Wake up, Buy Here, Pay Here people. It's a beautiful day. Go grab yourself another cup of joe and say hello to Jim and Michelle Rhodes on the Buy Here, Pay Here morning show. Take it away, you two. Well, good morning. Yeah, you're muted. Oh, which one? Test, test. Test, test. There I am. There you are. I'm back. Well, that's what happens when I'm out of town and Jim sits in the seat with the control board. Because I'm out of control. Jim doesn't know how to control. I just push buttons until it sounds right. Yeah. Yeah. So, um, back home and it's sweater weather. Oh yeah. Um, we, uh, we enjoy coffee out on the patio and we're still doing it. And this morning I have a, like a little, um, Google home small speaker out on the patio. And I was like, Hey Google, how, what's the temperature? And it was thirty one, thirty two degrees. And so we're starting and lots of snow happening on the mountains and all of that. Yeah. You had to bring that up. Well, I know Jim would prefer to be in warmer climates where there is warm. I mean, for me, if I'm going to do warm, I want to do beach, but yeah. So we'll, you know, we're, we're heading into the season and doesn't look like we're going to be getting away much this year with everything that's happening with family and, and all of that, that we'll, we're going to just hunker down and enjoy the, Utah weather. Yeah. Alrighty. Uh, what do we got for announcements? Um, there's a, for our V eight plus thing is tomorrow. So we've got that. It's still not too late to, to get involved in V eight. And so even if you, um, you know, it's, it's, it's too late for this month's meetings, but if you sign up to start next month and we can give you access. So yeah, you know, anyone out there that wants to be participate in the V eight plus meeting, which will be with Brent Carmichael talking about pay plans. And that will be a live event with Brent. Yeah. So it won't be recorded. So it will be a live event with Brent. And usually when we, bring other people, vendors or, or experts in, it's recorded, but this one will be live with, with Brent. So the dealers that are there are going to be able to ask questions as, as you go along. So that, that's a bit of a treat. I'm going to ask questions of Brent. I, yes. I mean, well, you know, he's, he, he plays in so much data. Sure. Yeah. And, you know, really rich conversations from his NCM dealer. Those of you who are new to the Morning Show, Brent Carmichael has been one of the, been the biggest buy here, pay, I think he's the only buy here, pay here, Twenty Group moderator for NCM. And NIADA made him an offer And he's moving to NIEDA to be over all of their dealer education, which includes twenty groups. And I can say here, I'm going to be asking Brent tomorrow about the possibility of inviting the folks from NCM to come, and perhaps Jeff Martin, whenever it can make sense, to talk about that whole transition and what that means to them. Because from my perspective, it's very significant. I haven't seen a lot of talk about it, but I feel like NCM made a major contribution to the buy-here-pay-here industry in this whole arrangement. And so I think it's something that we want to talk about and celebrate. So we're really excited about that. So he'll be there tomorrow. So again, if you are listening to this and have been thinking about getting involved, tomorrow is that big event. So today, anything else before we, we do have the dealer forum that is, I've got it right here. It is the tenth through the twelfth of this month, so it's coming up, or not this month, but next month. That's right. November first is on Friday, and I have to keep, it's hard to believe that we're in November. Yeah. The only other announcement I would make quickly is tomorrow is the thirty-first, which is not only Halloween, it's the end of October, which means... if you're a V eight member or you're one of those many dealers that I talked to say, yeah, I love what you're doing with the VA. I look forward to being a member maybe next month, maybe next month. And so it is, it's, but if you're, it's the end of the month, grab your notes, receivable report and your inventory report. Because not all systems will auto-generate and capture at the close of the month. So having good opening and closing balances are going to be important. And then DCS actually has the white hat report that we've been working on for principal balance. If you're listening, Michael Sansone, we want to work it out to get you on the broadcast and show that with others. And I know that Mike Downey is also close. We need to find some dealers on AutoMaster. In fact, if you're listening and you're an AutoMaster dealer and you want to be a a beta dealer with that new report, reach out to us and we can work with you to, to start producing, testing that. Yep. It's just, it's going to be, it's, it's been a little bit of a haul to get some of this taking, but we're still at it and there will be more as we go, but it's just, we're really, really appreciate the, the cooperation of different DMS providers out there. So, yes, grow, understand, To grow and understand your buy here, pay here clientele. No, it's to grow, you need to understand your buy here, pay here. You know, it's like punctuation. Yeah. It changes everything. That dramatic pause. Right, right. So there are kind of three different things I want to talk about here. And this, in a White Hat Wednesday context, this is... about being able to relate to customers and kind of this came about last night. We had a pretty rich conversation. It was your newcomer group. Yeah. So these are ones that don't quite have a hundred accounts yet are brand new and it's more, that one's not so much about data except they're looking at aggregate data from all the groups. So they're kind of getting some idea about, you know, what's possible, but it's more coaching. yeah and I think where we went last night as a kind of an aside is kind of where where I kind of step into squiggly lines on occasion especially when we're working with new dealers I like to ask them to consider things that aren't common conversations so squiggly lines those of you who are um newer to the morning show um we we've classified most of what is taught by straight lines and squiggly lines And straight lines are straight line operational things. They're like the numbers and it's the things that are black and white. And they're more, and I always get this confused, kind of left-brained where they're analytical. It's that stuff. And the squiggly line is more the intentions, the emotions, the You know, those kind of, it's the heart piece. So, and that's more right-brained. And so it's, so when we talk about straight lines and squiggly lines, we're talking about the difference of, you know, classifying those two different things. And White Hat Way is built on a foundation of squiggly lines. Yeah, it's built on kind of, I like to call it more than. Let's talk about more than day-to-day business, right? And so in that context, I think when I think about the marketing element of what we're talking about here, there's three different components we want to talk about in this idea of how understanding the clientele that you serve understanding what the marketing people call an avatar identify your ideal customer and get really clear about who that is and so you can better