did different things to uh we're very fortunate in chicago here that that our performance manager our latest one he just lives very close to the facility he'll jump in his car and come over um we'll talk constantly about things and when it came time

for profit time it wasn't so so tough because they said okay it was provision we believed in it we believed in the process we trusted it we won they're telling us this new tool it's going to make us better there's no reason not to trust them they always always always did right by us so let's jump in with both feet okay and um they embraced it and they all won they believed because it was already proven to them that the other way worked and it was the same guy saying hey guys this is the new

model what do you think and and i told them and we had this conversation not too long i said you know what guys in two or three years from now maybe it's not called profit time maybe it's called something else maybe it's profit time 3.0 profit time 8.0 but this is a living organism and as long as you embrace it and you understand it you know you got to understand it first right yeah because if you don't understand it you use it you really haven't gained anything you'll do better that's great you know one of

the things dale says is you make money on the car when you buy it right so tell me a little bit about your appraisal process and you mentioned some phenomenal numbers sure sure so i want to get rid of this wedge between the client and the salesperson and it always happens at the trade there's always the guy behind the glass or at the tower and they're talking and then he comes back with this number and it doesn't matter what number it is sir you're you're you're 2002 honda civic is worth a million dollars oh that's

ridiculous right right that's way too low so they're programmed like that the customer so you got to get them out of that um that mode of thinking you got to get them out a little bit out of there where they have to think and we always go after the trade first what i mean is you know third-party pricing you remember that right um greatest thing ever greatest intro ever takes all the heat off the numbers and then we go ask about the trade well yeah i do have a trade well that's great mr jones you'll

be happy to know here at downtown honda of chicago we actually have on site a kelly uh blue blick representative that will be appraising your car for you the great news is he's going to give you a great figure for your car in the event that you trade with us he'll allow us to take that car and trade and also you'd receive the tax credit for that in the event you don't trade with us he'll still write you check for your car you just take the curse off it right there and you won't believe how

that works so every car goes through that same process so on one hand we got the customers coming through the door appointments or walk-ins or whatever and they're they're given a figure by this third party so guess who they're not mad at the dealer right i'm not the guy yeah you know and sometimes they'll have a little mishap with the third-party pricing of the kelly blue book figure or the autotrader ico figure um but that representative is skilled enough who we have here that he can talk them through that and they're not talking about the

price of my car they're not talking about anything other than their car that they're representing to somebody other than the dealership and they eventually come to what an agreement that number's done we're not talking about that number again now all we got to do is show them a car they came in to look at that they've probably done 15 to 20 hours worth of research online sure that between all the cars they saw they decided that was their first or second choice it had the lowest miles in the best condition in the right color and

they're here and they already know the price so there we have the third-party pricing so price has now been taken away it's their car they've agreed with kelly yeah my car's worth 10 grand it's our car that they've always come in right already for because it's the car they want they've done the research and that car is already priced in their wheelhouse that's why they're here sure all you gotta do is be able to add and subtract it's a beautiful thing yeah and so when you think about those opportunities to acquire cars from the consumer

then your cost to market is significantly better oh it's incredible it the cost of market's incredible and like dale said you make your money when you buy the car that's right so when you're buying cars that i mean we've bought cars at 50 cost of market we bought cars at 60 65. we normally buy cars in the low 70s to 75 percent and you just don't have a choice but to make money at those numbers the consumer is happy that they're getting a decent offer on their training they're they're excited and let me tell you

it it does two things it it creates no um there's no there's not that traditional us against you he's got a number from a third party he believes in because kelly's done such a great job branding what they do they believe it's kind of like carfax yeah you know oh the carfax is clean the car's got to be perfect we both know that carfax has makes mistakes some things don't get caught but between that and and something else it does that was uh kind of unexpected it compresses the sales process because normally you have a

lot of go back and forth for certain different areas of the sale whether it be the trade objection when you get all that stuff out of the way and it's done you've kind of compressed the time um it allows you more time to gain rapport um you know and and become a friend and i think that's the key to selling a car you've got to have that rapport that connectivity sure and once you get that it becomes very easy to sell sell a vehicle yeah the other key to the appraisal process that we see is

