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, friends. Good morning. It is Wednesday. Wednesday. Yeah, we're kind of scrambling to get to the desk this morning. That sometimes happens. Yeah. You're still buttoning up here. And I may or may not be wearing pants today. This is part of it. You know, we're going to keep the shot right up here. Yeah. No. She looked under the desk. We're across the desk from one another. Oh, that's so funny. Yeah. Yeah, good morning. It's amazing how fast the last few days have gone for us. And I did my first, y'all who listen, did I say that right, y'all? Yeah, she's been working on her, y'all. Yeah, she's the Seattle girl. Living in Guymon, Oklahoma, and a friend here said, hey, I need to go into Amarillo, which is the closest... big town two hours two hours away and so we drove in and did Sam's Club and and sorry there's a plug for Sam's Club and had lunch and did some shopping for Christmas and it was just really fun I was like okay this is now yep so another thing those of you who are seeing this right over her shoulder yeah The new white hat. And it was something you had a special order. And they called us before we went to Utah because it was out of Utah that we ordered it. Jim says he has a freakishly large hat. Every place I go in, they're like, sir, we don't have that size here. That's not a size that we carry. Nobody carries that size. So we got a call just before we went to Utah and they said, hey, we got your hat in. We're still interested. give us a call. Yeah. So we did. Yeah. And so next conference, you will be seeing him. Yeah. Donning a little more, more shaping to be done so we can kind of get a classic. And I think we're in the right place. I mean, we can take the hat to Amarillo and it's like, we're Texas or we're Oklahoma, which also does cowboy hats. I picked up some boots when we were back in Utah because I knew coming back to Oklahoma, you never know when you travel around this part of Oklahoma, you don't know when there's going to come a need to rope some goats or or to kick some some kick some stuff so you just don't know so you know you gotta have boots so got the boots got the hat i'm back to back to my roots yeah so um i think that we're sufficiently caught up with all things personal yeah michelle rose yeah yeah um so today uh you know we Yeah, today we're definitely taking on the white hat topic as usual with a Wednesday. And I feel like with this one, we are going to do the best we can to drive home how this can make a difference in your business like tomorrow, today. There were a few things as we were going through and working on talking points and all of that, that it was just like, that's that's really a strong point. So yeah, I'm looking forward to and yeah, yeah, just on point. So yeah, as usual, we we we chose a topic. We ran it through chat GPT and got some instruction. And I'm finding that's really wonderful for coming up with additional thoughts that we hadn't necessarily considered. So those of you who know, you know, we've been working on our own chat GPT AI for White Hat Way. And so our you know, she's like virtual assistant, whatever she's she has had every transcript from podcasts. I'm listening. Am I distracting you? Yeah, you are. Every transcript from podcasts, everything that's written has. So she's like fully versed. in all that we teach. And so when we ask for, okay, so on this subject, give us some talking points. It like just draws from a lot of different things that we've talked about. And adding in whatever it is. Because not just things we've talked about, but it understands, it grasps the entire philosophy and approach and strategy that is White Hat Way. So it's able to you know, offer additional points of view, just like a third person would in a conversation. But this is, you know, the, the obviously, obviously the machine has the capability to access tons and tons of content in a split second. And so it brings back. Some of the things we've been asking her are just like, you know, what do you think about this? And then she's pulling case studies and, you know, all of the things that are, that are like documented from out in the ether. That's like, oh, I wasn't even aware that they did a case study about this, which supports something that we've been teaching or, you know, whatever. And it's, it's pretty, pretty darn cool. And before we move on, Jim has worked on my background. And he's still trying to figure out what he wants to do. So this is Michelle and I across the desk from one another. I'll grab a third camera one day and we'll set it up where people can better see the whole layout. But I'm looking at Michelle and across the wall across. So, but yeah, my wall is completely bare. So yeah. So all good. We'll get there. should go ahead yeah yeah so let's dive into this thing about flexibility I think flexibility is you know is an easy enough word for us to understand I think the question is how do we really how do we train our people around that how do we uh you know how flexible are we on a day-to-day when we show up and kind of looked at four areas of the business and in terms of flexibility one is going to be lead management and working leads and nurturing leads and and kind of qualifying or pre-qualifying or sometimes i call it disqualifying leads we how flexible are we in that part of the process the next part would be in negotiating right that would be part of the sales negotiation structuring the deal and then the next one would be underwriting making the decision but somebody separate from the folks who have already worked with the customer to this stage. And then the last one would be collections, working with a customer on the collection side, which is obviously the longer tail of the relationship. And so we're going to look at all those pieces today and kind of break them down individually by sort of category or department and talk about how flexibility can show up. And I think more importantly, how it can earn dealers more business just by installing some degree of flexibility at key junctures in their process. Okay. All right. Did you want me to put this up and I don't know if you took it down, but first one, flexibility starts at the lead stage like you were talking. Yeah. Yeah. So basically what that means for me is, you know, we see a lot of dealers who look, everybody's leaning on technology. It's understandable. We're gaining in technology. Now AI is on the scene and doing more work for us. I think the, the, what I'm trying to balance here, what I'm looking at flexibility and lead process is the, how adaptable are we at hearing a customer story? And we see people advertise from a marketing