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. Happy Friday. Hey, welcome, y'all. It's been a busy day or a busy couple of days here. I know Jim's had a lot of stuff going on. We're getting ready for the conference. And so a lot happening with getting prepared for that. We will be at the conference, the NIADA conference. When I say the conference, I'm talking about NIADA. We will be there. We actually are doing a booth this year. And I don't know that... I think we've done one one other year but so we are yeah and then we are also doing our white hatway certification course prior um to the actual conference so um and this is this year it will be by invitation only yep so and I'm speaking on Wednesday on uh success tools some simple success tools that people can use for I'm excited about that profit cash flow yeah yeah that'll be good Anything else that we need to write on? Okay. Well, today we, before we bring Charles and Brian in, I typically will peruse. We get, we get the, the hard copies. Cause I prefer, I don't know. I'm just one of those people that like paper. So we get the hard copy of the used dealer magazine. Came across an article in here that just really, really, just it's it's struck a harmonizing chord yeah with a lot of things yeah so um I'm gonna go ahead and bring them in we have um good morning uh charles pompey and brian how do you pronounce your last name molette molette okay charles and brian pompey molette is that right pompey yes Okay, excellent. And they are joining us from Kingston, Pennsylvania. So they're up in the Northeast. And we're really grateful that they're here to join us. And we've got some great conversation to have around there. Welcome. Yeah, welcome. Great to be here with you guys here. And we saw that Richard Green apparently interviewed you guys and prepared the article around this topic of collections being improved through just routine engagement. So those of you who want to look at the article, it is in April's edition and page eighteen is called Keeping Customers Engaged Dealerships Courtesy Call Boosts Collections. Yeah. So courtesy calls, why don't we start out, Brian, if you want to explain to us what, how did the idea come about and what does a courtesy call kind of sound like when you guys do that? Well, basically, I mean, we, we came across the idea in a twenty group a couple of years ago. We decided to implement it to, you know, try to get some recurring business, things like that. What we did is we started quarterly calls, basically just to touch base with the customers, make sure that everything's okay. And it kind of took it away from it being such a bad call from us. You know what I mean? We were trying to build more of a rapport and a relationship with our customers at this point and not have it be a cringe-worthy moment every time you see our phone number pop up on the phone. Sure, sure. Yeah, and it's probably like I've always said, you know, the customer's more likely to answer your call when they're not past due, right? So you probably got to take your call and talk a bit. Um, so, uh, Charles, I, uh, we were chatting before the show. Um, this is a generational dealership. Uh, so your dad started it back in nineteen eighty seven. That's a big year. Amazing. Yeah. Yeah. That was that. Yeah. Dates me. Yeah. I don't meet a lot of dealers before. We, you know, we know dealers from the early nineties, but I honestly, we don't a lot of buyer payer folks from the start of before that. well and I know from talking with with charles that it started um he did new car so it was jeep chrysler dodge yeah whatever the chrysler whatever yeah um yeah So and then the other thing that I found out, too, is that when you were in a twenty group with our friend Brent Carmichael, that Charles's dad was in that same twenty group. So small world. That's been a while. Buy your pair isn't that big anyway. I think that there's, you know, maybe twenty thousand, fifteen thousand dealers. Dealers across the country. It's a hard thing to know, but. Yeah, just glad to have somebody who's got that many years of experience. So I want to hear more about what you guys experienced. Once you started doing those calls, what were you able to see as a difference from that? I think initially the probably biggest thing is, is that the collectors don't want to make them. So like, if it's like something that you're like a path that you're going to go down, it's something that you really need to commit to. I'd say for a minimum of like a year, like we're going to do this, no matter what the pain will continue. It doesn't matter. But I'd say, I don't know, probably by like the third quarter of doing it, it turned into like, we don't want to do it to like, okay, it's not that bad. I think it became more of like a refreshing thing, actually. Yeah, because I mean, and that was my initial thought was like, let's take like, like a job that is inherently negative, right? Because you're calling asking people for money in their past due and listening to what's going on every day. And they'll try and get a couple hundred calls every quarter. That's like positive, like, hey, how are you doing? Thanks for being a