really understanding at the time of appraisal what it's going to take to get that car frontline ready so how do you think about that reconditioning costs and expense associated with that so i think there's uh two theories there uh one theory i've worked in both i happen to like the way we do it here more one theory is everybody just kind of says look we're gonna go and hire a company do all our recon work and and and we're gonna we're gonna put a thousand dollars on every car and that's it maybe it needs 300

with the work maybe it needs fifteen hundred dollars of work but because you put a thousand on every car i think that's to the vendor's advantage i want to keep every nickel and dime i can keep right in-house okay so i know that every car is going to need x y and z so those fixed costs i've got into my appraisal screen right in v auto it's in there that's a fixed cost and then our acquisition team is very good about taking pictures um and they're they're kind of uh almost a little too critical um

you know they'll they'll we we know in our selection in in viato you have the different bars you can select a bumper's 250 a rear bumper is this a quarter a dent a ding and we just click off so that's all pre-loaded because the acquisition team they've got the time they've walked around the customer and something else that's great about that is the customer has buy-in hey mr customer it looks here in your mirror like did you oh yeah i was coming out of the garage the other day and i hit the concrete pole and

made the turn too tight it's no problem happens all the time we're in a big city it's probably only 150 to fix that oh i didn't know it'll be that cheap so you start adding 150 and 250 dollars starts adding up the customer in his own mind he's devaluing his own trade right and um we we get the work done in a timely manner we do a lot of bodywork it's a big city a two-year-old car three-year-old car in chicago i don't care who's driving it you're gonna have to paint the bumpers you're gonna okay

at least in chicago the bumpers are still in the car in new york the bumpers are in the back seat so that's the difference but yeah we we do a good job with that and you mentioned you're using irecon has that helped in this process night and day um this my uh i the the worst part of my day you know um and i think it's our founder that told me this or i've heard it before but he's kind of like hey gary do the hardest thing do the worst thing the thing you hate the

most do it first get out of the way boy there's so much truth to that too because your day only gets better right if you wait to the end of the day the thing you hate the most you end on a very negative note so what uh what i try to do and that that thing for me was always recon because we're in a big building the cars could be either in the building maybe on four maybe on five maybe the car's a mile and a half down the road at millennium park you just don't

know we even tried to utilize tracking devices they don't work underground we've been that successful there um so i used to hate that because all i would know i'd normally find at one or two cars i got lost in the system there's the process oh we met to detail that one but the guys at service took it first now it's four days five days later it drives me crazy um and when you're turning inventory you know if you if you look at our veto we're turning our inventory anywhere from a low of 16 to a

high of 26 times a year um that's a lot of hunting and pecking right yes so when we got down to irecon and again my performance matter introduced introduced me to this alex he said look this tool once you master it your life's going to be a lot easier so the first two months with that tool i i also did was making me madder because before the department heads would point fingers why why did this happen why it's bob's fault why is it boss bob had the car well bob what'd you do with it well

i gave it to so-and-so and and you couldn't figure out who it was to blame right you just knew it was broken well i recon they pointed the finger and i saw that bottleneck and inspection i needed to go talk to my fixed ops director said hey buddy you got 13 cars in inspection one has been in there for three days on task time majority been in there for a day and a half what's going on and guess what happens they get out of inspection then they go to work in process so number one you

got to have your tasks set up correctly and when you do it makes life very easy and then everybody is held accountable and they hold themselves accountable and now it's become a game a sporting event who can get their cars at the lowest task time and it's kind of funny they created this on their own their own thing and they brag about it you know they'll send me a little i'll get a text on what's happened at seven in the morning hey average task time 20 minutes in my in my responsibility area where's the rest

