Adam Torres and John Dowling discuss AED Summit.
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Show Notes:
Listen to the Associated Equipment Distributor’s annual summit coverage. In this episode, Adam Torres interviews John Dowling, Co-Founder of By the Box and Author of Service By The Boxes, explore Service by Box and the Associated Equipment Distributor’s annual summit thanks to the support of our sponsor, Vanguard Captive Management.
About John Dowling
United States Marine veteran who has had a successful 25-year career in the Product Support Industry. He started out as an equipment mechanic and worked his way up to be a field service mechanic. John was promoted to service manager and eventually to branch manager of a heavy equipment dealership. Then he accepted a position as a field service representative for a major heavy equipment manufacturer. In his last role before entering the recruiting and consulting industries, John was Director of Product Support at a 9-location heavy equipment dealership. As Director of Product Support John had great success in developing, documenting, and implementing processes. See to the left some of his accomplishments.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of mission matters. My name is Adam Torres. And if you’d like to apply to be a guest in the show, just head on over to mission matters. com and click on be our guest to apply. All right. So today’s guest is John Dowling. He is the co founder of by the box and also author of a book, a bestselling book service by the boxes.
John, welcome to the show. Good morning. Good morning. Hey, so pretty excited to have you on the show today. We’ve been covering the AED summit now for since we’re recording this January twenty third. So, the summit just took place week or so ago and I was out there had a lot of. fun got to meet a lot of new individuals.
This, this particular episode in this series is sponsored by Vanguard captive management over at van cap. com to learn more about what they do. But it was a lot of fun to be able to go out to the summit and to really just start to explore this industry, which is. Pretty new for the show. This is our first time going out to that summit, but I can see that based on the interviews that we’ve been doing we’re going to be going back a whole lot more.
So first off, John, I just want to say welcome to the show. And I’m glad, glad to be here. Yeah, so first off service by the, service by the boxes, the book tell me more.
Yeah, so great question. So I’ve worked at just about every level. When I got out of the Marine Corps, was a heavy equipment mechanic, so went to work for a construction John Deere dealership. And anyways, eventually went to work for a case dealership. Promoted to service manager and branch manager. Went to work for a manufacturer, and then before I got into consulting I was a director of product support at a heavy equipment dealership.
and so I say that because I’ve had worked at every level and service always seems to be the most misunderstood. Department within a heavy equipment dealership and what I realized is people just did not understand services. So, throughout my, my years of experience, I have had great success and I’ve documented my processes in my procedures.
And so when I was a director, I developed this program service by the boxes that just broke the service process down into 10 basic steps or stages. and Then into the premise, or should say the methodology behind it is, is there is a required action to move a work order from one step to the next step, and that one person has to be responsible for that action.
And so, breaking it down that way, use that to train store managers and executives, but also service managers even other dealerships. What is the service process? Like, what does that look like? And really helps you to, to find out like, where is your bottlenecks. And so instead of being this mystery department, it’s broken down in very simple, simple stages.
So I think unique about the reason I call it by the boxes is I’m not a very creative guy. And so the first box was the inbox. You know, everybody has an inbox. Every department you have an inbox in your for, for your email. And so years ago I realized you gotta have an inbox that all the paperwork goes into that one centralized location.
’cause a lot of dealerships have a bad habit of just like. Flooding the service department with paper and it just goes everywhere anywhere like somebody’s desk. It’s like, as long as it’s been in 4 walls of that service office and they have it as you can imagine that chaos and it gets lost.
Nobody knows where it’s at. And so that that happened to me as a service manager and finally, I had to school everybody in the department at the dealership was a service manager. And I said, I have this inbox right here. If you want me to do anything or look at anything, you stick it in there. If it goes anywhere else, I’m not responsible for it.
And I even called out the store manager because he would just lay stuff on my desk and it would get moved or disappear. And I’d say, well, Earl, did you put it in the inbox? No, I put it on your desk. I’m not responsible for it. I don’t even want to have this conversation. And so anyway, so that’s how I came up with the inbox and then I was like, what’s the next stage?
And I was like, I don’t know what else to call it. So I’ll call it the tech box and then it was the parts to be estimated box. So anyway, that’s how we come up with service by the boxes. In basic steps or stages, or like, I like to call them boxes of the service process. How does this help dealers in the heavy equipment industry?
