On today’s show, we welcome back Your Car Guy Shawn Hays, co-founder of Sales Hustler and GM at CMA Colonial Chevrolet in Richmond, VA.
Jim Fitzpatrick: Hi everyone. Jim Fitzpatrick with CBT News. Thanks so much for joining us today. Today is a special show that we’ve got because we’re talking to Shawn Hays. I know that you know that name and this face that you’re looking at right now. He’s the co-founder of Sales Hustler, and now the new General Manager of CMA Colonial Chevrolet in Richmond, Virginia. So welcome into the show again, Shawn.
Shawn Hays: I love being on here with you.
Jim Fitzpatrick: So let me ask you, what’s it like being a GM?
Shawn Hays: Well, I would say, I’m four days in and I’ve solved all the world’s problems already, Jim. Okay? No, it’s great because what I’m doing right now is just assessing. I’m in the assessment stage, I’m learning. I’m learning the team here and how things were done previously. How things I would like to be done. If people are in the right roles, what their goals are. So I’m not too deep in it yet. I know there’s a lot of things I don’t know yet, but that was why I chose this company here, is because the GM that’s leaving, who’s going out, he’s retiring, and he’s here to be able to help me for this transition period.
Jim Fitzpatrick: Oh, that’s great.
Shawn Hays: That’s going to be so helpful.
Jim Fitzpatrick: That’s great. And you don’t often hear about that, somebody that’s retiring. I know that that company is notorious for holding on to their people. Right? Talk to us about that.
Shawn Hays: They really are. CMA, Liza, her father, Carter Myers, that’s why it’s called CMA, Carter Myers Automotive. Great, great company. I’ve had the opportunity to spend time with Carter, an amazing, brilliant guy. Fun. He’s 81 and you would not know it at all. And Liza, she is smart as a whip, but not only that, she sees the big picture, she understands that people run your dealership. People are the important cog and she really, really invests a lot of effort and money into her employees. And you know, it’s just an amazing company to work for. And you know, Jay, the outgoing GM, he’s been here 31 years. 31 years.
Jim Fitzpatrick: Wow.
Shawn Hays: You know, the knowledge that he’s going to be able to give me is just unmatched. And that’s why this opportunity was so great for me.
Jim Fitzpatrick: So now you’re in this position as general manager, which means you’ve got to hire managers, they’ve got to hire salespeople. I know you’ll probably be involved in all of that process because you come from that background, you know what you’re looking for. Let’s talk a little bit about that for a second.
Jim Fitzpatrick: And this was a question that I had asked you when you were online the other day in your podcast on Facebook. And that was, do you believe sales managers have to go through the showroom floor in order to become a sales manager? Or could it be that they come from another industry, whether it be a pharmaceuticals or a big box retailer or something else where they possess management experience and possess the management skills necessary to be effective with people and not have to sell cars?
Shawn Hays: Well, I might feel differently down the road on this, so this is only coming from my opinion right now, but I really believe that to come from another industry in here and understand what the day to day salesman with Fixed-Op, what your daily technician, your service advisor, what they go through. I think you really have to be in the business to understand it and be able to not only empathize but make sure that you put the processes in place to make them effective and great. All right? So, I don’t agree that somebody should come out of the industry without selling cars, spending time, being in a Fixed-Ops, spending time being in the service advisor role, something. They need to understand what it is to be on the grind every day in a dealership. Now, can a Fixed-Op person be a front of the house? Can it be a GM? Yes, I think that can happen. But to come from out of the industry and not understand at all any parts of a dealership, but just to understand how to be a manager, I wouldn’t hire that person.
Jim Fitzpatrick: And as it relates to salespeople in your environment at that store now, how many times would the sales team be in training? Is it something that you see weekly, biweekly, every day? And then the followup is who in the dealership trains the salespeople?
Shawn Hays: Well, we’re probably a little bit smaller dealership than what I came from before. You know, being with Dan Cummins who had 40 sales people. Here, we have nine.