of your guys that's great it it makes it fun and uh it's a great tool but but the best thing about the tool is it's the only recon tool you can get in the world that integrates perfectly with v auto in profit time and even if you don't want to look at it every time you look at profit time it's right in your face it is yeah and you can't avoid it that's great that's great and i think the one thing that you mentioned is critical right the the total amount of time it takes to

recondition a car that's kind of a score at the end of the game right the task time on each step is is where you can make the difference right but josh said be understanding because i used to chase the the total uh recon time but you got to be a little uh put a little sanity in there for instance that total recon time takes all the tasks and and compiles them and says okay here's recon time if i've got a body shop task i know that's not going to happen in an hour or a day

it could but normally you know i'm doing a fender and a hood i might be five or six days i might be waiting on parts parts is another one unavailable parts uh recall is another one so i try not to get over crazy about that and realize okay my overall test my overall recon time is five days it really isn't if i pulled out body shop task time and pull that recall task time and pull out waiting on parts to ask time i might be down to a day and a half which is good i

look at the individual task times per category and what it tells me is is that department head managing that task and if he is we're all good and everything works out yeah either internal department or if you're using an external veteran you can understand how well they're getting the work done exactly exactly and the hardest thing was to get the external i do sub out my detail okay okay um it's it's a crazy process but um getting the third party on the task where he's kind of now become a team member yeah and uh that

was a that was quite a fight at first that's right but i just had to make him understand that this is the process if you're unable to follow it let me know because i got to find a guy that can and they get on board that's great so gary one of the things we hear a lot in the market today is the lack of availability of new car inventory so help me understand what's going on today here in your store and how that's kind of changed the way you're managing the store sure so we've always

managed our inventories um you know nobody saw this coming i certainly didn't and uh it's really affected us i mean we have hit all-time lows on new car inventory we've gotten down as far as 12 cars in stock um we i i i call the trucking company every day i know everybody there by their first name just seeing if i got anything in the yard he was talking he goes gary we usually have 4 000 cars in the yard he goes we're we're doing we have 800 cars so just think the percentage how much that

evaporated thank goodness that through the use of v auto and um provision and profit time as time has gone on we've really gotten really good at used cars and uh now we have to be absolute superstars experts because without that revenue stream and without that profitability um i hate to think what was going to happen absolutely you know one of the things that was amazing to hear is how much you are focused on always trying to improve and get better right so one of the things that we love to hear is what's next for you

what what how do you how do you want to take the business going forward you know it's funny um i i work for a guy that i literally i i if i never had a brother but if i had one he could pick it it'd be him and he constantly challenges me to go to the next level there's no finish line there is no finish line um i love being recognized i love the recognition of being a leader in my career field profitability is great but you know what it's there's no feeling like going home

at night and having a winning day a winning day and then you enjoy that for a few hours and then realize that tomorrow you got to beat it game on you got to beat it i was a military guy for a long time and uh and i loved that uh i i serving my country um was very honorable it meant it means it's funny how at this age it means more to me now than it did then i don't know my mindset's different but the one thing i was taught in the military was you don't

always have the luxury of having everything you need to complete a mission but their mission is their matter life and death yeah and so there's no options right so kind of the car business my attitude has been the car businesses is there some things that are a matter of life and death and then some things are more important and for me this career this industry which i love it's the most important thing i do every day and i have a responsibility to make sure that the men and women that i'm raising beneath me bringing them

up to the new levels that that they have every bit of knowledge and anything i can pass to them to make them better every day and then we all win because you know it's it's like it's like my my my founder says i can't win unless you win i can't do it it's impossible you have to win and i want you to win you know and uh i think we're both guilty of that is uh sometimes i want things for people more than they want them for themselves and that's a tough thing to do sure

but if you can take that person and instill that fire in their belly and they can what they can accomplish is endless so what's next for me is i'm just going to keep growing i guess eventually one day i'll i'll stop you know um one day i'm going to die and that's i guess i'll rest then yes right yeah well gary thank you so much for joining us today thank you i enjoyed it it's great and uh thanks for the products and keep developing them keep growing we will we'll be right there thank you [Music]

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