People, People, People

I’m getting old I guess, when I typed that title I could hear Drago from the John Wayne movie McClintock. John Wayne says “Drago, drag out that hog leg and get me some attention!” As that scene continues a crowd of new settlers to the Mesa Verde gathers. McClintock (John Wayne) tells this crowd about the last group of settlers, all gone now, because the government has “given” them land to farm in the high desert, with fees of course. The bureaucrat in charge steps up and begins to point out that McClintock owns everything around them, all the supplies they have came from his businesses and generally makes being successful a bad thing and that McClintock is just looking down and holding back the poor people. Sounds familiar even today. That movie was made in 1962.

I bring that up because it is relevant to BHPH today. BHPH, or the Note Business, has been around for a long time. Used to be a dealer could buy cars for $300 to $900 and spend a little “making them right”, if they did anything besides clean them. The customer would bring something close to what the dealer had in the car as down payment and then make $35 weekly payments, in cash every week at the dealership. Everything was tracked on paper, very little paperwork was needed and the customers all lived around the dealership.

Our customers, very basically, have the same issues as always. They cannot pay cash for a car and a bank or other lending company will not do business with them. The customers need a vehicle for the freedom of going where they need and want to, when they want to. Bus and subway schedules are only in the major metro areas and are not the safest, most convenient way to get groceries. The majority of people do not have those services.

Many things have changed since those days but the business is, at its core, still the same. It is our people working with the customers to help solve the issues of car ownership.

When I started in the business, we had a DMS and a credit card processor. We could run a credit bureau on a TWIX. No internet or cell phones. We did lots of field calls, knocking on doors and rolling around in apartment and Walmart parking lots.

The people that taught me the business used a budgeting checklist and sat down to interview each customer, talk about their expenses and how the customer got into the situation that brought them to us. Once the underwriter had “approved” them, sales could finish the deal and send the customer off in their car. The collectors made Welcome Calls to these folks to review the account and start the relationship. All the customers came to the dealership to pay the weekly payments. With 2500 accounts at one operation, there was a huge amount of activity on Friday and Saturday. Everyone in the dealership had their favorite customers and customers came in to see their favorite employees. No GPS, no cell phones, no internet just relationships. Like today, we had bad customers, car problems and most of the issues we see today, with 75% of sales repeat and referral business.

So many things have changed since the 90’s. Websites, email, texting and social media. Add to that, consumer advocates and bureaucrats thinking they can protect the consumers from the evil profit making business people. Lawyers finding any way they can make more money by getting into court, setting a precedent (you’re not in court but still) which causes the “need” for a new document, disclosure, insurance coverage, a warning sign to put on the wall, and who could be contacted when.

COVID came along and really shook things up. So many of the things we would never consider before have become primary procedures. Sales are done via a website, CRM and BDC. In some cases, the vehicles are taken to the customer and someone from the company has a tablet so the customer can have all the documents disclosed and electronically sign everything in their living room. Many collectors working remotely which has grown into offshore collections. No more cash payments except via a kiosk or barcode at the drug store and most payments are electronic so customers can pay from anywhere, anytime, even automatic payments taken direct from the consumer’s bank account.

I had a conversation with someone discussing Artificial Intelligence and how collection calls can be made through an automated system utilizing AI and no people. “Sounds and responds just like a person” they said. I have spoken with some collectors in person and via social media that say, “we call after 14 days delinquent”. Everything before that is handled automatically through scheduled text messaging or emails. Today many cars are sold using 2 GPS units, one wired with a starter interrupt and the other wireless so when the customer googles how to disable the first GPS there is a backup to find the vehicle. Now the customers call us is what I hear from dealers using the interrupts. I have seen aggressive interrupt usage cost sales and erode the portfolio.

I am not against progress, so many of the things I listed are advanced and cool. I am merely saying that for decades BHPH has been about flexibility and the relationship, and we have all but removed the relationship aspect of it. I read about customers having no loyalty, duh…..they do not know you or your people. Salespeople aren’t selling or establishing repor, referrals are not requested or worked so there is no personal relationship to help repeat business, just order takers guiding folks to the website. Customers seem more hostile and harder to contact. Part of that is the bureaucrats and consumer advocates making consumers feel protected, lawyers giving the sense that money can be made if there are any slip ups, and the customers have no relationship with any of your people so no personal reason to be nice.

There is a trend away from relationships or repor, direct contact with customers. I know that life has gotten so much more complicated, and technology has taken over so much of the interaction. I feel sure people are still looking to be sold and interaction or relationships are important to many. I do talk with dealers that do almost no advertising because they have so much repeat business and a great reputation in their market. Obviously, the business works both ways so I suggest having both digital sales and relationship sales. Encourage interaction, have the salespeople call good paying customers on a regular schedule, have customer appreciation days, have drawings for prizes occasionally and make the winners be present to win. We had hot rod shows on the lot, Halloween costume contests for kids at the dealership and we did live remotes with food trucks on site. Big city stores have less success with this, unless they are in a specific neighborhood. Smaller market stores can really become known as friendly, and everyone can meet. It is still a people business.