standpoint, they'll put out something that says, you're more than your credit score. Well, okay, but if you just look at credit score plus some boxes and customer meets qualification, yes or no, then what happens with that lead who's a no? We look at the customer and we say, this customer does not qualify. We hear a lot of dealers on Facebook saying, I'm getting a bunch of junk leads, a bunch of bad leads, nobody qualified, nobody got any money, whatever. So you hear that and you think, okay, well, so we're sweeping them into a pile that is not qualified can't help them you know and so i think that's the question i would have is what is what is being done to make sure that we are being flexible to do what when i first got in the car business the buy here pay your business i should say it was the phrasing that was used when my training was, does the customer fit your program, your way of doing business? And there's a lot of things to consider in that besides just the things that might go on a checkbox on a piece of paper, right? In terms of job time, residence time, the basic qualifications. So I think this is part of, um, You know how we want to talk about that, which a quick aside, a reminder, we're talking about this on a Wednesday. We've got Friday. I've got the rest of the recording because last Friday. Yeah, we had a technical problem with Jeff Owings podcast that we did on Friday. And so we want to finish out that podcast. And Jeff shares a lot about his own approach to underwriting over the years. Right. So with the flexibility starts at lead stage, treat every lead like a maybe. Yeah. not a no dealers winning right now are the ones that adopt their first touch approach based on context, credit communication, style, urgency, and life chaos. You know, there's, it's an interesting thing. You know, we have, we've, we've worked with a lot of dealers or talk to a lot of dealers, like a junk leads, junk leads. It's a lead, which means all of those people you said no to, we're looking for a car. Right. And, And they're probably going to continue looking for a car until they found a car. Sure. And so it's, you know, junk leads are, are only junk leads if you're not flexible. Well, and I can say there, I would never call a lead a junk lead because just because they're not a lead today doesn't mean they won't be a buyer tomorrow. Right. So, so I think I would kind of adopt the approach that there will be customers that I cannot help today. but I think the key thing that I've, and I've talked about this in the podcast before and plenty of my coaching, I am training. We always try to, In the sales process that we meet a customer with this idea, it's in our mind. When we show up at the dealership on any given day, when we walk out to greet a customer on any given day, when we sit down at the computer and we start a chat thread with anybody on any given day. I think the mindset needs to be, if anybody within fifty miles of this building can do it, it's us. it's me like if i'm the salesperson or i'm the dealer like i want to adopt this idea that If anybody can help this customer, it's me, which means there may come a point where we just can't get there. You can't solve income. If customer does not have the income to support the payment, that is the minimum payment, then you just can't get there. The math just won't math. And so that happens. It's not to say that every customer can become qualified, but we're talking about those customers that we miss because they're on initial pass. They don't seem to meet the checklist. and so we tend to dismiss them and move on to another one the next point was to qualifying leads without disqualifying people right and so little curiosity yeah um you know when we stick to and this is something that i see uh happen on offline is like rigid scripts um rigid uh disqualif disqualifying um rigid scripts one size fits all prequels kill more deals than bad credit ever will Yeah. And when you play the percentages and look, we've had some interesting conversations with some dealers lately and dealers and other members of their professional team, I'll call it. And they're in the process of re-examining their approval process, their deal structure, some of the stuff because their volume is low. And so there are things that we're examining in order to make a judgment about why their volume is lower than it could be. And this is among the things we're looking at is, how are we disqualifying? Because I would say that there are so few customers, like if you run a hundred customers through a lead flow process, and I have my typical checklist of I'm looking for six months job time, six months residence, two thousand down, whatever that list looks like, they're going to be so few customers percentage wise that check every single one of those boxes, just almost any dealer anywhere. This would be true because they paint that line of this is the customer we're looking for. and so i think this is where the the gray we i feel like in the by your peer business we live a lot in the gray we certainly need to get comfortable living in the gray space that's what this that's what the the industry by your payer is yeah it's living in the gray yeah and finding ways so so to me this all comes back and so the reason you've heard me say in the past that in hiring sales people and bdr in this case for bdc I would be, for those not familiar, BDR is business development representative or business development center. So having people who are working leads. One of the things I'm looking for in terms of profile qualification is creativity, because it's my belief that we sometimes have to get creative in order to find ways to make the deal fit and to help solve the problem that the customer is describing. We first have to understand the problem. We have to listen. which is the whole thing is curiosity. It's just being curious. Sure. I have to understand their story. I just think this is part of why, and as we move toward AI, I think we're going to be testing the limits of AI in terms of what can AI glean from the customer in a conversational way? Because again, if the customer doesn't check all the boxes, sometimes there's a story behind the customer's reasons that they don't that's their situation today and i've just done it a long time i've managed i've owned dealerships and and worked with a lot of customers a lot of places and i can just tell you that there's often a story behind why the customers landing in your business today with a you know with their credit circumstances their their income circumstances And so I think when you think about does the customer fit my program, is this the kind of customer that if I can get