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Terry talks about how prepaid maintenance “subscriptions” like EXOGloss offers can help you communicate with service customers and retain them to YOUR dealership instead of local competitors. Terry & Brad also talk about next week’s ASOTU Con and what they’re looking forward to about it.

Tactical Tips Episode #31 Transcript

BRAD: Alright, we’re back with another Tactical Tips Tuesday. We took a little bit of break for a little while as I got adjusted to my new role as a Vice President of Digital Marketing at FIXED OPS. So we got a lot of cool things coming down the pipeline. But today, we’re gonna talk about something that you don’t necessarily always think of on the fixed ops side, and I have my friend Terry Torline. He’s the Vice President of Sales for EXOGloss. He also might be the biggest man in automotive. We nicknamed him “Bigfoot,” and he does a fantastic job of recapping our group text every day that we call Terry’s Notes. So Terry, welcome to Tactical Tips Tuesday, man.

TERRY: Brother, thank you so much. I appreciate that, and congratulations on the new title!

BRAD: Yeah, I appreciate that. 

TERRY: Well deserved.

BRAD: We’re gonna see each other pretty quick. This episode is gonna come out next week, but that next weekend we’ll be headed to Philadelphia, which is why I have the ASOTU hat on. We’ll both be out there at ASOTU so if you like what you hear today, reach out to us.

TERRY: I am so looking forward to that weekend. Kyle and Paul have set the bar really high about a convention that’s the new wave convention. So I’m excited to see what they have. Those two have done an amazing job of putting this on. So I’m excited to see what they have set up for us on that weekend. It’ll be fun.

BRAD: Yeah, I’ve known Paul a long time, and he and kyle both do a fantastic job, and it should be a lot of fun. I’ll be doing the Pitch Tank, so that will be kind of fun to get up there and do a little pitching on the stage, and then Owen’s coming with me, so Owen and I will be out there. I think we’ve got a little plan to go to the baseball game and go get some cheesesteaks and run the Rocky steps. So we got a lot of quintessential Philly things to do while we’re out there too.

TERRY: It’s gonna be awesome.

BRAD: Yeah, so all right. Well, if you haven’t got your tickets, go to ASOTUCon.com. Go get your tickets. It’s September 11th-13th, and it’s gonna be fantastic. And they just opened a new room block if you haven’t done that.

TERRY: Is there a belt? Is there a belt involved?

BRAD: There’s no belt. Yeah, I don’t know if there’s a belt involved. I don’t know what it is.

TERRY: I’ll hit Kyle up.

BRAD: Yeah. So, I will say that Terry has a company that does prepaid maintenance and warranties and stuff like that for dealerships, but it differs quite a bit from what the traditional way to do it is. You actually do it by subscriptions, and you can customize it to each individual dealership, and so everything’s going to subscriptions. Hell, even like heated seats and stuff like that in cars. People are talking about that. And I’m sure there’ll be subscriptions to where you can subscribe to charging stations and then go charge so many times a month, and I’m sure there’s gonna be 9,000 different types of subscriptions. So I think it’s a really interesting play because it makes it a lot easier for people to choke down as far as the price goes whenever they’re looking to extend warranties and stuff like that. Also makes it extremely easier to sell in the service department. Right, instead of coming in and saying, “hey, you need $2500 or you need this much of a warranty,” you guys do it on a yearly basis. So tell us a little bit about your model and give us a little bit of information on the subscription models, how it works, who’s already moving that way as far as OEMs go, and then we’ll go from there.

