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. Good morning, everyone. Happy Wednesday. Welcome to the morning show and a White Hat Wednesday episode. You got announcements, news, updates from the world of Michelle? Well, I mean, that depends on whether or not you want to, like, world of Michelle or world of work. How much time do we have? Yeah, not an awful lot on my end. Okay. We have a couple of announcements. I've been trying to spread the word that Brent Carmichael will be with us next Friday. It is that Friday, right? Yep, and I guess he's going to be here with us next Wednesday. Tommy Brandes. Oh, is that that one? Yeah. Okay, good. Nice. So Tommy will be here next Wednesday, and we'll be kind of talking about how, about underwriting and how it's, you know, more about character. Okay. For him. Yeah. And how that's worked for him. I think the title was something of the nature of how someone with character does underwriting, essentially, right? Well, no, how you underwrite someone based on their character. With character. Mm-hmm. I can, I can, we can talk about both. Yes, we can. Yeah. Right. So, yeah, I think that's ties into our thread for today, but the other quick announcement of Brent Carmichael is doing his collect cash, not the car in Texas on the fifth, May fifth. So that'd be like a week from Monday. And so those folks in Texas want to get there for some excellent collection training. I was going to say it's the day after May the fourth. Oh, which those of you who are Star Wars nerds. Yep, there are a few out there. I'm quite close to a few. I tell the story of my family worked in the theater industry, and my brother, my older brother, the one that passed this last fall, he and a friend were given permission to watch the premiere of Star Wars, the premiere weekend, all day long, and they watched it like three or four times and went to school and no one believed him that he'd been able to. And back in the day, that was like, yeah, mind blowing special effects and all of that. So yeah. Different now. Star Wars. Shall we get into our topic for the day? Absolutely. So for today we're talking about, um, the title was integrity metrics. So this is going to be a really fascinating thing. And notice that we formed it in a, in the form of a question. Can track doing the right thing. Right. And we believe you can, and we're going to, so this is part of what, you know, I look forward to, we've got some people we're working with now that also share that outlook that this is going to be interesting to measure. Yeah. And it's like measure is the big thing. And I actually, one of our colleagues and friends, Brent Newman. Okay. I think I get it right. That he posted something on buyer repair success around, you know, you can't, you can't change what you don't measure, you know, or you can't. Yeah. I mean, you don't, and we've, this has been like preaching. I mean, it's like, I understand. It's like, you got to measure, you got to measure, you got to measure because other, if you're not actually measuring with something that is tangible, then it's just, And the tangible things are obviously easier to measure. So what we're wading into here is the idea that you're going to start to have the means to measure things that are less tangible. And for us, that's going to start with white hat certification. In other words, when you certify a dealer and you, those people, we have confirmed that before they are extended invitation, that they operate by certain principles in their business. And then of course they get that certification and it says they make a commitment, a kind of ongoing commitment to operate their business in that way. And, and obviously when they're in the white hat community, so to speak, then we're going to support them in various ways to make sure that we can support their success, right. Through education and whatever else is going to be. So I think. Through education of their consumers. And the dealer. And the dealer. But so that's, you know, that's, we'll be absolutely measuring. Yeah. And as we move toward certification of consumers, then I think that'll be another one that we can measure just starting with certification alone. Like these, these folks subscribe to this set of principles. They made a pledge to strive to uphold a certain set of principles. And now to be able to have that as a line item that you can now measure and check to see that that did that dealer Compared to other dealers, we're performing differently. We already have that now, Michelle, in our VA. We have dealers now that are White Hat certified, right? And so we have data history from before their certification. And as things are applied, we're going to be watching that. But, you know, I think that obviously this is not just a funnel to White Hat certification. This is about also dealers out there. what are some of the things you can do to measure those things? And like one of the, we have another guest that's coming on mid month. And I'm like, my, my brain is shutting off. But those of you who read the used car dealer magazine, it was an article that Richard Green wrote with a dealer and his business manager, where they talked about how a courtesy call helps with collections. And so we're having come and talk about like connection with a consumer. How does connection move the needle? And connection is like one of these principles of it's, you know, like the integrity metric. It's like, are you creating an opportunity or are you taking an opportunity to connect with your consumer other than Where's our payment? Yeah. And I think this is an example of where you'll see White Hat Way be able to provide support to those dealers who are part of this kind of ecosystem, because this, we do recognize that engagement is going to be part of the thing. And obviously one of the first things that dealers who even are interested in the White Hat approach tends to be this idea that we teach the long game approach. So I think, you know, the reason why certification is significant is near term, it's the first measurement that we have that can be a checkbox that allows us to measure the difference in operating in that way. Because we've seen in our career, certainly as I've been around it, we know dealers who have certainly sustainability. Some of the dealers that have been around the longest are the ones that we see that operate from some sort of I'll just call