Breaking Down Service By The Boxes: A Marine's Methodology

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What separates thriving heavy equipment dealerships from struggling ones? The answer might surprise you. It's not their sales volume or brand lineup—it's how they manage their service departments.

Marine Corps veteran John Dowling transformed an agricultural dealership from $40 million to $139 million in less than five years by focusing on what most dealership owners overlook: the profitability of the service department. In this eye-opening conversation, John reveals how his "Service by the Boxes" methodology breaks down complex service operations into 10 accountable steps that eliminate bottlenecks and dramatically improve efficiency.

The numbers tell a compelling story. A single technician generates approximately $260,000 in gross profit annually—equivalent to millions in equipment sales. Yet service departments remain misunderstood and mismanaged by owners who see them as cost centers rather than profit engines. John and host Ron Slee explore why service departments must transition from reactive to proactive management, why guaranteed pricing beats estimates, and how simply committing to close work orders the same day can transform cash flow.

Perhaps most revealing is what customers truly value. At a recent industry survey, when equipment managers were asked what factors most influenced their dealership choices, price received zero votes. What mattered most? Service capability—having technicians available when equipment breaks down. As product differentiation between equipment brands diminishes, service excellence becomes the true competitive advantage.

Whether you're running a dealership, managing a service department, or working as a technician, this conversation offers practical wisdom to transform your approach. Try implementing just one principle from John's book "Service by the Boxes," and he guarantees you'll see returns that dwarf your $20 investment—or he'll buy the book back himself.

Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.

We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.

Episode Transcript

Speaker 1 (00:00):
Aloha and welcome to another Candid Conversation.
We're joined today with areally interesting young man by
the name of John Dolan.
Of course, everybody's a youngman.
To me now, john is a Marine.
I say is a Marine because oncea Marine, always a Marine.
Hoorah, yeah, and I'm not goingto go any further than that.

(00:20):
John, why don't you introduceyourself to my audience and tell
us who you are, what you are,what you do yourself to the my
audience?
And and tell us who you are,what you are, what you do, all
the rest of that stuff, andwe'll just start our
conversation.

Speaker 2 (00:30):
Yeah, yeah, I guess what you, you, you, you talked
about the Marine Corps.
I remember I think I was injunior high and, um, I was
watching cartoons and they had aMarine Corps commercial.
Come on, and you know, if, if,if and if, if you, if you're old
, if I was going to say old, butyou know, be kind, be kind, be
kind.
But they used to have an off,an off, an officer in his dress,

(00:52):
blue, uh, uniform and he hadhis sword, he'd bring it up and
he said the marines, the few,the few, the proud, the marines.
And I remember running into thekitchen and, um, and telling,
like I know what I'm going to do, I'm going to join the Marine
Corps.
And so that was like seventhgrade, I think it was.
And so, yeah, so two weeksafter high school, graduated

(01:12):
high school, two weeks later Iwas in San Diego, mcrd going
through Marine Corps boot camp.
I was a heavy equipmentmechanic in the Marine Corps and
so after I got out of theMarine Corps, I was sitting
around the house for a week ortwo and I was like I got to get
a job.
So I just start telling how oldI am, and so I want to say
thank you for calling me a youngman, because I'll be 50 this

(01:35):
year.

Speaker 1 (01:36):
Oh, I'm almost 80, young man Almost 80, yes, so.

Speaker 2 (01:39):
I'll take young man every day of the week.
But to show you how old I amnot as old as some I've got the
big yellow book, you know it hadall the phone numbers in it and
I just started flipping down tolike construction equipment
dealerships and just callingpeople on the phone and said,
hey, I'm a mechanic and I need ajob and so I went to work for

(02:04):
Rush Equipment Centers.
It was a John Deere industrialJohn Deere dealership in Houston
, Texas.
They've got they were acquiredby Doggett Machinery.

Speaker 1 (02:14):
The John Deere site was yes.

Speaker 2 (02:17):
Correct Yep, yep and so yeah.
So I worked for them for aboutthree years or so and then
promoted up to be a fieldmechanic and then did that for
another couple of years withthem and then left them and went
to work for the Case dealership.
Ironically, the Case dealershipAlso in.
Texas, also in Texas and Houston.

(02:39):
So Doggett owned the Casedealership and so I worked for
the John Deere dealership andthe Case dealership that Doggett
has owned, both of them atseparate times and which is kind
of ironic, but anyway.
So I went to work for them formaybe a year or so as the, as a

(02:59):
field mechanic, and then gotpromoted to service manager,
then branch manager.
Then I took a role with cni um.
I was a manager, field serviceoperations on the case side
covered texas and oklahoma, andum then left there um and went
to work for chris whackman.
He had just recently acquiredwashington county tractor and um

(03:24):
he like hey, I can continue tobuy locations, but if I don't
make any money, like what's thepurpose in that?
And so he realizes his partsand service business just like
every other ag dealership youknow, very sales focused.
And so he's like I needsomebody that knows ag or not ag
, but I need somebody that knowsparts and service.
And so employees that used towork for me were currently

(03:48):
working for him and then theterritory manager for New
Holland, because they were NewHolland dealer.
Him and I were good friends andit was ironically they all told
Chris like well, john lives inBrenham and if you can get a
hold of John Dowling, like he'syour guy.
And so over several months, um,I was doing very well at CNH
and at one point Chris is like,just come work for me and let's

(04:11):
just take, take, take, take overthe world.
You know the track, the track,the tractor world.
And I was like, well, why not,let's do it.
And so turned down a two paygrade promotion with CNH to go
work for Chris and had great,great success.
I mean, um, we are, uh, I thinkour initial revenue when I
started was like 40 million.

(04:31):
In less than five years we grewit to 139 million Um, so almost
200% growth.
Um had over 200% uh uh growthand service about 140% I think.
In parts revenue doubled inlocations, employees, everything
, and so had a great time there.

(04:52):
And I think it was about yearfive.
I had a conversation with Chrisand told him I was ready to move
up, wanted to do somethingdifferent, and he was like, well
, the only place you can move upis my job and I'm not leaving.
And he was like, well, the onlyplace you can move up is my job
and I'm not leaving.
I was like, well, I guess it'stime for me to move on, and I
like a challenge.
And so I stayed on for one moreyear and left there.

