Stephen & Phil talk about the importance of understanding your clients’ individual needs and creating a diagnosis before prescribing any solutions. They also discuss the Same Here charity, which focuses on mental health and is close to the heart of Fountain Forward.
Tactical Tips Episode #30 Transcript
BRAD: Hey guys, welcome back to another Tactical Tips Tuesday. I’m super excited I ran across these two guys on my journey checking out vendors and, particularly, people that are kind of partners to dealerships and really kind of focusing on that. So I want to introduce you to some guys that are super awesome and we have had a lot of back and forth lately, and I really love how they go about things. So we have the guys from Fountain Forward here with us today. So we have Stephen Jurgella, and then we have Phil Trzebiatowski. Is that how you say that? Is that close enough, Phil?
PHIL: Yeah, you nailed it!
BRAD: Okay! So these guys are really cool. So normally, we talk about fixed ops, but you know, I made an exception for these guys because the way that they go about bringing on clients and the way that they qualify clients before coming on is so needed. It’s so, so needed in the automotive industry. So, Stephen, I want to talk a little bit about the questions that you guys ask as people are coming on with your product and explain a little bit about what you guys do and then we’ll kick it back over to Phil to talk about the analytics side down the road.
STEPHEN: Sure. So I appreciate you having us on. So, just a few years ago, we just kind of stumbled into the fact that I had observed that automotive marketing companies were, you know, these big beautiful presentations and these big pitches and all these things, and what I noticed was the amount of time that they dug into the actual store’s issues or room for improvement was next to nothing. And so, I was always a fan of the medical diagnostic process, which is discovery, diagnosis, prescription, prognosis. And so we make every single dealer go through a decent amount of friction when they watch our ads and look at our ads. They have to read blogs that are one thousand, two thousand words at times. And after that, they then reach out to us. They do an intro call, and then they do what we call an “ASA” (automotive strategy analysis) in which they answer questions for about forty-five minutes, and then we will give them their diagnosis and prescription, all for free, which does take about eight hours of work. But then our relationships with our dealers, they don’t go three months and we get a thirty-day out. We stay with them for years and years, and so we just don’t believe in adding a thousand dealers with our type of process and product. We believe that we’re gonna spend the time to invest in you, Mr. or Mrs. Dealer, and then, once we have our analysis, I’ll give it back to you for giving us your time and, of course, if we can help you, I will write that prescription for you. You don’t have to take it, of course, but if we don’t, we learn something from talking to you, from your data, etcetera, and so we’re good with that transaction.
BRAD: I think this is so cool. So I’m gonna coin a phrase for you, okay, here, because this is what we do live on here. Right. So, my good friend at TrueSpot, we talked to him about being the Domino’s Pizza Tracker of the service department. So you guys are the Telehealth guys of social media advertising. I mean, it’s very similar to what you do, and you know how big that movement is right here. So, once you dive into the data, what are some of the common problems that you guys see? You can gotta go back and forth if you want and kind of tell us. What are some of the things that you see as you’re going through these clients?
STEPHEN: Sure, so, the vast majority of the time, it’s data overload. I didn’t start in actually like the automotive business, if you will, until 2013. But what I discovered when I started is that all these dealers wanted more and more data and then around 2015, I just had a revelation one day-they don’t actually look at it. They don’t actually look at it nearly to the level that they are able to, and then Phil, over the last six years, Phil started doing this at seventeen years old. We just started to put the numbers together, and we just started looking manually, just looking, looking, looking, looking, looking and then comparing. And then Phil would do a correlation study and then he would do this and this and this, and then what we found out was if, and yes, social advertising is a big component, purely because it’s the cheapest attention as it sits right now. But we put advertising strategies together based on what the data says and we’ll use Facebook, Google, Outdoor, whatever is to get to the objective as cheap as possible. But we’re the Moneyball for car dealerships. So before we run your ads or anything like it, Phil and his team have already pulled the car in, we have opened up the hood, we’ve taken off the wheels, and any weird noise we’ve looked into, and I don’t understand how the marketing companies out there, you pull up your vehicle, and they write you the repair order, and they haven’t even looked at your vehicle. They haven’t even run a diagnostic. They haven’t plugged the little thing in. It’s here and they do it all the time. And so we, and again a testament to Phil and his team, they pull the car in, do all of that first, and then you’re sitting in the service center, and you’re having yourself a delicious coffee, whatever it is, and we’re gonna hand you what’s wrong with the car, and of course you can choose to fix some of it, all of it, whatever it is, but we’re the Moneyball for the car dealer. We believe that the biggest issues, they just don’t look, and it doesn’t mean to be disrespectful, but they don’t. A lot of them don’t. The vast majority don’t.
