In this transcribe of the Used Car Dealer Podcast, Zach interviews Luke Lunkenheimer, an inspiring trainer in the automotive industry and owner of a multi-rooftop used car dealership group. Luke's journey from a past of addiction and prison to the cover of Used Car Dealer Magazine as a successful car dealer is nothing short of remarkable. Zach delves into Luke's transformative journey, discussing how he overcame the stigma of his past, the unique strategies that set Luke's dealerships apart, and the impact of training on sales. This conversation is a deep dive into the resilience and entrepreneurial spirit that defines Luke Lunkenheimer.
Zach: Hello, Zach here and we have an excellent guest on the podcast today, Luke Lunkenheimer, who is the owner of a multi rooftop dealership group.
Luke: Very glad to be here, Zach. Thank you.
Zach: Very excited and Luke, your journey from addiction in prison to becoming a successful car dealership owner is remarkable. Can you share with us some of the pivotal moments that helped you transition from your lowest point to where you are now?
Luke: I'd be glad to. And it's something I really enjoy talking about because I think there's been a multitude of instances in the past where I have shared the story and people have come to me and it's inspired them. So, I love to share this. The, I can tell you one of the most major pivotal moments, to use your word, was when I was offered an investment, to kinda, to kinda take you back without going into thorough detail because we would be here for a week. You know, had a drug problem off the back of a, you know, had a football scholarship, got an injury lost, the scholarship got depressed, got the surgery to try to remedy the problem. Surgery went bad, got depressed again. They coded the pain with painkillers. I found out there was addiction in my blood and, you know, the heredity of the genetics or family. So I went down a very dark road for about 10 years, just always being in sales, always making money and being a productive member of society, but gradually escalating into a worse addict as the years went on to the point where I did in, in my later years of my addiction become a less than desirable member of society. So imagine you're this, you know, young pre 30 year old guy. You know, you, you, I think that the your best years are behind you, you know, which really you're a pup at that point. And then you end up robbing a bank and going off to prison and for all intents and purposes, your life is over, you've destroyed all social credibility. You know, your credit score is shot your, you know, you got tax problems, you, you're just everything that you could possibly imagine would be the bane of an adult male's existence was present in my life. So I get out of prison and I, you know, I'm on parole and I have to go get a 9 to 5 job. So one of the things that I always felt was nefarious for me was a sales career because sales is where I got heavy into addiction. You know, the stay out late after the heavy sales and party. And I'm in with a hangover, typical used car sales person. I hate to say but we all know it. And, and unfortunately I, as that progressed, you know, I I realized that addiction and, and that job went hand in hand or so I thought, well, we'll kind of place that off to the side. So coming out of prison, I had a very low self value. Ok? I was a has been par salesman. I was the, the, you know, the in the cesspool of society, I was not a desirable member of the societal totem pole. So I went to work, get a body shop and I was very honest on my application, but they ended up firing me because the multitude of car dealers that came in to get their wholesale cars fixed were, oh, that's Luke. You know, you hired Luke the bank robber and eventually he was a very thin skinned gentleman. It just wore on him too much. He let me go. I later found out that was unlawful, but that's really of no consequence anymore. So I went and sold used cars kind of host sale with a, with a partner if you will for a while, somebody that I knew from before, who was not exactly a, you know, a savory individual, but there was money to be made. And eventually he went south, he went into the, the, the, the throes of addiction again. And so here I am like, man, like it just, it's cyclical and I'm surrounded by it. Luckily, at this point, I was strong enough to maintain my sobriety. So I was reached out to by a gentleman who owned the Aftermarkets Pro Company in Syracuse New York. He had like seven franchises and he said, you know, I've been watching you, I'm a friend of your dad's. I had worked for him previously and been fired actually because of my addiction. always sold him a ton of product. But unfortunately, my behavior and my, you know, tardiness and so on and so forth. So he reached out to me and, and he's a big guy on second chances, very religious. He's a very wholesome individual. And he said you were always a strong salesperson. The rumor on the street is you're better. Now, I'll give you a crack at your old job if you want. And this was a godsend to me. At that point, we're talking a, a six figure sales job, 100 and 60 180 grand a year. That was the most money that I'd ever made. You know, you're talking about a young man that comes from a humble,, rural family who, you know, father made 70 grand a year and he was one of the wealthiest people in the town. So for me to be, you know, almost tripling that it was, I was, it was a rockstar income to me. , so he hires me back and I perform for him and I do well, and I'm just not the same old loop that he remembers, right? I'm kind of like docile and, and almost not depressed, but you can just tell I, I don't have that fire. So one day he comes to me and he says, you know, what's going on, man, you're, you're my number one salesman yet again, but you're number one by this much. And for the those of you that can't see the audio, I'm making AAA Salt pinch motion with my finger. , as if to display that, I, I was only above the board by like 5% as far as, you know, my lead as the number one salesman. And he says, you know, you used to double everybody else's sales, what's going on. It's almost like you're selling just enough to be number one. I said, well, I am, you know, because I'm competitive and I don't wanna be number two, but I just, when I worked for the other gentleman previous to this,, the gentleman that I said got back into addiction, he allowed me to run a used car dealership for him and I scaled his dealership from a little Winnebago trailer on a gravel parking lot to, you know, a, a place where we had like 40 units, a garage, a mechanic, a couple employees to an actual business, you know, and we split up everything 5050 at that point. And, you know, I made like 100 grand in 11 months or something like that. So I, I saw I had the potential to run a business. I was given liberty to buy and sell automobiles at the auction, which is something I truly enjoyed. I was closing my own