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. Hey, good morning, everybody. Howdy. Welcome to a Wednesday. Yeah. So a little bit late here, some technical stuff. And it took a little bit. I don't know if you saw it. It's kind of delayed. Like it almost restarted the stream, you know, after several seconds in, but everything looks to be okay. I think we're live. If anybody listening in, we'll just chime in and let us know that you're hearing us and that the stream is in fact streaming. Technology. Sometimes it works. We've been really fortunate with the podcast. I mean, we sat here and go live and we have a lot of, we won't say the internet provider, but our, our internet gets interrupted a lot. Yeah. Construction happened in our area. Yeah. And so for us not to interrupt the podcast, we're pretty fortunate really. Yeah. We really, really are. And, and, you know, we do, we, we enjoy having, well, not enjoy it, but it happens every once in a while where it's like the soundboard or the, you know, it is, it is, there's a lot of little moving pieces to keep track of. So for sure. Yeah. Yep. Well, we got a really fun topic today and we can dive into it. Other announcements are, uh, just a quick reminder that we have Brent Carmichael coming on Friday. And so we'll get an update about the conference and all the things happening in the education side of NIADA. So look forward to having Brent back here. And then the Monday after, or this coming Monday, Brent will be in Texas for the Collect the Cash, Not the Car. Yeah, I'm just glancing over the calendar. So just verifying that. And it looks like it's in Houston. So check it out, find it on NIADA and go attend that thing on Monday. So, Tommy Brandes is joining us today, but not live. It looked like it was going to work out with his schedule, and then he had some things that, as we were joking around, it's like, oh man, sometimes it sucks to be so popular. Yeah, right. Poor Tommy. Yeah, poor Tommy. So, he wasn't able to be here live, so we got together with him on Monday and recorded... the the topic and and also recorded a lot of just like, you know, talking about stuff. But so we we have clicked that. And so we're going to show that today and then have some some feedback as well. What are the reactions? Yeah, we'll have reactions. And we've got I've got really some this is a fascinating thread. So I think this will probably be a multiple episode conversation because it Accidentally, this thing started out with ChatGPT. We were asking ChatGPT to suggest some topics. We're in the White Hat way. And White Hat Wednesday split one out that Michelle liked and said, hey, Tommy would speak to this one well. And so we recorded that on Monday. But that whole thread continues in our ChatGPT. And it has really taken me into an area that has always been a curiosity as somebody who lives in coaching between the former dealer. And so what Tommy's going to talk about today is extending credit based on character. Right. So this is, and chat GPT begins to refer to it as character lending. Yeah. And it's just, it's just so you know, but like a little bit of a context and we'll talk about this as part of the thing, but just like, before you get started watching, Tommy's been in business for more than thirty years. He is one of the old heads the the like he's one of the founders are not not really a founder but he's he's like been around um since really this surgeons I think what she's trying to say when tommy hears this she's trying to say you're an old dude not saying you're old because we're like the same age so um so it's he's been around for a really long time jim and he came from this uh jim worked with the company that tommy trained from and how to do this. And so there's a lot of, yeah. And you've known Tommy for years. And, and so, you know, there's a lot of threads that are the same in both of your fabrics of your, of your ideologies that are very, very similar. And then the third thing that, that goes along with this topic is Tommy doesn't use any software for underwriting. He doesn't. I don't think he ever has probably not. Um, and it doesn't mean he doesn't have his own checklist. He has a process, but he's never used something that is like predictive modeling. Right. Um, the, the, uh, And I'm not saying that that's good or better, or I'm not saying that the other way is good or better, but just I thought it would be good for people that have a little bit of context as we're starting to listen to this. I've prepared a streamer for this morning. You can read it with the rest of our audience today. I'm not attorneys and are not offering legal advice. Seek the advice of an attorney before... act and needs to go faster on any information shared. So I'll play that again. Because we're definitely, part of what fascinates me about this is, as Tommy talks about this, and people are going to hear what Tommy has to say, and they're going to say, well, what about compliance? What about compliance? And they're not wrong. And Tommy's not wrong. Well, and you talked a little bit about this during the thing, around the compliance thing. And it's just, you know, there's just got to, it's finding that balance. And I think ChatGPT is helping me have new ways to explain that and to offer dealers some very specific things they can do to walk this line, if you will. So I think we're definitely, you know, and this is what we do with Why That Way. We're in the space of the intangibles, and we're talking about some things that aren't on the typical checklist. So I think this is why it starts to fascinate me in terms of, I want dealers to be able to be flexible and creative. So let's hear how Tommy. Yeah. Yeah. And this is really this this whole conversation is a white hat way conversation. Tommy is actually the it's funny because we got a text message from Candace and Nick, who were our first official year of twenty twenty three white hat honorary dealers. Well, Tommy and Gordy Tremolin, who is just wrapping up his, uh, he's the executive director right now of NIADA, not the executive director. He's the board chairman of the board. He's the chairman of the board this year. And so he's wrapping that up. Um, so both of them, uh, back in a conference for five, four years ago, um, the Jim did, he was a moderator for a class during a, uh, buy