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How ReconVelocity is Helping Dealer Groups Like Premier Automotive Get Through COVID-19

Troy Duhon From Premier Automotive & Hugh Hathcock

Transcript:

[Music] 00:10
you’re watching CVT news the coronavirus
00:14
coverage hi everyone Jim Fitzpatrick
00:18
with CBT news thanks so much for joining
00:20
me again as we continue our coverage of
00:22
coronavirus and the impact that it’s
00:25
having in retail automotive we’re joined
00:26
today by mr. Hugh Hefner is the
00:29
president and founder recon velocity and
00:31
along with him is dealer Troy Duhon
00:33
founder and owner premier automotive
00:35
thank you gentlemen for joining us on
00:37
the show today thank you sure so Troy
00:41
let me start with you talk to me a
00:43
little bit about your operation are the
00:45
stores open yeah most of the stores are
00:48
open from the front end but like states
00:50
of California there’s a little bit more
00:52
of a restriction but in New Orleans we
00:54
can actually operate front and back but
00:56
in Kansas Missouri it’s like
00:57
appointment-only state of California
01:00
some really strict requirements so the
01:02
service of parts is open but the front
01:04
end is really on an appointment-only
01:06
basis okay okay and and how how’s
01:09
business if you had a you know
01:11
interesting or April how off you think
01:13
it’ll be I think the industry can be off
01:16
at least 45%
01:18
I think it’s gonna be 40 to 45 percent
01:20
okay not feeling now on the used-car
01:23
side which is really interesting you
01:25
starting to see a lot more people sway
01:27
to use even the manufacturers are
01:30
telling they’re seeing almost three to
01:31
one used to new Wow three to one
01:34
okay and when do you think we’ll see
01:37
something coming back to any sign of any
01:40
sign of normalcy well let me share this
01:42
with you that’s like the perfect storm
01:44
interest rates as low as they’ve been in
01:46
50 years yeah
01:47
gas prices are as low as they’ve been in
01:49
30 years I paid a dollar 29 a gallon
01:52
smart and then the average age of a car
01:55
on the road is the oldest it’s been
01:57
since World War two the average car
01:59
narrow road is 12 years old Wow
02:01
so you got to realize those three things
02:03
are a recipe for a beautiful situation
02:05
yeah except the one thing you’re missing
02:07
your consumer confidence because they
02:09
don’t know what this new norm is going
02:12
to be and so until they feel normal
02:14
they don’t want to go into debt so
02:16
you’re gonna see an incredible uplift I
02:19
see it coming is a question is
02:21
and I think it’s gonna happen when
02:22
consumer confidence comes and and no
02:25
prediction on when you think that will
02:27
be there gonna be two months six months
02:28
I think the manufacturers about to
02:31
unleash the biggest and center program
02:33
the energy has ever seen in the end of
02:35
May mid-may yeah I think when that
02:37
happens the bargain shoppers gonna say
02:40
I’m not waiting because I getting 0% for
02:43
84 months and I’m getting a two thousand
02:45
dollar rebate right and there’s so much
02:47
liquidity in the industry that even
02:50
subprime consumers are getting approved
02:52
that’s right three months ago I couldn’t
02:54
get a loan but today I can’t the three
02:56
war I don’t have to put up with zero
02:58
down I got no payments for four months I
03:01
get a two thousand dollar rebate and I
03:03
paid zero percent for eighty four months
03:04
right that is what will motivate a lot
03:07
of people to not wait for that
03:08
confidence come back that’s right we
03:10
actually spoke to some consumers on CD T
03:12
news and they said the reason that they
03:14
purchased the car now was actually being
03:16
for – it was twofold it was to get a
03:18
great deal on a new vehicle because of
03:19
the incentives that are out there and to
03:21
also relieve themselves of the car
03:23
payment they currently have so they
03:25
traded the car they gave up a $650 a
03:27
month car note and and they have no
03:30
payments for the next six months picked
03:32
up a new car in the interim and they
03:34
seem to be happy with that yeah you’re
03:35
gonna see a lot of people refinance cuz
03:37
currently making my loans at ten percent
03:39
eight percent seven percent even if my
03:41
loans at five percent now I get 0%
03:43
that’s right that’s right
03:45
and do you have all of your employees
03:47
working or have you had to furlough
03:48
anybody well I’ve had you know I have