deals, talking to my own customers, desking my own deals. It was autonomy. And what that autonomy did is it showed me that business ownership was something that I enjoyed. But also that, you know, when you're somebody like me who had had such a lack of discipline and such a, a poor moral compass to be able to show and prove to yourself that you can now be a good participating member of society who can discipline himself enough to have access to thousands and thousands and thousands of dollars cash and do nothing other than behave properly. That's a major accolade to one's self, you know, to the majority of the audience they probably say, well, yeah, it's the right thing to do. You have to understand when you come from my upbringing and being raised by wolves and in the throes of addiction and living on the streets, that's a difficult thing to do. So I kind of leveled up in my own head. So I've been very wordy and we're both getting to this point, but it's important. I laid the back story. So at this point, he says, OK, well, you know, so tell me what's going on. I said, you know, I just, I miss being my own boss. I miss the used car business. I can't believe I ever would say this again, but I miss being a used car guy. So he engaged me in conversation and what he would tell you today if you asked him, say rich, why did you make that decision? He would say, because I saw a light in Luke and a spark and a flare and an appreciation and passion for something that I'd only seen several times in my life. And the other time I saw it was with my former business partner that he made millions with. So he identified something in me that was a AAA an appreciation for a particular portion of the marketplace and a passion for it. And he knew based on his thought pattern. That means invest. So you're talking to a guy that fired a drug addict for poor behavior and theft of service. Watched him go off to prison, rob a bank fall flat on his face and then offers him an investment opportunity. And the long and the short of it is he wrote down on a piece of paper, an offer which was very generous. It was over 50% in my favor. It was 100 and $50,000 in working capital, which is not a lot in the used car business, but it's certainly more than a smidgen for a felon, you know, and basically said, you know, I'll give you a cheap rent on one of my properties. Go start your car dealership. If you do good. After four years, you can buy me out for this predetermined figure, which was more than reasonable and you know, pay back the 150 over the course of four years. That way you own the cars. And I went home and I spoke to the woman who is now my wife and was my girlfriend at the time. And I said, this seems too good to be true. She said then do it. So I went back the next day and I said, you know what? I don't know why this is happening, not gonna question it. And I put my hand out and he shook it. And that was the beginning, the inception of Cny Drives that we've scaled the three dealerships in a $12 million company and, you know, so on and so forth. So Round Robin here now to, to really drive the point home. The most pivotal moment for me was when I was somebody who was downtrodden, whose society had seemed to throw away, who did not feel like he had any credibility or, or any force in society for somebody of his level of wealth and, and business acumen to then say, yeah, here's a checkbook with 100 and 50 large in it, go run a business. It was probably the biggest confidence boost one can receive coming from that type of end. So that was, you know, pivotal moment. Number one, second most pivotal moment was when I sold the first used car out of my new car dealership. And then the, the third most pivotal moment was when I opened the second store and was able to install management that was profitable and scaled to a successful dealership without me having my hands on the steering wheel. So to reiterate it was the, the redemption of receiving the investment. It was the fact that we sold our first car. You know, there's, there's a term for that we all use in the business and we all know what it is, but it's certainly built confidence that I, you know, when you sell your own car that you bought and recon and, and marketed and did it all yourself. It shows you that it's not just a magical process that only the deities of the world can do. It's a real hands on thing and you've done it, it instills confidence and then to scale that operation to a second multiple and have two revenue streams. Those were the probably the three most pivotal moments of my success with CNY Drives..
Zach: And you mentioned in the used car dealer magazine article that car dealing is in your blood with your grandfather, your father all being in the industry. How has your family heritage influenced your approach to the car business?
Luke: Yeah, so that's a great question. And I get that question a lot because I volunteer that information because I think it's important. You know, you have people say to you that you know, and of course we all have haters but they all, you know, your granddaddy was a car dealer, your daddy was a car dealer. You know, that, that's why you have success. I can tell you that the car business in 1956 when my grandfather owned his Ford dealership while they were selling fairlanes and Thunderbirds. There's nothing like the, you know, scroll happy society that we live in today in the used car industry as we know it. Now, I tried to tell you that the network was helpful. You know, somebody would come in and look at a used car in Lunkenheimer. Lunken Heimer. Where do I know that name from? Doesn't your dad, you know, used to run? So, and so, yes. Oh, ok. Well, you're a good family. I know I can trust you. I probably got 3% of my business from that. Ok. So, certainly not a game changing factor, but, you know, a benefit nonetheless. , I can tell you that it certainly, it gives you kind of some intrinsic confidence, kind of like, you know, I imagine David Beckham's son or Tiger Woods son would go into professional sports imagining that they had the genetics to accomplish championship level winnings, because you know, that the predecessors have done it and, you know, iterated upon it and, and improved and, and done it well. So I think it's a little bit of a confidence booster, certainly did receive a little bit of increased business from it, but I can also tell you this, I am a vastly different character than my grandfather and father. Were they, they fit one particular societal mold or per persona. Mine is vastly different. So there were many times people came to me expecting one thing and getting something drastically different and it was counterproductive. So the 2 may cancel each other out, but that would be how the me being the namesake it would play into the carpet.
Zach: So, Luke for the audience's understanding, can you talk about the current scale of your dealership operations, inventory size. How many dealership rooftops you operate?
