Service Satisfaction Strong, EPA Rolling Back Emissions Rules, Mr. Beast Chocolate Profitability

Paul J Daly  0:01  
Good morning. It is Thursday. March, 12 man, it's Thursday already. I don't know. We're gonna talk about some we haven't talked about a while, service department satisfaction. It's just a great topic I'm excited to talk about. And all the other there's some EPA and political stuff, and Mr. Beast and chocolate profitability is also something that we we haven't talked about Mr. Beast in a long time. Yeah,

Kyle Mountsier  0:26  
but I think it's like, super it's actually super relatable for auto, that story. So if you're like, how does Mr. Beast chocolate relate to my business in auto? Just hang tight. Get there.

Paul J Daly  0:37  
Mr. Beast has such a has a closer tie to ASOTU than most people understand. And some of the first early newsletters, the first emails that went out, we had a section called what the kids are into, yeah, yeah, that's right. And, and this was back like, when you know, we were writing the whole email every day, right? And what the kids were into was basically what my kids were into that, right? If you didn't have kids and teenage you wouldn't know and Mr. Beast, and think of how much bigger he is now than he was four or five years ago. Oh, my goodness, right? And so, like, I feel like we were kind of like a lot of people found out about Mr. Beast through his people understand all the things they found out from his

Kyle Mountsier  1:17  
I yeah, I was actually, I recorded a podcast yesterday where the person interviewing me reminded me of something we did. And I was like, Oh, wow, you're so right. We did. It's so wild. I know,

Paul J Daly  1:30  
I know. Well, speaking of things that we've done, we're coming up on 1000 episodes. Oh my goodness. Show, which is, that's a couple of things. That's I mean. So we're gonna do something a little special. Kyle's coming into Syracuse, we're gonna record it live, and kind of just take a moment to look back and celebrate the things that are worth celebrating. And if you're in this world, you know, it's because we keep thriving people at the center, and all the insights, all the tech and everything else comes out of the human element of the business. It's always been the core of what we do. If you haven't seen it, by the way, we do have a docu series on Amazon, and to be called more than cars, just search more than cars. And season two, it's in editing right now. We've, we've already shot a number most of the episodes, and I've been seeing little glimpses of it because I get to be across the way from the editing editing suite. We'll call it. What else is really good? Oh, yeah, a couple.

Kyle Mountsier  2:24  
Oh, we got a sodu con. You know, just a little thing like that. If you didn't see yesterday, pitch tank applications are open. So if you're interested in pitching your product or service to a room full of investors, gonna be there dealers, anybody that might be interested in what your product does for the industry. You can go to asot, ASOTU con.com forward slash pitch tank. Sodu con com, forward slash pitch tank, and submit your idea, your product, your service, right there. Yeah,

Paul J Daly  2:53  
because ASOTU CON brought to you by our friends at Reynolds and Reynolds and Google goo. ASOTU con.com after you go to the pitch tank thing, just go to a soda con. It's coming in hot 6162 days away. We hope you can join us in Hanover, Maryland, may 13 through 15th. Easy to get to, so easy to get to. And I don't think you'll ever regret going, honestly, I don't think so. Oh gosh, there's so many announcements today we're doing again, back to the doing, back to the doing things. So we do have another one of our so do edge webinars coming up Friday at 2pm this is with our friends at renew energy, with Robert blessing, talking about leveraging renewable energy. And this is not just something if you're in the EVS and things like that, I think they've done a really cool job at building something that helps you in your personal life. And if you drive an EV, it helps that out as well, and kind of bring it all together with dealers. So basically, we're going to talk about how dealerships can promote sustainability by leveraging renewable energy. They have amazing programs. I actually gave them my electric bill.