reach them and serve you know the the collective uh customer base that is similar to this persona So there's marketing that we're going to talk about. We're going to talk about sales and then we're going to talk about collections. So I want to break it down in that way because I'm talking about growing the business. So for us to grow the business, we first have to reach the right customer. And how do you do that? So we first, by breaking down what we're talking about in terms of understanding the customer first, let's make sure we understand who is the customer that we want to serve. And I would start for me as a, as a former buy here, pay your dealer. And somebody who's been working with, especially in our V eight groups this month, we've been kind of challenging the dealers by going through a case study about affordability. Like let's first think about income. Now, a lot of people are going to think that's a straight line thing, but it's, it, I mean, it, it can be a straight line thing. Cause it's like, these are your qualifications for underwriting straight line, whatever. But again, When we talk about affordability, we're also talking about really keeping in mind the customer in them being human and having a human experience, which includes a lot of different things that don't show up on their list of bills. Right. Okay. Yeah. So it's, it's kind of understanding that I really want to spend some time here to break down what you and I have come to understand through working with dealers and through, you know, just our overall experience of working with folks in the industry, kind of what we understand about the characteristics of the customer that we serve in the buy here, pay here space. And I often talk about, you know, when I travel that it's common for people to say, Jim, you don't understand our customers around here are just different. And I just kind of, you know, that lands on my ears funny because it's like, I've heard that so many places and I just don't find it to be true. Everywhere I've gone with you to talk to a dealer that, that, that is, that is a, that is, if, if they're, if they're feeling friction and changing and, and, Um, yeah, it's, it's usually around, but you don't understand. Um, you don't understand our customers here are this. And listen, there are things I don't understand, but to have a good understanding of the customer that we serve. Yeah. Yeah. The dialect is a little different in Philadelphia than it is in South Texas. Yes, that's true. What's not true is that, um, your delinquency is higher because your customers in your area are different. As an example. It's like we want to say, we tell ourselves as a team or as a company that part of the reason we have problems is because our customers are different. It's not us. It's the problems that our customers have. But before we get into this whole, well, a little bit of a squirrel, to understand that the problems of a customer... Yeah, let's just go forward. Yeah, a little bit. But yeah, go forward. So it's fine. The premise then here is if we're going to have success in marketing, reaching this customer, what the marketing people talk about is a persona. And look, we get it. And you're by your payer business. It's not like you're hiring some... New York, you know, ad agency who's going to go out there and do this market analysis and really, I don't know. I, there's very few dealerships out there that actually have like a marketing department. Absolutely. Yeah. I mean, and they're the big ones. And so usually marketing is something that you're hiring an outside person to kind of throw some things at stuff, but it's, it's their content that you're tapping into. And I would say the big thing that I would throw in here is kind of my own perspective on the thing that gets left out of marketing. People think of marketing as advertising and sell, sell, sell. That's marketing. But what they leave out of marketing is a big part of marketing is research. It's understanding the customer. Otherwise we run the risk of putting a lot of dollars, putting a round peg into a square hole. And so this is why in marketing, we really need to understand the customer that we're going to serve. And I think for today, we're talking about trying to do that collectively. The reason they choose an avatar or persona, like you might, if I'm working with Bob's used cars in Indiana, you might choose to say, okay, let's pick two or three that are representative of the customer base that we serve. Like, who are they? Right. And so you can, you can put identity on them in terms of their vocation or whatever, but I think it's better to kind of keep it general to understand, you know, who, so who is the customer that we serve and buy your payer? Well, we really want to understand like among things you and I talked about this morning is I think if I were setting up a dealership and a new community, you know, next week, I would be looking at, where, where do the customers live? Like what part of town generally is the income? Okay. So yes. Yeah. And then where do they travel? Like, where do they, where do they live? Where do they work? Who are the primary employers? Where do they play? And where do they shop? Where do they shop and spend? And spend. And this is actually one of our things that a lot of this business is built on is putting new dealers into business. And so frequently we'll have a dealer that hasn't even chosen a location yet. And so one of the conversations we have with them, it's like, where do... Where does the buy-here-pay-here customer shop? Where do they live? What kind of things do they... Where is the radius of the place that they drive to the most? Where are they at? And so there are some things that Jim is like, watch for pawn shops and laundromats and check cashing and those kind of things. Auto parts. Auto parts, yeah. And those kind of neighborhoods and communities is that, those are the customers for those type of businesses. And so you have the same type of customer. Yeah, and in today's marketing, it's possible to serve ads, you know, to certainā€¦ AI and technology is amazing. Yeah. It's amazing. So, you know, we can obviously, you know, hire people to help us engage in that. But I think the first thing, even if I'm not hiring anybody to do any research, I'm notā€¦ I'm not spending any money for AI. I think it's still important for us to identify who is the ideal customer that we want to reach so that regardless if I'm just sitting back running my own Facebook ads or even if I'm doing organic outreach, I still need to know who I'm speaking to. And you brought up an article this morning from Forbes that really speaks to, I mean, it's like questions that you can ask yourself, ask your team, and possibly even survey your team. Because, I mean, those of you who, a Google form, easy way to do a survey, really easy. You know, if you need some help in how to do one of those, you know, feel free to reach out. But it's really easy and you get really rich information every time we work with a dealer. And it's like there's an assumption and we challenge that assumption and then we'll throw out a survey and it's like, oh. Right. And because, again, one of the things that we talk about frequently is don't assume. Right. Um, because there's a lot of assumptions out there about who your customer is and, and