Luke: 100%. So we're a very unorthodox operation, Zach. And when I say unorthodox, I mean, you don't visit one of my rooftops and get greeted by an array of sales people and walk into the glass showroom where there's several cubicles and a coffee maker and a, a desk and then a box for F and I it's just not our setup. So what we do is we work a central desking system. So we have one general manager that's upstairs in a, in office that's not readily accessible to the sales floor and they work every deal with the sales people from that office. Now, my sales people, if you will and for those of you just listening, I'm giving air quotes with my finger because they're not just sales people, they have additional amount of tasks where we actually title them sales managers. Now, people who have history in the car business that come to work for my company. Well, these aren't sales managers, they're, you know, they're not, you know, they don't have lease calculators and, well, God, I'm dating myself. They, they're, they're not stocking inventory, you know, they're not, there's functions that they're not doing. They're not overweight guys with chains and open polos sitting behind the desk, yelling through the glass and writing with car, ran on the window, right? Maybe that's just a central New York but these are people that understand that their operation is to greet the customer, maintain their storefront, you know, work the deal prequalify for financing. So essentially, there's a lot of autonomy with my sales guys. We have situations where a customer will come in. Let's say they're a subprime customer. The, the, the sales, the sales manager rather qualifies them very rigorously. That's, that's a major part of our process rigorous and compassionate pre qualification upfront. They then sit down with them, they qualify them and they'll desk a subprime deal right there at their desk, test, drive a car and sew one up and send up a deposit in the deal folder with no intervention from the general manager. No finance manager. They've got a lot of autonomy. They have a very aggressive pay plan. So what my setup looks like is, you know, one larger central hub dealership that's got the service department, the reconditioning department within it. Then there's satellite locations which are 40 to 50 car, much smaller lots that house one or two sales guys and the customers come in, the cars are reconditioned, you know, preset, ready to go and they kind of pedal vehicles out of there. There's a mechanical issue or they want inventory off another lot. It passes through our Fulton location, gets recon their service there. And then all deals in DMV, comes back to the central location. So we, we have, we're very light on it, on personnel. , that's something that I've kind of maintained all the way through for, you know, for expense reasons. , we always try to, you know, maintain very high profitability just because central New York is an extremely volatile market. If you ever lived through a Central New York winner, you know, that, that you could truly come to a halt in sales when there's so much snow that automobiles don't move and people don't leave their house. So, it's a conservative business model, but it's also highly profitable because of the lack of overhead. We've got a lot of strict processes and procedures and quality checks. So it's, it's relatively unorthodox. but it's highly effective for us. And I've taught this model to some other entrepreneurs in the United States that I met at the N I ad a convention and they've replicated it and they're very, very profitable.
Zach: Wow. And what, what do you think really sets you apart from the competition or are your biggest differentiators? I know you talked about like the sales managers but just curious. Anything else?
Luke: Yes. We are very subprime heavy. So we, you know, a lot of dealerships will advertise their dealership and then they will have their offshoot commercials with their 1 800 loan phone or need a car, get a car, buy a car.com. You know, they're, they're, they're subprime offshoots. Cny drives is named for exactly that reason. One thing that I really,, took to heart when I opened my dealership was my,, desire to help the subprime and kind of the, the lower spectrum buyer. I saw when I worked at franchise dealerships, a very, you know, shirt them off attitude paid to the customers who were less than, you know, less than creditworthy. And that, that is, understandable in some cases as you will get the customers who have just been nefarious and don't pay their bills and stiff people and make a habit out of it. And the same way, there's good and bad people in society, there's good and bad moral compasses on a customer. But what I've discovered is a vast majority of the subprime clientele is simply under educated. They don't know what their credit score is. They don't know they need certain types of credit or a volume of credit to buy a car. They don't know that a cosigner has to actually have a better credit score than they do. They think they just want two bodies on the loan. They don't understand that by being self employed and not paying tax on the majority of their income is detrimental to their ability, need to look favorable to a bank. So my team is trained to sit down and thoroughly flesh out credit, the finance process right down to the point where we ask the customer, do you understand that financing means to borrow money with the car as the secured asset and pay it back in payments over a period of time. You'd be amazed how many people say no. So we advertise very heavily for subprime if you come to the central New York area and ask what Cny Drives, they'll say, oh, it's the dealership that has the, the inexpensive cars, but they're really high quality and they go through a really scrutinous mechanical process. And then they also have that department where they help people with bad credit. That's what we're known for. So one thing that I get from a lot of people that investigate my business model out of curiosity in conversation or because they're other, they're auto people is well, jeez Luke, don't you feel like you're kind of limiting your outreach when you, when you focus so heavily on subprime into that? I would say this if somebody wants an automobile, if somebody is after a 2019 Ford F 250 crew cab with a 67 diesel in silver and you have one and it's got a good Carfax and it's a nice clean rust free car and your price is competitive. They're not gonna go well, honey, this one's at that Cny Drive. So we can't go look at that one, right. So as long as you've priced your vehicles effectively, as long as you have a strong online presence, as far as the displaying of your inventory for sale. Ie Car Gurus Carfax, not to, you know, plug these places, but I think they're kind of industry standards, right? So your auto traders, your car, whatever, you know, if I missed any, I apologize. But as long as you have your inventory aggressively advertised on these resources, these mediums of communication with your consumer and people are aware of the product that you sell. I don't think in any way that you're, you're deterring a prime client. I really don't.
Zach: So how is the rise of online platforms like you mentioned? And digital marketing impacted your sales strategy and customer engagement?
Luke: Ok. Do you mean like like your cars.com?
Zach: Yeah, like you have so many places you could list cars online, it could be anything from like Facebook marketplace to cars, cars.com and then you have all of these like digital marketing, like paid search seo like ways that you could bring awareness and engagement to your business.
Luke: Sure. So how, how has it changed the marketplace or how do we use it?
Zach: How do you use it and how is it kind of changed your marketplace?