BRAD: So this is what I love about Phil. Me and him are both data nerds, right. And Phil is very, very, very great at holding people accountable because there’s been multiple times where I’ve missed and I’ve had to call Phil back, and I’m usually pretty good at it. And so Phil holds people accountable really well, and that comes from being a really strong analytical person that can look at data and derive insights from that. So, Phil, what are some things that you look for when you’re going through these dealers that really kind of stand out as you’re diving into stuff?
PHIL: Well, so as Steve was mentioning, you know, we just started compiling data, and after years of doing that, we also ran into data overload. There’s too much data. So we had to figure out a way to just sort that data better. We’ve come up with three different levels that we’ve realized, three primary levels where dealers lose profit. Level one being in-market demand, level two being their website and inventory level, and then level three being the lead nurturing level. Once a lead actually becomes a lead, how well is that dealership following up? How are they handling that lead? Are they setting enough appointments? And so there is a level to that where we have to hold our dealers accountable. So that’s really the three levels that we look at. So again, in-market demand, what kind of mix does a dealership have? And we take that a step further too-how does that mix convert into leads? Does a dealership have too many third-party leads? Do they not have enough third-party leads? So that’s level one. Level two, this is, Steve if I remember correctly, a dealership spends one dollar converting traffic for every fifty dollars that they spend acquiring that traffic. Correct?
STEPHEN: Yeah, the most recent one I’ve seen was something like fifty to one, basically.
PHIL: Yeah, and so that is another level that we think as a massive hole is, you know, we can drive as much traffic as we want to a dealer’s website. If the cars aren’t merchandised well, if the pricing is off, if the website user experience is poor, users are going to defect and they won’t turn into leads. And then, lastly, let’s say we are driving quality traffic back to a site. That traffic is converting. Ultimately it becomes opportunity for the dealership. How many appointments are they setting? That’s that level three lead nurturing and that, again, requires a level of accountability really by our dealers, to you know, just encompass a process-oriented culture. And if those numbers drop, you know, that’s okay, that happens, every month is different in the automotive business. But if they drop, let’s figure out why, let’s understand why, let’s put a process in place to bump those numbers up.
STEPHEN: And one thing to tack on top of it is and every dealer, especially when things are off, they panic. And I understand why. I’ve been part of a dealership before. I have as a partner. I’ve watched how much money we can blow in a day when things are off. But if you follow this you win long-term and Phil and I use this all the time: prescription without diagnosis is malpractice.
BRAD: Yeah, no, I’ve heard you say that a lot. And what I love, what’s so similar between our two companies, right, is that it’s all about going back to the foundation. This is all before you even start doing ads.
BRAD: It’s before you start doing anything!
STEPHEN: It’s all about the fundies, right, Phil?
PHIL: All about the fundies.
BRAD: So you have to be fundamentally sound and you have to know what process they have. Right, do they have a BDC? Are they going to salespeople? And I gotta think that that plays into what you guys do, and it plays into what we do on the service side. Right. Do they have a service manager? Do they have a body shop? Do they have an in-house recon or do they have to send it outside somewhere, you know? So I think that’s so important. What I really love about the company is like hardcore problem-solving, right, hardcore problem-solving. Don’t give me this, don’t give me this… this is my show. I’ll say what I want. Don’t give me this bullshit about “I just need more traffic.” No, what are your actual root causes? And you guys do a lot of root cause analysis with your clients to get to those root causes, because, if not, you’re just treating symptoms. Right, to go along with the theme, we’re just treating symptoms.