you can't be sure unless you actually measure the, that who, who your customer is. And so we've done a lot of measuring and we've done a lot of surveying and through our costs to our, um, our clients and all of that. And so Forbes, you know, what this list that they, and I think it's what seven, eight things, um, um, that they're like seven ways to know your customer better are really, so if you've got a pad of paper and a pencil around with you, these are things you're going to want to write down and create a survey around these things, these questions, because they are really going to help you get to what it is that, uh, that motivates or whatever your, your customer. Sure. Our customers. And it's reflective of kind of their behaviors, right? Oh, So the, I've got the link ready. I've got it copied. I can throw it in the comments on, on the thing when we finish up here. But, um, just remember that you do want to read the bullet points. I can go. Yeah. Um, so this is like going into a deep dive of your current clients, understand their habits. Right. So, you know, that's like where, you know, that, that can be, um, where they, uh, entertain themselves, where, you know, uh, uh, Yeah. That's like, what, what, what kind of, what kind of things do they just typically do? And, and, and don't guess and don't guess. And, you know, and, and, and you can like with your team brainstorm, what are habits that we're looking and just write down five or six and, and choose the top, you know, four or five and throw them into a survey and ask, you know, what are the things that, that you enjoy? Sure. um, or that, you know, or that you, that you do. The next one is goals. Oh, yes. Um, I haven't done it in years. I quit, I quit trying to ask dealers to do it. I created an application on my own and we use it in my own dealership, but I found that dealers were just not comfortable asking the question that I put on an application, which was, um, we're dealers of their team. We're not comfortable asking. So where, where do you spend your time? Like when you're not at home and not like on a Friday night, what are you doing? Yeah. What do you do with your spare time when you're not at home and not at work? Obviously, there's some selfish interest as a creditor to understand that. But it really helps me get to know the customer. Oh, well, I'm in a bowling league, so I'm bowling every Tuesday or Thursday. When I'm not at home or I'm not at work, this is where you would most likely find me. Oh my gosh, when you said bowling, and I was thinking like, I'm at my kid's baseball game or what, I mean, right there is like a goldmine. Because I can tell you, every bowling league and every soccer team is looking for sponsors. So there's just right there is one is, and you're reaching your customer through supporting their habits. Yeah. And, you know, their interests and their hobbies. OK, so the next one was goals. So what you know, what are they trying to are? Do they have goals? I know like Candice Price just just really, really appreciate her. And I'm so grateful to see that she's just being asked frequently to actively participate in games. in things on a higher level to help buy her, pay her. She's out of Omaha, Nebraska. And she, she talks to her customer about their goals, and that part of her program is to help them get into a home. Because, I mean, that's a goal and a fear. It's like, I would like to have my own home. And most of them don't know. So it might be just their goals might be financial goals. It might be we want to be able to go on this trip or just whatever it is. What are their goals? What are the things? Yeah. So the other thing that I recently observed in our own surveying with some of the dealer clients we've worked with was, and I was surprised by this. I've been doing this a long time and I did not expect to see this answer that we surveyed customers that we had missed, like customers that had been in our CRM. They maybe filled out an application, but they got to a place where we had an email address. Did not buy. Did not buy. And so we went out and surveyed those customers that did not buy. And one of the questions we ask is, in your shopping for a car how important is it to you to improve your credit in this purchase and it was very high it was like almost seventy percent of the respondents said yeah it's very high it's a high priority and if I take that at face value because they didn't have to choose that there were other options that said that's not important right now you know then if that's true then that's one of the motivations or goals that we would know that maybe we do need to look at credit reporting in our business because if that is important to the customer that we're serving and trying to reach and that we're missing then that would be significant I I would I would propose that um because I I know from the the surveys that that I've participated in you know when you talk about why do you suppose that people have to use buy here pay here it's because they weren't taught. They don't understand budgeting. They understand that credit is important, but they don't understand why or how they improve it. And so that's, that's my, that it's, that it's, there is still a gap in education. And so, you know, because a lot of people are going to say, well, if they, credit was important to them, they would make their payments on time, but they don't have that link. in their thinking, but they know credit is important if they want to buy a house or if they want to get a, you know, but they don't understand how to get to where they, what the pathway to having a better credit score is. And, you know, the importance of that. So there's a bit of education. So yeah, goals. And then the next one was identifying the customer's fears. Okay, that is huge. And, you know, we teach, I teach story branding. And this is through Donald Miller. Those of you who, who are interested, it's, you can get a book called Story Branding. He also has an academy and there's so much to learn and you pay so much a year. That is key to creating your message is to understand what it is that their struggles are and what they fear. And it's not that you're trying to poke fear, but you're trying to offer solutions to things that you're afraid. our customers' fear and struggle. Ideally, it would acknowledge and address their fears, right? So this is where, you know, in our marketing, and this is going to be true when I say marketing, this is the ads that we might run. This is how our website might look. And this is also the kind of conversations that we would be having on the phone. Yeah. Oh, yeah. to better understand, like, because when we think about those customers that we miss, because virtually all the dealers that we talk to, one of the big conversations, big threads in our meetings in the V-Eight this, this month has been around this idea of these low closing rates on leads. We're getting lots of leads, but the closing rate is very low. Why? Why are we missing all these people? They, it's like, you know, the smart alecky sales manager I worked with back in Oklahoma years ago is that the customer's not there looking for a ham sandwich. You know, they're in the market to buy a car and a very high percentage of them go away, quit talking to us and don't buy. What are they afraid of? What did we do to