it caring for their customers for today. We can just kind of put it in that bucket. Like, so it's, it's, it's really this thing about how much effort do you put into supporting, um, nurturing and facilitating the success of your customer, right then. So that's where you start to really, cause otherwise, how would a dealer measure that? Well, and the, the, the important pieces is to, look at where you're at right now and all of them that, you know, like what are your collection rates? What are your, your, your chart job rate, you know, at what point are people being repoed? I mean, it's just, and like, and looking, really looking at your underwriting practices and all of that. One thing that I see that is, it's not, it's, it's kind of dangerous because it still allows for a zillion people um, assumptions from a dealer is that they, they want to improve something and then they throw everything in the kitchen sink at it. And, and, you know, and that just, that can really skew what exactly is it that moved the needle. Um, and so, you know, for one thing, if, if you're going to start tracking in your business, um, how changing something. uh affects your business or affects you know it's like like so what we're what we're talking about is like doing the right thing so what are the what are the pieces of doing the right thing and that is you know uh there are lots of different things that you can you can do around that one of which like I just mentioned is developing a relationship or communicating with your consumers outside of and that can be done a lot of different ways so I mean it can be multiple pieces to a campaign to to to Drive connection. I wouldn't add another thing to that for like six months. And then you add another thing and just watch to see how things are playing out with your, with your, because it's basically, we're just, we're talking about it's tying back into the success of the consumer, which is the success of the portfolio. Right. Yeah. I think I'm only hesitant. On the idea that I'm going to wait six months before I do more things that are going to benefit the consumer, just because you're right. But it's like, am I, am I adding a customer relations and customer engagement element because I want to reduce my charge jobs? Yes, of course. That's a business reason to want to engage a customer. It's a straight line deal, which can affect profitability and cashflow and all things in my business. I think what I'm really referring to is, um, You know, we really we want to be able to measure whatever would be the things that we implement. So I think that's your main point is like if you if you implemented three things at one time and something improved, you wouldn't be able to know for sure which one contributed to the progress. So let's if you don't mind, it's because we when we talk about metrics, it's like something that can be measured. So where would you find improvement for integrity? Where would you find needles moving within a business? In our buy here, pay here business? It's going to be reflected in Google reviews, although that's, That's problematic because you see people doing goofy things to move the needle on Google reviews, right? But it's one element. It is one element. And it's also one of the things for recertification that we are going to be looking at. Then it would be surveys of actual customers who were in the system. Then it would be a measurement of repeat and referral business. I think that's going to be a big one. I think you're going to see dealers who are white hat certified and who are operating with high integrity are going to see a higher percentage of repeat and referral deals absolutely okay so that would be a big one for me that I would be looking at and then it would just be charge off rates I think it because if we're if we provide support to the customer and we genuinely have a have an interest in their success um then that would be reflective of there's a flexibility component this is why it's kind of hard to measure any one piece of this and that's why you start with know some sort of label if you will none of us really like labels but this idea that we have a badge that says this is what makes us different and so if you just start simply with the dealer operates under these practices here's the thing as coaches we've done this for a long time even if you have a white hat certified dealer we're still we don't own the dealership still you know bears the dealer's name so there it's still going to be up to them to operate their business and they won't all do business exactly the same but what you will be able to say is this out of this group of ten dealers these three or four bear this certain badge or this identity and you will now be able to measure those yeah measure how their their business um uh performs which is you know Brent Carmichael, I always think about Brent Carmichael now when I use the word performer because he just kind of chuckles like performs how? Like what performance? Yeah, exactly. There's a lot of different metrics, but you just asked me for one and I would be looking at charge off rates, right, based on the metrics that we use. And there are many of them, but... But then the other one I think is most significant is when we're winning repeat and referral business, that says a lot about how we're conducting business. Well, and the dealers that we talk to, and we'll talk to Tommy about this, because he's got people in his book of business, customers that have been with him for thirty years. And then there's other generational pieces to that. And so, you know, that, and we all know, that it costs a lot of money to acquire a new customer. I mean, and it just costs every dealer out there. It's like, yeah, it costs an awful lot of money to acquire. And so what's the difference between a repeat customer and acquiring a new customer? And so right there, it's like, if you want to look at hard numbers, that if you were to say, if I were able to Not necessarily increase sales, but increase the amount of people that are repeat or referral customers by five deals a month. What that How much that moves the needle. And that's, you know, that's not a ton considering that. That's a big number. If you do five a month, I mean, it depends obviously on the dealer's typical volume, but five a month is pretty substantial. That's the difference between that customer staying on the books versus