here, pay here. It was, the forum, whatever they call it. Yeah. The older super form. No, it was before that it was the one that I don't think it matters. Okay. It doesn't, it doesn't, but they were given like white hat way seal of approval. You're the kind of the, the very, very, very first one. So Tommy, has been, he's been a part of the evolution of White Highway in a way. Yeah. And I think with Tommy, Tommy's somebody that could go in the same bucket. I often describe myself as an unapologetic fundamentalist. Like I just still preach the fundamentals. Right. And, and so Tommy and I have that in common and we also can tie it back to football and some of those kinds of things in terms of sports. We speak the same language. Yeah. And there are times that they're, they're speaking the same language and I'm, Just listening. You're going to hear us speak the same language and what you're about to listen to. All right. So I'm going to pull it on and then I'm going to back us off because there's way too many, like, squares and faces. But we're going to be here and, yeah, we'll, yeah. So I may have to do this or something. So go ahead. Can we start it? Yep. Oh, I have to start it on my side, don't I? You certainly do. Okay. Here we go. notifications all the time and we're just kind of like so I started recording so I wouldn't forget so don't say anything you don't want to yeah we aren't starting the podcast itself yet but wait a minute there's a problem we're not at the right place in the video so something happened in the editing this must be the pre-edited version so Let's take it down for a minute. You guys talk amongst yourselves. Let me go fix this and find the right video. Because I had one pre-edited. You know, I a lot of times have things prepared for this such occasion. I'm blank today. Yeah, yeah. Okay. So I can hum a little tune or, you know, whatever. Mm-hmm. Okay. You think we're good? Okay. Okay. When Tommy, Tommy B, when character extends credits. Let's try it. You got it shared? Yep. Okay. Good morning, everybody. We have a very special guest today, Mr. Tommy Brandes. And we have Tommy has intersected with the things that Jim and I have been working on since Jim and I became we pretty much so for quite a few years. And Tommy was very, very instrumental in offering platforms for the morning show to be able to get to a wider audience. and because of he is the uh the head honcho founder and guy that you have to have everything approved through success and he's just all around good dude Right? That too. Don't leave that out. That too. And, you know, Tommy, I think that you have been on the show with us quite a few times over the last few years and always have such great insight. You and Jim come from a very similar, the same background, basically, in philosophy that was driven by Rick Reeves. We did a special a little while ago about philosophy what it contributed to the industry. And so when this topic came up today of when character extends credit, I'm driving the topics for a lot of different podcasts. And I was like, Tommy, that's who we need to talk to, is Tommy around this. Because this is really stepping into, this is Tommy's paradigm, or this is his philosophy where credit is extended based on character. So thank you, Tommy, so much for joining us today so we can have a conversation around this. Hey, guys, it seems like it's been forever, but it's great being on. Thanks for having me again. You're absolutely welcome. So Michelle mentioned the Rick Reeves thing. Of course, you know, you and I have that in common. We both came through that training years ago. It was excellent, really foundational training. And Michelle also mentioned the word philosophy. So maybe we could just start with kind of your philosophy around underwriting and deciding who you're going to do business with. Well, I guess, I guess it goes back to when we started. Now we're coming up next month will be thirty three years for me. So there was no Internet. There was no credit, you know, there was credit scores, but we didn't know how to pull them because you couldn't pull one. I don't even know how to pull a credit score back then. So it was really an interview with the customer, and it was based on honesty, accuracy, and ability to pay. It's still on the top of our applications today. We still use it. That's really quick. There's three things. Honesty. Accuracy. The information you provide. And your ability to pay. Yeah. So even today when I'm working with somebody, you know, it's like, do you? Okay, here's the three. Can I get approved? Do you have a drive? Do you have a PA driver's license? Yes. Do you have a job with verifiable income? Yes. Do you live within an hour of Quaker Town, Pennsylvania? Yes. You're approved. Come on in. Now we got to work the numbers. and that's where it really starts yeah good and so you still this philosophy is still what you work by today and it still works it still works we get so in the weeds of percentages and figures and risk models and and numbers and all that stuff and I think that's all come along um for banks or you know to value your portfolio or for for whether it's for you know getting credit or or sell or something where a bank what we're talking about So we need all these num ratios and all that stu them warm and fuzzy. But Yeah, it's a different thing. And Michelle, you haven't been inside this part as much, but I can say that the customer that we meet in your line of work, they're in that category that we call unbankable. They haven't been successful in conventional financing situations. So we probably shouldn't be trying to apply conventional financing rules to that. Now, we all got to use technology and we all got to be compliant. So we're going to use technology where we need to. And we have a chance in our buy here, pay here space to go beyond that. So that's the part I really look forward to talking to you about today is like, you got your list, which you have your things that you go through. And now how do you go about judging character of this party and this customer and deciding if you're going to do business with them? Well, obviously, I think we have to. It's something that you guys said in a morning show or a podcast a few years ago that stuck with me. Everything I usually have is something that I picked up along the way