past this challenge of today, would they be a good customer in my portfolio for three years, ten years, thirty years? So, again, the small minded kind of approach says it's got to check all my boxes or I move on to the next one. I think we just we're going to miss a lot of people because we don't approach it with curiosity. We don't listen. We don't hear the entire story and we don't have a chance to really work the lead. So I would, um, I'm, I'm voicing something that I've heard, uh, from salespeople. It's like, oh my gosh, another sob story or, oh my gosh, you know, it's just like, and, and that it's, it can be, um, it can be, uh, if, if you're like being rigid about, uh, uh, really rigid about, um, qualifying or all of that elite then it's like you start to hear a story it's like no and then the attitude changes to you're wasting my time right you're wasting my time yeah you're wasting because i could be and it's like you know what to listen to someone's story yeah might take you ten to fifteen minutes it's not really wasting time um because because again, like you said, you may not be able to qualify that, you know, may not be able to, but it's like having this, this open dialogue and having, you know, finding out, asking questions, being curious about the person and what landed them on your lot creates trust. Right. People trust those that listen to them more than those that just like, sorry, can't help you. Right. Right. And so it's creating trust, trust. goes beyond the bounds of this one deal. It spreads, it ripples out. And so if you take the time to listen, to ask questions, to understand, you may be able to help them with another problem. You may be able to, it's like, oh, and you're showing empathy. That's rough. That's really rough. Okay, so how can we make this work? Getting creative about how can we make this work? And if it ultimately doesn't, work out, then it's like, okay, we're not going to be able to do this today, but here's what we can do and here's what you can do. But you can't get to that point without listening and being empathetic to their situation. And I would say when you say, you know, wasting time for ten minutes, I would say you're investing time. And so what I mean by that is that I'm going to invest that time and I may get to the end of that ten minutes and I may still not be able to help. However, I have heard the customer in a way that now when I come back to them and say, you know, unfortunately, we're just our program just doesn't fit that. You know, unfortunately, I just won't be able to help. You know, if your income improves or we can talk about getting a co-buyer who will join you and share in the financial commitment, then maybe we can talk about something like that. So please reach out to me. But I think I have a better chance of talking to that customer tomorrow because I took the time to really listen and understand what's going on with them. Because I think so many of our customers, if you if you said if you said ten percent of the hundred applicants that I talked about would actually check all the boxes. I doubt it's that high. But if you just if you had ten percent. Then the question is, with that other ninety percent, what percentage of those customers are marginally qualified or with one simple fix would be able to make an adjustment and be flexible and get them in the program, get them some wheels and get them started financing? so i think that's part of what i'd be looking at is just you know i'd make that investment in time i would understand them and make sure i heard their complete story and and again i still may not be able to help at the end of that but i i have a chance better chance to win their business and the referral business because i just took the time to listen and understand what's going on yeah and that is you know listening just for dealers that are out there you know we we um we've worked with a lot of different dealers and when they're looking for a new salesperson, they love it when they get someone that has experience in independent or franchise or whatever. That is a very, it's a very different beast. Right. Although when you worked in franchise, it's the listening part was really essential, but it's a skill that is not common with salespeople. And so it is something that can be learned, but it requires you to be willing to train them and to, you know, take them through exercises of, uh, it sells people inherently have like a lot of, um, they have more, uh, I want to say ego, but like, it's just, they're, they're really, you know, hopefully sure themselves and all of that, then you can be those things. But if you're not, if you're not stopping, you're talking. and listening to what someone says and not interrupting. And I, you know, I know I, I struggle with that sometimes when we're talking, interrupting, but just listening to understand instead of listening to respond. Right. Because the moment that a salesperson or a normal person hears something and they have a response there, boom, there's my response, but they may have missed. the lion's share of what the situation is. And so they're making assumptions based on what they just heard. And there may be five elements and they are responding to one. Whereas if they understood all five elements, there might be a different approach that we could bring to the solve the problem. So I think, yeah, understanding the entire problem is certainly going to be helpful in terms of making certain that we have a chance to have a successful outcome so yeah i think that that listening part is is huge we it's about problem solving and that's why i say the creativity i can't solve the problem until i understand fully the problem and so this is why i have to build listen and by the way that that thing about training you know sales people talk less i've closed pins on the lips are kind of painful but you know whatever whatever works you know it's like Exactly. Yeah. Let's move on. Negotiation built on transparency, not tension. Right. So talk to me a little bit about tension. OK, so, you know, when we talk about tension in the lead process, it's again, it gets uncomfortable because the customer often we have to remember so many of the customers that we're going to work with. We talk about this thing about financial illiteracy or what Candice Price called the knowledge gap, right? So there's a knowledge gap. Customer doesn't really understand a lot about financing and that's okay. But if we run the risk of, we gotta be careful about how we talk to the customer and that we don't condescend, that we don't have some condescension, right? In the way that we speak to the customer. And so we want to help them and