losing them. It's pretty significant impact. Well, but it's doable. Oh, sure. Yeah, that was my point, you know, that it's significant and it's doable. So, you know, the next part of that is it's not about, you know, if you're if you're looking at repeat and referral, it's not about your underwriting and it's not about your marketing. Right. And it's not about your lead flow and it's not about your sales team. It's not about these things that so many dealers are like chasing. This is this is and it's an important piece. Yes. But it's like this is. Their first focus is, is that, and, and it's just, you know, doing, doing things to, to connect with your consumer, you know, starting a program of traded in doing a newsletter and, you know, having, uh, just connect this way and there's a prize or, you know, whatever, but just different ways of really connecting with your consumer. and showing that you care and that you're, you know, you're, you're customer centric or, you know, community centric or whatever. That's, you know, when, when you can, when you can move that needle by, and that's how you move that needle is with repeats and referrals is first off, they have to know you. Right. And then they learn to trust you, your experience and, and like you. And once you, once you reach that and the known, liked and trusted, with your current book of business it's a lot easier yeah for sure to get them to do that I'm going to put one more thing on the table around this is something that we will be able to measure going forward and we're many months out on this but I haven't really socialized michelle that we we're going to build a white hat crm okay so let me explain what that means so it doesn't mean like when you say that it's like I hear all these people are like They're what? What they're going to be. Yeah, yeah. It's it's yeah, it's not right. Yeah, it's so let me just say it's it's really a way for us to measure and to verify something that I have kind of Suggested strongly in our space. And this is only available to White Hat certified dealers. Correct. Yeah. So this is something, but what we'll be able to measure in that is when we take what I'm calling a White Hat approach to lead management and pre-purchase engagement, let's call it, then we'll have lots of things we can measure to find out if that converts any better. with all the measurements that would typically be lead conversion, all those metrics on the front end of a purchase. But then what's more important is you'll be able to tie then that customer who comes through that channel and lands at a dealer And perhaps they become white hat certified as a consumer will be creating an online solution for a dealer or for consumers to become white hat certified. So now imagine all about education, about all the, yeah, how, how long works and dah, dah, dah, dah. Yeah. So that went through on your, so this is what way brings to the thing in a way for us to measure. And look, numbers are numbers. So if you run the thing and it doesn't work, we're going to know that too, right? Like it doesn't matter to the consumer, right? It doesn't convert, right? So we'll see. We're just going to run it, we're going to measure it, and we're going to find out. And so I think we'll probably work in cooperation with some other CRM providers, but I think the big part of what I'm looking to create, because I just don't see it in the industry, is a little different process that is a little less sales driven, a little, looks a lot less like a cattle. A lot more education driven. yeah it looks a lot less like a cattle shoot you know it's kind of the way I think about it like it's it's going to be yeah you'll see a different um you'll see a different level of interaction and engagement with that dealer or with that consumer and so it'll be fine it'll be it'll be a good thing for us to test and we'll be able to test it through our white hat certified dealers out there in their markets and just build them see does it does it convert any differently and then ultimately does the customer who does convert especially those who would become certified themselves in some capacity, then does that perform better in the end? Like this is where integrity metrics start to really come into play. And so that's why we formed a phrase or the way of a question today is like, These pieces are not there yet, but this is part of what you can see White Hat Way do, and this is how you begin. Because we talk about with our dealers, look, and we said it in the certification course, like, look, this White Hat Way thing is a nice, warm, and fuzzy thing to talk about. It feels good to talk about it, but will it make a difference? Can we make these intangibles? tangible in a way that it does improve bottom line, profit, cash flow, longevity, sustainability, like all of the things, can we show that it's going to do that? So this is where I'm thrilled to be working with some people who get it and have the, you know, the means to like, yeah, they have the tools to do this. It's interesting as we talk to different vendors in the space that, um, are, you know, we're collaborating with or with the dealers that, that have, um, have already become certified is that they know, but they can't measure it yet. I mean, it's like, but they know it's like, yeah, that, that approach will work. We don't know how well yet, but it will, it will move the needle. Well, and that's evidenced by the number of people that are stepping in. We have people that are kind of, we'll call them, ancillary sort of providers or so we refer to them really as affiliates. Like they're people who are on the fringe of the industry. Sometimes they're looking to break into the industry. And when we describe what it is that we're doing with the White Hat Way movement, they get pretty energized around it and they see the opportunity there. And so I think it's just a matter of um now it's just a matter of measuring it like you know as we move forward and of course it helps that I'm starting out as a numbers nerd right so we'll we'll have our analytics we're just going to need to make sure we're thoughtful about the way we set up our absolutely absolutely and you know I just I want to uh I want to circle back a little bit to education okay um for the consumer um and this comes from like hard, uh, I, it wasn't enough for a scientific experiment, but I've, I've had the opportunity to talk to