Luke: Yeah. So you know, when you're a guy that started selling cars late nineties, you know where the the cute girl in the short skirt from auto trader was just coming into your dealership and you were just learning about online advertising and vetting of an automobile. It's definitely a paradigm shift to present day, right? So it's changed in that, you know, we used to add, you know, when I sold cars back when I first got started, there were literally advertisements in the newspaper. You know, you had a, a six inch by 12 inch Sunday ad that had your lease specials in it and you better know your stock number of the lease special because you know, John Q customer was coming in Saturday morning with his newspaper and his cup of coffee saying you got a red one, right? You know, working off the ad vehicle trying to switch that kind of old fashioned bait and switch new car sales. There's that there is, you know, just your, your normal drive by traffic. You know, these are all things that were staples of the past, moving into present day. It's almost like a drive by comes in if they come in, right? There's no newspaper ads anymore, you know, you're essentially optimizing for your web traffic, I think is really where we're at now. How have, how, how do we leverage those? You know, I think it's a, it's a, a delicate dance really. I think that as a business owner, you have to identify what platform is best suited to your style of inventory, right? So if you're so like, for instance, us, we're selling a much older automobile, you know, we optimize for vehicles that are, you know, 7 to 13 years old, we sell older used cars. Now, I've got 2020 2019, but it's probably 25% of my inventory. 50% is probably 5 to 7 years old and another 25% is probably 10 to 12 years old. Again. With that heavy subprime focus. You need those low dollar cars. Right. , but I think that if we were to leverage heavy on auto trader with featured listings, when people are going there looking for the majority of new cars and weight models, I think we're not spending money effectively, doesn't mean we're not there. It means that we don't saturate them with money and try to massage that platform for all it's worth. I think that in the used car market, you know, something like Carfax of vetting resource where people go, you know, they see the car, but then they wanna go see invent the car and make sure that it's a decent piece. You know, I think you wanna have a presence there. So without getting an intricate detail and plugging any more websites, that certainly wasn't the intention. I think that as a dealer, you have to identify where you're best served. I think we all know all dealers know that it'd be nice if we had a marketing budget that allowed us to be heavily present on every platform and get every lead, but it's just not possible. Right. It's the nature of the, you have to find that delicate balance where your, you know, your, your, your benefit versus your spend, you know, are, are with Lady Theus on the Justice Day. That's why I keep her here in my office. She always reminds me of that. So yeah, I think it's just, it's just a dance, you know, you got to make sure that you're leveraging the things that are gonna work for you. Get away from the things that don't, don't be afraid to tell a vendor. No, I see too many dealers. I have a dealer friend that's got an ad budget. That is, I mean, it makes me ill to see how much money he spends in ads and he doesn't do any more volume than we do. You know what I mean? So I would have to believe that there's a good portion that's ineffective simply by logic. So I hope that references, you know, that that answers your question.
Zach: Definitely. And another kind of industry question, you know, what are some of your challenges in terms of inventory management? And how do you address them if any?
Luke: Sure. I mean, post Coronavirus, we're seeing book value fluctuations that are 30% over the course of three months. You know, that's devastating. I may be a little embellishing a little with 30/3 months, certainly seen 30/6 months, but certainly seen drastic change over 90 days. So if you're rotating based on a night, you know, 60 to 90 days supply. You're buying a vehicle for 15 five and you're, you know, you're putting it out there for 18, 950 then you, you know, three months later when you're hitting, you know, aged unit time and it's like, ok, what are we gonna do? We're gonna offer it. Is it a nice car? We gonna keep it, we're gonna pay it off. Did you know, did we floor it all the questions that we asked ourselves as dealers? And then you look at your JD Powers value and you go, wait, what like that, that retail value, that's what I paid for the car. How is that even possible? And then you go back through and you know, some of the DMS will give you historical values and you just watch it. Kind of don't just graduate downward and you're like, man, that's unbelievable. And then the market shifts and you, you off all these vehicles, you take a hit the market shifts and that same car that you just sold for a $3000 loss and now has a book value $1000 more than it did when you bought it the first time. So I think that's the most frustrating thing. But that being said, you know, I've been able to, to develop a keen eye for the cadence of these things based on industry news based on what the new cars are doing and you know, the production and allocation. you know, and it's, it's really very simple, you know, you just have to pay attention, I think. But it, the, the fluctuation in book values would be my biggest bone of contention simply because I think we're so heavily leveraged into subprime and finance.
Zach: Definitely fair. And you emphasize in the used car dealer article, the importance of maintaining a moral compass and business. Can you elaborate on how you apply ethical practices in your dealership and the car industry at large?