customer. You know, is there anything going on? No. I think we lost him. Can't hear you. Okay. Can you hear me now? Yes. All right. We hear frequently that dealers don't like having to make those kind of phone calls because it's like, I don't want to know that there's something wrong with their car. I mean, was that something that you guys were a little bit hesitant about as well? No, honestly, I don't think we were hesitant about it. I think, honestly, I think it really has helped in that way. I mean, I'd rather, you know, stay off a customer's issues, you know, and deal with them now than deal with them down the road and have them thrown back at us when we're just trying to make a collection call. Absolutely. Yeah, I mean, honestly, I think it, from the word go, I think it kind of sounded like a good idea to both of us. Although, like I will tell you, whenever we bring it up at like two hours, to another dealer they're like why do you want to open a can of worms you're just asking for problems like there is like a significant amount of pushback uh that comes with it and like the way that I try and explain it is it's like going to the doctor it's preventative care right so I mean like just because you don't know about the issue it's still an issue I'd rather know so I can deal with it than you know not know just assume that everything is okay yeah let me uh You don't have any audio. Can't hear. We don't have any audio. No audio. you're muted oh okay all right can you hear me now yes okay um technical difficulties um all right okay very good um so the pushback that you were getting uh you know obviously that when we're doing collection calls are teams. I mean, they're dealing with really negative stuff and, and I've worked in the, not in this industry, but in other industries where There comes a point in our life cycle for the year that people were having to get refunds or things like that. And it just became really hard for my phones team to take those calls because they can really get beat up. Oh, yeah? Yeah. And then now I've lost it again. Are you guys hearing her? Can you hear me? That's probably better. But they get a bit beat up. And, you know, and I understand it's because that's team morale is a huge thing, especially when you're in your collection. people are like your front line. They're the ones, the sales team gets all of the glory, all of the fun, all of the, you know, it's all of the star kind of stuff. And I just, one of the things I, from coming from a customer service background myself, the idea of doing something that makes their job easier in the long run. I mean, it's when you can start to have those great calls those connecting calls, all of that, it really does shift your team's attitudes about all of them. I agree. I agree. So you said it took about three quarters in order for that to start to shift. They could see a difference. Probably a little longer than that. Like the change in mindset from the... uh collectors yeah yeah the mines yes so I mean I think with them they they they're used to just going into calls I mean I've been in collections for like I said twenty twenty five years so I mean you're hardwired basically to get on a call get off a call get the money get out And that's pretty much it. So it's kind of a whole flip. You know what I mean? When you're trying to wrap your mind around that. But once they didn't, I think we got more blowback from our our own people that we did from the customers. I mean, you have those rare customers that will be like, listen, I don't want to hear from you either way. Yeah, right, right, right. So all you do is you mark them down. You don't call them again as far as that goes. But I mean, it's yeah, I mean, it definitely was a mind change, but I think it was a good mind change. And I think they appreciate it a lot more now than they did then. Yeah. So I'm still with the team and I don't know if you're going to be, can you guys hear me? There's a little bit of a delay on the audio, but if you can hear me, I can hear you just fine from where I'm at. We're just across the desk, but I've got a couple of things teed up and I want to kind of follow through on what you said there. And then, uh, Charles, when you talked about, you know, you don't want to have the conversation. Let me show something on the screen here. That was a poll that we did in the BHP success group back in August of twenty twenty two. And so the question was, are your collectors trained to ask how the customer is getting along with the car? Right. So you can imagine the reaction of some dealers would say, oh, no, I don't. You can see that. No, not ninety percent of them said no. We don't we don't want them getting involved in questions about the car. And this kind of was an interesting one for me because I came from a background where I did. We did try to talk. We did try to talk to the customers about those kind of things because. you know obviously we we all know from you've been in by here payer for more than about two months you know that when the car's not running the customer doesn't want to make the payments and that just meant that you know if if the the performance of the car is going