walk them through the process because customer may not understand all the elements of financing and they certainly don't understand our program and our qualifications and all the, you know, the kind of the boundaries that we typically work within. So it's not surprising to me the customer would not. that they would be asking questions that are kind of be frustrating, you know? Um, and so it's, um, so how we, how we respond to those, especially, I think it's, you know, we all know that texts can be misinterpreted. Yeah. Text. So if you're, if it's a chat thread and we're texting with a customer and what we say can be misconstrued and it's, it's tricky. I'd much rather get them on the phone and talk through that because I can also, then I can incorporate a lot more tone. So they can hear that I'm really trying and I'm really, really trying to help them work it out. So, you know, the knowledge gap and I, you know, I when you said talking down to someone, I think, too, that I have. There's another layer to that, too, that I just I want to to just quickly as quickly as we can, because we haven't even touched after things. Talking down to women. Yeah, for sure. Because I have been called sweetheart, which is condescending as crud. We were watching Landmen last night, and it's like, well, sweetheart, and I was like, whoa, to a waitress on the show, and I'm just like, I'm hoping that we have gotten past treating women as not as smart. I have a lot of really smart women out there, and I have watched in our travels of condescending attitudes from a lot of sales men that that is it's it's really offensive. Yeah. And and so, you know, it's just I'm just putting in there, let's really be careful because it's one thing to be condescending because, you know, you've got these people in front of you that it's not easy, but that you being condescending and how you explain something that you're like, this is basic. But when you add a layer of looking at someone in a manner of sexism, whatever. And I don't want to get off on the social stuff, but that is a real thing for those of you that are out there being salespeople or whatever. Just be there. Yeah. And I would say for that, there are cultural things, right? There are regional things. Like in the South, you'd be more likely to hear sweetheart or that kind of stuff. It And it may not be intended the way that it's received, but I think we don't need to risk that. Like we, we, we, we can, uh, like in certain places that if I say, yes, ma'am, they think I'm talking to like an old woman, you know, it's like, you know, it's like there can be some of that, but I think, um, your, your point is that we, I think we can avoid that altogether and not be, um, we don't need to step in that hole. And so I think we can talk to people about that. So let's move on to the next one. Um, um, uh, underwriting it through a long-minded, through a long, I put it up and you put, you put it up. I'll stay off of the book. Underwriting through a long-minded lens. Okay, so when we think about the underwriting, obviously this is getting into beyond lead management. Now it's getting down to decisioning, right? Now we're structuring and we're deciding how we're going to underwrite paper So, you know, like one of the key software providers in our space is I remember them telling us that it's not software providers like an underwriting tool provider. They explained that they're really analyzing three things. They're looking at the customer profile, their qualifications, you know, credit wise. past repos, et cetera. They're looking at the deal structure, right? And then the last one would be the collateral itself, the car that the customer's buying, how's it going to perform? So obviously the car is the car. That's not something we're talking about here in terms of flexibility, but we are, I would say when it gets into underwriting, This is where even more creativity comes into play. I think if I'm the underwriter, you're the salesperson, my creativity is helpful. But if you've already brimmed the customer, I never get a chance in underwriting to use my own creative capabilities because you've already brimmed the customer saying they weren't qualified. So this is assuming that you were flexible, you got the person in front of me and I'm still trying to work the deal and make it fit for the customer or whatever. So in underwriting, my definition here of underwriting would be around, how do we How do we finalize and approve the deal? So there's there's some of that is deciding underwriting before the customer is ever in front of us. And then there's the flexibility of working with a customer, you know, while we're in underwriting because the deal is a little a little a little tight. I'll give a quick example. This is something which I used to use a lot, especially in chat threads and training people to have conversation chat through it. when you're talking to customer about payments. So I wrote them down here. I'm going to give you at least, I wrote down six levers that we can work with and working with a customer to make a deal fit. The customer's down payment at delivery, right? Their trade-in, whatever we're doing about their trade-in, right? That can also be a lever. Any deferred down, if we're going to do additional deferred down payment after delivery, that can be a factor. irregular payments which are like those tax time scheduled payments that's been a conversation this week we'll probably bring that bring that and talk about that more specifically as we head to tax refund season and then um obviously the payment itself where we set the payment itself and then the last one would be turn so when i think about that if i'm again a salesperson i'm chatting with you and you're interested in buying a car and you say to me because it's common in chat thread, they'll say, can I get a car with a payment of four hundred dollars a month? Well, I don't react negatively. Some salespeople might say, heck no, you know, our payments start around six hundred. Well, I just gave you all these levers. There's all kinds of ways we could get there. Depends on how much down payments you do and how much trading you've got and how we're scheduling. But the part that I would say that's phrasing that I would this is an example it's representative of I could say to you as a customer, you know, we try to keep our payments or our payment contracts no more than thirty six months. But we've got some flexibility on that. So think about what I just said, because I'm trying to I'm trying to help the customer frame what I'm working toward. I'm trying to trying to make the thing fit for us and for the customer. And I'm trying to say we try