Luke: 1000%? I, I draw from personal experience. OK. So when I talk to my employees, one of the things that has been a blessing and a curse in my existence, Zack is the fact that I was your typical snake oil salesman, you know, and I have people say to me, dude, how could you admit that? Like you're on a, a podcast or you're on a nationally syndicated show or you're on this radio show or you're, you know, why would you divulge that because it's true? And because if you wanna make peace with yourself and you wanna make progress, you have to identify the reality of the situation. you know, it's kind of like the, the, the cliche that you can't fix the problem until you identify the problem or, you know, you can't fix yourself until you admit you have a problem, you know, the problem was fixed. But in order to keep it fixed, you know, I think that a bad moral compass is like cancer. You know, if you, if you've been developed that way as a human being and I'm not trying to, you know, down talk anybody that was a part of my molding stages. But if you were to watch the movie, that is my life, you would very clearly see how I could operate with a very self pointing moral compass and be perfectly ok with it because my mentors, family members, managers and coworkers all behaved this way and it not only was it allowed, it was revered. You know, if you could talk to old lady with the broken hip to buying a ketchup popsicle, knowing she had a tomato allergy while she was wearing white satin gloves in the middle of 100 degree summer day because you got a $300 spiff. You were a hero, right? Meanwhile, you know, who cares what happens to her? And that was the, that was the world I grew up in as far as my early stages of my career in the car business. So I've lived there, I've lived on that side of the fence. I've been that guy. I've also gone through extreme trauma between, you know, bank robbery and jail and drug addiction and all the other things I've, I've been through that you read about in the article and then coming out the other side, you know, when you've had it, it's, it's kind of like when AAA veteran comes back from a foreign war that was violent and, and, and difficult, they can sometimes be the best therapist for someone else who's gone through that. Right. , I believe that my, you know, the story that I tell to my employees, to people, to just an audience at large is incredibly effective because some, you know, you can go to church and you can hear a preacher tell you about being a good person and what a bad person is, right? You can have a life coach, tell you how to be a good person and what a bad person is. And you can also have a kindergarten teacher, tell you how to be nice and not be a bully, right? But when you've got an individual who has lived, it breathed, it wore the suit and cash, the paycheck coming to tell you what it does to your insides, what it does to your social stature, what it does to your, your overall soul, really not to get philosophical, but just kind of the the overall demeanor in your, in your, your feeling of your place in the world. It's just a very, very dark thing. So trying to bring it a little more on a positive note, what I've shown my employees and my management team is that the fruit that the, the honesty. Tree bears is incredible. Right? And it's funny because when I say these types of things I've given talks about this and there's this little itty bitty part of me that deep down in my soul, that is a chunk of that old guy that says, are you big wuss? Why you're talking about being nice? You know, we're salesman, we're ruthless, we're moneymakers, we're wolves. You can be, you can be, but you can still be a good person, right? So to kind of put a cap on all of as I've gotten to the latter part of my life as it stands now. Ok? I'll be turning 40 next month. One thing that I've learned in, you know, from 2016 when I started CM I drives through, you know, getting the term millionaire on you, which is a big day and you don't really know when it comes and then you later understand it's really not that big of a deal anyways. And then you move past that and then you go on and you iterate and you move on in life, you realize that the most prolific and successful people that you've ever met and I mean, highly successful, I'm talking about the guys I know that have had 60 $70 million exits from companies. They've built guys that I know that are founders of billion dollar companies and just other entrepreneurs that have gotten to the level of success that they wanted to get and lived. What they believe is a perfect existence. From that point on people who are truly happy, the, the common theme amongst all of them as they got there by doing the right thing, they helped people. There's, there's a, some people that I follow, obviously, you know, mentors. but then there's also the people that you watch in social media and you know, all the little youtube videos and snippets and stuff and the, the, the common theme amongst all of them, the, the celebrities, the influencers and the people I know that I can reach out and touch is if you're ever in a position where you're just having a tough time, you know, business is slow, your personal brand isn't moving forward. You're just, you, you're in a quandary of some sort, just stop and help somebody just remove any selfish intention. Find somebody that needs a little bit of help. Whether it's the old lady next door that's trying to shovel her driveway, whether it's the neighbor kid that needs 100 bucks for his boosters club to go on the trip or whether it's your customer that needs an extra 500 bucks to get approved, you know, in their trade to get approved and get the deal so they can have reliable transportation. Just do it, man. Just do it because too many people are looking for instant gratification act. They wanna do a good thing and they want to take a picture of themselves doing a good thing and they wanna post it to social media and they wanna get inundated with like, so they can go home and tell their selves that they're worth it. Right. If you just continue to force positive into the pond, that is your life. those ripples will just continue to travel out and travel out and travel out. And then one day when the waters calm and you're not doing anything, you're just kind of existing and maybe having a bad day, all of a sudden, a few of those ripples will come back and hit you. And it comes at times that we don't expect, it comes at times that you know, that we really truly need it and it comes back in much greater force than it does when we send it out. So I would encourage anybody who's entrepreneurial in spirit or is trying to crack the code of business, just do the right thing. It's sometimes a little more costly but that investment in your time, your energy and your money, you'll never find a person that says I did all the right things, but I'm broke. It just doesn't exist very true. If they do, they're just bitching, they didn't really want the right end.
Zach: And what advice would you give to someone in the car business who's maybe currently struggling with addiction or they're trying to rebuild their life after a major setback, kind of based on, on your experience doing the same?