to be tied to the you know the ability for the customer the willingness for the customer to make payments and we kind of wanted to know and support that so so this is just an interesting element to think back to what you guys saw and I did if you said it I might have missed it as we dropped out there but What were the nature of the conversations? When your collectors were making those calls, how did the conversations end up evolving? If I could jump back to that poll quick, I guess my question to that poll would be, who do you want talking to the customer about the car then? Your salesperson? That doesn't make sense to me. I think and not to divert too far here, but I think that's a common confusion, at least from my perspective, is that we don't sell cars, we collect loans. So I don't really care about that. The salesperson is not the face of who we are, the collections or account representatives or whatever you wanna call them. I mean, that's- They're frontline. Yeah, I mean, they're truly frontline. You know, I think pretty much anybody can sell a car. It takes a very special person to, you know, do. Delicately handle a collection call, yeah. But as to how the phone calls, so I think they initially started pretty soft, just kind of like, hey, thanks for your business. Just calling to touch base. You know what I mean? And then it evolved from, hey, thanks for your business. Has anything changed? How's the car? You know, is this still your address? Is this still your phone number? Because... as like we have a really high ACH percentage. So there was a lot of people that just, you know, we didn't talk to them until it was time for their title. And I mean, you're calling to solicit, you know, whatever balance and you don't have a good phone number, you don't have a good email, you don't have a good address, but the payments are still coming out. So. Yeah, you lose touch with all those great, those great payers. You know what I mean? The ones that you don't normally focus on because they're always out of the, you know, out of the limelight. Right, right. And coming from customer service collections, because I think that collections and customer very, very similar is there's a lot of people that believe no news is good news. You know, no communication is good communication. And it's like that, that everything is shifting in our culture. It's like, no, it's about connection. And, and we're, you know, especially in buy here, pay here, when we can start to make that shift from a transactional, which is like the payments are coming in. I don't need to talk to them through a relation, relational relationship. Absolutely. All the difference. Yeah, absolutely. Yeah, I mean, you don't get to talk to them. Like I said, they fall under the limelight. You don't get to speak with them. So the fact that we do get the opportunity to talk to them, I would rather Carlotta Car Sales be the first thing in their mind when they think of, hey, where am I going to get a car again? You know what I mean? Yes. Good experience. Yeah. And you know them. And you do feel more comfortable working with a business that you feel like you kind of know. And they get used to the voices and names. You know what I mean? So they get the use of those people that they speak with all the time. And it just builds a great relationship. Trust, loyalty. I love that. We had another Pennsylvania dealer on a few weeks ago, Tommy Brandes. I think you guys probably know Tommy. And he... He talked about, Tommy's been in business thirty plus years himself, and he he talked about this idea of repeat and referral business being a real measure of, you know, kind of the gives you a sense of the fiber of the company. Right. When you have high rate of repeat and referral business, that's a real positive reflection on the culture of your company. We also know it's the most affordable customer we can. You know, we spend a lot of money attracting customers sometimes. And that repeat and referral deal is is pretty easy way for us to go. So when we lose that relationship and listen, we're having this conversation in the middle of twenty twenty five. Technology is sweeping into the buy here, pay your space and people are jumping all over that. And it makes sense. We all want to be more efficient. And we recognize your point, Charles, about the ACH. We recognize that ACH is older technology. All these new technologies allow us to text message and use automated means to communicate with the customer. But when we we lose that routine contact with the customer. We probably also lose more of that repeat and referral business that is especially important to us. And I think it just, it becomes very transactional. And if that's what a dealer's looking to do, that's one thing. But I think when you, when you factor in, and I always say the smaller our market is, the more true these things are that we're talking about, right? You want that repeat and referral business in a small market, And it just becomes, especially kind of becomes amplified, but I'll fish out a couple more of these polls. I want to, I want to go back for just a second while he's looking up another poll about the team. You