03:50
about 1,300 employees and so I’ve
03:53
probably laid off for a look about 300
03:55
now with the PPP I’m trying to bring
03:58
them all back yeah because I’ve been
03:59
advant all my stores have gotten their
04:01
monies and I’m trying to break everyone
04:03
back because you know what I’ve learned
04:04
in times like this at the end of the day
04:07
it’s your employees that make sure you
04:09
stick around that’s right you’ve got to
04:10
treat them right and I’m trying to get
04:12
them all back but a lot of moms you’re
04:13
getting paid good to stay home sure you
04:16
struggle with that balance because some
04:17
I’m getting paid $4,000 stay home I know
04:20
it’s crazy yeah absolutely it’s a tough
04:23
situation you want to bring them back
04:24
they’re like well maybe a boss I’m
04:26
making thirty seven hundred dollars to
04:28
stay home and I deal with this stuff
04:30
yeah that’s right that’s right and you
04:32
you’re you’re hoping that you know the
04:34
helping hand from the
04:35
we’ll get him through but in turn in you
04:37
know I turn it it all of a sudden
04:38
becomes the crutch that they want to
04:40
live on for a while that’s right yeah
04:42
not not a good situation the reason that
04:44
we wanted to bring talk to you today
04:45
Troy along with Hugh Hathcock he’s
04:47
obviously the founder of recon velocity
04:50
there’s a lot of companies out there
04:51
doing some some great things to support
04:54
their clients in automotive retail right
04:56
now Hugh half-cocked we’ve talked before
04:59
on our show about that he’s stepping up
05:01
to the to the plate on this and you know
05:05
with his incentives and his and his
05:08
recon velocity relief program talk to us
05:11
a little about the importance of a
05:13
program like that
05:14
for me remember this I’m from New
05:16
Orleans so I’ve been through Katrina so
05:18
I know what it means to have a vendor
05:21
who sticks with you through tough times
05:23
so I went through this 15 years ago when
05:26
I completely had every store I had going
05:28
to water what you is doing a recon
05:30
Velocity’s doing and I’m not comparing
05:32
him to other vendors but he’s done so
05:34
much more because majority of my vendors
05:36
are giving me half yeah where Hugh is
05:39
waving at all yeah see on top of that
05:42
he’s saying until you make it money you
05:45
don’t pay me now to me and I’ve been
05:47
knowing you for a long time because I
05:49
was one of his original elites you know
05:51
dealers for 25 years
05:52
sure Hugh has always done that because
05:54
for him relationships is as important if
05:57
not more important than anything else
05:59
right I agree Hugh talk to us a little
06:01
bit about your move in other than that
06:04
and just waiting all of the fees for all
06:05
of your services to your dealer clients
06:08
as well as any I think any new clients
06:09
that come aboard right during these
06:11
trying times we got great response from
06:14
the dealers we are doing it for existing
06:17
dealers and new dealers of course it was
06:21
designed mainly for our existing dealer
06:25
base there’s not a lot of dealers now
06:27
that are in the last egg will be into
06:30
the tough month that are looking at new
06:32
programs but we probably had you know a
06:35
little less than a hundred that have
06:36
moved over from some competing products
06:39
that were still charging them so we’ve
06:41
had a good mott still as far as growth
06:43
but
06:44
now we’re focused on this tech gear the
06:46
dealer try some dealers are letting
06:48
people go in the back and they are
06:51
short-staffed so are my performance my
06:53
trainers my sales people are focusing on
06:56
helping dealers get through that and
07:00
utilize the product in today’s
07:02
environment with a shortened staff maybe
07:05
add seven people ten people running the
07:08
product and now they’re down before
07:09
right we were doing things virtual WebEx
07:13
to make sure they’re utilizing it not
07:15
losing days you know frontline on this
07:19
we go ready sure sure
07:21
so for some of the dealers that are
07:22
watching us right now that are not as
07:24
for movies recon velocity as we are here
07:26
at the show tell us to kind of give us
07:28
the the four one one on it and and what
07:30
how it helps dealers well I mean all
07:33
dealers are have overlooked how
07:37
important it is from when they purchase
07:41
the car trade in the car to get it
07:43
retail ready I mean they don’t they they
07:46
have a lot of important things they have