Unknown Speaker  3:56  
Oh,

Paul J Daly  3:58  
that's because I got dv. So they're like, Oh, well, let's run the scenario on you. And I love it. Here's a little spoiler. I use a lot of power at my house. You already get crushed. I do. I have a lot of kids, and my neighbors are mostly farmers, so every month I get the notice that's like, you use 38% more power than your most efficient neighbor. Oh, my goodness, yeah, because they like

Kyle Mountsier  4:20  
kids and home school and home all day, dehumidifiers,

Paul J Daly  4:25  
the whole thing, the whole thing's unbelievable. There you go. All right, let's get into some news. For the second straight year, dealership service departments have earned stronger consumer satisfaction ratings according to the JV power 2025 us, because customer service index study. The study is conducted on owners of one to three year old vehicles ranked brands on a 1000 point scale across five categories, service quality, service advisor, vehicle pickup, service facility and service initiation. Luxury segment leaders were Porsche. Number one, Lexus, then Cadillac. Mass market leaders were Subaru Mini and Honda. Look at many showing up in there

Kyle Mountsier  5:06  
a generational sense. Yeah, a generational

Paul J Daly  5:10  
trust gap emerged with baby boomers scoring trust in service providers at a 6.24 so 6.24 out of seven, while Gen Z. Do you think was higher or lower? 5.77 hours for sure? Yeah. 12% of history, 12% of all the issues brought into the service department were not fixed correctly on the first visit. And only half of those customers returned to the same dealership, while 5% almost half of them, went to an aftermarket service provider, EV service that service satisfaction lagged a little bit behind regular ice and interesting. Yeah. So here we have a quote here, and then we get some commentary. John tanarovich, Director of auto mode of retail, JD Power, said, the study clearly shows that good service leads to loyal customers, while complimentary maintenance programs drive strong retention. The level of intent to return for actual customer paid service depends on the service experience that the dealer delivers.

Kyle Mountsier  6:05  
There you go, yeah. I mean, I I contend that every great operator, every gate marketer, every great service manager, should be intensely focused on retention strategies for paying customers, right? Yeah, again, maintenance programs great ways to to own retention, right? But the real tell is like I had a paying customer that returned as a paying customer. I think segmenting that data, figuring out why or why not people are returning is a big deal. I think that mobile service has a lot to do with that, because people are just tired of like driving 25 minutes for their next role change. They're just gonna go right down the street. But there's so many tools and technologies to create, to craft great service experiences, to send videos, to text when things are ready, to say people's names when they arrive in the lane, I would say, like, if, if you're spending less than 50% of your time as an operator on your service department, then you're focusing in the wrong direction. You know,

Paul J Daly  7:10  
just thinking of is when you said text, when things are ready. I mean, some of the basic, lowest hanging fruit is just better communication, right? You don't need to spend another dollar. You just have to tighten up the processes so that communication is as real time as possible. I love it like, you know. I like on the Starbucks app, when you order, it's like, you shoot your orders in, and then you see when they start working on it, and then you see when it's done, that's right, it's just little updates, you know. And just knowing is like, if you know, like your car has been brought into the bay right as soon as someone checks it in and works on it, then you just know it's there, right? You're paying a little attention. If there's any questions or anything that come up during that time, you're already elevated attention. And then when it's done, you're like my car's done. Just think of how many fewer phone calls to the dealership that's going to generate

Kyle Mountsier  7:57  
it. It does. And I can tell you from real experience of doing it, it works. You just have to put in the time and effort to make the systems work for you. And speaking of

Paul J Daly  8:07  
making the systems work, wrong, but wrong button,

Kyle Mountsier  8:13  
okay, it's okay. Don't end the show. We're here the

Paul J Daly  8:15  
US. EPA is taking steps to reverse Biden administration's ambitious emissions rules, which have forced automakers, obviously, to ramp up EV production. The EPA is now reconsidering its 2024 rules aimed at cutting passenger vehicle tailpipe emissions by 50% by 2032 a regulation that did have Ford's support. At the same time, the agency is reviewing a 2022 rule reducing smog and soot forming emissions and heavy duty trucks, basically the National Highway Transportation Safety Administration's fuel economy standards originally set to increase from to going to increase to 50.4 miles a gallon by 2031. Is also under review. California's plan to ban new gas only vehicle sales by 2035 was sent to Congress for review, but the GAO ruled that it cannot be repealed. So obviously, this shake up was something we knew was coming, and yesterday, they just announced a bunch of, I don't know, attention actions, we'll