know, turnover for team members in collections can be really, really high because they get burned out. Have you noticed whether or not people are staying longer? Are you seeing any shift in them wanting to be like, they feel like, attitude of being part of a team and and just wanting to to be in it to keep that position have you have you noticed a shift in that since you started this practice uh I I mean as a general rule not just collections like we have super low turnover yes um I think our youngest employee would be about ten years old oh wow yeah congratulations that's amazing thank you we have good people yeah yeah Yeah, I got another one here. And this, bear with me on this one, because this is kind of got two layers to it. So I asked the question, let me just read it to you. It says, ever paid a price in collections for getting too friendly with the customer? So Brian, I'll bring this one to you with your collections experience. You know, people say ninety one percent say sure have, you know, like the customer begins to take advantage maybe when we get to know them too well. And I think I think we're talking about something a little different here today. This is not about getting too friendly as much as it is just having some sort of relationship. But it is still appropriate. Like your thoughts on that, Brian, what you see there, ninety one percent said, yeah, we paid a price for that. Well, I mean, it depends on what you're actually doing. I think if you have a guideline set with your collections and you are giving everybody the same answers that they're asking you the questions for, you know what I mean? You can't have somebody be able to call in and speak to one collector and then that collector does something differently than the next collector would do. So I think you're running into that problem if you're taking it case by case and just running willy-nilly on what you're going to do with them. But if you have a hard line as what you're willing to accept and what your collectors are able to do, I don't think that's an issue. That's a whole other topic, which sounds to me like you guys have pretty dialed in. We might have to have you come back some other time talking about the procedure, where you're Steve Levine would probably love that, too, because if you keep things pretty contained, there might be exceptions here and there. But it just it really offers a a energy in your business of stability. Like we know, we know, we know. And the more familiar your team becomes with those tools, then it's, you know, it makes things a lot smoother. And you might even get new ideas for new tools. What, you know, can we try to do something like this? because they're very, very familiar with like how well some of these tools work. I think it's all about customer training. So, I mean, I feel the good vast majority of our customers know the way we do business, know what we will accept and what we won't accept. And I think that kind of trickles down word of mouth. And also, like I said, from them dealing with us through the years. Yeah. And that's clearly about boundaries. And certainly that makes a lot of sense. I would say that on that poll about being too friendly, I would always choose that, even if I'm in that ninety one percent bucket or whatever. I think I would always choose that because the alternative is no communication at all. At least I've got some dialogue going and I can navigate that thing about the too friendly, just as you talked about and managing through kind of policies. But but I think, you know, it's the lack of communication that we know contributes to a whole lot of. ultimate charge-offs because when we don't know what's going on with the customer and the car and whatever else is going on in their life, then it just naturally translates into a drop-off and we can't solve a problem that we don't know about. Right. As a creditor. You know, and so it's just about kind of making sure that we maintain some some level of communication. I wanted to a couple of things that we talked about prior to getting on the show, because I was asking a little bit about one. When you started when you started making the shift, did you see or did you measure any change? I said I was talking about. Did your collections number go up or down? And then Charles, you mentioned something that wasn't about collections, but that is probably a bigger uptick that most dealers would appreciate. Do you want to talk about that? Yeah, you're just going to have to remind me. Oh, it was around your charge-offs that you experienced. When you started doing this, your charge-off numbers changed dramatically. I would say like our collections have always been pretty strong. So our collection numbers have not really changed. I think what has changed the most is, is we have like literally like zero skips. I mean, how many for the entirety of last year? Like two maybe? Yeah, very few. You know what I mean? Like two for an entire year. And we typically don't have like... an issue with not being able to find it. We all know that thirty-three percent are going to charge off no matter what, right? It's just like, what is the expense and output required to recover