that stuck with me. And it was like you have to put yourself in the customer's shoes when they're walking through the door. And you have to think, OK, say this customer has heard no six times before and you are the last person. dealership on the block and they have to build up they have to have everything right they have to have their script down perfect I've been here certain time I've been here I've been here because if they screw this up they don't have a car and if they don't have a car they can't provide for their family so they're going to do it as hard and they're going to put guards up to make sure so so the number one thing that that you have to do is is make sure you can break down that wall and get to know the real person there. So I think it's how you approach that person, you know, and how you, you know, and how you talk with them. It's, it's great with, with my guys, Gunner and Tolan. And now we got a new guy, Dom, that I've known. They just have fun with the customers. Break down. This is not, we're getting you a car. We're trying to help you. So it's break, breaking that wall down. And then just really how that customer interacts. Obviously we use, you know, you're not going to take somebody that doesn't have a job and, and is behind on rent. But even if they're behind on rent, they're going to go live someplace else. I mean, Rick always told us if it's a true need buyer, your car is more important than your house because you can go sleep on your buddy's couch, but your buddy's not going to lend you his car to go to work. So if they're a need buyer and they need a vehicle, then they're going to figure out a way to pay for it. You know, and that's really what it's hard to explain. But, you know, good people show themselves eventually. Yeah, I get that. And I'm not surprised. It's kind of you touched on it, but I'm not surprised if I were working on your lot today and I met a customer, you know, greeting one of your customers. I wouldn't be surprised if they were misrepresenting themselves, kind of, you know, giving me some false information about their job time. They're stretching the truth, right? They're giving some information. I think this is part of where we got to be careful about technology. I heard a story not long ago about somebody had a customer come in who scored really high. and they had twenty four years in their residence. Well, come find out the person was twenty four years old and they'd reported that they'd been in their mom's address. all the twenty four years. Well, that looks good on the machine, right? Yeah. So you got to be kicking you out because you're twenty four. Yeah. So it's like two different. You got to you got to get past what the screen shows, you know, or what the past, what the scoring, the scoring model that you're using shows, whether it's high, they still turn somebody down or low and you can still approve them and why, you know. Right. So it's a little bit and it's so interesting to me. And every time I've had a chance to spend time with Steve Levine or some of those, it's like I like testing the edge of this thing in terms of we know we need to be consistent in underwriting. And we know in order for us to help a customer get financing, we got to sometimes be a little creative and we got to kind of work around the edges and live in some gray space sometime. And so this is part of the nature, I think, of our business because we are in an unconventional box, if you want to call it that. And I think, Tommy, when I think about people stretching a job, I always think about the technique that I was taught way back in that class. And I used it as a dealer and as manager for many years where everything looks good on paper, everything looks fine. And I'm moving toward approval. And as a chief underwriter, I used to always just kind of look for something in there that I could pick apart. Like in the credit report, and my example, Michelle's heard me use it a thousand times. The customer's saying, I lived in Quakertown for three years, and for four years before that, I was in Philadelphia. And then I pulled their credit report, and it says six months ago, Phoenix, Arizona. Now I've got something to talk about. And so I'm gonna go to the customer, even though I fully expect I'm gonna prove this customer in about fifteen minutes, I'm gonna send them home in a car. I'm gonna go sit with them and I'm gonna have a conversation that says, you mentioned that you lived here, it says on your application you lived here three years. And let me just remember, when you sign the application, we explain to you, our decision is based on honesty, accuracy of the information, right, and so on and so forth. And so I say, I'm so close to, you know, and figuratively, I'm this close to giving the keys, right? I'm so close to being, but I need to understand something. You indicated you've been three months or three years here, four years prior to that. Why does it say that you live six months ago in Phoenix, Arizona? And then I just get quiet. Yeah. And I let them explain what that is and. Nine times out of ten, there's a perfectly good explanation. But what I like about it is right before we hand over the keys, it drives home this idea that honesty is a big deal with us because we're starting a relationship and we want to be starting that based on a deep level of trust. Like we want to we want to trust one another. Right. So this is where that's right. Yeah, that's exactly right. And I think listening, listening to Gunnar. talk about, I say, look, for thirty two years, we community. Uh we're not he know, we want to help yo way we can help you is i and then we will build on you know how missy used to go through the one ads and try to find jobs for people you know um it's that and that's kind of and that's truly how we do it you know um you got to really want to do it you got to really believe It goes back, I said it before, our customers are survivors. And we were talking about it. We're sitting out at the Buy Here, Pay Here United Summit, having dinner with a couple other dealers at Peter Luger's. And we're paying for this really great overpriced steak and wine and all that. And I'm looking around, I'm like, you know, this meal is going to cost probably what our customers make in two weeks. Yeah. And we're going to eat steak and drink