TERRY: So the subscription model is basically just, say, a half a turn of the screw of the old prepaid maintenance program, and the logical reasons are it tethers the customer back to the dealership. So not only on the name brands that you sell does it tether the customer back, but even on your off brands that you sell, it tethers the customer back to your store. Instead of a Ford store selling a Toyota then, they go to the Toyota dealership for maintenance or service. It tethers them back to the Ford store. But on the prepaid maintenance programs, there’s typically a good, better, best option for the customer, but it’s typically a one, two, or three-year push-out for the customer, and they have to come up with that. Obviously, the longer you tether the customer to your store, the more money that comes out of pocket. So let’s call it a $200 push, so for the next three years, it costs you $600 in order to tether them to your store for three years. The subscription model takes it one step; it allows you to still have a good, better, best type program but it puts it on a one-year basis with annual renewal, i.e., a subscription. What we’re finding is that after the first year, there’s about an 80% retention base of customers they hit it on their credit card, debit card, ACH, there’s about an 80%, or a little bit greater than in the first year, re-up for the second year, it gets down to about that third and fourth year down to about a 70% retention. They can have that swung over to a new car, a new VIN number, as they go forward. The program is URL-based; your service writer just needs to key in the VIN number into the website. It tells you whether the service is still available, if they’ve used all their services or how many services they’ve used. It also sends push notifications to the customer to let them know that services are due. So it’s a pretty robust system in order to engage with your customers to let them know that the maintenance is coming due or that they have a maintenance that should be scheduled for their car. And again, it’s just another way to communicate to your customers, reach out and tether your store and brand them back so that they’re coming back into your store. Eventually, that serviced vehicle may turn into a trade that you can sew a new car to the customer. But everything’s going subscription model nowadays.

BRAD: I think it’s so important, right? I honestly think service is the biggest opportunity to build relationships with people, and if we’re able to use stuff like you have, which is not only solving a problem but using technology just too to say we hear you, right, we hear you. We know that that’s a lot of money upfront. We know that if we make it for a year, we make it transferable, we do all of that kind of stuff, that it makes it a lot easier for people to do. Because I know, even as a guy that’s successful in the business, and when my old change comes up, I’m like, Oh man, it’s a hundred eighty bucks. And you know, because I have a diesel, there’s some level of like, I don’t want to drive there. I’m a car guy, you know I grew up in a dealership. I work in dealerships, I’m in dealerships all the time. But I’d be lying if there still wasn’t this part of me where it’s like, man, I don’t want this to be a long, drawn-out thing. And I’ll tell you a story when I first got my truck, I would take it back to the same OEM and the CDJR stores here in town… we’ll say they’re not the greatest. I could drop it off, and it wouldn’t be done until the next day sometimes, and then everything wouldn’t be checked. So I take it to the Volkswagen store. That’s where I take my truck, and I’ll pay extra. I don’t care because I know they’re gonna do the right job. I know they’re gonna put it on the Hunter lift or the Hunter alignment thing. I know they’re gonna check all my fluids. I know my disc’s gonna be filled up when I leave, right? But that’s another thing that the FSA store wouldn’t do, is fill up your fluid. We don’t have gas pumps that have that here, so you have to like get the jugs, and you know it’s a pain, which you would think that in the middle of like redneckville, Texas, you would have the gas pumps that have the fluid. So I think that’s so cool how you can do those subscription models, and I think retention is a big, big part of it, because if you look at how much business we lose to like independents, especially. My theory is that we lose it because when someone’s searching for stuff, there are 900 of those closer than the dealership, nine times out of ten, and so they win on search volume. Right. But they also win because we don’t make things easy, right, and we don’t explain things, and we don’t chop things up to show the value, right, and I think that’s the cool thing about the subscription model that you have that you’re working on, is not only does it do that, but it allows the dealer to do that to fit the process right. They can customize it.

TERRY: They can customize the program to whatever they want. They can go as far as we’ll pick up the car, a pick-up and delivery type service. You can make the program as robust as you want. Here’s where the benefit is. Think about who you didn’t capture because that customer didn’t buy from your store. You said it earlier that you go to a store different than where you bought your car, and the reasons for that are varied, maybe you don’t like the OEM or that particular store. But, more importantly, customers are driving 25, 50, 100 miles or having a car delivered to them. So where they bought the car is, in a lot of cases, not where they’re going to have the car serviced. So when you capture those customers in your service now, you’re going to capture that customer in order to sell them another car. Why did they drive? It’s not that you wouldn’t have sold them that car for the price they got driving 100 miles away, but you’ve now captured or tethered that customer to your service center. And that’s where we’ve not done a great job over the years. We’ve let 60% of our customer base go to these independents, and we need to, I don’t want to go as far as saying turn the service drive into a sales drive, but we need to understand those things that need to be done in order to capture retention of our customers.