scare them off? They're buying a car though, somewhere. Somewhere. Maybe not today, but it's like, why aren't they acting? What are they afraid of? So I think this is the part that in my own experience and working again as a former dealer myself, I think what I see is that the customer is, and this is why this is kind of an important thread for a White Hat Wednesday. Mm-hmm. The customer that we serve has had their own direct experiences or they've heard many horror stories and they're afraid of getting into a transaction where they're either not gonna be supported or they're going to be under a lot of pressure. you know, in terms of, and they're not going to have a lot of cooperation from the creditor that they're working with, the lender dealer in this case. And so I think this is something we have to be mindful of. The customer, and it's true in business, it's like the customers want to trust who they're doing business with. Yes. Right? Yes. Let me ask you, you know, we talk about how many accounts are charged off, which is typically repo or, you know, total loss or something like that. You know, and I've really enjoyed when we can talk to buy-here, pay-here dealers, and we've worked with quite a few that have been that customer at one point or another. Um, having your car repoed is traumatic. Sure. It is a trauma. And I know, you know, there's a lot of people out there is like, let's not talk about what are your traumas. It is traumatic and it's not something that someone wants to experience again. And so that is a fear. And so, you know, if there, if, if our customers fear is that you're going to turn around and repo this car and I'm going to be without a car, um, then, um, there's, there's a message that you can put out there about, you know, uh, the support that you are, are there to offer. And, you know, and that, that reboing is like last resort and we're going to, or whatever about this, but there's something in there around that too. And so, you know, when you talk about fears, um, you can look at just what are their fears about their car and then what are their fears that not having a car create. Okay. um so there's you know there's multiple layers of the fear that having a doing business with you will help alleviate let's stop and talk about something that's related to this and it's something I put in the description of the podcast this morning it's like The idea of the lens that we see the customer through. So when we talk about the fears of repossession or fears of dealing with a customer or dealer that's not trustworthy, I think if I try to look at that through the lens of some of the dealers that we've met or they're members of their team, And you can almost hear the phrasing of, you know, well, make your payment and you won't have a fear of repossession. Or there's sort of an attitude that sort of identifies or thinks of the customer base as deadbeats. And irresponsible. Yeah. And so they use this expression and they have this view of the customer base that is irresponsible. And where does that come from? Well, past experience. They spend their day dealing with the delinquent and the past due and the repossessions. And so that forms their opinion. And they start to apply that then to the seventy percent of the customers who are not a problem. They might just be like, oh, I had a little bit of a thing. And so I just I, you know, can we make an arrangement so I can get things back on track? But that most of your customer base is not. out to be irresponsible are not out to get a dealer. I mean, it's that, that, that is, I, I see that. And I, I, I have a really hard time believing that a few bad experiences or even a Even if it's thirty percent of your of your customer base have these problems that you should treat everyone the way you would treat the thirty percent. Right. And I think that you should treat everyone the way you would treat the customers that aren't a problem. Everyone should get that kind of. And, you know, and how we how can we help? How can we support, you know? And there's nothing we're talking about and we'll get to collections like right now. I didn't put stuff on the screen, but we're kind of mostly staying right now in the market. Yeah. So if you think about the market and how do we serve? So again, we're thinking about growing our business. Yeah. And so when we're saying, how do we grow our business? One of the conversations I've been having recently with our groups and some of our dealers is let's remember, especially in the holidays here that, um, We can grow our customer base two ways. We can grow our portfolio, which grows our cash flow two ways. We can create more sales, which we have to pay for those cars to do that. Or we can save some repos and keep those customers on the books and get better at conflict resolution and support and start to identify those things and work with folks. So I think when, as you said, when the thirty percent affects our willingness to cooperate with the seventy percent, then, again, we're kind of getting away from marketing. But, but it's like, we have to think about the lens that we see our customer through. And that's going to affect our marketing. It's going to affect our conversations in the sales department and underwriting. Yeah, well, this all kind of comes down to, you know, when we talked about their fears, is that, that our customers want to pay their bills. Right. Say it again. The end. Our customers want to pay their bills. They don't want to worry about a repossession. want to pay their bills so let me stop for just a minute and say there are people listening and say that's not true of some well you can you can talk about the exception but for today the conversation needs to be around the rule because the rule is this is the customer that we serve this is the customer that we're working to reach and so when you get so caught up in the wiring and somebody I used to work with talked about is like If you're so tangled up in the wiring that you let this affect your lens and your view of the customer that you're really trying to serve and how to really help them to be successful, then that's unfortunate because it's going to filter down to all the elements of your business. So this is a difficult business. It's like being able to maintain that perspective. And I think, again, from a White Hat Wednesday standpoint, I really, when I think about marketing in our segment, I really want us to be able to market ourselves in a way that we begin to sell ourselves as trustworthy and overcoming some of these fears. Right. We sell ourselves in our business. Yeah. Supportive is good. Yeah. So when we can get out there and. You know, we talk about becoming known, liked and trusted. Really, all three of those. Right. And so if you you got to first be known through your marketing, get yourself out there. You need your customers to like you. But they when they trust you, that means they don't fear you and they accept that you are on the level. And so I think this is where our day to day attitude from starting with the dealer principle. That trickles down as to who we do business with, who we don't. The phrases, the words that we choose to use in the building are going to affect our team. So this is all part of a... kind of a I'll call it a culture of growth okay so this is kind of this idea that we