Luke: That's a great question. There's a dichotomy there, ok? So for the addict, I can tell you very succinctly and positively in order for somebody who's struggling with addiction, ok? And for anybody listening to this or watching this, if you're going through this, this is gonna hit you upside the head like a ton of bricks, OK? That helpless feeling that you have where you wanna tell the world you're in control. You have a lot of people convinced you're in control and just so, you know, spoiler alert, a lot of them know you're not in control, even though they tell you, they think you're in control. You're, you're, you're lost, you don't see any sort of reasonable light at the end of the tunnel, you're just kind of in this downward spiral that, you know, is gonna continue to head in the downward trajectory and you're waiting for intervention from an outside source. And I don't mean intervention in the, the direct, you know, MTV, root of the word, I mean, intervention in something to intervene simply, OK? It's not going to happen. Ok? Even if somebody let me give you a perfect example, how many intervention, you know, when I was in prison, they made us watch intervention, right? I was in this clean and sober group and they made us watch it and I can tell you out of every intervention that I ever watched, Transpire. I don't think I ever saw somebody sit down the intervention and go. Yep, you're right. I have a problem. Thank you all for being here. Let's walk hand in hand to rehab. No, it's passing the buck. Placing blame, enabling, manipulating. That's the behavior of the ad, right? So especially sales people, you must understand that you're selling yourself. Number one, you are not in control. If you're in control, go seven days without touching the substance. And then once you hit day seven, send a middle finger to central New York in the air and say you're wrong, Luke and then go another 300 you know, 55 or six days sober. And I'll tell you that you've got it licked. Now when you get to day three and you can't do it then understand that you're not in control. Now, how do you solve for that? You have to understand why you use chemicals. Ok. I remained addicted to opiates for a decade. Zach ruthlessly addicted. My life revolved around it. Ok? And the only thing that saved me was prison, ok? When I went in and robbed that bank, it was my subconscious mind saying, ok, conscious mind, I'm gonna convince you that we're here to rob a bank to get drug money. But in reality, I'm so completely out of control. Our, our voluntary operations of the body are gonna cease to happen here. Pretty soon. There's so much chemical in here. This guy is gonna drop dead. I'm gonna convince you it's a good idea to go in and rob this bank knowing full well, you're gonna get arrested and go to prison because that's the only shot that this fuselage I'm riding around in called Luke is ever gonna stop and, and get better. And prison was the best thing that ever happened to me. They threw me in a cage, they locked me away to sweat it out and vomit it out and all the other colorful happenings of a withdrawing drug addict. And all I wanted to do, Zach was use drugs. What it took was me attending a meeting in prison where a counselor came in and kind of took me to the side and said, you know, you don't look like you belong here. You don't look like the prison type. And I explained to him what had happened in the addiction and he made it a point to sit down with me and we discovered some things about my past that I had buried very deeply that were troubling me. And, and quite honestly, I didn't even remember them like it took having to talk about them and flush them out for me to even replay those scenes in my head and go oh my dear. God, that was traumatic, you know, and I don't wanna, you know,,,,, villain vilify anybody in my life. So I won't tell the stories, but just as a child and we're not talking about, you know, sexual thing, just, you know, being forced to use chemicals socially at a very young age and told it was the cool thing to do that eventually got me to the point where I was addicted before I even entered high school. So, you know, and then understanding how many times I said no and didn't want to and I'd rather not. And no, I'm sick, I'm gonna throw up. But, you know, you must keep doing it. So I had to wrap my head around the fact that that was my evil. That's why I use drugs. So I had to flush it out, deal with it, cry about it, deal with the pain and then understand that now that that was out and it was dealt with, I had a chance at sobriety. So anybody listening to this show, you have to dig deep, it's going to be painful and it's, it's darkest before the dark. So you have to get down in there and you have to pull that out. You have to deal with it. You have to come face to face with it. And then when you do that, you'd be amazed at the healing that happens. And then you've got a shot at being successful to just try to stop doing a substance because you wanna stop doing it. You'll never be successful. Ok? It's like, you know, you have an engine that's making noise and you just, you know, put towels over the hood and then it gets louder, you put more towels over the hood, you just keep blanketing it with towels. Next thing you know, you can't even close the hood. There's so many towels, the engines still make a noise and then you throw a rod and the thing is broken, right? That's the way addiction is. Unless you get in there and you fix the problem, it's gonna continue to manifest and it's gonna be insidious and it'll kill you. It could truly kill you. They say addiction ends in jails, institutions or death and they're right. It's, it's always one of the three. Now, the flip side of that, you asked me to anybody that's struggling with addiction in the, in the car business. You know, how could they deal with it? What was the other part of the question, Zach?
Zach: It was, you know, rebuilding their life after a major setback. So maybe that's not necessarily related to addiction, but they've had a huge setback. You know, how did they get back into the game?
Luke: It's one word, my friend, humility, the moment that you can look at everybody in your life and say, hey, I've screwed up. I've really screwed up and I'm so embarrassed, but I need you people to understand that I wanna get better. I, I appreciate you if you'll give me a chance and give me some rope here. Ok? And just let me kind of go through this process and, and rebuild. You know, there's, unfortunately, we live in a society that's incredibly judgmental. It's incredibly geared towards instant gratification and is very media driven. So if the media says that you're a villain, if you do it, you're a villain. If you do it, the smartphone can give it to you in three seconds flat. So if you can't get it in three seconds flat, then you're not happy, right? So the society is so instant gratification driven, so judgmental and so driven by media that anybody who's an outlaw really has a difficult time getting back on the track with the rest of society. Ok. What I would say to those people, number one identify that sometimes being on the track is not the best place to be. Ok. Look at society at large and say when I watch these people on the subway or I look at this group of people moving on the sidewalk or I'm in the fast food restaurant and I'm seeing the the the conversations and the goings on. Do these people look truly happy? Or is it the old guy in the corner? Drinking his coffee, reading his paper, smiling with a picture of his dead wife next to him propped up against the napkin dispenser. Like why is that guy happy? And then you learn eventually that he's identified the thing in his life that he, that he, you know, has trouble with. , he's made peace with them. He's got love for himself, but he appreciates the world for what it is and any misgivings that he's had along the way, he's been able to forgive himself and ask others to forgive him for. So humility is there's like these, if I were to write a book, humility would be one of the governing tenants to a successful life. Ok? Really? Because you can accomplish great things. But if you hold yourself at a higher level than those beneath you, you're never gonna learn more and you're gonna be stagnant, you're gonna get stuck for anybody that's gone through a major setback. You have to forgive yourself. You have to understand that you're a human being and some people setbacks are bigger than others, but I promise you there's always somebody who's worse off. So you have to dissect it in that moment and say, ok, I have two choices. I can either stay stuck here and I can live in misery and I can, you know, have this, this, you know, terrible connection to my past. That's just coded me like a cancer and I'm just gonna stay stuck or I can say I'm gonna shed that skin, I'm gonna move forward. But the only way you can move forward successfully is to know that it's going to be uncomfortable and make peace with that. It's going to be difficult and make peace with that. You may have to incorporate yourself into a new group of people. It may be your old crowd. That was the reason for your setbacks. Basically, you must audit yourself have the humility to understand you were wrong and how you went wrong and then the perseverance to move forward, not caring what anybody else thinks because I promise you all those people that stand to judge and hate and make fun when you finally get it right. And you're racing across the finish line, they'll have a reason to hate you then too. Isn't that right?