BRAD: Yeah, I think you know demystifying these warranties, right, because it’s like mystic thing, right, where you’re like, “oh, what does it cover? What does it not cover?” you know what I mean?

TERRY: Not all warranties are created equal.

BRAD: Not all warranties are created equal, not all scheduled maintenance is created equal. So the more information, I mean, if you think about like us going to shop on Amazon, right, what do we get? We get options; you click on something, and you get every piece of information you could possibly want about that product. Right, we don’t do that as much on that side of stuff. There’s some parts of it. Well, you know we have Maroni stickers, and we have stuff like that that gives everything about vehicles. But we have to continually take that perspective and apply it to the rest of our business and warranty and prepaid maintenance and stuff. In places we don’t usually apply those because what tends to happen is in most dealerships, the finance person doesn’t know what else is covered, the service advisor doesn’t know what’s all covered, and then everybody has to go to the warranty clerk to ask what’s covered and then it’s all that. So if you had training together and you could decide what’s covered as a store before you put it together and then you’re able to train that and get everybody on the same page, it’s much easier.

TERRY: It is, and that’s where your platform, where the FIXED OPS DIGITAL® platform, has all that. Creates all that information in the one Amazon-type experience. It’s right here on my phone. I’ve got it right here with me, so it’s easy to get to.

BRAD: I think it’s awesome. We’re almost out of time here, Terry, so here’s the one thing I want to ask you before we go. First of all, I want to thank you for coming on. If someone wants to reach out to you, it’s just terry@EXOGloss, right?

TERRY: terry@EXOGloss.com. Linkedin is Terry Torline. I’m easily found.

BRAD: Or if you just if you’re walking through Philly and you see some guy that’s this tall, more than likely that’s Terry. So just go up and say hi to him. One question before we go. What are you most looking forward to about ASOTU Con?

TERRY: The opportunity to have one-to-one conversations. We jump in Clubhouse, we jump on zoom calls, we jump in a lot of different forums. And a lot of the people that are there I’ve connected with over the years, but I’m looking to have those one-to-one experiences. I mean, you and I talk a lot on the phone about this, that, or the other business. Most of us probably not even business, but I’m looking forward to having that ability, and I’m also looking to learn as the only way that we can stay relevant in this business is if we learn what the dealer community is looking for, and if we don’t provide what they’re needing and match their needs, then we’ve become irrelevant. So I’m looking forward to that.

BRAD: Yeah, sorry, Penny was trying to jump over my lap, a white lab puppy, and she’s a mess. So yeah, no, I think that’s spot on. I’m super excited about seeing everybody and this conference feels a lot different. I’ve been to a lot of conferences. It feels a lot different. So I think it’s going to deliver on that, and I’m super excited about that. The thing I might be most excited about is to see one of my mentors and friends, Damian Boudreaux, on stage for the first time in a long time, and I think it’s gonna be very powerful, and I think that’s something that as far as “sales trainers,” I think he’s the best in the nation and he just has a good heart, and he does things by relationships and aligns with everything that I believe. And what you really want to look for in a sales trainer or any sort of trainer is someone that doesn’t challenge you, but makes you challenge yourself right, challenge the way you think, challenge the way you say things because that’s when the true change comes, and I think that’s what Boudreaux does so fantastically, and so I get like giddy as a little girl, just waiting to hear him speak, because I’ll probably cry, I’ll probably be excited, I soak in everything that he says. I’m super excited. 

TERRY: I’ve got a list of guys that I want to have a cold beverage with, and Damien is one of them that’s on that list. The guy just, I mean, he’s forgotten more about selling and training than I’ll ever know. So I’m looking forward. I don’t even think Damien knows that. I’m looking forward so much to seeing him.

BRAD: As he would say, he always tells me, “you’re so impressive,” and then sometimes he tells me you’re so not impressive. So it’s funny. So, yeah, he’s very impressive. I was super excited to see him, but we’ll see you guys out there. Terry, thanks for coming on today.

TERRY: I appreciate it. Thanks for having me today. See You, Brad. 

Haile Clifton

Haile Clifton

Haile is the Marketing Coordinator at Fixed Ops Digital. She has worked in Digital Media & Design for 6 years and helps with internal marketing and Drive Service Specials deployment at FOD.

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