(05:17):
Different things happened.
That was during COVID, and so,anyways, found myself without a
job and didn't know what else todo.
And so I'd started writing abook about a year or so before
and I was like, well, I don'thave anything else to do.
So I went out to my pull houseevery day and wrote for eight
hours and then, after I did that, my wife says John, you need to

(05:39):
go get a job.
And I was like I do have one,I'm writing a, writing a book,
you know.
But she didn't, she didn't, shedidn't go for that.
She wanted me to get out of thehouse.
And so, uh, long story short, uh, went to work for jay lucas,
who owns jordan sitterassociates.
Um, I think that's how you andI got connected, um, through jay
.
And uh, yeah, you know, jsa'sbeen recruiting in the heavy

(06:01):
equipment industry for man,probably about 40 years now and
so went to work for him asdirector of dealer accounts
management and then left inJanuary and I've gone full time
in consulting and training and Ido speaking engagements and
stuff.
So and then oh, by the way, Ialso Kevin Landers Landers,

(06:25):
which I think you had a, he wason as a guest a while back ago
Uh, him and I just, uh,co-founded a software
development company called by bythe boxes.
So if you've ever read my book,service by the boxes break
service down into 10 basic steps.
And so this, this um by theboxes, is the work order
tracking app and basically justtracks every step and stage of

(06:49):
the work order process, givesyou a nice visual dashboard and
instantly you can look at thedashboard and find out where's
my bottleneck, like whereexactly in the service process
is, is, is everything gettinggetting hung up at.
And so, if you've read my book,service by the boxes, it's a
methodology, it's a philosophyof accountability let's break

(07:13):
down the complex to simple andit's undergirded with
accountability.
And what I mean by that is likethere's one required task to
move a service work order fromone step to the other.
There's one identifying thingthat you have to do.
And once we identify that,that's how we broke down the
different boxes.
But then we assign that task toone person and one person has

(07:36):
to be responsible.
Like everybody says, ifeverybody's responsible for it.
Nobody's responsible for it.
So you hold one personresponsible for it.
So you, you hold one personresponsible for it.
And so when you utilize the,the work order tracking app, it
undergirds that.
So when you have a bottleneck,you know the exact employee,
that I, that I, that I need togo and have a conversation with

(07:59):
um which.
So, like I said, ron, I startedout as a technician and I
remember consultants would comein and the executives would come
down and they'd always tell howbad service was doing and every
time they would stop all theproduction in the service shop,
bring all the mechanics to thefront of the service shop and

(08:20):
tell everybody to work harderand work faster and to work more
efficient.
But what I've discovered it'susually not the technician,
sometimes it is, but usuallyit's a poor billing process.
It's a poor process fromopening the work order to
getting the estimate approved,ordering the parts.
It's all those in-between steps, or boxes, like I like to call,

(08:43):
that really adds time to it.
And for a prime example youknow average.
You know an average dealership.
It takes them 14 days to 30days to close a work order.
So much now that CAT isdictating that, that that their,
their dealerships, close theirwork orders between seven and 12

(09:04):
days because it's such an issue, but that has nothing to do
with the technician.
You know the technician can getthe job completed in a couple
of days, but if it takes anothertwo weeks or a month to close
the work order, you know.
So, anyways, I can digress.

Speaker 1 (09:20):
Let's take that one and let's take the growth you
had with the ag dealer from $40million up to $130 or whatever.
Why do you think that waspossible?

Speaker 2 (09:32):
So I think, two things I would say.
One part of it is an internallabor rate deflates your numbers
, deflates morale, deflateseverything.
But with that, one of thesuccesses I had to drive
efficiency is we.

(09:53):
So maybe it's three-pronged.
One of them is you need a flatrate every internal job, because
a lot of times, if you have aninternal flat or service labor
rate or not, everybody says, oh,it's an internal job.
Because a lot of times, if youhave an internal flat or service
labor rate or not, everybodysays, oh, it's an internal job.
We'll just take our time.
Those jobs should be flat rated.
And so, believe it or not, whenyou give an employee, a

(10:16):
technician or whatever, you givethem an objective, you give
them a goal.
They want to reach it.
And so we increased ourefficiency.
One way was saying hey,technician, you've got X amount
of time to get this loaderinstalled, the radio installed,
and so they had a clearobjective.
And so instead of taking two orthree days to get a loader and
a radio and washed it, it tookone day.

(10:38):
Because they know this is a oneday job, Like we're going to
hold you accountable for that.
Streamlining our processes, youknow.
So the service by the boxes.
That's the process that Ideveloped while, while while I
was there at at WashingtonCounty Tractor and I rolled that
out.
So we did training, ad trainingevery month, parts and service

(10:59):
manager training to re, re, re,ingrain.
I guess you could say, likethis stuff that we're working on
day in and day out.
Human people are very forgetful, so you got to constantly
remind them on that and so.
But with the training that weknew exactly what it was, and so
I had a work order.
Uh, I caught it, a work ordertimeline audit, I think it's

(11:21):
what it's called, basically theapp by the's app.
I had that in an Excelspreadsheet and I could go into
the business system and I wouldpull different dates within the
business system, put it in thisExcel spreadsheet and it could
tell me how long did it take meto open up a work order, how
long did it take me to assign itto a technician, how long did

(11:42):
it take me to get a partsestimate?
How long did it take me to getapproval from, how long did it
take me to order parts?
And so then, when I'm seeing mybottlenecks, instead of going
to the technicians and saying,hey, work faster, work harder.
If it takes me two days to geta parts estimate, well then I
need to work with that backparts guy and it's like why is

(12:02):
it taking me two days to get aparts estimate?
I want it in 24 hours and so,cutting all those little things
out, we increase the efficiency.

Speaker 1 (12:14):
So stop there for a second and go back to your
marine days.
How did those work orders work?

Speaker 2 (12:25):
So, yeah, so we would .
I was at a component rebuildshop, so I was at GSM company at
Camp Pendleton in SouthernCalifornia, and so what we would
get is we'd get a unit, wouldbring it in and would have to
tear it apart, diagnose it, andif we were less than 65% of
total value, then we hadapproval to go, go go ahead and

(12:48):
do it and um, but one of thebenefits we had there is is um,
we, we, we'd have an NCO, soyou're, you're, you're, you're
what we call a non, a non, a nonrate.
So if you ever see a Marinedoesn't have a blood stripe like
the red stripe down their dressblues, they're called a
non-rate um, and that's a reallygreat story.

(13:08):
But probably don't have time toget into it.
But those, the non-nc or thencos, would kind of manage you
know, four or five guys at onetime and really help them.
You know, because you got kidslike myself.
I was right out of right out ofhigh school, had what?
Three months of training and itwas really more a theory of
operation.
And then I get dropped in aunit and like hey, here's a, an,

(13:29):
l, an, l, an, l, an lvs,transmission or transfer case,
to rebuild um, and so that'sthat's how that that would work.
You would be assigned it, butyou'd have like a mentor there
to really help you so let me.