want to bring this attitude that we're going to serve folks are there going to be irresponsible troublemakers that land in our portfolio absolutely but we got to avoid having that negatively affect how we approach and reach the customers that are the typical customer who do really well. And they're the ones that Tommy Grant has called survivors. Yeah, they want to pay their bills. And Tommy is like, I have never seen someone who can stretch a dollar bill more than our customer. And it's like hats off to you because those that have more financial bandwidth are are really wasteful. And so we get irritated when our customers are a little bit wasteful. But, you know, it's like, yeah, let's turn the mirror around. And like, let's, so to have, to give them the grace of, our customers want to pay their bills, but they also want to go get a beer with their friends on a Friday night. And so, you know, the, the, the fierce thing, the next one was how do they make their buying decisions? And so, from my experience most of our customers are in a panic when they need a car yeah um and so they make their buying decisions I mean there's there's I I don't believe that there's a lot of our customers that do massive amounts of research before they go looking for a car so but I think we better Yeah, I mean, there may. Because we haven't really surveyed that about their buying decisions. Do they look at reviews? Do they look at reviews? And we were actually talking about this this morning, is adding that to some of our surveys. It's like, is the review of a company important to you? We know the survey suggests that in the new car and used car segment, they do that. But in buy here, pay here, that's going to be different. Yeah, it's, it's, it's a different, most of the time when someone buys a car that has the financial bandwidth to go to a dealership or a franchise or, or an independent, they are, they're, they have the ability to be a little more picky too. And, you know, we, Yeah. So understand their buying decisions. So this Forbes article talks about, you know, some customers buy impulsively while others are more methodical and they do their research and what have you. So we certainly need to understand that about the customer that we serve. I can tell you that our own experience of working with marketing and, you know, CRMs and some of the data coming out of there, it does suggest that there are... There's a pretty high percentage of the customers who don't buy right away. You know, one of the things I learned when I got in the car business, they used to say, true or not, they used to say, when you meet a customer, you can expect that they will have made their purchase within about seventy two hours. Now, I generally operated on that practice. I certainly coach that when when we speak to a customer phone in the building, whatever that we want to bring an urgency about, we're prepared to do business right now. Like whatever information we have, we're prepared to help you in the car today. Because I remember when I first started, it's like the B-back. And I was like, oh, they're going to be back. And Jim just would shake his head. He's like, mm-mm. Why don't you stand out on the curb and wait for the bus with all the B-backs? Wait for the B-back bus. Yeah, and so that took me a little while before I realized that it was not... Well, we just don't operate on that idea. We have the urgency. And of course, we want to operate on the idea. If they don't buy today, we've made the kind of impression that when they do get ready to buy, they want to come back and do business with us. But... I just want us to bring the urgency to every interaction that we're prepared to do what we can do to help and make it and help you into a car right now. That's what you're here for. You're not here looking for a ham sandwich. You're here to buy a car and I'm ready to try to help do that right now. And if the answer has to be no, it has to be no, but I'm going to try my best to help solve the problem right now. But I'm just saying, we, we know that the customer, as apparently many of the customers do not make an impulsive decision. I used to always operate on the idea that most of our customers who are, are shopping for a car in the buyer payer space are shopping from a place of need. Like it's almost out of desperation. I think was your word. It's like they, they need to get into a car right away. Well, Why? Well, because their last car broke down, their last car got repossessed, or they've been borrowing their aunt's car. And regardless of whether or not they're great at paying their bills, they still need a car. Yeah, they got to get around. So I think a lot of times I expect that there's some urgent need around replacing a car right away. But what the data is starting to suggest, there's a pretty high percentage of customers that if that's the situation, they're finding other ways to work. or whatever, because they're not necessarily all buying right away. We're seeing a fair number of our dealers that are having, at least the ones that are working with a good persistent BDC, they're having many deals closed that are more than thirty days since the first inquiry. So that just means there's a lot of customers that are in the market for an extended period of time. And they may be for a different reason in the future. So just kind of keeping them in the loop. You know, when you think about it, When someone is having a problem with their car or, you know, whatever, like I need a new car, that's usually something that they're going to like, it's talk while they're at work or it's, you know, their neighbors and it's talk with their neighbors. And so to have, you know, have been really supportive of your customers that when, when someone, because it's good, those kind of things come up in conversations every day, you know, it's like, I need a new car. And, and Um, I just, you know, I, for whatever things is that having a customer be able to say, Hey, you know, this is where I went and, and, and they've been really supportive and they've, they've worked with me when I've had a hard time or whatever. And it's like, this is really where you should go. That is gold. And so, um, I think, you know, even though we may not get online and look at the actual, uh, the actual, uh, ratings that that people have given um to a business if if if you are actively supporting your customer that your customers will talk about it especially when someone says hey this they do that conversely though too yeah um uh so if if you've really had a negative experience they're gonna steer people away from your business so before we move away from marketing I would say that I forget the exact phrase, but in marketing and education around marketing, they talk about that buyers tend to purchase... And one of the things we want to be mindful of in our marketing is that there's a time when opportunity aligns with basically the offer. It's sort of like I'm... I'm in the market. I'm in the market. I'm not I'm not making time every day to shop for a car, but I'm in the market. I'm in the market. And suddenly an ad comes into my awareness. Oh, there's a car dealer. I need a car. Let me stop and examine that. But you also can recognize it from a marketing standpoint on the known, liked and trusted. If I'm suddenly in the market for a car, right, for