to keep our payment schedules no more than about thirty six months because that's good for you and it's good for us. We don't want a thing to run too long. It's going to get high interest rate interest going to accumulate. So we're trying to keep it to around thirty six months. But we've got some flexibility on that. OK, so this is just me saying we've got some soft edges here we can work with. Right. And so I can try to help. But that's I call it working inside the box. You know, we love to talk about outside the box. And so this is kind of if you think about staying inside this box, this is the frame that we're trying to work within and make the deal fit. And I think where we'd like to have some flexibility when we have a real hard policy. And when you think about payment, you also think naturally about payment to income ratio. That's what you're looking at customers ability. But these are all things that we have to look at. How much flexibility can we have? in the interest of making a deal and make it make sense. Right. And so this is where I think we gotta, we gotta, we gotta listen and be ready to live in the gray space a little bit. Yeah. And, you know, I was just thinking about, you know, we talked about the tax time and we're coming into that a little bit, but, you know, if your payment would be six hundred and they want it down to four hundred, it's like, well, then can you afford every year twenty four hundred dollars at tax time? Because that's where we can meet that gap. It's like bringing bringing that in. And so, you know, a lot of people, it's like, oh, I can keep my payments down to four hundred if I come up with twenty four hundred and I normally get X amount. So, yeah, I can do that. Yeah. Boom. Yeah. Yeah, for sure. OK, so next one, strategic exceptions. and emotional exceptions i love this conversation yeah and i love this because it reminds me of conversations we've had on i think we did tote the note podcast years ago with um steve levine around this idea about the compliance in underwriting how much flexibility can we have like here we are talking about flexibility and underwriting it's like how flexible can we get well I'm as a former dealer, I'm prepared to make my case when I'm being flexible in the interest of the customer. Let's think about what that means to me. It's like I'm saying I'm trying to work with the customer, I'm making exceptions. Now, what Steve Levine would say is that if you're going to make exceptions, be sure to log them because this is where we have to make sure that we're documenting that why we chose. Because obviously, the regulatory people are trying to make sure we're not doing anything that's discriminatory and so it's understandable. I do think we're going to be in the gray space in buyer-payer underwriting from time to time. And so what that means is that when we do step out there and make an exception for someone, we agree to do a little higher PTI, for example, then we want to log that. I think Steve called it an exception log. We want to keep that log and document why we chose to deviate. But I think what this is really asking us to think about is the emotional element and instead of making wild gut calls is what it says, you know, then some would call that a wag. So people know what that is. So I don't have to explain it. And then as opposed to having a rigid rules. So, you know, we've talked plenty about the rigidity element, you know, when we're super rigid, we're going to miss a lot of business. We're just going to miss a lot of business because there's just a whole lot of customers don't fit in the box, but I think they would still be a good candidate for your program. If we could learn to look past, this one thing today and look at the the likelihood of success over three years ten years thirty years right so so okay so let's move on to the next one flexible payment structures build loyalty yeah and that was chat gpt feeding that to us i've felt that way but basically it's it's suggesting that there's loyalty in that And I would agree. I think, again, we can come back and talk more at length about irregular payments. I did learn yesterday in talking to a dealer that is in North Carolina as an example. And years ago, I had a dealer tell me, I love this idea of doing irregular payments at tax refund season, but my state won't allow me to do it. And I did a little research when this came up again with a dealer in North Carolina. And my research said that you can't still can't do it. They want the payments to be the same. So this is again, and if you're listening state of North Carolina, sometimes rigidity and buyer payers, a problem for the consumer that we're trying to help, you know, they're trying to protect the consumer and it's admirable. I would say why? So if, if I can structure a deal with a customer that allows them to put their thousand dollars down today, which is hard to come up with right before christmas for a lot of our customers right so if they can do a thousand dollars down today and they want to try to keep their payments at four fifty you know as an example well if the customer if i could tell the customer would you be agreeable if when we you get a tax refund we talked about it you guys typically get tax refund with three kids and it's common for you to get a sizable tax refund if we scheduled about a thousand dollars of additional payment in March, when you get your tax refund, then what that's going to let you do, or let me help to do is I can now keep your regular payments throughout the rest of the loan a little more affordable. If you'll just promise that one irregular payment in March, you know, cars have gotten more expensive. Contracts have got longer. I've gone to suggesting we do two of them. Let's do one March of twenty twenty six and March of twenty twenty seven. I can schedule that in the contract as long as my software will accommodate. Yes. as long as my contract will accommodate that regular schedule on the printout and my state is okay with it, then I would say that's a win for the customer. And you can see it in the customer's face, like, oh, you could do that? Like, that's huge. Like, if I could pay a little something from my tax refund and that's gonna help me keep my regular payments lower, think about what just happened there. And so this is an example where flexibility and structure makes it and lets us solve that PTI thing that we're bumping up against all the time. You know, let us, let's keep the payments lower. And I think the difference in us winning that customer and not, and I shared, we can again, talk about more length when we come back and dig into that subject more, but I share with our VA groups, kind