Zach: Well said and Luke, I really appreciate how generous you've been with your time. So I have one last question for you. So you achieved remarkable success with multiple dealership rooftops. I want you to talk about your new sales training venture Paid to Persuade and some of the other exciting things you're working on for 2024 and beyond.
Luke: Yeah, dude. So I appreciate the plug. Real quick before I get to P2P, I'll plug the project that we're working on with my buddies over at Bread. So I'm a big fan of hip-hop and rap. OK? I'm not exactly what you would call a rapper, but I appreciate wordsmithing and hip-hop music and I've just always had an affinity for it. When the movie Eight Mile came out the battle rap scenes, I just, I was enthralled. I loved it. And as time has progressed, I've just grown more of an affinity, you know, the beat makers and the battle rappers. So, one thing I like to do at random is I like to watch battle raps. I like to watch two guys that are wordsmiths go against each other and have a freestyle battle rap over music. And there's a large subset of Americans and worldwide really that like to do the same thing. That's why rap battle videos get millions of views on YouTube and tiktok and the like. But one thing I noticed here and then not so or in the, in the recent past was the fact that there was no app for a smartphone that facilitated a real raw live online rap battle between two people. So I got a feather up my rear quarters and I said, you know what, I'm gonna make an investment. We're gonna take a shot at this. I align myself with some very talented people and we're making, we're making, we've, it's in beta right now and it's, it's going beautifully. So we're gonna be launching that here in the next couple of months. So anybody that likes hip hop loves to watch two guys go at it and, and battle rap, bars will be coming to the marketplace in April May. We're very excited about it. That's my, my shot at being a tech CEO. Luckily it's going very well paid to persuade is the name of the sales training company. Z I tell you one of the thing, you know, truth be told, full disclosure. I'm a candid guy. One thing I've learned about myself is I am a good businessman. I'm a good boss. I'm not the world's most talented car dealer. OK? When I say that, I mean, if you were to sit down with Fox Automotive and you know, the the major big swinging, you know, what's of the car industry and say, OK, to find the perfect car dealer, he'd have his po protector, his V auto at the ready. He would know, you know, all his D MS left to right back and forth and, and we know what they would probably, you know, envision. I'm not that guy. I'm an entrepreneur who's very keen on used cars and used to help his dad sell yarn cars out of the front yard that we, we would buy low and sell high out of the swap sheet in the wan ads, OK? The reason I was successful as a car dealer and I had to come to this realization was, I'm very effective at training the sales staff. These guys close at a rate that is so far above the industry standard. And I'm not trying to sound egomaniacal. That's why I prefaced it with something that I'm really not the best at. Right. I can acquire inventory. I'm a great car buyer. I buy them cheap. I got a great network. The auctioneers love me. I have great relationships with the people we buy cars from, so we buy good inventory. I might not be the best ever notating it with the appropriate amount of time. I probably paid too much money to the floor plan company. Probably could be better at marketing, but we are incredibly successful because we close deals. Ok? Somebody like yourself who's brought a company to market and, and been able to successfully do many of the functions that most people normally hire for. And for the those in the audience that don't, I, I was talking to Zach Free, free to show he's a very prolific businessman. He's incredibly smart guy. I'm a little jealous honestly. he accomplished a lot at a very young age and he's incredibly humble and that's what I like about. That's that humility word. But the, the, the the ability to teach somebody else to qualify somebody in the blink of an eye, draw their pain points out. Converse, converse about them with the customer, have a conversation around the things the customer doesn't like first draw out exactly what brought it and paid to persuade. We have what we call the big three. What brought you here? What's your buying power? What do you hope to accomplish today? And it's funny because when you tell that to a veteran salesperson, like, oh, this is your secret sauce. What brought you here? What's your buying power? What do you hope to accomplish? That's only what we ask every customer. Well, in reality, no, no, they don't. Ok. The majority of sales people say, hey, what brought you here to the customers? Oh, we were just driving by, we were over at Chick Fil A. We saw the F one fifties. We figured we'd swing in. Ok. Well, what kind of f 150 are you looking for? That's not asking what brought you here today, right? So what's asking asking what brought you here today is, oh, well, we were just driving by Mr Jones. We're on a highway. Everybody's gotta drive by. , I'm just busting your chops. No. Really? Today though, today you put your blinker on today, you turned into our parking lot and today you decided to walk up and shake my hand. So why is today the day? Oh, well, you know, we, we, we've been thinking about trading our Toyota Sienna van because we need a four wheel drive. You know, the kids are off to school now and we got, you know, we wanna go travel the country. So we're thinking about buying an RV and that's why we need to pick up truck Ok. Well, what spurred you to come over here today? Oh, we just picked out the RV and now we're over here at Chick Fil A getting a bite to eat and we were gonna head home. But the guy was saying something about towing capacity and we like Fords. So we wanted to come over here and see if the other fifties, you know, would get the job done. Ok. So they're not just driving by, they just bought a camper and they're the ether still on. They're excited from buying the camper. They just treated themselves to Chick Fil A. They wanted to come over like you strike while the iron is hot. You have way more information now than you had before. Oh, ok. So, and then there's something we call a LR the active listening response, right? You don't just go. OK, let's look at F one F you say, OK, so what I'm hearing you say, correct me if I'm wrong is, you know, we drive by a lot. We see a lot of F one fifties. We have a we, we like them but today because you just bought the camper now kind of the the wheels are spinning a little faster. We've got some urgency here now, right? Mr Jones and then you infer you put that suggestion question in there, right? He didn't say that there's urgency now, but you want to suggest that, right? So now it's, you know, we've got the kids. So