whatever reason. And I'm, I remember that there's this dealer in my area that I love their social media posts when they come across it, just like they, they, they show respect for their customers. Like they, they're appreciative and they show respect and they have events and they just, they show that they care. Right. And so now you're, now you're, it's going to resonate with some, right. Where they can say, oh, that's somebody when it's time for me to buy a car. Yeah. and I have the opportunity to choose where I'm going to do business, then I'm going to seek out the people that have been in my awareness, right? At a time I didn't need a car. And so this is kind of part of what I would say. And I would, you know, part of what we're talking about right here is like, you know, your market, figuring out who your customer is. And that just flows into how you market to them and, you know, your marketing. And, you know, we've... the social media is great because, you know, we've, we know like with commercials and television and all of that, that it takes so many hits before you become an awareness as an option of, for, of those things. And so I'm not really squirreling. I'm more possuming, which means it's related, but I love the social media. Um, But people aren't on their social media all the time. And when they have to get a car, a lot of times that's like a conversation that's happening in their home. And I would suggest, and I really want to measure this, but I've talked to different dealers. And if you can... if you can layer in a social media campaign so they're seeing that all the time and do uh the ability to be able to to target neighborhoods with um direct mail like a postcard that that isn't about these are all of our features and this is but something about um that story branding this is You know, we the problem being solved or whatever. And that's going to go. People look at the stuff that comes in their mailbox. They just do. And so it's like even putting on there, put this on your refrigerator because you may not need it right now. And it's like it's a coupon or something that says for, you know, we'll match a down or whatever. And it's good for so and they'll put it on their refrigerator. Mm hmm. And then they're seeing all the social media. And then the conversation comes up. And then guess what it is that they're going to look at? Is that I can't I can't say you say they do open their mail. I can't say what percentage of people open their mail. But it's not an open because when I get the envelopes of stuff, but when I get a like a postcard, a big postcard, I always look at it. And I most people do. How do you know most people do? Here's what I can say. It's from surveys that I've, and research that I've done on the internet about, you know, the percentage of people that actually look at their mail versus the percentage of people that open an email. So here's what I can tell you on that subject. Troy Spring, you remember Troy works with, is a partner with Tracy Myers. Yes, yes, yes, yes. And Troy and I had a conversation which was recorded and I think we probably brought it to our, our podcast. But basically he said, cause keep in mind, Troy's a guy who works with franchise dealers with big budgets and they have really comprehensive campaigns, which includes social media and billboards and probably all kinds of stuff. And he said, direct mail absolutely still works. So people have moved away from it. Most of our dealers are putting all their money in Facebook and Google, right? They can do it, whatever. But I'm saying Troy says in their big budget campaigns where they have a chance to test and analyze all these different types, direct mail still works. So it's, it's a question, you know, again, on the marketing thing is we need to understand where our customers live. I don't know in today's, um, um, marketing, how, um, Specifically, you can identify demographics for your mailers? You can. I've done the research and it's just like, you know, we talk about being able to identify for social media. It's getting as pinpoint accurate with direct mail as well because it's coming from surveys, from the censuses. It makes sense. I think it would be less reliable in our subprime sector because our sector in general, this is a very broad statement, but our customer base tends to be a little more transient. So I think the data would be less reliable in our subprime sector. But where do they move to? Well, I don't know, but I'm just saying it can work. I'm just saying the campaigns through direct mail can work. It's really just a question. For me, it's less about what... whether the mail, whether the mail item reaches their mailbox. To me, it's more about what is the message that we're delivering. That's it. Exactly. That's it. Exactly. But I mean, if you're, if you know that you're getting those postcards in all of the apartment complexes in this area, all the duplexes in this area, this is where specific income levels live, all of that. Even if they're transient, they're usually moving in and out of apartments or they're, it's, they, they are going to be moving around. So if it doesn't have to be a, it's just current resident. Sure. So, you know, you're sending that kind of stuff, but we digress. Um, got to be careful about discriminating in our sector, but you, we're just using demographics, which everybody uses every time you get on Facebook. I mean, that's not discriminating. That's just like, I'm trying to, I'm trying to meet my customer where they're at. And so the next one was who would you like to work with? And this is a very loaded question because I, we all want to work with someone who's going to pay on time every month. Okay. That's just great. Your, your, um, that to me is it really, it really weaves in underwriting as well. And that's where things like what is their income? Um, you know, what is their history? What, and, and, and all of those things. And the, the big question that I've, um, seen a lot on social media is, you know, they're talking, I've, uh, uh, about like the, just the income. And it's like, let's break down the budget of someone that only brings in this much money. And, you know, and so we're, we're looking at, you know, I want to have a shiny car on my lot that makes me proud to drive onto my lot because it just, it's, it makes me feel, I don't know, whatever. Um, is your customer able to do that or who you're trying to reach and have come in is, are they able to comfortably afford what it is you have on your lot? And, um, and if not, you know, it's like run your budgets, people run it's dealers. Just look at, um, the, the, the price of your, what kind of payment, all of that. And, um, you know, let's make sure that we have vehicles on our lots that if your customer is from this demographic, that they can do it comfortably. And, you know, we are like, well, we can stretch it. We want to be able to get as much as we can, but we also have to understand they have to buy coats for their kids for the wintertime. They have to, you know, they've got these things that are not usually part of what we're asking about when we're budgeting through, you know, you know, if we're doing a budget conversation with them. So be aware and look at it, look at it without blinders about, If I had this much money, what is rent? And, and one of the things