of what my past experience was with those. And so we can go through those numbers. All right, next one. Collections, firm posture, flexible pathways. OK, so this is really about. So let me read what it says here. It's not about being soft. It's about having more than one play in the playbook. OK, so this is about having kind of I call it I call it tools in the tool belt. Right. So flexible plans reduce charge offs, increase recoveries. and make customers feel respected, not cornered. OK, so this is getting into an area where, you know, we can maintain a firm posture. And I talk a lot. We've used the phrase over the years about being flexible but firm, right? And so we're going to be friendly but firm too is another one that comes up. So we can work with customers without giving away the farm or giving away the dealership in this case. We don't have to always say yes to the customer and do everything they are asking to do. But having some degree of flexibility in there creates um it facilitates communication encourages uh future communication i'll give you an example i thought about this situation this happened to me years ago i remember having a conversation with somebody i had a payment somebody was calling me about it that i missed right on my own situation and when they called I just took the call and I said, would I be able to schedule that for such and such date in the future? And they said, yeah, unfortunately, I'm only authorized to schedule it within such and such. And so I can't remember the outcome on that. It doesn't really matter for this story. But the point is, what really happened there is it kind of created a situation where, okay, so there's really almost no reason for me to talk to you today if I'm not in a position to pay it within the fourteen days or ten days or whatever the number was. So that's the significant part I want to drive home is that we can create a scenario where our customers just really, what's the benefit of talking if you can't do anything for me here, then why answer your calls? And that is something completely in our control. Right. Um, it completely in our control and it's that whole trust thing and opening up communication pathways. All of that is when we are overly rigid and, and, and someone has been through, cause you know, we know that the, our customers have their ups and downs and flows, you know? And so this may be the second time that this has happened and it's like, they're not going to answer your phone call. Yeah. And that's something we complain about. We're not going to answer your phone call. We've created that scenario ourselves. And look, I'm not saying, let's be super clear. Of course you need to have policy limits. And of course your collector one or your level one collector will have certain limits. But what I'm really talking about is how do we make exceptions to that policy swiftly so that a customer can be taken care of? We can grant an exception where it's appropriate without giving away the farm and just kind of letting the whole thing get loosey goosey. We can maintain policies. but have the ability to adapt quickly. I like giving collectors a certain amount of latitude to do some of these things so that we can be agile, we can be nimble in working with customers and And this whole thing is all everything about the white hat way approach to collections is built on this idea that this customer is going to be with us a very long time. So this payment that we're wrestling over today is really a small thing. So what we have to we have to have to. kind of cover this line if i think about a collection supervisor or collector they have to find this line between being flexible without you know giving away too much and so now they've created this situation where the customer expects it every time and so that's the line that we walk but i would choose that line of being flexible and having to rein it back in over the alternative because being too rigid means way too many repos Yeah. And that's not the outcome I'm looking for as a white hat dealer. Right. Yeah. And I, you know, I, I think that we're, we too, there, we see dealers like, we're just going to throw it at the end of the loan, take the payment, throw it at the end of the loan. That really doesn't drive home the responsibility of making your payments. It's just like, oh, if I can't make the payment, we'll just do it on the end of the loan. And so one of the things that we've encouraged people to do is like, okay, so if that happens and you've exhausted all the things, it's like, all right, here's what we're going to do is we're going to up your payment by twenty dollars, fifty dollars. every payment is going to be up by fifty dollars until this balance is paid off or when March first happens. Right. Because when whatever it is, it's left will be paid off with your tax. Yeah. And just so you know, this this becomes a limitation of software. So I think this is something that people need to be aware of. So having having a good software is going to accommodate more of these kind of things. And so I think this is something that we but I think you're referring to something I've said that I used to have customers that would finance with us and maybe two months into the loan, they're saying, hey, I'm a little short on my payment or I had to buy some shocks for my car or whatever. Can you take my payment and put it to the end of the loan? That was your phrase. That was their phrase sometimes. Where did they hear that? They didn't hear it from me. They didn't hear it. They might've heard it from somebody on their team or on our team, or they may have heard it. They may have done that with another dealer they financed with in the past. So this is another thing for us to be aware of is those practices are going to affect us when it comes time for the customer to finance with us. So we developed a practice where we just said, no, it never went to the end of the loan. We worked out other ways to get it paid. And so you gave an example of how that can be done. Okay. So obviously humaning is something we talk about. People, people, people, right? And so how do we keep the human element into it? You want to read what it says there? And I want to say that this goes for just about everybody. People go through seasons. That is humaning one-on-one. Yeah. Um, job changes, medical hits, childcare explosions. Yeah. Yeah. Dealers who adopt to life curve balls end up with lower repos and more referrals. So, you know, there, there are ways to do that, to work with the ebbs and the flows. Cause I mean, even it's that's every human, every human out there has like, well, that came out of nowhere or, you know, wasn't