the vehicle? I'd rather have a customer say like, hey, this is the life event I have going on, whether it's divorce or jail or whatever, and say, here's the car or bring it back because we're talking to them. And then when that life event is resolved, they then feel comfortable enough to come back to us and we'll sell them another car. But I mean, it's only because we have that open dialogue and it's not like, hey, come get the car. hang up and we never hear again. Which is not something we used to do at all. That's again only been the last couple of years and really a result of to give credit where credit is due of Brent telling me to take a look at that. Awesome. And I think for me, the biggest change would be that it turned our collectors from collectors into listeners. You know what I mean? Like actually listening to the call, not trying to jump off, listening to what the problems are. And like I said, instead of letting that fester and happen over time, I think it's a good thing to get it out of the way and not wait. You know what I mean? Well, Jim just had a quote up just a second ago about it changed the dialogue. It just, you know, that, and so do you have, I, When and this kind of ties for me into the we don't want to be too friendly. And and I think if you're being friendly overall, then you can understand when there might be one or two that are going to bite you. But, you know, when when when it's like there's a lot where we're working with a lot of people that we have a great relationship with. and you're still going to have those charge-offs, but it's one thing if you're friendly with one person because your collector just connected with them, and so they're swapping the things, and they're doing the stuff, and they're talking about all the things. That's a little bit different when you become friends, friendly with someone, than if you're just having a culture of um, inclusivity where, you know, we're, we're trying to get everybody in as, as a community. We're, we're, um, that your collectors are feeling more connected because it is, it does start to feel, I know it gets a little trite when you talk about part of the family, but it does, it does have that kind of feel to it when you, when you start to really reach out and, uh, to, to what Jim said and you as well, Charles, ACH was the death of connections with, with our consumers and so you know we see and we're making it even more easy for yeah exactly and so maybe it might be an app now but but it still is is very very faceless and so you know it just it's when we've spoken at different conferences and and talking about connection and and you know, really bringing your customers in so that they become to know, like, and trust you. That's a question that comes up all the time about ACH. It's like, well, how do we do it? It's like, oh, there's a lot of ways you can do it. And I love that you guys have pinpointed a way that has really, really benefited your business. Can we go back to to referrals and repeats. Did you see the needle move on that when you guys started this as well? Yeah. I mean, still not to where I would like it to be, but it's definitely improved. Yeah. And do you guys do, what's your average length of note over there? like, three years. Yeah, yeah, it's pretty common. So, you know, just when you think about that and we think about the, like I say, when you have a three-year relationship with a customer and it mostly is ACH, that's obviously, we want the payments, right? That's part of what we're doing. We want to see those payments come in. I think we just sometimes end up paying a price when we don't also have some sort of relationship with a customer. But I think it's, you know, if I were a collector and by the way, I'll pause for a minute and tell you guys, I've always told dealers who, you know, over my career, I've done a lot of work in starting dealers in business. And when we meet people that are brand new to business, never collected car payments, I always tell them, you know, the best way you could decide if this business is for you is to go spend three hours in the collections office, sitting next to them, sitting next to the cashier counter for about three hours and listen to the dialogue that happens with the customer. We hope it's dialogue like what you guys are describing, but I think it does give people a sense of what it is to be in this business and what kind of problems. And the other thing that I've always said is that many of the customers that we finance in our sector, it's unfortunate, but so many of them just don't know how to solve their own problem, right? And so that means that we step in and have to kind of support some of that but that starts with listening back to what you said before it's like if we listen it's just like if I'm a collector in your office I'm probably the one of course I'm also the guy who chats with people on an elevator but if I'm taking a phone call and I'm posting a payment in the system I'm probably asking hey it's holiday weekend you guys got plans you know and I'm looking them up you know but I'm just chatting right I'm just making kind of but I'm also, um, I'm also trying to connect with