wine. And these people have to live and provide and support a family on that money. So we have to figure out how to help them and keep them from failing. And if the customer comes in, if that customer really understands that, then I can work with anybody. I can work with anybody. I'm at the philosophy. I've been watching. So, you know, we keep chasing the, there's two, you keep chasing the higher ACV part because you can think you're going to get a better customer. And, and, and I don't think, I don't, I don't believe, I don't believe that it's true. And I think we all know it's not. We just put that in our head. We just spend more money and put more risk out there and cost more money. It looks nicer. As you work your own. Yeah, as you work your way back and you work with a true customer who really needs help, who is out of options, that's the customer that will work with you. And we'll take a less expensive car, but still a quality vehicle. It's just not, you know, a dream car. But that's how we started this business. We started this business on providing dependable transportation to good people. And that's what we need to get back to. Yeah. Well, I think, too, for you to say we think a higher ACV is a better customer, that suggests that this customer at the low ACV is a poor or bad customer. And maybe it's just the way we manage that customer. It's not that, right? So it's back to the character thing. I'm not surprised they might misrepresent themselves when we meet them because they're in a tough spot. They're backed into a corner. Yeah. And so I think what we have to do is be prepared to get past that. And sometimes it takes a little work. And this is what makes me nervous, Tommy. I mean, you were in this just like I was before all the technology. And it's like, that's a little what makes me nervous about the technology is we lean a little too much on that. We lean a little too much on the GPS and try to approve everybody. And then if we don't, and you'd say it better, like the, Managing the collection side is what that's the difference between success and failure. It's way more on that side than it is because we can underwrite a deal and we can make what looks like a bad customer on paper. We can make that deal work. when we have the right kind of you know mechanisms in place on the collection side and we can support that customer but yeah I think that's uh you kind of got to the part of it what am I leaving out michelle oh well I I yes I yes I was just enjoying I was eating my popcorn over here it's just like preached um it's great great stuff go ahead michelle Well, I was I wanted to to head into this this philosophy you have about spinning which direction someone is spinning and weave this into the conversation, because that is that is to me so much more powerful than a software. Um, and, and, you know, I, when I look at the, the GPS and the, and the underwriting, um, that's to me, it's when you talk about, we're leaning in too heavily into that, making the decision, um, it's meant there to be a safety net, not the brain behind everything. Yeah. And that's the thing you go with stability is the biggest thing. I mean, you can go in and click a button and you change three jobs. Um, And you have no stability. But the person changed the job. They went from, you know, this job, went from a fry guy at Burger King up to a, you know, up to a line manager at Wendy's or whatever. I use my sales guy, Tolan, right now. He applied for us, he worked at Arby's and he was seventeen years old and he had recently turned eighteen and he went from staff to shift manager at eighteen years old. Six months. Six months. Now this kid comes in for an application, you're throwing him out. He's an eighteen year old kid, he's got six months on the job at Arby's and if you put it in the credit model and he lives at home, gone. He turns down. So I asked him, I said, how did you become the shift manager? So fast. He goes, well, he goes, I was the only one that showed up for work every day. And they wanted to promote me before, but I couldn't be promoted until I turned eighteen. So on my eighteenth birthday, they promoted me to shift manager. And with pretty much that conversation, there's character. And that's the same character that I used to hire Poland that I would use to approve a deal. And he's a great kid working for me for over a year now. Yeah. And, and how many dealerships and, you know, you've got a lot of buddies that are dealers, how many dealerships would have broomed that out? It's like, it's a no, it's a no, it's a no. It would have never made it to the building. Yeah. Right. Yeah. So I think that's part of what we spend our time looking at is trying to help dealers. And I just had a meeting earlier today with some people on the tech side and I'm, I'm just always telling them, look, and the way that we would build a process for somebody, a sales process is I'm, Always trying to help get more customers as close to the decision makers as I possibly can. Well, and that's absolutely it because dealers can say, well, that's great, but most of our people aren't. And it's like, you don't know that until you have a conversation with them. right you know outside of like how much down payment do you have how long have you been on the job and do you have a state like state driver's license yeah it's you know we get it tommy like people are trying to scale their business and they're trying to be efficient so they use the technology and they make quick decisions and they they're playing the math just like you just came from vegas like you know simply just playing the mathematics right but I think what what we're hearing you say is if you will invest a little more time right there and get to know that customer you can have some of those customers that are with you for decades You can. You can. And the problem I'm seeing today, and I get it, you know, to get in this, I don't even know anybody who is getting in this business today. I mean, I think the only people getting in this business today are millionaires. And if I was already a millionaire, I probably wouldn't be going into this business. That being said, it's a business that you can make money like no other if you do it right. But our customer base, you know, you just have to work with them. They need help. You just have to work with