STEPHEN: And we talk to our dealers specifically during the onboarding process, and shout out to Kat who’s our Client Relations Director. We tell our clients we are going to go through a process when you bring us a problem, of unpacking what the real cause of the problem is and at times, there will be symptoms in which you think we should go towards or we should make a change based on that symptom. And I let them know that, and this is a shout out Rick Wilcox who gave me this years ago. But we follow AQESC, and I’m gonna do this every single time. I’m gonna bring Attention to the problem, I’m gonna Qualify it all the way until I really understand what the problem is. I’m gonna calm the Emotions, don’t worry, chill out, we’re good. I’m gonna get back to you at this date, at this time. We’re gonna Satisfy it, and then we’re gonna Confirm it. And if you just follow it over and over, and Phil and I, we do training every month, because we all at some point we just start to go off the road and we go on what we call the attention satisfaction loop. When you’re just treating symptoms you never actually solve the problem, and so we all do it, right, Phil? So we get back on and I’m like, “hey, bro, we skipped the steps there.” It feels like, gosh, all right. And I do the same thing. I’m like shoot I went right to it. But a dealer that just wants to go and again, I don’t mean to be disrespectful about it, but it’s kind of at the core of the industry for a lot of especially the old school dealers, spaz if you will, and just go “I’ve got to drop a mailer for five grand right now.” Well, I have the evidence to show that that doesn’t work. Nine times out of ten, it doesn’t actually solve your problems. So do me a favor, give me an hour of your time. Let’s unpack this and your five grand. I’ll split it with you. You give me a check for $2500, you keep $2500, and you just won’t do that irrational mailer or something like that.
BRAD: Yeah, so here’s the beautiful transition. You teed it up perfectly. So let’s talk about results, right, let’s talk about the things that you guys look at to show the dealers like, “Hey, we are kicking butt, we are doing a good thing.” So, Phil what areas do you look at? There’s a lot of different stuff with Facebook, you can do a lot of different things and we’re working on some really interesting things with Facebook recently. But what do you guys show the dealers to say, “Hey, look, this is working, this is doing great”?
STEPHEN: Hey Phil why don’t you unpack like Facebook, Google, all the different ads of the title, Facebook, Google Text, Google GMB, you know, yadda, yadda, and creating that with Facebook and then breaking down in the core.
PHIL: Yeah, well we’re big proponents of media mixed modeling. So you know, we’re looking at how are the marketing advertising decisions ultimately affecting sales volume. That’s really what we care about most, what we try to show in our reporting, and also what our dealers care about most. Like they can say that, you know, they care about traffic, which we do as well, but traffic doesn’t always sell cars. Car sales are what our dealers care about. When it comes to our actual advertising, we have found that Facebook does a wonderful job creating an intent, but it doesn’t always get people to convert. Facebook creates intent and then we use Google, Google paid, Google organic to capture that intent. That’s really what we try to show. We also show growth in specifically what we call the “core lead volume” or lead volume originating from a dealership’s website. We’ve done a case study back in the past that core leads close to 37.5% faster than an average third-party lead. The average growth is about 47.5% higher and the closing percentage for core leads is about 2-4 times higher than the leading third-party providers. So a lot of times, what we see with our dealers is they have too low of a percentage of their overall lead volume as core leads. They’re not driving enough traffic to their website. That’s not converting into enough core lead volume to really sustain and grow sales. They’re reliant on third-party lead providers. They’re struggling with grosses, their salespeople are really grinding over those leads. So that’s probably the biggest area of improvement that we try to increase is that core lead volume for dealerships.