expecting that. And then you have to adjust, you have to step back. you know, all of that, that doesn't mean that you are, um, that you are giving away the farm in the process, but understanding that, um, a sob story, which I've heard, um, salespeople, it's a sob story. Those things fricking happen. And people that have a sob story that are in a low credit score, it's much more impactful. Then this sob story happens for someone who has a seven hundred credit score because it's like things happen. There's a job change. I got laid off from my job. That's a different. You know, people that have had it, they maybe have a savings and they can carry themselves for six months or whatever. Those things happen to everybody. And so it's like, and some of us, I heard dealers, it's like, well, they should know better and they should have us. It's like, they don't have the bandwidth. It's like, what planet are you on when you think, well, they're not planning for the future. Do you understand our customers? That's the dealer who's got their own knowledge gap, you know? So yeah, it's like they're, they're misunderstanding about this customer. So I think that here's the part I would say, life can be difficult. It has its moments for most of us. And if you're a customer in this country with a poor credit score and lower income, those setbacks can be more devastating. They can be more challenging to navigate. And when you're with a creditor, in this case, a buy here, pay here dealer, lease here, pay here dealer, who's not working with you, then that becomes very pressurized. It becomes very stressful and frustrating, and the outcome tends to be bad in those situations. So it's again, the question is, can we develop a long-minded approach that allows us to think back think past today's payment. I always remember there was a dealer I worked with from up north years ago who said, and this is a different conversation, but used to say, we try to think past the down payment. In other words, it was only one element when they're considering approving underwriting. And I would say the same is true here. Can we learn to think past this payment? And I would say we really want to look at our policies to make sure that we're not placing so much pressure around this one payment that we're losing deals, ending up with repos because we just couldn't allow ourselves to get past that, that setback of the day. Absolutely. Okay. Next one. Flexibility is a trust deposit. We talk about trust deposits all the time and the more it's, you know, we've, we've, and I'll reiterate quickly, every relationship has a trust deposit. Yeah. Has an equity bank. And, um, and so when you build and you're making deposits every day, and this can be in a marriage, this can be in a partnership with business. This can be a customer and a, and a business when you are making deposits daily of like, I'm, I'm listening routinely, you know, all of those that, that when that happens, um, you have more equity, you have more. ability to be able to, to work together, to, to get through the hard stuff. There was a podcast I listened to recently where Bernie Brown, I don't know if y'all know who she is, but she has made a career on studying, um, relationships and studying, uh, uh, she's a scientist and, uh, lots and lots and lots of experience and case studies and all of that. And she was talking about equity in, um, in just a uh leadership role and how a leader um uh you know again ebbs and flows every it's a an organization can experience everything so you know an organization that hits a uh a hardback or whatever a hard time and so the leader brings everyone together and says like trust me we're going to work this way work it out and it's like trust you I mean, if you've not built any equity, but the leader that will swing through and it's as they're walking in, it's like, Hey, Jeff, how are you doing? Is your wife feeling better? Okay, good. Is there anything we can do? All right, great. You start, those are trust deposits. And so part of that with... You know, the flexibility of being able to listen and be able to work with someone and, you know, how can we help? And the, just the listening huge trust deposits, because when those hard things happen, they feel like they have a relationship with you. This is a relational business. This is, well, some people do it transactionally. We want it to be a relationship because when you lean into it being a relationship business, you can weather those storms and you know, Flexibility, trust upon. Yeah. And so that you call equity, I would say you could build up some goodwill so that if we think about the dealer customer relationship here, we build up that equity, we build up that goodwill. And so now the other thing that happens here and ChatGPT raised the idea is that when customers feel like you're trying to help them win, they stop hiding problems. Like, this is so big to me. It's like this idea that, you know, they want to just recoil and stop talking to us unless they trust that we truly are interested in a successful outcome. Right. So they can begin to communicate with us about the difficult stuff when they can trust that there's not going to be some, you know, harsh retaliation. You know, one of the things and this is I've worked in customer service. I very fast paced certain seasons where it gets really, really tense when when you encourage or kind of require your collections, people, your collections team, or even if they come in and they're talking to the owner or whatever. take good notes. And then when that person calls in, refer to their notes. And this is a skill to be able to read while you're having a conversation. And, and some softwares I'm sure will allow you to bring it up really fast. And so you can pin things to the top. So, you know, when you know, it's like that, Hey Jeff, how's your wife doing when they call in and you know, Oh gosh, my mom just went through open heart surgery and, but you haven't talked to him for two or three months, but that's the first thing that you, it's like, Hey, before we get into this, how's your mom doing? She, about three months ago, you'd said that, can you, I mean, imagine the amount of like, right. Yeah. Wow. They, they're listening to me. Right. Um, how impactful that is taking good notes when you interact with someone, when there is something that, when there's a challenge or a celebration or all of that, it's such a great opportunity. Like I said, we worked with really, really high challenge, whatever. And some of my team, someone would call in and it's like, I want to talk to so-and-so because they built a relationship and they trusted them that they were going to help them resolve