Speaker 1 (13:42):
Let me explore that one.
Basically, what I think youwere saying is you had an NCO
and you had four directtechnicians reporting to them.
Correct, Basically, a densityof supervision of one to four
was because most of the guys inthe rebuild shop were rookies,
like yourself.
If I transfer that around alittle bit and do repair and

(14:05):
maintenance not maintenance butrepairs does that density change
?
Say that To technicians.

Speaker 2 (14:13):
Are you talking about , like, getting in the civilian
shop or, oh, any shop?

Speaker 1 (14:19):
Like, if I'm going to repair a washing machine, a
lawnmower, and in the Marines inthe military, for the most part
you've got standard time, soit's a very different gig.
In the dealership nobody'sgiven them any guidance, either
from the OEM or from anybody,and I attribute that to the fact

(14:43):
that the OEM doesn't make anymoney on labor.
They make money on parts andmachines.
So they only pay a third ofparts and machines.
Yeah, Dialogues after warranty,but that's to minimize costs,
not to get revenue.
Yeah, I think one of thebiggest problems we have in the
you know, service by the boxesor any application of labor is
direct floor supervision iscritical from my point of view.

Speaker 2 (15:05):
Yeah, I think that goes right back to you know flat
rating, like like your internalrepairs, and have and having
that supervision of telling thattechnician, this is a, this is
a five hour job.
And because the technician maythink it's a 10 hour job, well,
if they think it's a 10 hour job, they're going to mentally
prepare for to take 10 hours todo it.

(15:25):
But when you have thatsupervision of saying no, this
is a four-hour job, and thenthey go, well, I have no idea
how the heck I'm going to getthis done in four hours.
Then that shop foreman or thatlead mechanic can work with that
newer technician to reach itLike this is how you get there,
this is how you can do the jobin four hours.

(15:46):
Um, this couples with this man.
This is like a a rabbit hole wecould go down.
But part of the problem we havewith technician recruitment and
also retention is I've learnedthat shop foremans and service
managers they don't want to dothat work.

(16:06):
They don't want to coach andtrain the technician.
They want to hire a technicianwho maybe was in the military,
maybe has gone to a tech school,and treat him like a 20-year
veteran and if they have to givehim any assistance at all're
like oh, he doesn't knowanything.
These, these guys in techschools, they don't teach them

(16:28):
anything and that's that's.
I think it goes.
Going back to what we're sayingabout supervision is we've got
to train and grow technicians,but this hasn't changed.
There's no difference in 20, 30years ago.
I had a conversation the otherday and I talked to the shop
foreman and I was like well,when you started out, how old
were you?

(16:48):
Oh, 20.
I said did you know anything?
No, I didn't know anything.
I screwed everything up.
I was like okay, what's thedifference with the, with the
new generation?

Speaker 1 (16:58):
Okay, so stay there for a second, because that's
true.
No, we're, we're, I call it.
We're hiring tools in a toolbox.
That's the people.
And if the skills that arerequired for that tool are not
sufficient from the actual guythat is there, I'm just going to
replace them rather than trainthem.

(17:19):
When I started, we had theCaterpillar dealer in Quebec.
We had three apprenticeprograms going a year and they
went for 18 months.
So there was no plan.
Yeah, we had a 40-foot trailerthat was a school that we would
hook behind a low bed and takeit off to the customer site, to

(17:40):
store sites and just do mobiletraining.
Yeah, and we spent a lot ofmoney on training.
Mm-hmm.
And one graduation party, oneof the guys got drunk and drove
himself into a phone pole andkilled himself, and that was the
end of those graduation partieswhich took a lot of the
emphasis away from training, andthey ultimately stopped.
And then every single aspect.

(18:04):
And I'm anal, I, I love servicedepartments.
I love saying to the salesdepartment or the rental
department I don't have time foryou because my shop's full with
customer work and I'm not goingto take somebody off a retail
job because you want adiscounted price.
I can't go find somebody elseyeah.

(18:27):
And they finally said well, howdo I get into your shop?
I said pay the same price as mycustomers which they did, and
I'll take care of you all daylong, and that was the end of
the argument.
So now, it's first come, firstserve first in, first out, all
very simple stuff.
But then and I'm talking about100 years ago, this is 1970.

(18:48):
I put an order parts orderingstation on the floor so they
didn't have to walk to thewarehouse because we had a big
damn shop.
It was like a youth gate with20 bays on both sides.
So the guy would be walking forabout 15 minutes to get there.
And I remember Monday morningafter a football game or
Thursday morning after a hockeygame.

(19:08):
At night I'm up in Canada, yougo to the back counter of the
parts department.
There's a lineup and they'reall hanging around talking about
the sports or whatever the hellit was, until they got their
turn and it never.
My little pea brain says why doI have two people doing
something that one person can doby himself?
So we put in these orderstations Again, this is 1970, a

(19:32):
phone.
We had four of them and we haddirect pick up the phone and it
rang in the parts department tothree women that sets on.
Yeah, and in those days we hadan npr, an numerical parts
record, microfiche, right.
So the guys would go in, they'dpull out the fish, they put it
in.
They'd either write it down orgo right from the fish, pick up

(19:53):
the phone and call in.
That was it.
Then back to their bay, and themost walking they'd have to do
is you could see it, you know,maybe it was 20 feet and the
part was delivered to them.
Now the parts department's upset.
They don't want to deliver it,come and pick it up.
Well, wait a second.
So now we look at the partsdepartment and dealers don't do

(20:14):
this when I'm finished thislittle diatribe.
So we used to say, okay, who'sthe highest priority order in a
parts business?
And everybody said, oh, the guythat walks in.
I said that's not true.
Well, who is it?
It's a field service technician.
Oh, so what do we do?

(20:36):
We take order by order by ordertwo items, three items, six
items, one item, whatever thehell it is.
I say, well, wait a second,we're going to give it to
somebody in the warehouse withsix orders at a time.
Well, how the hell are yougoing to do that.
I'm going to use a dolly.
I'm going to put tote boxes onthe dolly, one for each order.
Oh, polly, one for each order.