consumers of portfolios and ask them personally questions around why they think people end up in buy here, pay here. And, you know, it's, and it's, I'm looking forward to, to, to kind of, uh, turning that more into doing some surveys. And we've talked about that for quite a while. And that is still very much so on the burner with surveying people. But other than life events that cause a divorce, a medical something, whatever it is that causes people to shift into being a buy here, pay here, consumer which we all know that that's a whole nother level of challenges as they understand this is you know this is let's help you get yourself pull yourself back out of it the biggest reason all of the people that I talked to was education they were never taught and you know we can go down the whole thing of like used to teach back when I went to high school and before there were there were schools that taught more on how do you balance the checkbook? They don't talk about that anymore at all in school. You know, how do you create a budget? How do you, you know, like, or even they never did when I was a kid, they never talked about contracts and understanding what, you know, when you're going into a mortgage or a car loan or, you know, all of those things, what some of these things mean and what it means if you, if you do this, but don't do this or, and all of that. And so there's an understanding that we have that our consumers are under educated. They, and you, you had a phrase for that, um, that we've talked about about, um, there's a huge opportunity there for dealers. to help teach their leads and their consumers about these kinds of things. And as a rule, dealers are too busy to educate, but I think you don't need surveys, Michelle, to be able to know this is something that those of us who've been dealers or been inside the CRMs and actually corresponded with customers, you wouldn't have to sit in that chair for more than an hour or two to get questions from people that like this customer clearly does not understand how the financing yeah anywhere like any dealership like they're asking questions that clearly they don't understand how it'll work and so this is where it's just evident and I think maybe the phrase you're looking for remember candace price called it the knowledge gap and knowledge yeah yes and so that's something that we kind of adopted that phrase because that that is kind of what you're seeing here and and it's something I think why atway can do um kind of from the sidelines where where Dealers don't have time for that, right? They're busy and they're trying to work the lead and they're trying to be efficient. And that's the nature of the thing. And that's why I sometimes call it a cattle shoot kind of environment. They're trying to Who qualifies? I only want to spend time with the customers who qualify. So who have the down payment, what that might look like. So this is where I think we can provide a solution. And that is, it's a beautiful overlay to a regular business structure. And it's just like, let's, and that's what White Hat Way is creating. It is not only the education for the dealer, but also the tools that are there. Cause I, I mean, I was talking to, uh, I was talking to Meg Jones, who's our director of marketing yesterday. And, and she was talking, she does a lot of marketing for dealers and she, she was like, so many dealers are like, I don't even want to look at them. Just, just do them because there's enough in their brain space to, uh, that they're juggling hamster wheel, juggling, juggling, juggling. that to look through and approve all things is just not something that there are many out there that are like that. So what we're, other than teaching them how to get off the hamster wheel, cause that's a whole nother education track for dealers is this, how can we help a dealer connect with their consumer, educate their consumer and help them show ways of, uh, showing integrity to their consumer and helping consumers show integrity to the dealer. So it's like when you talk about the integrity metrics, that's not just a dealer, but that's also a consumer. And it's just, and sometimes that integrity is because they don't know any better. And, and it's like, it's, it's, it is, unfortunately, if you, if, if it's just a transactional relationship, then they don't feel any kind of connection to the person, the process, the deal, the business and all of that. And that, you know, unfortunately people don't connect and they don't engage if they don't feel like they matter at all. So, and that integrity part of like, I'm going to follow through with this. If a consumer doesn't feel like a dealer gives too much, whatever's about them and their success, they're not going to go out of their way to try to, to be, to be good for their work. Yeah. Yeah. I think we should wrap up. I think that covered. Yeah. I think I covered what I wanted to get covered. So yeah, we're, we're, we're good. I appreciate, appreciate folks tuning in. I think this is part of where you can expect to see us go and where we expect to build add value, you know, down the line here and just, we have to measure and see, you know, because we, we're not doing it just to feel good. We, you know, we, we want to have lasting relationships, certainly. And there will always be parts of what way that will be less tangible. And we're looking to, um, you, you like my choosing hands. We have this thing about, but cause, but just negates everything you just said. So, and it's a continuation. So, and we, we expect to build it, demonstrate that that translates into the bottom line. Absolutely. Absolutely. Yeah, there's a really beautiful horizon for what it is that's happening quite halfway through this year and the coming years. We're really excited to just watch it starting to move this needle. And we recognize all of these things a dealer can do on their own. And we're here to give you, on the podcast, give you advice, give you all of the things that they've able to you know do it yourself but we recognize that a lot of dealers super busy and all of this connection stuff and all of this is not something that they really even have the band to deal with so hey everybody thank you so much for joining us on white hat wednesday um we know you're busy uh we will see you friday on friday enjoy the rest of your week all right have a great afternoon everybody we'll talk to you