07:48
to do so they they just don’t they
07:50
haven’t had the software or they haven’t
07:52
had the technology they haven’t had the
07:54
people they haven’t had the processes
07:55
and they haven’t put priority on this
07:58
very important part of their business so
08:00
they assume that they’re five to seven
08:03
days and recon time and in reality
08:07
they’re closer to 14 days double what
08:09
they think they are because there’s they
08:11
don’t have a real time Tool tracking
08:13
this right will have people
08:16
communicating and they don’t have you
08:18
know this process touches so many
08:21
different spots in the store from
08:23
mechanics detail BDC I mean you know
08:29
getting pictures done there’s so many
08:30
people that are part of this process and
08:32
they’re all doing this phone systems out
08:37
our twenty years old whether they’re
08:39
paper systems that could be other types
08:42
of software but the reality is we’re
08:46
trying to get dealers to be aware of how
08:48
important this is and that’s been the
08:50
problem in the recon space for twenty
08:53
years is you know it’s not fine
08:55
is you know imported to the dealer
08:58
selling cars the CRM as DMS so I can
09:03
make him see this as a as a priority
09:05
problem that will make him a lot of
09:07
money we believe very much in this
09:10
product as a company so they can tell
09:13
that when they talk to us we just got to
09:15
get in front of more dealers we’ve got
09:16
to use things like ze key to get in
09:18
front of users but we need yours like
09:20
trying to tell you you know when their
09:23
experience has been because you know
09:25
choice the unique dealer I mean out of
09:27
fifteen sixteen thousand dealers truly
09:30
was already owned a recon product when
09:33
we started our company nine months ago
09:36
yeah ninety percent of the dealers that
09:38
I call all aren’t doing anything but
09:40
they think they’re okay so I think way
09:43
more important for guys like Troy to say
09:45
hey you know here’s what I found with us
09:49
than it is me up here so I talked to us
09:54
a little bit about them are you know a
09:55
program prior to recon velocity and yeah
09:58
I was on differences on revenue BG on I
10:01
was on router recon I switched and
10:03
understand that time is money at the end
10:06
of the day when you think of what we
10:08
learned through online pricing of used
10:10
cars the minute that cars traded time
10:13
becomes money so you have to expedite
10:15
that time and create a process of
10:17
accountability yeah well your news car
10:19
Department and your service department
10:21
are working together that’s right at the
10:24
end of the day that you know they always
10:25
have a tendency to not get along
10:29
Moyer’s this ball I broke up enough
10:33
fights between the technicians and the
10:35
used-car people bottom line is this it’s
10:37
a reconditioning process that promotes
10:40
accountability reduces time and you also
10:43
got to understand there’s a new norm now
10:45
so every used car that we trade in not
10:49
only do I have to get it through the
10:50
process
10:50
I got a sake if I gotta clean it now
10:52
yeah I got to verify to the consumer
10:55
that this vehicle has been sanctified
10:57
yeah that it has a st. location process
11:00
so all that has its time is money and
11:03
the other thing that you didn’t mention
11:05
is his program on recon match
11:08
is amazing because no product has ever
11:11
taken a car that I bought at an auction
11:13
car that I trade a car I buy off the
11:16
street and then tell me based on my data
11:18
who is a predominated and they want that
11:22
car yeah now I could add the phenomenal
11:24
so now I got a chance to find a match to
11:27
a car before the car even gets on the
11:29
used-car lot that’s fine that is HUGE
11:31
yeah that really is big so now the
11:33
efficiencies involved in that which is
11:35
what everybody’s you know thinking right
11:37
now is how efficient can I run my
11:39
dealership not just in tough times like
11:41
this but also beyond these these
11:43
challenges but so with it with a sense
11:45
of efficiency built in there that you’re
11:47
getting the car ready and meanwhile you
11:49
have a home for it as soon as it hits a
11:50
lot its efficiency accountability and
11:53
additional new revenue yes before we
11:56
never had this revenue we didn’t go into
11:57
that database to find a customer for
12:00
that car right right wow that’s
12:02
fantastic and and all of this for free
12:04