them. I see people, eight references. We used to get eight references. We used to get ten references. Now we get to emergency contacts. And they're the people, you know, they're an emergency contact. We went through everything, you know. There used to be some phone calls, bring in your pay stubs. Well, if they don't have pay stubs, they're not coming in. Well, don't worry about the pay stubs. We'll get to the pay stubs if we have to. You know, everybody's getting into this business to try to have zero charge. That's not our business. Our model is you're going to take charge of. You are selling. We are, according to the banks, one hundred percent of our customers will not pay you. And somehow, seventy to seventy five percent pay you. So that's that realm. Now you've got to decide. You know how much risk you want to put out there and who you want to deal with and all that. But there's good people that if you work with them, they'll be there for decades and bring their kids in and their friends. Referrals is, you know, your your referral count is a true level of how you are as a dealer. If you have high referrals and high repeats, then you're probably doing it right. If you if you look at your referral, you get no referrals. I guarantee you got a problem. Yeah, that makes sense. And that's very consistent with what we talked about. I think that I lost a bit of a thought, which happens on occasion. It was because my phone rang. I forgot to turn it on silence. It's my mom. It happens because of our age. That's true. I truly do. Did you find your thought? It'll come back. Go ahead. Okay. I truly do appreciate, you know, when... how long of a monologue do I want to go through um my shtick is good humaning and you know it's and systems and processes and jim you know just the that he has that he understands the numbers and he understands the operational things and I don't and I don't really need to Yeah. And so I just, I love that your approach to having a buy here, pay here business is about good humaning. It's about being a good steward and champion for our customers that are disadvantaged. Yeah. Yeah. And I've said it before, Tommy, we talked about, I'm sure, on prior podcasts, but you used the phrase, that was the thing I forgot, was you used the phrase, our customers need help. And I think so many of them that we meet, and your guys back at the dealership see this all the time, the customer needs help, but they don't really know how to help themselves. They don't know what's available. They sure don't know your finance program. They don't know what's possible. They don't know what can be done with a trade. And it's just lots of little stuff they don't know. They don't know how to do that stuff for themselves. And so I think this is where, you know, we got to be able to talk to them. We got to be able to ask them questions and find out what's going on. And sometimes we'll find solutions that they don't really know even exist in order to make something happen. So I think this is the part that I just I think it's back to the human thing. We got to we got to be prepared to invest a little time. And is it you know are there days that you think we spend a lot of time with the customer that doesn't ultimately get approved yeah but that pays off for us somewhere oh yeah right well yeah that's and I always say that you got to treat every customer like it's your last customer uh and you need that sale you know um because if you do it right if you bring somebody in and you immediately go to broom them because they don't have this or they don't have that then that customer's just gonna go tell all their friends that they got bruised absolutely you know there's another one that's just gonna tell you no You know, so so if you give them every opportunity, we have some that we work with for three, four or five months. Sure. Building up a game plan until they came in to buy a car. You know, you can't buy it today, but this is it. And we keep in touch with them. And three, four or five months down, you know, I take a picture and have a little story of every one of my customers on Facebook. And there's always a little story. And on some of them we worked. It's been weeks. You know, we worked with them until they saved up or they had this. They were getting another job. Uh, and, and then we bring them in it, but yeah, it's truly, they are a part of the family. And, um, a lot of people don't want to do that. And I understand it. Um, you know, so it's gonna, you know, that's where the higher risk comes in where you gotta, let's buy a higher car and let's over-recon it because we think we need all these things, you know, and make the customers jump through hoops with ten references and, and belittle them because we're, you know, and then they just don't pay anyone, you know, it's, uh, It's yeah, we're coming to to this, you know, the Gemini's we've been working on our business is it's it's about, you know, that whole known, liked and trusted. You can't be known until the people know the story and this and what you do with the the post is like this is a story and people relate to stories. They relate to stories a lot more than they relate to. Oh, look at the red Camry. That's a nineteen. or a twenty twenty one with X amount of miles. But it's like, oh, I that's pretty cool that they they work. And even if it's not necessarily the story they are experiencing right now, they see someone who, you know, it's it's it is a relationship. And so you're telling the story. And I just love it. I use that all the time on this podcast, Tommy. And it's like, you know, tommy brandis does it's like the gospel according to tommy brand it's because you know that there are some people I think there's some people out there getting sick of hearing it right well and I'll and I'll tell you as a as as the the the wife of another graduate of uh rick reeves it's like you guys geek out about this kind of stuff yeah you get it and and it's it's it's always good if I don't just only give examples that jim when he was a dealer so it's it's you know you're just really you are a shining light on those but you don't really want to thank you I really I appreciate that which I really do um and it's I I just really have to really want to help people you know and and they'll see through it you can't fake it just like the