Like, how does it help them become more profitable? Oh, man. Great. Another great question. You ought to do like podcasts for a living or something. Hey, yeah. So the way that it does is, Okay. Most owner, majority of the ownership of dealerships within the heavy equipment industry and I would say most businesses out there is that when they start a business or buy a business, let’s just, let’s say, you know, sustain within the heavy equipment world is that they have an opportunity, but the dealer or It’s like, I don’t understand parts and I don’t understand service and so my thing is like, I’ll hire somebody to run parts and run service.
I’m okay at sales. So I’ll focus on the sales and I’ll focus on the administrative task for the dealership. And so, as a dealership continues to grow and expand, maybe they have to have multiple locations, they tend to promote people and hire people to have a sales background. And so now you’ve got years down the road, you’ve got an executive team or leadership team who really sees, or I should say believes like the sales department embodies dealership and that the parks and service department are there to undergird and to support the sales side.
But this is the tricky thing, or this is what’s important in the sales department, your margins are going to be anywhere from like negative 5 percent to maybe 10%. If you’re selling really unique specialized equipment, you might get into like the 20 percent margin range, but let’s just say average dealership will make about 55 percent margin on the sale of a piece of equipment.
On parts, they’re making 30 to 40 percent margin. When it comes to service, they should be making anywhere from 65 to 75 percent margin. So where’s the money? Like, where’s the profitability? And so really, this says, hey, you’re focusing on the wrong department. But sales, not saying that sales is easy, I’m saying sales is the easiest department to run.
Service is more difficult because you have, a lot of people, and managing people is difficult. And managing that process and managing people is difficult. And so the way that helps them is you get somebody who doesn’t understand service or doesn’t have a background, they can literally read my book and if they just read one chapter, they could apply things to the principle that they found that one chapter in the book and see an instant tomorrow in their dealership.
it really empowers somebody who doesn’t have a service background or doesn’t understand it to say, you know, what, this is not as complex as we it is. And so, yes, we can do this. So, it gives them the. confidentiality and encourages them to engage their service department and own it and really drive not only revenue, but really will impact their bottom line profit.
Now, you recently attended the ad summit. Yes, you were there. I think you’re correct. Yes, sir. Yep. Yep. Yep. I spoke on Thursday. Amazing. As a matter of fact. long have you been going to the summit? Well, ironically, this is my first year. Oh, come on man. I love hearing that. Hey, I love hearing that.
It’s both of our first years, man. We were both newbies then. Obviously, you were in the industry many years and myself, I’m learning the industry. We got, we got the same anniversary, man. Nice, nice, awesome. so I was at the conference and I gotta say I do a lot of different conferences, a lot of interviews, and I just think the energy there, the people there, the like, I thought it was something really, really special.
Like, what’d you think? Oh, man, it’s like a marathon. I mean, it’s good. It’s a good, 12 to 15 hour days. you start off early in the morning with breakfast And then you just constantly, you’re meeting people. There’s other vendors there. It’s a good time to network.
So my business partner Kevin Landers I met him at a conference in AED conference in Nashville, Tennessee. So, I tell people this there was a Arms, an AI platform company that I’ve done some consulting work with. They’re based out of Ireland. They’re doing this really cool stuff with AI to help Parks and Service Departments to be profitable.
And so they reached out to me to help them launch their product in North America. And so basically, I guess this is a real conversation I had. It was like, if you’re going to do business in North America, you have to go to Summit. Like that’s, you’ve got to meet dealers. You have to join AED to do business because it’s such a great.
Company, or to say association that they really want everybody to be successful. And so they have these events like summit to allow people network together to eat together to drink together. And it’s just this great. Vibe. I mean, you were there is everybody’s like open, you know, let’s talk, let’s sit down and have a drink.
Let’s just because what do you do? What, you know, can I help you? Can you help me? And it’s really unique because our industry is a lot of like handshake. and relationship based and so like cold calling or sending a cold email or LinkedIn requests like that doesn’t get real far. Like a lot of these guys, they are gals and we have a lot of ladies entering into this industry.
But you’re going to do business with them. You got to meet them face to face. Well, it’s really a small industry as you’re learning. In that, every town has a handful of dealerships, and so for me to have the ability to meet and talk with everybody that I talked with, it would probably cost me 10, travel costs to fly all over the United States and try to set up a meeting, but they’re all there.
And they’re like, hey, let’s talk. So it is night. Wednesday night is funny. Wednesday night. It was probably. It was late, it was probably about midnight, and I was speaking the next day, and I had to, and I said, guys, I gotta go. My voice was starting to crack that I talked so much. And I was like, ah, I’m speaking tomorrow, like, I gotta go, go home, not go home, but go to my hotel room, and can’t talk to nobody in the morning, gotta rest the voice.