Kyle Mountsier  9:18  
call it, yeah. I mean, we, I think ever since November, we've known that something around this is coming, is starting to be more clear exactly what's going to happen or not going to happen. The The good news here is that, you know, there's a little bit less pressure on the manufacturers from an R D perspective, however, you know, a lot of these around like are really focused on getting to hybrids as being more ubiquitous across the industry. And so I still really hope, because we just see so much volume increase in hybrids, I hope that the manufacturers are putting a focus on that, because Toyota's proven that. And you put a focus on that, you really win in this game. But again, the the question mark is, for those brands that have heavy truck sales, whether or not they can whether or not they can meet these so should be welcome news for a lot of manufacturers, but I still think that the heart behind some of these rules is is something that we need to be after as an industry. Because, man, I can tell you, for me, you know, getting 36 miles to the gown in a van is welcome. Is a welcome gift, and when we have it,

Paul J Daly  10:28  
yeah, no doubt, no doubt. All right, speaking of a welcome gift, Oh,

Kyle Mountsier  10:38  
Mr. Beast may be the most subscribed YouTuber in the world, but his biggest business isn't content. It's chocolate crazy, his snack brand, feastables, which we actually talked about in one of those emails a very long time ago, when it got announced, made $251 million in sales and $20 million in profit last year, while his main media ventures lost, lost nearly 80 million unbelievable. His high budget videos can cost sometimes up to $4 million and are hard to recover the expense with just YouTube revenue. Obviously, the commerce division led by feastables is now the most profitable part of Beast industries, and is projected to triple, that's right, triple in size by 2026 companies raised over $450 million in funding and is currently seeking another 200 million, pushing its valuation past $5 billion all started from a couple YouTube videos, fam, uh, investors are betting on consumer products, though not the viral content with new snack brands, a cereal line and a mobile gaming division launching soon. Whoa. The Bloomberg report said by 2026 media revenue will account for only 1/5 of Beast industries total sales.

Paul J Daly  11:55  
Look I got the OG, Mr. Beast feastables. Look at that. You got this? No, this is the OG. This one they released it. Oh, just the means to be smart. It doesn't. Yeah, it doesn't. It doesn't look like this anymore. Unreal. There's no candy in it, though. We ate it all, but I kept the box. Um, so I think this is several, several points on this number one right talk, when I saw him on an interview, and he is very obsessive person, and he says his success is really he attributes it to to him, his ability to focus obsessively on one thing. He said, It's not great for his mental health. But he did talk about the the chocolate company. He says I was obsessed with learning about the chocolate business. He's like and I know more about this business than anybody else on the planet. And he means it like all the logistics, all the manufacturing, all the supply chains. And I think this is, this is something where he understands attention, and that he turned that attention into a CPG, monetizable thing. And this is the same thing we talk about on a much smaller scale, about why it's important to build a brand and invest in content, right? This is a pure example of someone who understands it costs money to build brand and make content and build affinity. And then he said, By the way, do you want to buy this chocolate bar? And I think the dealerships that build brand the best understand that it costs money to build a brand, build affinity. And they're like, oh, by the way, you you need a car, and like, you're going to want to buy it from us, because you know the characters, you know the people, you know the personalities, you know the intention. You feel like. You know the heart, one of the reasons we make more than cars. Know the heart of the industry, and then you're gonna buy the product. So this is just on a mind numbingly staggering scale that there's a $5 billion retail business,

Kyle Mountsier  13:38  
consumer business, to me, is the same thing that Tesla has gone through, and obviously at a smaller scale than Tesla, but still, like a very, you know, cognitive real, reality that even though I, I bet you, Mr. Beast, well, the new show, obviously, but like the industries as it, as it has been, has not spent much actual money on marketing, like, in a traditional sense, like ads on TV or whatever, right? All of the marketing is through the content. That's the brand play. It's actually very, very similar to ASOTU, like we don't spend money on quote, unquote marketing. It's all of the brand stuff. So when you see companies like this that are putting money into content over ads, you see a much stickier audience, and so it's a direct relationship to any brand that is willing to put in the work for the long play, because you just get a YouTuber that can sell Chocolate stuff.

Paul J Daly  14:41  
I had to get the wrong button again for the second time. Great episode. Look, if you can't take one thing away from that, it's like that people are paying attention to the people, things, not necessarily the data things, all the time. So go out there. Pay attention to people. We'll see you tomorrow. Bye.

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