(20:56):
Oh, so if it's an order for atransfer to the branch, when am
I going to pick that part?
Well, it's not going to be whenthe order comes in off the
computer.
It's going to be a couple hoursbefore my shipping leaves.
So started to get.
What I was trying to do is getpeople to think about what the
damn thing is that they're doingand they don't.
So I'm famous for going up to aguy at the counter, picking up
the phone and putting thathandset by their ear and say

(21:19):
what's that noise?
Yeah, it's the dial tone.
And they don't normally hearthe dial tone because every time
they're on the phone they'reanswering a phone.
I want them to call out too.
Oh, my God, what are you doingto me?
So that, going from 40 to 80,somebody lost business, yeah,
and that somebody that lostbusiness had taken the business

(21:40):
away from you because you didn'tdo the business the way the
customer needed and wanted youto.
Mm-hmm.
And I submit to you today, john,that's even more critical and
more prominent.
Yeah, because over the last 40years we've had the number of
dealers in the marketplace isdown by half twice.
Yeah, canada had 10 catapultedwhen I started.

(22:04):
Now there's two.
Is it because the others arebad?
No, is it.
What's it causing it?
It's too damn expensive now.

Speaker 2 (22:16):
Make any sense to you .
Yeah, yeah, labor is expensive,parts are expensive, every it
takes a lot of cash.
You got to manage.
I think you've got to manageyour business better.
I mean, back in the day youcould sell a couple units and
you made plenty of money andlabor was cheap, parts were
cheap.
You know?
Um, I mean, I think when Istarted, I think our labor rate

(22:37):
was like 55 an hour.
You know now it's like 255 anhour.
So, but it is ironic, I'm gladyou brought that up.
I was working with the dealerthe other day and they had an
issue that the wrong part camein and so parts and service was
fighting each other and the CEOwas all aggravated, like why are

(22:58):
you even bringing this thing tomy attention?
And so as I dug down, I toldhim I figured out the problem.
The problem is you have aservice technician telling the
parts guy they're both lookingat a part screen, like you said,
two people doing one person'sjob.
And he pointed at the rod rod,he thought it was the gland.
The wrong part came in and nowwe don't know who to blame, we

(23:20):
don't know where, where is thefault at.
And then I told him I said in1998, I was looking up my own
parts like the.
Your technicians in 2025 canlook up their own damn parts.
And now you're being moreefficient because you're paying
one employee to do one job andif the part comes in wrong or we

(23:41):
don't have all the parts, who'sat fault?
The technician?
If the technician, if it's onthe technician's list, you know,
and it didn't show up, well,then it's on the parts fault.
And I tell people I'm nottrying to find somebody to blame
, I'm not like trying to pointthe finger.
I want to know what part of thesystem isn't working.
If, if the failure is in theparts department, then I tell

(24:03):
them you pay it.
You pay freight overnight, getthe part in.
If the technician forgot toorder the part because it wasn't
on on his or her parts list,service pays freight overnight.
There's, we don't have to thinkabout it.
There's no discussion.
There's no like mental capacitybeing wasted on 200.

Speaker 1 (24:20):
Everybody knows what the process is, so let's, let's
stop there for a second, becausenowhere in this discussion and,
I'll bet you, nowhere at thatdealership was somebody
expediting the part so they gotthe right part there tomorrow.
Yeah.
So my gig is any part you wantto order, every part that is

(24:43):
received from a customer ormechanic.
You want to get that processedtoday before you go home?
Yeah, but any part you're shortI want you to find today before
you go home and call a customerand tell them where it's
available.
Yep, and we'll get in a plane.
We'll go visit a thousanddealers.

Speaker 2 (25:02):
I bet you we don't find three that do that yeah,
yeah, and kind of what's been akind of getting back to by the
boxes, and one reason that we wewere able to grow service by
200 is because we were able tofind our bottlenecks.
And so if, if we can keep thattechnician and that piece of

(25:25):
equipment in the same bay aslong as possible, you're more
efficient instead of movingthings in and out, in and out,
in and out, in and out.
That's just time you can't bill.
And so one part of it oftracking it's stages, but I call
them boxes, so tracking one box.
So one box is parts to beordered and we should be
tracking.
How long does it take to orderparts, especially for the

(25:48):
service department?
And so I tell everybody youorder service parts the same day
, same day, every day.
You don't wait for a stockorder, you don't.
And so what comes to find outor what I've discovered a lot of
dealerships the parts manageris getting his butt chewed out
about freight, and so instead ofselling the freight to the
customer and quoting that upfront, he says well, we're going

(26:11):
to put everything on a stockorder and get free freight.
Ok, great, great initiative todo something.
But what happens now?
We're ordering parts once aweek, and now you have those
$250 an hour techniciansstanding around there twiddling
their thumbs because we wantedto save $1,500 on freight.
And so that's a part of thesoftware that's good that you

(26:33):
can say here's my bottleneck.
That's a part of the softwarethat's good that you can say
here's my bottleneck.
Why does it take us five daysto order parts if the approval
was already done?
And just by doing that will cutoff five days from your billing
cycle, which increasesprofitability, technician
efficiency, billing efficiency,cash flow All of that can be

(26:55):
laser pointed down on.
How long does it take you toclose a work order?

Speaker 1 (26:59):
So I'm in Finning and I'm running the parts business
and it's 1978.
And we have a meeting interview.
I was from Quebec so theyweren't happy to see me, and we
went through all kinds of manystories.
But the thing I said to the 53guys is you don't go home until
you've found every part thateverybody's ordered today.
Yeah, and I sent 53 cots, oneto each parts manager in each

(27:23):
store.
That's funny.
And one of the guys actuallycalled me up and he said what's
this for?
I said you haven't figured itout yet, have you?
And I didn't answer thequestion.
He called me back the next dayand he said I got it.
I got it, but if you change thedynamic, I don't care how much
the freight costs, I don't careof any of that crap.

(27:46):
What does the customer wantfrom me?
He needs a part.
He wants the part.
It's my duty to get it to him,and as fast as I bloody well can
.
He's got a down machine.
He needs a technician.
I repair the machine as fast asI bloody well can to get it.
So I don't care who pays forwhat.
We'll figure that outafterwards.
If you're a surgeon in ahospital, I don't think anybody

(28:08):
cares if you use an extra pintof blood.
Yeah.
Get the guy healthy.

Speaker 2 (28:14):
Yeah, if you got a job shut down, it's losing you
$10,000 a day.

Speaker 1 (28:23):
Do you really care about a $500 freight bill?
Well, so then then you yeah,the interesting thing about that
the owner operator, hismachine's down, he doesn't have
any money.
A quarry, the loader's down,he's got 20 trucks backed up.
Yeah, you know, we're notlooking at the job properly.
So now, when you're inconsulting or with the book

(28:44):
service by the boxes, you'relooking at a solution to the
problem.
I'm, I'm from a different school.
I'm going to bring them aprocess.
Yeah, I'm going to change.
They're not going to use theirprocess anymore.
I'm not going to bring them aprocess.
I'm going to change.
They're not going to use theirprocess anymore.
I'm not going to adapt theirprocess.
We're just going to and findout where the bottleneck is.
I tell them where thebottlenecks are allowed.
And if you go beyond thebottleneck, guess what?