that I've seen recently is like, twelve hundred dollars. I don't know very many places that cost twelve hundred dollars that you that's that is a two bedroom right I want you might be able to get a one bedroom which is going to be a single person that whatever and then that person who's doing that is is going to have to make x amount of dollars and that's usually somewhere around twenty to twenty five dollars an hour okay In order for them to afford a twelve hundred dollar a month. So let me offer a squiggly line of who I would want to do business with. Keep in mind, I'm a guy who started sitting with customers and taking applications in nineteen ninety seven. I own my own dealership from oh five to twenty eleven. And I did pull credit reports. And if I were a dealer today, I would be pulling credit reports. And the customer that I would be trying to do business with is the customer who's going to be truthful with me. I can overlook lots of past mistakes. I can pass repos. I can overlook a lot of that stuff. But the reason I would pull a credit report is is after taking an application, I'm going to ask the customer, you know, anything on the credit report you want to share. And then when they say no, before we move on, it's going to be, what about any past repos, past bankruptcy, anything like that? What we don't want is surprises. So I want to hear from the customer. Are they prepared to be truthful? Because I want to hear from this is why I still like an in-person conversation. I want the customer at the building. I want to meet them. I want to sit across from them. I want to, I want to read body language. I want to, you know, I want to see eye contact and I want to know if the customer is being truthful with me. I can overlook a lot of stuff and I can step into a three year business relationship if I've got somebody that I feel like is being truthful. Why? They want to trust us. Well, I want to trust them. If I'm a dealer, I'm going to step into a long relationship and I'm going to provide you financing as I want to trust you. So how would I get there? Well, I can't get there with a web app. And the other thing is, is like, so if someone is not being truthful about what's happening on their credit report, do you say there's the door? Yeah. The moment that they do? Yeah. Or is it because most of our customers have been told no and so they're going to gray areas that they feel like are the things that will keep them from being able to get a car. Yeah. And it's like, if you can show them that, yes, I'm aware of all of the things and give them the opportunity, it's, it's kind of like, it's kind of like, it's, you, you're likely not going to have a customer come in and be a hundred percent truthful. From the door, from the moment they hit the door. But when you can set a precedent that's like, you know, it's not going to keep you from getting a car. I just want you to be truthful. I just want to be, I just really want to understand your circumstances. And you tell about things like, it looks like you had a thing in Phoenix, Arizona, but you live in Charlotte. Yeah. And so that was last year. And you said you've lived here for the last five years. You know, talk to me about that. And then, you know, so that they know that it's like, hey, I just I just need to be open. Yeah. And I think, you know, now we're kind of stepping more into sales and underwriting, which I think, you know, we're starting to wrap up here. But I think. All of the things that we talked about are really relevant in all of these aspects because it's what do we know about our customer in order to be able to serve them when they're buying, when we're closing the loan, when we're collecting the payments. We really need to understand the customer that we serve in order to have success there. Yes. I think all the things we talked about, regardless of which segment, that's going to be true. But back to the thing about, you know, I know artificial intelligence is working in our favor. I know that there's, you know, all these data analytics that can help us. And there's all these sophisticated tools. And that's wonderful. I've not heard of any AI deployed in the subprime auto space that is reading people's body language or eye contact or any of that stuff. And so I think there's just, we got to, one of the ways that we can. Uh-huh. we can feel comfortable and I think it's really significant if you're my customer and you're applying and and I get to the place where you tell me the ugliest parts of your credit story and I'm satisfied that you're telling me the truth it correlates with your credit report because there's a story like you might have had a past repo but almost with every repo there's a story what happened well the dealer Wouldn't pay for the repairs, so I couldn't afford it, so I walked away. Well, that's one story I need to hear. There could be a whole different story. Well, I co-signed for my son, blah, blah, blah, whatever. You need to hear the story. So I think there's, who do I want to do business with? Somebody that I feel like is being on the level with me, who's speaking. So now we get to the place where I agree to finance you today. You just told me about the ugliest parts of your credit circumstances, which is a big relief to you. We still move forward and I agree to do business. Now you step into this three-year business relationship with me knowing there's really not much we can't talk about. Uh-huh. Right? Yeah. And I love the, I don't remember, it was probably someone that, it's someone you'd worked with or whatever, that the end conversation is if there's ever a problem. Sure. come and set yourself down right there and we can work it out yeah it also puts me in a position now to because we talk about sales and underwriting which could also encompass closing right the actual we've we've we've met with them we took the application we've underwritten the deal and now we're going to close the loan so if I'm in your situ or I'm closing loan with you and and maybe I'm the underwriter and you share with me the credit circumstances and I say okay, we're going to move forward here, but here's what I need you to understand about how we, so that if you find yourself in a similar situation around a mechanical problem, which you described as the case, here's what's going to happen with us. You still want to move forward? This is how we handle mechanical matters. So you can avoid being in the situation you were in before by doing this. There is, you know, flashy stuff, new technology, all that is really fun and it's flashy and it's like, yes, yes, yes, yes, yes, yes. And it's appropriate for the people doing a hundred, two hundred cars a month. And it is, but it does not. replace that conversation and it does not replace you know when we like we get into the collections part which is support it does not replace what you have in your tool belt to support them I mean what you have like what are the things that I can what tools are you giving your your collectors to be able to help support them and I know you know uh uh you can use all of the technology and feel better about yourself. I personally and you may have a different I've I've yet to see how high technology is actually equating to better loan performance. Well, let me tie this back to sports because that's what I do. No, I think we're