during these times right now right so
12:06
that’s got a he’s being nice yeah yeah
12:09
that’s awesome tell me a little bit
12:11
about your your group how many
12:14
franchises do you have and in what
12:16
markets we’re in New Orleans we have
12:18
five stores in New Orleans Louisiana we
12:20
have five in Kansas City we have two in
12:22
Texas we have three in the San Diego LA
12:26
area and then we have five in the back
12:27
so it comes 20 stores yep
12:29
wow that’s fantastic and so what do you
12:33
think about expanding you know are there
12:36
are you looking around right now saying
12:38
hey if there’s if there’s some dealers
12:39
that want to sell out maybe it’s a
12:41
buyers market to expand your group oh
12:43
it’s it’s definitely a buyers market
12:44
there’s no doubt if there’s a lot of
12:46
people who have just said I’m done so
12:49
you got people with phones a ring and
12:51
brokers are calling but again there’s
12:53
there’s even uncertainty on what is the
12:55
new norm
12:56
how much arrive business is now gonna be
12:58
digital online retailing sure how much
13:01
how long is it going to take for that
13:03
curve to come back from consumer
13:05
confidence you know see so you got to be
13:08
able to judge that and know that we were
13:09
actually acquiring two stores and we
13:12
were in the process of buying before
13:14
this event happening we’re gonna follow
13:15
through with those but there’s gonna be
13:17
a new norm and I think until dealers
13:19
know what that new norm is and they like
13:21
it yeah you
13:22
it could be interesting to see how that
13:23
flows out sure talk a couple of other
13:26
things while I got you here talk to us a
13:27
little bit about your marketing do you
13:29
have are you running full marketing as
13:31
you were prior to this or what does that
13:33
look no we kind of shaved everything
13:35
down and really what we’re doing is a
13:37
lot of Facebook guys our own individual
13:40
sales people sure and we do a lot of
13:42
database marketing okay so so you’re
13:45
seeing more and more of we call it the
13:47
new era digital salesperson ok
13:50
salespeople create their own brand okay
13:52
when creating their own brand what
13:54
they’re doing is they create themselves
13:56
as a brand among a dealership or a
13:58
dealership group and then they begin to
14:00
market themselves through Instagram
14:01
Facebook so we’re training our guys to
14:03
do more of that it become a relational
14:05
selling component that’s that’s the
14:08
dealers for a long time we’re nervous in
14:10
doing that because they felt wait a
14:12
minute if this person jumped ship or
14:14
they you know go to another dealership
14:15
or they’re lured away or whatever do I
14:17
miss that do I miss that business do
14:19
maybe they take it with them when they
14:21
leave is that a concern of yours at all
14:23
no it’s not because if I treat the guy
14:26
right you’re not going nowhere and sort
14:28
of treating them right is to allow to
14:29
build a brand like that and and you want
14:31
to encourage them to build a brand
14:33
because remember relational selling is a
14:35
lot more profitable than price selling
14:37
right when someone comes in a
14:39
relationship versus someone who comes in
14:41
on a price that they saw no question
14:43
different transaction
14:44
that’s right referrals generally have
14:46
maybe a fifty to eighty percent increase
14:48
in profit margin if it’s a referral
14:50
rather than just somebody clicking on or
14:52
walk it in right that’s correct
14:54
yeah and happier to you know to leave
14:56
better reviews and what have you after
14:57
the sale as well and all referrals are
14:59
more loyal to that service department
15:01
that’s correct right so what do you
15:05
think some of the takeaways will be from
15:06
this what are some of the lessons
15:07
learned Troy from from this this this
15:11
situation when we find ourselves in
15:13
today I think you’re gonna see a lot
15:15
more dealers skim some of my guys have
15:19
told me boss
15:20
I’ve laid off people and I realized how
15:22
lazy they were like I know you’d really
15:25
kid me yet I realize how we didn’t do
15:28
the following that they’re going back to
15:30
school my guys are running my new sub
15:32
they’re going back to school right I
15:34
think you’re gonna also see a lot more
15:36
our digital online transactions you’re
15:39
gonna see a lot of what we would call
15:41
door-to-door transactions right from
15:44
your door to our door and vice versa
15:46