(29:05):
We're going to visit.
And there's a consequence to badbehavior.
I'm not a hard ass.
I don't fire.
I've never fired anybody in mylife.
They've always been smartenough to realize that they
don't.
They're not doing the job.
Yeah, these people, john, andsay wouldn't it be nice if you
could be successful somewhere,because it ain't happening here?

(29:26):
That's pretty good, I like that.
But so every, and I agree witha hundred percent with what
you're you're talking about.
It's helping people get better,because nobody has helped the
service department, themanagement and the service
department.
They're not business people,they're technicians.
And how often do you find thebest salesman makes the best

(29:48):
sales manager?
Very, very, very very rare and,similarly, the best technician
ain't necessarily going to bethe best manager no, no.
So this is this is aninteresting gig, isn't it?

Speaker 2 (30:03):
Yeah it, I think it.
But it goes back to most ownersdon't understand the service
department Not at all, I agree,and they are fearful, and I mean
fearful of the unknown.
They would rather lose moneyand not get involved and not dig

(30:23):
into it and just turn a blindeye and they focus on trying to
sell more equipment.
But it makes no sense at all tocontinue to sell more equipment
because it makes the servicedepartment issue even worse.
Like loading up more pressureor more weight on something
that's already broken.
You're just going to crush itand then you have this high

(30:43):
turnover on the service managerrole.
Because he can't do it, hecan't keep up with everything,
he doesn't know what he's doing,nobody knows what's going on.
And I've talked to so manydealers.
They're like you know what?
Owning a dealership would begreat if we didn't have to deal
with the service department likethat.
Everything is great except forthat one aspect, and I'm like
that's your money maker, that'sthe fun part, that's, that's

(31:06):
that's where you really earn theyour, your customers, loyalty
and trust is right there andthey're willing.
They're willing to pay anythingfor it.
Um, I was.
I spoke at the oh, what was it?
The association of equipmentmanager professionals or
something like that.
Yep and so, uh, and then one ofthe main break breakout

(31:29):
sessions they so this is all.
Majority of these people areconstruction company managers,
owners, and we took a survey itwas like a live survey, it's
pretty cool Of what were theylooking for or what was their
decision factor when they chosea dealership.

(31:54):
And you know, the one responsethat got zero votes was the cost
.
They didn't care about the cost.
They're like.
Number one was can they takecare of me, can they service me,
and um.
So I talked to some peopleafterwards and I was like I am
so glad that y'all did that,because I'm gonna go back to my
to my clients and say, look, Iwas just there with your
customers and they could give arat's butt about the cost.

(32:15):
They want value, they want goodvalue, but they'll pay.
What?
If you take care of me, youtake care of my equipment, you
keep me up and running, I'll buyeverything from you and that's
the service department.
That is the key and I think inthis, in where we're at now in
the market we're at now, productdifferentiation, I think, is no
more.

(32:37):
If you name whatever top fivemanufacturer you have.
There's not a bit of differencebetween performance, fuel
economy, warranty, like whatever.
You want to say that this brandis better than that brand, it's
really the service department.
Do you have technicians and myequipment goes down, because I
don't care what brand you have,it all breaks, right, it's all

(32:59):
going to break and and customersknow that.
They just want to know when itbreaks.
Do you have the parts and doyou have the technicians to keep
me up and going?

Speaker 1 (33:08):
One of the things that has been fun is, for
decades now, everybody hasagreed that the salesman and
equipment salesman sells thefirst machine.
The parts and servicedepartment sell all the rest.
So when many dealers over theyears I said, okay, I'm not
going to pay any commission fora machine that we've replaced

(33:29):
that's the same brand as ours.
I'm only going to pay acommission to a salesman when
they bring me a different brandas a trade-in.
And everybody says you're nutsIf you think about equipment
salesman.
John, this is the month ofApril 2025.
Right now, I'm 80% certain ofthe machines that will be sold

(33:53):
in 2026.
True or false?
True, you're certain.
I'm certain 80% of the timethat that machine will get
changed in 2026.
80% of the time that machinewill get changed.
Why?
Why do I know?

Speaker 2 (34:09):
that Because the industry they always roll them.

Speaker 1 (34:13):
Well not just that I've got telematics today.
Oh yeah, yeah, I know everymachine and how many hours it is
.
I know what they're spendingper hour on parts and labor.
So I've got the graphs comingout.
I know which ones are too highrelative to the replacement cost
and I know what the trade-invalue is going to be like after
the number of hours.
So there's an optimum time.

(34:33):
And like after the number ofhours, yeah, so there's an
optimum time.
And you know I do thisdiscussion with equipment sales.

Speaker 3 (34:38):
When they look at me like I have to run another horn,
it's true though, isn't it?

Speaker 2 (34:41):
Yeah, it is.
But I would say this mostequipment dealerships are very
reactionary in posture, evenselling, like you said.
Now they can be proactive andthey can go and really provide
that service for that customerright.
They can go with telematicslike hey, mr Customer, if you

(35:03):
trade right now or you tradewithin the next three months,
you'll get the highest trade invalue for that equipment.
Once you get past this, repaircosts are going to start to
creep up and your trade in valueis going to start going creep
up and in your trade-in value isgoing to start going down.
So before those two things meet, you may want to trade it in.
If you plan on training in thenext 12 months, now's your time.

(35:23):
You can do it six months later,but it's going to cost you
another thirty thousand dollars,just heads up.
I don't care if you buy or not,but and but that's proactive,
sure?
Um?
So, versus being reactive.

Speaker 1 (35:37):
Let me talk about some transitions then.
You've seen it in your worklife that over the years we've
cut costs out.
We bring in computer systems.
I say we've gone from paper toglass because all we did was we
made it go faster by putting ina computer.
But we've put profit ahead ofcustomer support and by doing

(36:03):
that we've had customerretention go down.
And it just so happens thatover the last 20 years we've
gone from 100 dealers to 50dealers to 25.
The 25 are still survivingbecause they got lots of money,
because sales have gone up.
If they haven't gone up you'renot going to be there because
you've got 75% of thecompetition gone.

(36:25):
But why don't I sellmaintenance?
Because the service manager isnot interested in having a
maintenance technician.
He wants a journeyman foreverything.