But anyways, it all up well. Yeah, that’s awesome. What was, what was the talk about? So I talked about why service departments , underperformed. So I talk with dealers quite often in that they lose money in service. So I just told you that the service department is the most profitable department.
We’re talking 65 to 75 percent margin. But there’s dealerships out there that have been solely sales focused for so many years that they’ve just taken their eye off of service and they really see service as a cost center, like just a cost of doing business and the business is selling the equipment that they’re like literally losing money on service and you should be making, 75 percent margin.
And so it was one of the best attended sessions. We had people standing up in the back of the room because people realize that services is where it’s at. That drives your cash flow , drives your profitability. And also it is so important that service affects every part.
of the business into that, market share, like, how much the market that a company has when they sell their equipment. Well, service drives market share, because, you know, just for example, could probably agree with this as well is that we really don’t care what brand of widget we have.
It’s more of a. Customer focus. It’s when my widget breaks. Are you going to be there to support me, you know and that’s the mindset now. Like, we really don’t care what the cost of the product to a certain degree. We don’t care what the cost of the product is, but it’s really service when this doesn’t work.
Can I call somebody? Can I text somebody? And, so there’s no really differentiation between products anymore. I like iPhones, but an Android phone is, you know, I can’t believe I’m going to say this, but it’s probably just as good. You know and so same thing like you could buy a man we’re going to get comments on this 1 once they get to what did they just say?
Yes. Now I am an iPhone guy and I’m not you’re not gonna turn the text green on me. Are you out of the group? Yeah, yeah. I’m, I’m, I’m an Apple guy. I’ve never owned an Android in my life and I’m just saying, in theory, in theory, green type gaming, is that a thing? I, you’re, I think so. So, but when it comes down to service, you know, and, so same thing within equipment, like a bulldozer or an excavator, like, there’s no difference.
You can go buy a bulldozers, a bulldozers, a bulldozer. And I was talking with the senior VP of a construction company, and he is like, we have zero loyalty Jeanie brand. He says, all we care about is who will take care of us. Like who’s gonna give us the best customer service? Well, that’s service. I mean, that’s the service department.
It’s in their name, right. Service. Mm-hmm . And, and so moving forward in this new era of heavy equipment, it’s not about the brand. it’s not about your fancy dealership. Can you take care of me when my machine goes down? Because these big contractors, if they have a machine goes down, it’s literally costing them thousands, thousands, if not tens of thousands or hundreds of thousands of dollars a day.
And so, like, they really don’t care the cost and they know a piece of equipment is mechanical. And it’s always going to break. So when it breaks, you take care of me. And that’s service. Well, John, man, this has been a lot of fun having you on the show today. First off, thank you. This has been an education and service by the boxes and learning more about your, I want you to, before we get off the line, I want you to talk a little bit about the software you mentioned and the new company.
Oh, yeah. That’s exciting. it is exciting. So my birthday was on December the 11th of last year. And so Kevin Landers who lives in a bus, sorry, I always, he gets, I think he gets frustrated with me, but I always tell people, Hey, here’s my business partner. And he lives in a bus but it’s a big fancy bus.
it’s like a 40 foot, you know, he sold his house and went RV in with his family for the dream, man. I’m, I’m, I’m happy about that. I want to, I’ve been wanting a podcasting bus, hold on all these heavy machinery dealers and stuff like that. Who’s got a nice podcasting bus. I’m trying to do a nationwide tour to all these dealerships.
Go ahead, continue. I want, I want one. I’m like, no, I want one to put my podcast equipment and go through the country. Yes. Yes. Be nice. So anyways, what we’ve discovered is that nobody understands service, but there’s no visibility. And so they’ll have a dealership. you can have hundreds of, work orders open at a time and lot of dealerships where you use like an Excel spreadsheet or dry erase board.
I’ve literally seen service managers have a stack of every copy of the work order on their desk. And this thing is like, literally. Almost a foot tall of work orders a paper, right? And you ask them, hey, what’s going on with work order, whatever, whatever. And they’re like, looking through hundreds of pieces of paper to find that 1 work order to tell you what’s going on.