them on a human level. And so this is just, uh, kind of the nature of it. And I think it's, it's a difference. It's what could set us apart. It's like, if it were just a matter of ACH payments, then their credit report would have, would show that they had been successful doing that with creditors in the past. Right. And so that's like, there's a little bit more that's required in our buy here, pay here sector that often it doesn't get talked about enough. And it's hard to, it's hard to, um, Yeah, and Michelle and I are just foolish enough to take on this intangible stuff, right? It's like there's things that are less measurable in our business, but it's still important to talk about and recognize. So go ahead, Charles. Well, I think the other thing too is like, Like, we live in a world of ACH, automatic text, automatic emails, auto dialers, right? So if, like, if that's what our customer is used to dealing with every single day, like, why do we want to be just like everyone else? Like, you need something to, you know, set you apart, not just for, like, contact, but also because, I mean, like, you want to get paid first, right? Yeah, absolutely. Yeah. So before we wrap up, so I just wanted to encapsulate some of the things that you guys did. These are quarterly calls, correct? Yes. They have nothing to do with the status of the account. Every single account. The other thing is you have a script, obviously, but some of those script questions are probably, we didn't really talk about the script. The way you get into a conversation is to have a script that is not yes or no. Open-ended. Yes. So you take that opportunity once a quarter to have an open-ended conversation with someone. I bet you after the first one, when they call again for the second time, that it's like it's a different, oh, hi, how are you doing? um, that first one is like, what, did I forget something? Are you, are you, um, are you angry with me? You know, whatever, because, but, but once you, once you get through that first one, by the time you get to that, that third one, yeah, your team is able to start to see a pattern and it's just, it's life. It's, it's culture changing in a team when you can, when you can start to, to really make it something that they're, they're enjoying. conversations but even when it comes to making a collection call after that for that specific customer that you just spoke with it opens the door and makes the dialogue better so they they don't expect that you're going to call them and rip them apart they just want they think you're calling for a conversation even if it is about a collection call yeah it's it builds the relationship and that's like like we said before I think that's really important Do you have specific collectors have specific accounts or is it just kind of like a, everybody in the team? I actually, I actually flip flop them every month. So this way. Yeah. So this way they always get, we have the same collectors, but every month they won't handle the same customers. You know what I mean? So this way they get both of them every single month. They get it. So it's not just the one nice person I want to talk to. It's the whole team. It's yeah. I like that. That's a whole different conversation. I want to have them back one day. Okay. But yeah, I think, you know, this kind of, when we can kind of wind down here, I think the, it kind of fits with what Michelle and I teach in what we call white hat way. And it's really just about helping dealers see a way we try to spotlight dealers who are doing things the way that really leans toward customer success. They want to see their customers be successful. They're playing a long game by your favor, right? So it's not just about today's payment. It's about tomorrow's referrals and all those kinds of things. This is kind of, what we've come to identify as a way. So what I hear in that is you guys are doing also what we talk about in our work is something we call trust deposits. You know, those phone calls that you make quarterly is some deposit that you make with a customer that is showing them that you do care on some level beyond the carpet. It makes the hard conversations easier when there is something in your bank already. I totally agree. Yeah. Awesome. What makes a difference, but yeah, we appreciate it gentlemen. It's really great stuff. I'm glad you guys are, are seeing success with that. We wish you much more continued success and look forward to having you back for another conversation. Thank you so much. We look forward to it. Great. Thanks. Yeah. I'm going to put you guys backstage. We're going to close out the podcast and then we'll just say a proper goodbye after we're done. If that's okay with you. All right. All right. Let me find you right there. Okay. Um, you know I just yeah you're right it kind of did um I really appreciate when uh And IADA, hope to see you all there. If anyone that's listening, if you're going to be there, come find us and say hello. We would love to talk to you and hear a little bit about your journey in Bayer Bayer. So have a great day, everybody. And we will see you on Wednesday with another White Hat Wednesday. All right. Thanks so much.