Speaker 2 (36:36):
Yeah, yeah.
And I think another thing.
So once again, they take a veryreactive posture.
Right, it is so easy.
I was working with a dealer theother day and we were talking
about campaigns.
Like you've got, this was adeer dealership.
They call them pips, and sothey have a slew of them.

Speaker 1 (36:57):
So I think the journey for everybody Pips is a
product improvement program, yep, and so A change to a machine.

Speaker 2 (37:08):
Yep, and so they have you got a lot of them.
You know every everymanufacturer has them, every
manufacturer wants you to getthem down.
And so I was talking with theirservice managers and I think it
was like January.
And so I asked them I said whatmonth comes after December?
Every year?

(37:28):
And they go January.
I was like what happens inJanuary?
And so they said everything inthe world.
I was like the shops dry up.
We don't have any work inJanuary, do we?
And they were like yeah, wedon't have any work in January.
I was like can you ever think ofa January where you had a lot
of work and some people?
So I asked the oldest guy likehow long the oldest service

(37:49):
manager, someone who's got like20 years?
He was like no, not really.
There's.
This.
One year we had a bunch of work, but usually we don't have any
work in January.
And I was like January comesaround every year, right?
They're like yeah, it does.
Every year it comes January andevery January we don't have any
work.
And I was like so why weren'twe planning three months ago to

(38:11):
order in all the parts that weneeded and start contacting
customers to bring in theirmachines to get these pips done
in January Because we know we'renot going to have any work to
do.
And I made the point I was likeanybody that's in the heavy
equipment business can makemoney in June, july and August.
The ones you can make money inJanuary, february and also

(38:39):
December, those are the onesthat make money, those are the
all-stars in the business.
But once again it gets to thatreactive mindset.
Service managers don't like todo pips or campaigns because,
like to your point, they got topick up that phone and they have
to listen to that dial tone.
Because they're used to thecustomer calling in saying fix

(39:00):
this, fix this, fix this.
And they just stand back andthere's a very reactionary
posture of just taking it in,shipping it back out, versus the
phone goes both ways and ifyou're going to be successful in
that December, january andFebruary timeframe you've got to
be proactive.
You've got to have more of astrategic view of how you're

(39:23):
going to manage your dealershipand spread that workout.
An example I had a customer who,when I was a service manager,
brought and this is one of thoseguys who looks like he he was a
bum and had no money, but thisguy was worth millions and
millions of dollars and um, andso he came in.
He brought some machine in.

(39:43):
I gave him an estimate on itand he made the point he's like
john, that's way too much money,I'm not gonna, I'm not gonna
afford that, you know, I'm notgonna pay it whatever.
And I was like that's fine.
I said, well, bring it to me inDecember.
And he's like what I said,bring it to me in December.
He's like I said you don't needit, you've got plenty of
equipment.
If you can wait till December,bring it to me.

(40:04):
Then he goes well, what happensin December?
I was like I push brooms inDecember, like I will make you
one heck of a deal if you cankeep my shop full in December.
And so he got it.
And so after that he would callme ever so often.
He's like John, are you busy?
I was like, yeah, I'm swamped,I don't have any time, okay.
And then he would call me andfinally I was like, yeah, you

(40:25):
know I'm not busy, I'm allcaught up.
You know kind of have a lull.
He's like all right, I've gotsome equipment I'm going to
bring into you.
And so, just being strategic,like that, I'm saying, okay, I'm
okay discounting, but I want todiscount to cover my costs, not
discount because I mismanagedmy customer relationship.

Speaker 1 (40:42):
So let's go a different direction.
How?
How much money does atechnician make for the
dealership?

Speaker 2 (40:57):
how much money like percentage wise or dollars
dollars.

Speaker 1 (41:03):
Yeah, you're in a standard dealership.
You're working as a shoptechnician, not even a fee about
300 grand a year okay, howabout the parts?

Speaker 2 (41:12):
uh, in addition, I'd say another 300 000 in parts, so
over half a million okay, solet's just make the arithmetic
easy.

Speaker 1 (41:19):
Let's say it's 300,000 parts, 200,000 labor.
What's the gross margin onlabor?

Speaker 2 (41:24):
Should be about 65% to 75%.

Speaker 1 (41:27):
Well, let's make it easy, 70% halfway in the middle.
So 70% of 200 is how much?
140.
Yeah, how much does the partsdepartment make in gross profit?
Should be about 40, 35 to 40%.
So let's take 40% of 300,000.
That's another 120,000 of grossprofit.
So between the labor at 140 andthe parts at 120, a technician

(41:54):
generates $260,000 worth ofgross profit.
How many machines have to besold to equal $260,000 of gross
profit?
A lot, is it 10%?
What's that?
You think you got 10% on grossprofit on machines anymore?

Speaker 2 (42:13):
I don't think so.
I think you're probably lookingaround five.

Speaker 1 (42:16):
If it was, they have to sell $2.6 million.
Most of them are around $3million, and if they make 8%,
that's $2.70.
That's less than what we'regiving up.
That a technician's making Onetechnician?
Well, that's right, yeah, andyou know.
So that's something else thatbugs the hell out of me, see,

(42:40):
and it's worse today than it hasever been.
When I started out, there werestill probably half the men that
ran dealerships started them.
Today it's second and thirdgeneration and it's a different
gig.
But if you have people thatweren't at the foot of a founder

(43:01):
Lewis Pierce at Walker ShawPierce the old man you're lucky
as hell.
You know Bill Blackie.
When he was chairman ofCaterpillar he'd go around and
visit all the dealers.
He's a Scotty, he's about fivefoot six.
I offered to work with him for$500 a year because I thought I
could learn a lot from him.
Foot sick.
I offered to work with him for$500 a year because I thought I

(43:22):
could learn a lot from him.
And the son of a gun said to mewell, I'm not sure I could
teach you a lot, but isn't $500a month a lot of money?
I nearly smacked him, but it'sokay.
So let me go to the next place.
What's a good backlog, let'ssay, for a shop?
Forget the field, just the shop.
What does a service departmentwant to have as a backlog for

(43:45):
the shop?
One to two weeks.
So what does a customer thinkwhen they call up and say, well,
you're not even going to startme after one or two weeks?
What do they think the customerthinks?

Speaker 2 (43:55):
Well, I don't.
That's not how I'm going tomanage a business.
I'm going to, I'm going to lookat everything within 24 hours.
That's not how I'm going tomanage a business.
I'm going to, I'm going to lookat everything within 24 hours.