Jim Fitzpatrick: Right.
Shawn Hays: Okay? So, I’m involved. Every day we meet at 9:00 when they get in here. About 8:45, 9:00, and then we train. And now, I’ve only been here four days, Jim, but I’ve been a part of it, the salesman, the desk managers have been a part of it. I think that’s the best way to do it, is to train every day, overcoming objections, understanding what questions are going to happen. Maybe it’s just a little bit of product training that day. Maybe it’s just understanding some different processes that you want to employ and put in place. But I believe that not just to come to work and sit at your desk. I believe we have to have that morning meeting and that training. I think that is really, really important to keep people sharp and to make sure that they’re growing as individuals and salespeople.
Jim Fitzpatrick: You know, we talk to a lot of salespeople here at CBT News, and one thing that comes up that kind of irks them is the fact that it’s 2019, the average price of a car is $37,000 although in many dealerships out there, a mini deal, if you will, pays a hundred bucks. I don’t know what it is at your store, but where are we going with that? You know, we’re trying to get good people into the industry, but then many deals are taken at invoice because of the dealer getting either the hold back or the dealer fee or the backend of the deal that oftentimes salespeople don’t get paid on, and then they’re given a hundred dollars to sell that car. And you know, it turns them off in a lot of cases, to say, “Wow, I just spent four hours with these people. I sold them a $40,000 vehicle, and I’m given a hundred bucks.” What’s your take on that, and what do you suggest?
Shawn Hays: Some dealerships have played around … I know a dealership I was at previously to going into management, they dabbled into having salary. You could take salary plus a little bit of minimized commission. Or you could take no salary whatsoever and it’s all commission. Okay?
Shawn Hays: So, to be totally frank with you, I come from the old school of just selling cars, the money will take care of itself. I get it/ We’re going to have to adapt a little bit because it is a “fastest to the bottom” industry right now. The competition is so high, so great. I mean, one market will have six Chevy dealership within an hour drive of each other. So it is a competitive market. We understand that. But how we do it here is we pay on how many units you sell.
Shawn Hays: Okay? So it’s a scalable model and it raises, obviously, and retroactive back to zero or to one, and it’s based on how many you move. All right? So, I think a lot of the dealerships are now going to go in the future to more of a volume-base. It’s really the only way. I mean, there’s no profit left in the cars that are online. We’re competing with so many dealers. Really, the only avenue of profit left is the trade or the financing aspect.
Jim Fitzpatrick: Right.
Shawn Hays: So really, the way we do it here is there’s a certain number to six, and then from six to nine, from nine to 13, from 13 to 18, 18 on up. And then we just keep scaling it up that way and then retroactive back to zero.
Jim Fitzpatrick: In terms of … And I asked you this question the other day, but I’d love for you to share your answer because I think it was a good one about Carvana. You know, I said 176,000 people went and purchased a used car from Carvana last year, and that number seems to be growing. What are some of the things that we can learn from a Carvana that’s out there? And why do you think 176,000 people went to Carvana or went to an app versus walking in to a dealership where somebody has invested a tremendous amount of money, not just in the showroom, but also in the service center to take good care of that customer? Are we threatened by a situation like that or do you think it’s a fluke, or what?
Shawn Hays: I think from the average consumer, they’re basically telling you right then that those 176,000 people just either don’t like the experience they’ve had in the past or don’t want to … They’ve heard about a bad experience that people had in the past. But a lot of time, it’s like chumming the water. All you have to do is have somebody say, “Oh, I hate buying a car.” And then somebody else says, “I hate buying a car too.” Even though they never bought a car before, you know?
Jim Fitzpatrick: That’s right.
Shawn Hays: So it’s just easy to gang up on the car salesman.
Jim Fitzpatrick: It is.