customer their their acts coming in to try to buy a car and live from you you can't you can't fake it it's got to be real you know I was thinking about that situation. Even those customers that you have to say no to or not today, they go away seeing that you guys have put in a lot of effort to try to figure, like they can just see that you tried much more than probably the three people they talked to before you. And when they go to work and someone says, well, did you get a car? It's like, no, but they're really working with me and they're really, you know, and so Those are the kind of stories that our customers can go and tell as well because that's even better marketing. Yeah, and that's where you got to be. I mean, when you're genuine with the customers, you know, then they go out and market. A small dealer like myself, I don't have ten, fifteen thousand dollars a month to, you know, boost on Facebook and all that stuff. I got to get my word out with my customer base, you know. Good. Well, one quick thing. I started in our own training in sales, I started using the expression, a lifetime handshake. When I meet somebody for the first time, trying to shake their hand, that's what's a lifetime handshake. Hi, welcome to the family. I like that. That's awesome. I'm going to peel that and put it in the pack with all my other stuff that I've stolen over the last thirty-four years. I have no organic, I don't have an organic thought. I said everything, it's been taken and twisted in some shape or form. you know, along the way. I think that one was organic. It was an original thought for me, but it's like, it just, it's, it's the idea that I'm bringing a mindset to, I expect you're going to be with us for a long time. Right. Right. So bring that mindset into every business partnership customer that I meet on the lot, whatever, like, it's just about bringing that mindset to my, my approach to that customer. But one quick thing, Michelle, um, this is going out on a white hat wednesday it was june first of twenty twenty two that we did the first white hat wednesday because tommy said hey why don't you call it yep that was my thirtieth anniversary and now it'll be twenty twenty five and yeah it'll be uh another month will be thirty three years and thank god gunner's running the show I got out of his way and I'm playing executive director for mid-atlantic idea and trying to help you know dealers do uh dealers learn what I did you know it's fun and we uh we uh extended the invitation for you to join us for our certification program in um at niada this this june but you've got a lot of hats to wear so I will be I will be in yeah I will be in vegas I will be sitting in a meeting probably across the hall um yeah oh wait Doing executive director things. We'll figure out how to get you that certification. It's all good. Hey, Tommy, thank you so much for taking your time. Thank you, guys. It's always great talking to you guys. We really appreciate it. Okay. I'm going to take that out. Good idea. There's so much there. I mean, we can stay a little bit and kind of round out some of the issues. Go ahead. What I'd love to do with this is to bring this conversation back maybe next week or something like that. I know that we've got a bit of our schedule filled up for the next couple of weeks, but this is something I'd like to return to and expand on. Yeah. So I think for today, what I can to invite people to join us, perhaps next Wednesday, we'll pick this back up because what Tommy talks about and how it intersects with what I asked chat GPT specifically about this subject and this whole thing you heard me touch on about There's several pieces of what you heard Tommy say. I wrote down several of the phrases, but you know, you, you got to want to help people. Okay. So to me, that's always been the part about this gray space between consistent underwriting and, you know, being gray and flexible and cooperative solutions. There's something that he said that I was like, okay, that, that is really, really true. He says that he's like, I don't know anybody that's getting into this business unless they have a million dollars or whatever. And we see it's like we're talking about, we talk about straight lines and squiggly lines. There's a very straight line way of approaching this business. And it's all process numbers driven. It's putting as much money in the bank. It's like using predictive softwares, all of that to be able to like, let's mitigate the risk. Let's mitigate the risk. Let's narrow that, narrow that. Um, and, and that's great that a lot of businesses are around that do that. What we are doing, what we are teaching is that there is a whole different side to this business that, um, that is good for everybody. And it's, and it's, it's, it's something that will, that will facilitate helping. Hmm. your community and your neighbor and your brother and your sister or whatever, I mean, go into good humaning. It's, it's a way for us to be able to, you know, have a good successful business because we take care, you know, we, we teach a lot of the straight lines and stuff, but also being able to be a good impact to your community, a good, you know, and to your, to your, your consumer. And, and you can't, fake caring. Right. And so that's okay. I mean, cause there's plenty of businesses out there that, you know, you not necessarily just invite your payer, but there's plenty of business that was like, this is a transactional company. This is, this is what they do. And then you see others that this is a relationship. It's relationship. It's transactional. This is a relationship business. This is, this is how these, these are their foundational principles is on relationships. Again, nothing wrong with foundational principles being transactional. But if you want to have the repeat customers, the referral customers, be able to spend less in marketing because you've got that happening. Become an asset to your community. All of these things, which also are mission-driven businesses. That's what we teach. Yeah, and I think part of what you're touching on, and by the way, I can't wait to introduce people next week or whenever it happens to the way ChatGPT speaks to this relational part of what you're discussing. It really goes to the humaning side of the whole thing. And I think part of what you're