Speaker 1 (44:03):
Now we're starting to talk.
But your your comment about oneto two weeks.
That's a go around.
We'll get in a plane.
We'll go visit a hundreddealers.
One or two weeks would bepretty standard.
Five days would be prettystandard in the field.
Yeah, tomorrow Get your machinein here tomorrow.
Why don't we do that?

Speaker 2 (44:22):
Yeah, yeah, I learned this the hard way because I
used to tell the customer like,hey, I'm two weeks out and
they'd bring the machine.
It would sit there for twoweeks and then I would diagnose
it.
You know, do an estimate.
You asked me one reason how wegrew service sales by 200

(44:42):
percent estimate every job.
You know, sell the whole job.
That's you.

Speaker 1 (44:47):
OK, stop there for a second.
Where did this word estimatecome from?

Speaker 2 (44:51):
I like estimate because I want to say, if I'm
within 10 or 15 percent, I'mgood Like if I do quote to me
sounds like I'm going to quoteexactly what the job is and I
believe, like a lot of servicemanagers get, they're like well,
I don't know exactly what it'sgoing to be, just estimate it Be
within 10 or 15% and we're good, like they're fine, like we

(45:13):
like.
I think service is a range.
I don't think it's a hard, fastnumber because it depends on
the value is in the eye of thebeholder.
If you got a customer who'sdown his excavator is down, he's
willing to pay another 10, 15,20 percent to get that machine
up and running, versus somebodywho uses his excavator on the

(45:34):
weekend at the family farm, he'snot going to want to pay as
much money and and so there's arange of value for that, for
that job.

Speaker 1 (45:44):
So I, I, I do things differently and I teach things
differently.
I'm going to give you aguaranteed price and I'm going
to give you a guaranteedcompletion date and I'm going to
give you a six month warranty,and that's the way I work.
Yeah, if I'm over, it's myproblem.

(46:04):
If I can do it in less time,it's my gain.
So how do you define or how doyou develop a standard time for
a job?

Speaker 2 (46:13):
John, that's a great question.
That is a really good question,and I think that's where
technology is going to come inand really, really help us with
that.
In the times past I have usedwarranty flat rate codes, like
looking up the warranty jobs,which is a complete pain in the

(46:34):
butt, and then doing amultiplier of, you know, 1.5 to
1.25, doing everythingdifferently.
I've done it like hey, shop forme, let's sit down and let's
talk about the job.
You know there's like athousand different ways to do it
, and what's aggravating or thisis what's frustrating is we

(46:54):
have probably what 30, 40, 50years of data in our business
systems of service repairs thatwe've done a hundred times over
and over and over again, butthere's no good way for us to
access that data in an efficientway to say what does it cost us
to do that repair?
And so this is where AI can comein, that you can get digital

(47:16):
iron.
They're an AI platform basedout of Ireland.
They have a model, an AI model,that will go into your business
system and say hey, I'm goingto rebuild a transmission on a
310B or C or whatever or J,wherever John is on now and it
will pull all those servicereports and look at how much
labor you had on it, what wasthe parts on it, and give them a

(47:38):
good range.
Of this is what it normallytakes.

Speaker 1 (47:44):
So what you're talking about and we've been
here for a long time we're stilldealing with transactions, not
dealing with data.
Yeah, and your problem withstandard times, flat rate,
whatever the terminology is.
You came through the John Deereworld.
You know what the servicepricing guide, the SPG code, is
right.
Yeah, terminology is you camethrough the john deere world.

(48:08):
You know what the servicepricing guide, the spg code, is
right.
Yeah, do you attach an spg codeto every segment of every work
order that you're doing?
No, why?

Speaker 2 (48:13):
not, it's a lot of work, isn't that a shame?

Speaker 1 (48:14):
yeah.
So you're not saying right orwrong, I'm just saying that's,
that's what they don't, why theydon't do it.

Speaker 2 (48:18):
Well what?

Speaker 1 (48:18):
what so is okay.
So an sbg code for uh and andjohn deer, 0417, I think, is a
water pump, and how manydifferent sizes of water pumps
are there?

Speaker 2 (48:35):
many, 10 yeah, I haven't been around deer for a
while, but they've got a lotmore engines now than what they
did when I was around.

Speaker 1 (48:45):
Well, actually anything under 45 horsepower
comes from Kubota.
Really.
I mean.
So there's all kinds of thingsgoing on here that are kind of
cute.
250-hour service.
Well, it's not that anymore,it's 500 hours.
Yeah, I remember putting apresentation on to a dealer
group.
John's, not that anymore, it's500 hours.
I remember putting apresentation onto a dealer group
John Deere dealer group all theprincipals, 15 or 20 of them in

(49:09):
the room.
I said, geez, have you heardabout the change in the oil
change, the filter change onyour maintenance?
No.
Well, it's gone from 250 hoursto 500 hours.
In other words, the cost foryour customer has gone down by
50%.
You don't know about it.
So there's another illustration, but with data.
I want an SPG in a John Deereworld.

(49:32):
Caterpillar has flat rate codes.
Commencement has flat ratecodes they all do.
And rather than me going throughthe books because those times
are to reduce how much they payme and I'm subsidizing the
quality of their machine, whichreally bothers me and they don't
like it when I say that.
But I'm going to take thestandard times.
I'm going to use a flat ratecode on every job all the time

(49:56):
and it's just like parts.
Once I've done them six times,I'm going to take my time, and
that's what's going to be thestandard time.
But what you're going to comeup with then is typically, I got
10 jobs and there's 20 hourstotal.
Well, my standard time is twohours a job.
A man drowned in river ofaverage depth of six inches, so

(50:19):
average doesn't work, so I gotto get into what's the deviation
off the average for each of thejobs and how much comfort do
you want to have?
Because I'll say that atechnician every day.
John, I'm giving you eighthours of labor, eight hours of
standard time labor.
When you're finished, you cango home.
Now you got to hold a qualitylevel, but when you're finished

(50:40):
you can go home.
Now you've got to hold aquality level, but when you're
finished you can go home.
Or, if you want to stay, I'llgive you more work and I'll pay
you extra for the eight hours oflabor you're here.
Yeah, all this stuff is simple.
If only the owners paid anyattention.
Your service by the boxes wouldtake you to all of this.
Yeah, so, nick Maverick,another young guy would take you

(51:01):
to all of this.
So you're one.
So, nick Maverick, anotheryoung guy.
Three clicks and he can managea sales territory for equipment
salesman Equipment salesman whenI started.
Or product support salesman.
Here's your customer list,there's your truck, here's your
keys, there's the door.
Goodbye.
Yeah.
We're not running.
We're not running a business.