And so I did have developed a work order timeline audit. When I was an executive at a dealership prior. And I wanted to see, how long was it taking us to get to each stage of the work order? Because . Whatever stage had the largest number of time of days or whatever, that’s my bottleneck.
the biggest issue that I have. And so what this software does, it’s based off the book, it breaks down the service process into 10 boxes or 10 stages, but it tracks not only how long has that work order been open, but it tracks how long. Has that work order been in that box, in that stage? And like I mentioned earlier, the methodology between about service by the boxes is that there’s ten basic steps.
There’s a required action to move the work order from one box to the next, and there’s one person responsible for that action. And so on the software or app you, it basically, if you can see a dashboard have you ever used a software like Trillo? Oh, yeah. Oh, yeah. Oh, yeah. so just think of Trillo, have like titles at the top and then you have all these columns going down.
Well, each work order has a card. And then, so you’ll see it , where every work order is at a glance, but also it tracks the time of that, that card from each box to the next box. but it also tracks, like, the average time that it takes to move. A work order from 1 box to the next, and then we have preset times in there that can be changed.
And so just say, you have. hours to assign a work order. So the inbox, we say, once you open up a work order, that’s in the inbox, then in 24 hours, you should assign that work order to a technician. So, our software, once that work order has been generated. At 12 hours, it turns yellow, telling the service manager, you’ve got 12 hours to assign this work order, or you’re going to start the process.
After it hits 24 hours, it turns red. So now the service manager, the store manager, the VP, everybody knows there’s a problem with this work order because it’s red and we need to find out what’s going on. So that gives them visibility. But also, like I said before, we track the average dollar value per each, box and then also the average time it takes to move it.
And so a big one is the work completed box. The work order has been completed. The repairs are completed. , all the service manager has to do is close out the work order. And this is where they just lose a lot of cash and a lot of time. It literally takes some, like, 3 weeks to close the work order, like, everything’s done.
You just need to close it. And so we can track that time and say, hey, this should be 1 day. And it’s 27 days. And so when that tells, like, the VP, the owner, whoever, hey, my issue I can’t get enough parts, or I don’t have enough technicians, or I don’t have enough customers. The issue is, it’s taken me 27 days to close the work order, and it should take me a day.
And so , they know exactly what stage of the process to focus on. And the example or illustration I like to use of that, like I said, I was in the Marine Corps, and so if we’re on a battlefield, and the corpsman comes up a Marine wounded, and let’s just say he got shot in the leg and he’s bleeding really bad, but he also has a really nasty cut on his finger.
Most business owners particularly with, dealerships, they see that, it’s a really bad cut on, on his finger and they focus on cleaning that cut out and putting the bandage on the cut on his finger, but he’s bleeding to death because he’s got a bullet wound in his leg.
And so what the software allows the dealership or empowers the dealership to give the dealership visibility, it says, okay, let’s stop the major bleeding. The major bleeding is not closing the work order within time. And instead of focusing on, we need more parts and we need more technicians, which are important.
Those are all important and we’ll get to those, but the major issue is we’re just not closing the work order. And so why waste your, political capital, your influence. Or whatever you want, how you want to say that when you’re working with the service man, little things that need to be fixed at some point.
But the major thing is, let’s just focus on closing out the work orders and that, going to have or biggest impact on profitability and cash flow. John man, this has been a lot of fun. How do people connect with you? How do they follow up? Yeah, so you can visit, visit my website.
So just service by the boxes. com service by the boxes. com. Also have a YouTube channel that I, create free training content for anybody wants to check it out. And then just you can email John. Service by the boxes. com and would love to connect with anybody who wants to learn more.
Perfect. And for everybody listening, just so you know, we’ll definitely put the links to the website, all that good stuff in the show notes and make sure that you’re able to go over and head right on over. And if speaking to the listeners this episode is brought to you by Vanguard captive management.
You can learn more at van cap. Big, big shout out to them for sponsoring and getting us over to the AED summit and putting this on our radar. A lot of fun, made a lot of good contacts and connections. And it’s the reason for this interview. So again, thank you , to our sponsor. For the listeners, if this is your first time with mission matters and you haven’t done it yet, definitely hit that subscribe or follow button.
This is a daily show each and every day. We’re bringing you new content, new ideas, and hopefully new. To help you along the way on your journey as well. So again, hit that subscribe or follow button and John, man, keep it going. and when the podcast bus comes, I’m gonna be calling you up and I’m be like, come on man.
It was your idea. You had the bus idea. Nice coming. Nice man. Thanks. Thanks for coming out. I appreciate you. Awesome, Adam. Appreciate your time.