in the middle of the World Series. I don't know if you were a couple games into the World Series. I was not aware. Thank you. Dodgers and Yankees. Okay. And I'm not really tracking it, but I know those are the teams. But here's what I would say about that. Do you remember the movie Moneyball? Do you remember that at all? So I forget who the characters were, or the actors. But the story of Moneyball was this guy who came on the scene in the baseball, and he started using analytics. He started studying. He started digging into data and it allowed them to get really sophisticated with their defensive positioning and some stuff. And the next thing you know, they're in the World Series for like the first time. So the idea here, though, is when I think about that and I see this more in football because I don't follow baseball as much. But you have all these sophisticated analytics that tells you where your shortstop ought to be positioned. Right. So that's good. But we can't abandon fundamentals. That shortstop is in the World Series largely because they practice taking ground balls every day. They're fielding ground balls and they're working on the fundamentals of the game, the fundamentals of the game. So this is what I'm saying. We got this cool new technology, which is great, but we cannot abandon the fundamentals. Amen. Amen. And that is, from my perspective, a fundamental of this entire process is humaning. Yeah. It's like it's having the conversations. It's connecting with your customers. It's supporting your customers. And no amount of technology can help you with that. And in football, it's called blocking and tackling. We talk about basic blocking and tackling. It's like the teams that are in the Super Bowl in football, you watch. They're generally going to be good tackling teams. They're going to be good blocking and tackling teams. Do they have great coaches who put them in great position because they've done their scouting report and they know where they're supposed to be? Yes. But they have to be able to make the tackle. Or every play goes for a touchdown, right? So the fundamentals. And the fundamentals is what I guess that, you know, when you think about if we're going to wrap everything up that we've been talking about, the fundamentals are knowing your customer, being a problem solver, helping them, you know, helping them learn how to be more truthful, and then supporting them after the sale. So getting to know them is going to help you market and reach the kind of avatar and the typical customer. But when I say get to know them, I don't mean their credit score. I mean get to know them. Get to understand who they are. I'm going to bring Candice Price into this real quick before we leave. That's one of the things that I really love about her approach is that she talks to them about their problems and she has an arsenal of people tools to help solve problems that are outside of their car. So when someone says, hey, I'm really struggling with being able to afford daycare or whatever, Candice is like, oh, you Let's call this person right here that works for this organization that does the thing, and let me get you hooked up with them, and they can help you with that. And so you've solved a problem that they didn't come there to have solved, but you cared enough to help them solve a problem. Which increases their chance of success with what's going on. It absolutely does. Um, it kind of gets them married to us. Like they, they kind of trust you. It's like, Oh, you're my friend. Cause you're helping me. And then one other thing I would just throw in here is like, I think I mentioned this before, but we've got a dealer in the great lakes. Who's one of our dealers in the V eight thing that is, uh, one of the highest volume dealers consistently. They're consistently up there at the top in terms of their units per month. And they don't take applications online. So I think when we think about fundamentals and we think about all the, I call it the pendulum swing of technology, a lot of us are overusing technology. And what I'm seeing, at least in this one very clear example, is that it's going to make a difference when we can get past the technology and start to be able to just talk to the customer get to know them right and and then you can figure stuff out well we are in a white hat way is not about the sales process and the collection process becoming sterile not at all um it's about you getting in the ditch with your customer and being able to to it's it's about getting dirty and um and helping and in ways that you can help table And sitting, yeah, it's like you're not sitting across the table. You're sitting on the same side of the table and both looking at the thing and how, you know, and coming jointly up with solutions to the problem. And yeah. But we've just got to understand them first. And so I think we touched on most everything. Obviously, on the collection side, we can see how all of the things that we talked about here would also serve us on the collection side. When we get to know the customer, we communicate with them, we listen to them and understand what's going on with them. then that goes a long way towards solving whatever the problem is. One of the reasons why I love the idea, and I don't have data to prove it, but it just freaking feels good, is when you have people on your team that are friendly and relatable. and approachable um and not salesy and not I mean it's that you have people that someone can sit down and feel comfortable having a conversation with it's like oh I could probably have a beer with this person or whatever because they have the interpersonal skills to be able to to get to know somebody, but they don't have to look a certain way and they don't have to, you know, it's just, it's like having people on your team that our customers would feel comfortable sitting on the same side of the table with as well. That's good. I think also whether it's collections or any other department, I think we can save this conversation for another Wednesday. But I think the idea of empathy versus sympathy and how to be empathetic and still hold the customer accountable. And that's where I love when we talk to dealers that it's like, I was in this position and I want to do this because I want to help others. It's just like, oh. So much of the foundation is already laid of the empathy and the caring and problem solvers. Sure. So we got to hire people that want to get to know our customers and know how to solve problems. Yep. Hey, everybody. Thank you so much for joining us today. Any closing thoughts? We really appreciate you giving your time. We went really long today because we got so much into the whole market research. If you want to learn anything more about some of the things we've talked about, there's an arsenal. We've got like four hundred episodes that are sitting in YouTube and the podcast, our syndicated podcast stations go there and, you know, you can search different different subjects. um thank you again for so much for joining we'll be back on friday with just a regular straight line um so we might be weaving more and more squiggly lines into what we talk about but we really appreciate and know that you have a choice on what you're going to do with your day thank you so much for sharing with us we appreciate it have a great day