so whether that’s me pick up your car
15:48
for service or me bring you a trade or
15:50
me bring you a new car I think you’re
15:52
gonna see a lot of door to door
15:53
transactions yeah the OEMs have jumped
15:56
in in a big way with their marketing as
15:57
you know you can’t watch TV for any more
15:59
than 10 minutes and not see one of the
16:01
OEMs with their ads that that pitch just
16:03
that approach will you know click on and
16:05
we’ll deliver the car right to your
16:07
front door right from the privacy of
16:08
your living room that’s right that’s
16:10
right I think
16:10
carvanha kind of showed us in the auto
16:12
industry that that actually can be done
16:14
they’ve been doing it now for a few
16:16
years and dealers in some case might
16:18
have been late to that party but I think
16:20
they’re there they’re all in now I think
16:23
the other thing you can see too is a
16:24
change of the typical car salesman right
16:27
now I’m high as many they can get my
16:29
hands on and they’re all coming from the
16:31
hospitality industry what are the
16:33
restaurants gonna do what is the new
16:34
norm yeah I go out to eat all the time
16:36
now or do I cook at home
16:37
that’s right know something that me and
16:39
my family did we haven’t done in years
16:40
at all six of us cooked and ate together
16:45
at home you know and and something I
16:47
mean I’m like wow this is how it used to
16:49
be in the 60s you know and and what’s
16:51
funny is my nine-year-old daughter loved
16:54
it she knows this is fun daddy
16:55
you know so you got a wonder what is
16:57
that effect on a hospitality industry so
16:59
we’ve been hiring a lot of waiters yeah
17:01
waitresses to sell cars
17:03
and it’s really fun that’s great that’s
17:05
that’s a that’s a win-win-win isn’t it
17:07
you you’ve been around the auto industry
17:09
for 30 plus years and had phenomenal
17:10
brands that you built elite obviously is
17:13
one of them and and now you’ve got recon
17:16
velocity talk to us from a vendor
17:17
standpoint what what you know is learned
17:20
from these times and and what the future
17:22
looks like for recon velocity I I agree
17:27
that there’ll be more door-to-door more
17:30
digital retailing but I don’t think it
17:33
will be to the degree if this thing
17:37
clears out like we think it’s going to
17:39
stuff gets back to normal for the next
17:41
three to six months I don’t see dealers
17:45
core way of selling cars really changing
17:48
that much
17:49
in six months if we get a relapse for
17:52
this yes but I I really think that you
17:56
know I’m gonna focus on being the best
17:58
recon tool doing the things I do best to
18:01
help dealers make their people better to
18:03
train this better but communicate better
18:06
I’m looking at some ideas of you know
18:09
being able to communicate to the
18:12
consumer some of the things that are
18:14
happening in recon not just selling the
18:16
car fruit week on mats but maybe you
18:18
know putting some things in there like
18:20
what we’re doing to the car in recon you
18:23
know communicating other things that are
18:26
pertinent to the sale in to the dealer
18:30
and to the consumer right but yeah right
18:33
now we’re just trying to 100% take care
18:36
dealers focus are all our people’s
18:38
resources on helping the dealer get
18:40
through this and it’s really you know
18:43
there’s a lot of downtime so all my
18:45
people are training they’re trying to
18:46
get the dealer better on what they’re
18:48
doing with us and that’s all we’re
18:51
focusing on we’re not really focusing on
18:52
calling dealers and trying to sell them
18:54
something now because that’s not what
18:57
they want to hear we need to get them
18:58
better the dealers we got we’re trying
19:00
to communicate better train their people
19:02
better this is the best time to do that
19:04
sure you know without a doubt gentlemen
19:07
I want to thank you so much for joining
19:09
us on today’s show Hugh Hefner of recon
19:12
velocity and Troy Duhon who’s founder
19:14
and owner premier automotive I want to
19:16
thank you both very much for joining us
19:18
on the show it’s it’s been very
19:20
enlightening and we’d love to have you
19:21
back to do a follow-up to see how things
19:23
are going as we navigate through this
19:25
thank you Jim enjoyed it thank you
19:27
appreciate it thanks so much
19:29
you’re watching CBT news the coronavirus
19:32
coverage
19:35
this has been a jbf business media
19:38
production

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