now there's some ergs here. So now the wheels have to get turning a little bit because you gotta have something to pull that son of a gun, don't you, Mr Jones? Yes, I do. Ok. Well, I appreciate your urgency. Thank you for telling me that they didn't tell you that you said that to them, right? But this is the process, ok? So, well, that being said, so I, I understand you want an F 150 you need one quick because that campus gotta have something to pull it. Right. Yes, great. Now Mr Jones, let me ask you a question. When you buy your, you don't say, are you paying cash or you financing? Ding, ding, ding. It's a trigger question, right? They're gonna, oh, I'm talking to a salesman now, you know, do you, do you generally, you know, leverage the bank and, and, you know, use their money to pay over time or do you like to just knock it out all at once? Oh, well, we usually, we usually find, answer them but no, this one, this one we've actually been saving, we got the money in retirement and, and we're, we're just gonna go ahead and pay for it and be done with it. Oh, no kidding. Now you have information. Now, if there's an incentivized rate those days were nice, weren't they? , you know, you can leverage financing, keep your cash in the bank. Use O PM, you know, have some more cash, get the vehicle at a low payment or you. There's the, the bottom line is this these three questions you can flesh out so flush out rather so much information from the customer to the point where you can literally just set up this little track directly to the clothes that when you get there, you're not even asking them to buy the vehicle. You're just like, ok, well, I'm glad we were able to solve for all your concerns today. Did you wanna go ahead and title that in both your names or you want to just have it in yours? And you know, I'm being a little cliche with the, who do you want to title it in clothes? But my point is there's no pain points, you're done. They can't object because if you've done it properly and we train this from start to finish, they're never gonna tell you I need my wife. Now, in this particular situation, the wife was there with him. But even if he was a one legged up, even if he was there by himself, you've already solved for that at the beginning of the equation. So he's literally gonna go and his mind is gonna do this thing. That's part of the human condition where it goes through the mental rolodex of excuses to walk away and think about it. And you've planted all the psychological seeds along the way. That truth be told. Zach and the paid to persuade training, it proves this. They're just gonna go. Yeah. Well, you know what? All right, let's do it. And there's so many other pieces to the puzzle. We leverage the power of three that it's incredibly intricate. But it's so simple in that the human being learning this system really only needs to remember three key points and then three things underneath each one of those a subset if you will. And then from there, the reason our training is so powerful and I appreciate you giving me this time to plug it. I won't name names, but there's some very large beings in the marketplace right now with kind of a larger than life presence on social media. And they're almost entertainers as much as their sales trainers, right? And they're, they're leveraging the fact that sales is so difficult and so intricated. This one's got a book of 300 67 questions that you can ask your customers. I can't remember 10 questions to ask your customer. And this one over here is saying that you need to get up at five in the morning and work out and, and it just, there's so much white noise. When in reality, selling is incredibly simple. There's a very honed process that we teach. It's very simple and what we leverage. You don't have to learn all these guys word tracks and rebuttals. You don't have to try to remember what this guy said. You know, word tracks and rebuttals have traditionally been the way sales people are trained. If the customer says X, you say why it'll work every time it doesn't work every time you end up having to put your own spin on it. What I do is I train sales people. Number one to be incredibly confident because confidence sells when someone comes to you and you're compelled that they know what they're talking about. You will buy from them and you will trust them. Number one and number two, we give them the information, but they're simply the conduit, they're simply the vessel. The information that comes out is from the training. But it's in their words, they know what they need to say, but they're forming the sentences and they're forming the phrases in their own words. So it comes out as confident. Try to watch a salesperson try to close the deal that's pulling word tracks and rebuttals out of the back of his head. You can clearly see that they're flipping through, grabbing, selecting, sending it downstairs and out the mouth that comes and it's incredibly awkward and one in three customers catches that and it, it kills any sort of sense of being genuine or having trust. The paid to persuade system is all, it's all natural. We build the confidence, teach you what needs to be said and it's all natural and we and we, we maintain it. That's the other thing in selling, they give you these systems and these courses and these DVDs, I'm dating myself again. These YouTube videos that are gated with a password and ID, they say, you know, use this and learn the system and you're good to go. No, it needs to be iterated upon weekly. Ok. And we have that when somebody signs up for our training, they, it's subscription-based and every week at the end of their Monday, they're on the phone with us relearning talking. Hey, this didn't work for me. Oh, it's because you did it wrong. You got to do it this way. So on and so forth. So very excited about it. It's where my passion lies. It's where my talents are. I've later found out not in being a car dealer but being in a sales trainer. And I'm just really excited about putting it out into the marketplace with tenacity. and I'll actually be I'll be on dropping bombs with Brad Lee next month. He's gonna help me promote it. He, he truly, he's endorsed it. So we're excited. I don't know if you know who Brad Lee is, but he's big and I love his content. Absolutely amazing. Luke. Thank you brother actually filmed it at his studios lightspeed, same place that Tony Robbins Grant, Cardone Damon John all filmed their virtual training platform. So I'm super stoked about it. Brad's a great guy.
Zach: Well, Luke, it's been absolutely amazing having you on the podcast. This is one of our best episodes. I really appreciate your time today and thanks so much.
Luke: Oh, well, we gotta, we gotta get back on here one day and make it the best. But no, I'm breaking chops, Zach. It's been a pleasure. You're an incredibly, just well rounded, awesome guy. I really appreciate the opportunity. I hope you brought these guys some value today.