(51:22):
It's like we're doctors.
Doctors are the worst damnbusiness people on the planet.
Yeah.
Yeah, so everybody worriesabout absorption right.
The real challenge is assetturnover.
We have way the hell too muchinventory that might turn one
and a half times a year.

(51:43):
So work in process, labor, yousay.
Fine, we got to close it within7, 14, whatever days.
Why not tomorrow?

Speaker 2 (51:53):
yeah yeah, I'll give I'll give you a day.
So what I if you?
I mean when you, when, if, when, when our listeners, if they
haven't, if they have read mybook, or when they do read my
book.

Speaker 1 (52:06):
Well, okay, so wait a second.
How do I buy your?

Speaker 2 (52:08):
book.
You can just go to M M M Amazon.
You can probably just Googleservice by the boxes John
Dowling and they'll come up,okay, I'll include that in this
podcast, okay, as a little bitof a spur.

Speaker 1 (52:25):
But how much does it cost, john?

Speaker 2 (52:28):
$19 and something cents.
Okay, so I guarantee instantROI.
If they read my book and applyone principle, they'll make that
a thousand times over.

Speaker 1 (52:40):
Okay, so guarantee is what you're going to get your
20 bucks back in how long?

Speaker 2 (52:45):
If they do it in the first month and they don't see a
difference, I'll I'll.
I'll buy the back book backfrom them.
If they apply that well atleast one principle found in the
book and they don't see adifference, then I'll buy that
book back from them.

Speaker 1 (52:57):
Okay, so people that are listening to this and pay
attention to it, because John'san honest man.
If he says he'll buy it back,he will, but then those of you
listening have to pay attentionto what I'm going to say now.
Whatever's in the book, do it,it works.
It works for many, many dealers.
Is it perfection?

(53:17):
No.
But good is the enemy of great.
Let's get good, yeah.
So what would you think?
Ok, so they've read the book,they understand it, the company
wants to do it.
What's the biggest problemthey're going to have from there

(53:38):
, john?

Speaker 2 (53:40):
Well, before we go go , I want to talk about, like you
said, close the work orderright now, close the work order
today.
So in the book that's what Isay service manager, you don't
go home.
Just like you said, buy themsome cots before you.
Close every work order now, thethis is a general statement.
Now, if you, if you're doing arebuild at a cat dealership and
it's, you know, hundreds andthousands of parts and it may

(54:03):
take you more than a day to makesure everything's right, stop.

Speaker 1 (54:08):
That's looking at the mess.
Yes, every day I finish asegment.
My segments are never longerthan eight hours.
Oh, that's a good point, goodpoint.
So if the end of the day comes,everything I've done today is
disposable?
Yep, so this argument and Iused to get it all the time we
rebuild a tractor it takes sixmonths.

(54:29):
How long is it going to take mefor the invoice?
Oh, it's tomorrow.
Yeah, I want the money, honey.
Yes, yes, all these guys, yes,the parts give me especially a
rebuild.

Speaker 2 (54:37):
Yeah, so what?
You, what, what I found?
The reason you can't close thework order the same day that
it's done is because we didn'testimate the work order.
We have no idea how much itshould be, we don't know if the
customer is going to pay for itor not, and we're we're fearful
to pick up that phone and callthe customer and say, hey, it's
$10,000, because we have no ideawhat their, what their reaction

(55:00):
is going to be, because wenever got approval.

Speaker 1 (55:04):
I'm with you.
So there's one objective I wantto have with you, because we're
at the point of winding thisthing up.
We'll have another one inanother month or something, if
you're interested.
But I want to get the wordestimate out of your goddamn
head Guarantee the price.

Speaker 2 (55:22):
So when I say estimate, I'm doing the same
thing you're doing.
This is my price.
If I go over, it's my bad.
If I go under.

Speaker 1 (55:33):
But change.
The word Estimate means thatthere's something, and that's
what every service manager hasused since the beginning of time
.
Yeah.
Guarantee Every machine thatcomes in.
I'm going to do an inspection,mm-hmm, and I'm going to talk to
the customer because I'm goingto find things that he doesn't
know are wrong with his machine.
Yep, and I used to get reallydamn tired about a guy calling

(55:53):
me up and needing a machine fora job and getting it out before
I had everything finished andhaving the damn machine come
back in worse shape in a day.
So I'm the doctor, the machineis the patient, the owner of the
machine is the insurancecompany, and I've had lots of
trouble with the insurancecompanies, mind you.
But how can we wrap thisconversation up?

(56:17):
We've covered a lot of ground.
We did, we did.

Speaker 2 (56:20):
Surprise you.
No, I've thoroughly enjoyed it,and I I tell everybody, um,
when I, when I work with dealers, it happens more often than not
they go.
Have you ever heard this ronsleigh guy?
And I was like, yeah, I knowhim, they go, you know him.
I was like, yeah, yeah, I waslike he is, he's a wealth of

(56:40):
knowledge.
And so I would say that ourindustry needs to be forward
thinking.
We need to look at our partsand service like.
The purpose of parts andservice is to make the
dealership money.

(57:02):
I think one of the reasons thatwe take a reactionary posture is
we believe the servicedepartment is to fix equipment
and keep equipment up andrunning, and that's not the
purpose.
The purpose is to make money.
The way that we make money isby repairing pieces of equipment
.
Make money is by repairingpieces of equipment, and so

(57:28):
what's key on that is the reasonthe technicians don't like to
do inspections, and the reasonservice managers don't like to
be proactive and ask for morework is because they believe
their job is to fix as manypieces of equipment as they
possibly can.
Why would they add more work totheir workload?
But once they realize it's myjob to make money and that goes
back to hiring, you know, yourtechnician versus hiring a

(57:51):
business guy, like, would youhire a heart surgeon to run a $3
billion hospital system or anMBA business guy?
You know it's not this.
Doing heart surgery and runninga $3 billion business is not
the same thing.
You know, replacing a hydraulicpump on an excavator is not the

(58:12):
same thing of running a servicedepartment.
So if we can get people torealize you need to be business
focused and business minded andrealize that the purpose of the
service department is to makemoney, not to repair pieces of
equipment.
That's how we make the money.

Speaker 1 (58:30):
That's a perfect place to stop John.
So, to everybody listening,thank you for being here.
Thank you, john, for doing this.
Yeah, glad to be here.
This will probably be postedthe 14th of this month, so look
for it, remember.
Service by the boxes 20 bucks,a 30 day guarantee.

(58:50):
John said that he would buy itback if it didn't make enough
money back in 30 days.
And thank you all for beinghere and I look forward to
having you with me at anothercandid conversation, mahalo.