also saying, and why Tommy would say that you don't see people getting into this business, is it's a difficult business to scale. And the only evidence you need to see is look at how many operations you can name across this country that have more than ten locations. Like it just, it's, there are challenges with scaling. And once you step off of the, out of the conventional, you know, kind of bankable customer and you step into this unbankable, you know, non-prime sector, then part of what Tommy's talking about here and part of what makes their business work and makes their customer sticky and kind of think the whole thing is it works better, you know, at a local level, kind of a real relationship with the customer. And so having that kind of relationship and handholding, which he didn't exactly use that phrase, but that's the way I always thought. That was what he was talking about. He mentioned a gal that used to work with him in collections, and people would come in and I've got a problem, and she would go through the help wanted ads with them. It's like, let's see. I've heard stories that she would be looking up crock pot recipes because it's like, I don't have time to make dinner. I'm so busy. It's like, okay, well, here's the thing. You got to crack it. That kind of stuff. It just goes to the thing about, and I think the reason I wanted to kind of expand on this conversation is that I'm sitting here listening to Tommy talk and I'm thinking about how, when we work with dealers who are new, you know, we work with launching dealers into the business that are brand new and we don't see a lot of them. There aren't people reaching out to us to get into that business. And, but when I think about that, I think you've heard me talk about that. for you to really decide if you want to be in the business, you ought to go sit at a dealership like Tommy's on a Friday afternoon, which is now different because more ACH, more card payments on the phone, what have you. But the point is, if you sat and could really hear the nature of the dialogue with applicants in the office, with customers on the phone, with customers at the payment window, That would give you a better feel for what is the fiber of a successful business. And it also helps you begin to understand, certainly somebody who's traveled and been in a lot of operations, like the difference between having a hundred and fifty, three hundred account portfolio and having a thousand account portfolio. The reason the wheels start to wobble with a lot of these dealers as they move to a thousand accounts, as an example, is that this stuff becomes stressed. It becomes more challenging to touch customers and have relationships in that way, which is why we've typically advocated for multiple locations to serve a thousand customers or however that's going to work. Because what Tommy's talking about here is some of this intangible stuff that if we just race right past that and we think we get it, we hear you, Jim. We know relationships are probably important, but we've got some good math and some good software over here no I'm just saying let's understand that what what you the the risk that you have in that math is that you're leaving out an important component that is going to be difficult to measure and it's going to have a real profound impact on your ability to scale so recognizing that early on might help you position yourself differently we want dealers to be successful we'd love to see them scale and help more people across the country right it's not that we we're cheering for their success And we think it's important, the fundamentalist in me says, football, blocking and tackling. You don't get to the Super Bowl, you know, you got good math, but you got to do the fundamentals. You can't, if you don't, you know, you can put any sports analogy, like if you don't know how to field the ground ball, you're probably not going to get to the World Series, right? So that's the fundamental stuff that you got to really understand about this business in order to really scale it and build on those fundamentals to really do the thing well. Fundamentals of heart. Fundamentals, yeah, with a mission-driven kind of philosophy. Right. So this is all part of where we think dealers will have a lot of success as they grow. And so I just was talking to a dealer by text this morning. So we had a couple of dealers sit in as mentors in our newcomer group. That was last night, yeah. Right. And so one of them was texting me this morning. Jim didn't? He wasn't the moderator. Last night was a big thing. Ken Yang moderated that group for the first time. We've been calling moderators and waiting. They're waiting to get over there and start moderating groups. And so Ken had the opportunity to step in and moderate last night. It went really well. And I was chatting with one of the dealers. And that whole thing about mentoring is like, everybody's got different business models there's never going to be a one-size-fits-all in this business uh everybody's got a different approach but I would say the one thing that I would ask them to do when we meet them is look look at this part of the business make sure you understand the relationship part with the customer and what it means to support a customer through a three-year note and hopefully the next three-year note and their their cousin's three-year note you know it's like we got to really think through that part of it to really have a chance to have foundational elements that are gone. And I just, I would just encourage dealers to understand Tommy's charge off rate is not really different from the charge off rate from someone that uses a lot of predictive modeling through software. Right. And so it's just like, what helps you go to bed, you know, feeling more confident about it. And as Tommy said, it really is unrealistic to think that I'm going to have zero charge-offs. The only way to get to that is to go just independent and not finance yourself. Yeah, that's somebody else's charge-off. Yeah, that's somebody else's charge-off. And it's just funny, for the four or five years that I've been working with you, is that I see dealers coming from that, that want to, to create that same kind of model. And that's, that's their motivation is like zero charge. You know, lower the charges, lower the, and it's