Shawn Hays: I do know this though, Jim, things have changed a lot in our industry even since ’07 when I got in the industry. I mean it isn’t that like what it used to be. I mean, for a consumer right now, it’s never been better to buy a car. You can find the lowest price by never leaving your couch, by putting an internet lead in and talking to four people, either electronically or by the phone. You can also find out what your trade is worth in two minutes, and you can even line up your own financing if you choose. So it’s really not tough anymore.
Shawn Hays: I’m not worried about Carvana. In fact, 176,000 people is not a lot when we sell 15 million cars. Right? It’s just a small little fraction of people. And those people, I don’t know if anybody could make them happy anyways. Right? And I don’t even know if they’re happy using Carvana either, because I know while I was selling cars, I used to have people use Carvana, send a car back, get another one, send it back because it had a smoke smell, get another one, return that one because it didn’t drive right. For a customer to buy a used car without sitting in it and driving it, I don’t think that will take shape. I could see it on a new car. I could see it. But a used car, don’t you have to understand it, see if it smells, see if it drives right, see if the tires-
Jim Fitzpatrick: Well, they’ll tell you that they have a very liberal return policy. So if you don’t like it for any reason, we’ll come with the flatbed, pick it up and take it back from you.
Shawn Hays: For seven days. You are correct. But most dealerships are getting that nowadays too. You know, we have a three-day return policy. So, I don’t know. I’m not really worried about it. And they’re not making a boatload of money either. So, they’re going to have to change something there to start being profitable as well.
Jim Fitzpatrick: Now that you’re in the GM hot seat, as they say, what’s going to be some of the big moves that you’ll be making? What are some of the big opportunities in the dealership? I know it’s only day four and it’s a very loaded question, but does anything jump out at you that says, I think I want to change this for the better?
Shawn Hays: Sure, absolutely. For sure. But before I do that, I’ve learned over the years to not be as … What do I want to say? Reactive as I used to be. I’m in assess mode right now, and I felt like the first 30 to 60 days, definitely the first 30 days, I’m going to come in here and get to know everybody and assess what’s wrong, if people are in the right position, if they’re not in the right position, who they are, what makes them tick, what’s important to them, what their values are, where they want to go in life, and then I can make the necessary changes.
Shawn Hays: And they’re not just reactive changes. They’re like, “Hey, these are thought-out changes that are going to make a difference in this company.” Right? We had a terrible month last month, all right? I wasn’t here but their last month … Now, this dealership used to sell 250 cars, and now last month, through multiple different reasons, we sold 74 now.
Jim Fitzpatrick: Ouch. Yeah.
Shawn Hays: Now, that is to my advantage because they probably wouldn’t have needed me if they were selling 250, right?
Jim Fitzpatrick: There you go.
Shawn Hays: So, it’s an opportunity. And I look at that, but I don’t … And I said this to my wife, “I didn’t jump in by just saying, ‘Oh, I’m going to take it. I’m excited for it.’ I respect the opportunity.” I respect it, but I know how much hard work it’s going to be, but I really believe I’m the right person for the job because when it comes down to it, it’s about processes. It’s about the people, right? And if you can nail the people and the processes, the rest will take care of itself.
Jim Fitzpatrick: well, Shawn Hays, co-founder of Sales Hustler and the new GM of CMA, Colonial Chevrolet in Richmond, Virginia. I want to wish you the best of luck. Congratulations to you. And love having you on the show. Want you to come back in a few weeks, see how things are going, if that’s okay. And keep doing what you’re doing, man. We love it.
Shawn Hays: I love it, Jim. Jim, every time I get on here, this is the … I love being on your show. I don’t know why. I just love it. I think you do a great job, man.
Jim Fitzpatrick: Well, you’re always welcome. You make us look good.
Shawn Hays: And one day, I’m going to come and join you in studio there.
Jim Fitzpatrick: All right, love it. That would be great.
Shawn Hays: All right, buddy.
Jim Fitzpatrick: That’d be great.
Shawn Hays: All right, man. God bless.
CBT Automotive Network, the number one most-watched network in retail automotive. This has been a JBF Business Media production.