the thing. We had in our budget to send flowers when someone passed away we even did it for when their dog did because they were broken up it's like that's been my life you know and we just sent a little hey we're thinking about you and little things like that i kind of digress but it's like when you listen and you take notes and you really act with a sense of you're a human i'm a human human he's hard i think The notes are, but if you don't truly care, like if you care, then you're going to be more likely to have notes and remember. Right. And so I think that's why it's just, you know, got to kind of care. Last one. Okay. So last one is the competitive edge is flexibility as your brand. Yeah. And I think we can close with, you know, something that I view as vitally important. in this whole subject, you can put flexibility out there as your brand. I'll give an example. I did a complete overhaul of a dealership years ago. I was kind of started out as a consulting arrangement and I became a general manager for them and went through a complete restructuring of the business, relocated, rebranded the whole thing. And one of the big signs that we put up was just phone number website. And it said, fast, friendly, flexible, fast, friendly, flexible. And don't want to say it you don't want to put that out there as your brand we also put on the front of the glass fifteen minute approvals and we we did it we we stuck by that fifteen minutes from the time the application was turned in we had a yes or no decision that's the application that's not the the whole process prior to but it's a fifteen minute approval from the time all the stuff was signed and turned in then we had a fifteen minute decision and it might be conditional but it was we definitely made it made a fifteen minute decision so we we followed through on the fast part We certainly emphasize the friendliness all the way throughout. But I think you don't want to say flexible on your sign unless you really are prepared to show up and be flexible every day of the week. Because otherwise your reputation gets soured because you claim to be, but you're not. And so I think this is the simple thing about it. The actions speak louder. It is show. And when you when you put it on your sign and you show that you really are flexible and you work with people, the word gets out. People say, you know, go see them. They'll work with you. And it's interesting because, you know, you talk about your tools and your tool belt. Just having when someone calls you with a flexibility is offering them options because if it's like pay your payment or it's like, OK, here are some options. Even if none of the options fit, you're still showing flexibility by giving them options. And there's, I don't know, those of you parents out there, parenting with love and logic. People like to feel like they have some semblance of control. And that's from when they're toddlers to the grave. People... I mean, think about your loved ones that are in a nursing home and how heavy that is for them because they don't have, well, my mom had her driver's license taken away. It was because she couldn't, she couldn't, she was like, was that a, was that a dog? And no mom, it was a black garbage sack on the side of the road. Yeah. That's like, it's kind of scary and it takes away and they feel, you know, they're feeling more and more boxed in because they don't have options. They don't have flexibility. So when we parenting, love and logic, it's like when you have a temper tantrum, you know, you're giving a black and white, go put your coat on. It's cold outside. I don't want to put a coat on. I don't want to put a coat on. Instead it's time to go. Pink one or white one? Which one works for you? And then they have the power to choose which one works best for them. And you don't end up having the temper tantrum or adult whatever that you have when people feel like they have options and choices. So part of flexibility is give them some options. Which one works best for you? Well, none of them does. Okay. Well, let me see if there's something else that we can give you an option. And if it isn't, it's like, then we, we, we just, you know, we're kind of in an impasse and I don't know, but it's, it's that whole process through that really, really makes the difference. Yeah. And I think all of this, I'm just aware of thinking about this and it's a challenging thing to help dealers, um, calculate but when you think about the the price of inflexibility means losing a customer and having to go replace them and i think we just need to get better at calculating what it cost us to lose a customer or what does it cost us to to gain a new customer and so i think the the the benefit associated with flexibility is such that we can save that customer and keep them on the books we can get past the headache and again we don't have to give away the farm to get there Oh, yeah. So, I mean, it's something they really consider when you talk about the cost. What is the cost of a repo? And what is the cost of getting a new customer? You add those two. Is this account worth giving up for? I mean, what do they say that it's how much was it like? I've heard numbers about what the actual cost to gaining a customer is. Oh, yeah. You mean, well, just what you spend in advertising alone, but that doesn't count your overhead. It's all of this stuff. And so, you know, if you can sit down and it's like it changes your perspective really, really fast. Right. It's like to do a repo, it's going to cost us X amount of dollars to have a tow truck and the thing and all the things. And then how much does it cost to replace that customer? It's like, is it worth the two thousand dollars? Right. or when we can get the two thousand dollars if we can be flexible with them and then we keep a customer we might gain new ones from referrals and we'll build our cash flow build our portfolio build our cash flow but yeah mostly we just want to save that customer because not only did we lose the account and the five hundred dollar payment as an example we had a customer go away unhappy and they're going to tell an unhappy story in our market. And so there's, there's a price of that too. So, so let's, let's save more customers. Yeah, absolutely. Hey everybody. Thanks so much for joining us today. It's White Hat Wednesday and we know again, you have a lot of places to choose to spend your time for spending some of your time with us today. We will be back on Friday. with the completion of the Jeff Owings conversation. I picked six questions. Thanks again, everybody, for joining. We hope that you have a wonderful day. We'll see you back here on Friday. Have a great day.