like, and they're coming at it from software's predictive modeling, um, narrowing their underwriting, you know, all of these things. And it's not moving the needle. Yeah. So yeah, that's right. And so this is, if you break that down and kind of go into a microcosm, we've got some dealers in that newcomer group are brand new. They've barely financed their first ten to thirty contracts, whatever. And so the mentors, I rejoin the conversation at the end and kind of wrap up the meeting. And as I stepped in, the conversation was around this thing about, you know, how aggressive should you be in your underwriting to do your first fifty contracts or whatever? So that was what they were all kind of discussing. And I found it interesting that the opinions varied in terms of how to approach that. But you could hear that some of them were trying to be super cautious in their underwriting because they felt like they couldn't afford to make mistakes. And I didn't say anything, but I thought, you're still going to make mistakes. you're going to be super careful and you're going to try to do the best in writing you can on your first contract. You're going to be super anxious about it. You're going to be, yeah. We'll just accept that three or four out of those ten are still not going to work out. You're going to be super cautious. Yeah. And I know when I've watched you take dealers into business and some of our launch, because we've launched different dealers into the business and it's like your first X amount of contracts just It's just be prepared to just approve a lot of things that might make you feel uncomfortable. Just be prepared because it really is, you know, what I see happen, what I see is that we get so caught up in the, yeah, it's, there is universal laws of averages And you know, that they say like in sales, if you make a hundred calls, you're going to get somebody that are going to say yes. Well, it's like, like let's rip that bandaid off right at the beginning. And it's like, let's get through those. You're going to have some fail. You're going to have some that, that, and you're going to learn so much in the process that it's worth letting go of that anxiety and just, you know, uh, Moving through moving through that. And I know I've watched you coach a lot of new dealers. And, you know, it's there are ways of getting creative about how we're going to make this deal work. But but it's like, do the deal. That's part of part of what happens in that stage of coaching is I do find myself having to sort of nudge the dealers into let's do business. Let's do business. Let's create sales. They have to. get comfortable because if they wait for every deal that makes them feel a hundred percent comfortable, they're not going to do enough business. And then they're not going to create enough cashflow, which is really the conversation I rejoined last night. And so it was just, was a really fascinating thing. It's a, it's an element that, and I think that if you take that customer or that dealer who's new and they do their first ten deals that they have to everybody has to come to accept is that the success of those ten deals in a small example is decided more based on how well you support that customer after they buy and stay in contact with them then it has to do with the decision about what what you're looking at in terms of application job time yeah so your level of support those ten people could turn into twenty or thirty referrals Yeah. I'm just trying to make those tens successful, but to understand that, you know, when you're looking step back from just this microcosm of this relationship with this individual that we know people talk, we know people, people refer, we know people advise against, we understand that that is human nature. And when you can help people be successful and, and for them, to feel like they really matter to you as a dealer that, that, and you know, and you've got a good referral program or something like that, that, that getting that one customer, regardless of whether or not you end up having to charge off, because there are great customers that end up charging off. We hear about it every day, but that one customer, like Tommy said, what kind of referrals and repeats you're getting, because that should tell you how successful your model is. I'm glad you said that because I felt that way. And we would probably start to measure that and be to the extent that our dealers can capture it. Yeah, but this will probably be another ask of the DMS providers going forward is, you know, help make it easier for dealers to be able to track that information so that because it is a really important indicator. Yeah. And we don't we don't currently have that number. Yeah. And you know, when we have dealers that are working with outside capital, Those outside capital people are of the mindset of banks that say none of your loans are going to perform. So we're going to we're going to really, really make it narrow what it is that we will accept. And you have to stay within your covenants and all of that. And so part of the other thing that we that we we try to we help coach people through is how do you get out off of that hamster wheel? to capital. How do you, yeah. Cause that's a hamster wheel on its own. Yeah. Yeah. You know, of, of capital and. It takes, it takes dollars to fund, you know, if you're gonna, if you're gonna be, if you're gonna help folks and you're gonna extend financing to people who have marginal credit situations or whatever, it takes capital to do that. So we gotta have capital partners, but I think, you know, the reality is some are gonna fail, but I think what I would be telling dealers, if somebody came to me with a million dollars at some point in conversation, If you're not prepared to do a little bit of hand holding on the collection side, then maybe Really a shout out to Tommy Brandes. Thank you so much for joining us. We appreciate, and he's just been so supportive of the mission because he aligns with so much. He was a white hat dealer before there was a white hat way. Hey everybody, thanks so much for including us in your day. We really, really appreciate it. We know you have a lot of other things that you could be doing. And looking forward to Friday with Brent Carmichael. All right everybody, have a great day. Thanks again so much.