BRAD: I think that’s so spot-on because what leads close at the highest rate? The ones that you get off your own website, right. And so if you’re putting them in that model and you’re bringing them back through there, you’re not building cars.com’s brand and you’re not building Auto Trader’s brand. And when someone buys a car, right, someone buys a car and they found it on Auto Trader, and they go to the coffee shop right and he’s like, “Oh, where did you get that car?” “Oh, I got it off Auto Trader.” They don’t say the dealership’s name because that’s the first interaction! Right. So the cool thing is is that if you’re bringing them through the website and they’re doing that, they’re saying, “Hey, I got this car from so and so and so dealership,” right, because it’s coming off of that website and that’s what all the contact stuff is branded, and so I think that’s so, so beautiful. Now one more thing I want to touch on because we’re almost out of time. As hat-bearing brothers of mine, you gotta go through the hat real quick, man, and let everybody know what’s going on with the hats because I know it’s a big part of your culture. So I want to make sure even if we run a little long, we’re not gonna get off of here until you go through the hat, because I want to see how good Steven’s is, because Phil described it beautifully when he first described it to me. He did a really good job.
STEPHEN: Phil did you give like the sentimental unpacking of it?
PHIL: Yeah the whole meaning of the hat.
STEPHEN: So, all right, I’ll see if I can say it like two sentences. So first of all, on the side of the hat is #SameHere. Same Here, this is the actual American Sign Language for “same here”. Same Here is a mental Health Organization, and what Same Here means is five in five people experience stress, trauma, and challenge in their life. And so instead of us saying one in five people suffer from a mental illness, it would be like the American Heart Association only speaking to people with heart disease. It’s all about preventative, about lived experiences, about five in five people. So Same Here is the nonprofit organization which the profits go to. And the specific wording of “FRWRD” is we lost a good friend of ours, my business partner. He died by suicide a few years back. Actually, tomorrow will be four years since Cam passed, and so, as much as we always want to move forward, sometimes moving forward, it’s not as easy as the spelling itself, which is represented by the missing letters on the hat. And so that’s what the FRWRD hats are.
BRAD: So I think that’s beautiful and I think that that’s a great ode to your friend. I don’t know if you know my hat story, but I’m gonna tell you real quick.
STEPHEN: Can you show it a little closer? I can’t see it.
BRAD: Oh yeah, so it’s just a FIXED OPS DIGITAL hat. All my hats say “here to help” on the back, which is in my handwriting. And so whenever I got into the car business, you know, I started thinking about, “hey, how am I going to brand myself? How I’m gonna do this?” Well my dad was a plumber growing up and he wore a hat all the time because you’re crawling under houses and you’re doing this, and we gave out hats to clients and we did all kinds of stuff, and so it’s like a tool for me. And when I put my hat on, that’s when my day starts, and so my hat’s a psychological anchor to remind me, “Hey, look, my day’s started.” When when I’m done, the hat comes off and then I’m in home mode, and so it’s a psychological anchor that kind of goes through, and I’ll post a little thing up here on the side. You guys will see it. So there’s a little almost like a point that I wrote about wearing a hat and why it’s important. So that’s why I connected so hard with Phil when he told me the story. So what I do want to say is we’ll put the link down here below, but if you do know someone that struggled with mental health or you do want to make a difference, you can go to samehereglobal.org/donate/ and you can donate through there in the memory of somebody that has had mental health issues or that you’ve lost. So I want to make sure that we’re all about supporting that and we’re all about supporting you guys. I’m super excited you got to come on here. Like I said, we made an exception. We’re talking a little bit about sales, which is where I came from. So I get excited about that and I just want to let you guys know that these guys came remarkably highly recommended from one of my clients that told me I would be remiss if I didn’t get to know these guys and from Facebook itself, too, not only from Facebook but also from one of my clients. So I would challenge you to reach out to these guys because they’re not the norm when it comes to the social media side of stuff. And if you really want to challenge yourself and you really want to make a difference and you’re down to be coachable and learn, these are the guys that reach out to. So I appreciate you guys coming on today and I hope you have a great-well, this will come out after but July 4th weekend. This will come out on the 5th. So but yeah, y’all have a great weekend.
STEPHEN: Thanks for having us, Brad!