When it comes to serving the customer, the community and staying compliant, these six dealers set the pace for the industry in 2006.
The Pacesetter from the West does so much for his community that he was nicknamed after the city in which his dealerships are located.
The Southwest Pacesetter has always been known as an overachiever, and the same holds true when it comes to how he operates his dealerships.
The Pacesetter in the South has used his influence in the industry to support minority-owned dealerships, and he was instrumental in establishing the General Motors Minority Dealers Association.
This year’s field also includes a Pacesetter whose Southeast dealership is so confident in the way it handles the subprime business that it has been using a customer satisfaction index (CSI) for the last seven years. Today, the dealership’s CSI registers at over 94 percent.
The Midwest Pacesetter cares so much for his community that he uses his dealership’s advertisements to warn drivers against drunk driving and road rage, as well as advocating the use of seat belts.
Out of the Northeast, the Pacesetter there works diligently to stay ahead of the curve when it comes to compliance and the latest industry innovations.
As diverse as this year’s field is, all the Pacesetters have one thing in common: The commitment and resolve to do it the right way. Each will admit to their imperfections, but say they continually strive to raise the bar for regulatory compliance and ethical practices within their respective communities.
Come Sunday, Feb. 4 (the second day of the National Automobile Dealers Association show), one will be chosen as this year's Dealer of the Year — not for the profits generated, but for the work done to improve the image of the automotive financing industry.
With dealerships in both California and Arizona, Jim Click and Bob Tuttle’s contributions to the communities in which they do business are well chronicled, such as the $1 million in annual donations they make to various organizations. In fact, Click is often referred to as “Mr. Tucson” for the work he’s done in that city. For the two owners of the Irvine, Calif.-based Tuttle-Click Automotive Group, their involvement in the communities they serve is all about carrying on the legacy of Holmes Tuttle, who founded the business in the 1920s.
Both Click and Tuttle, the founder’s son, have earned countless accolades for the performance of their dealerships, including the prestigious Ford President’s Award. Their success, Tuttle says, lies in their desire to take care of their customers, and to do the things others won’t. He says it’s about treating customers like family — something the company’s founder made sure to instill.
“Innovation has come through technology, but everyone can buy technology,” he says. “It’s really about the people, the training, the enthusiasm and the treatment someone gets when buying a car.”
Click prides himself on the compliance policies his dealerships have in place. Each customer signs a pledge, which ensures that he or she is aware of his or her rights. In addition, every deal is audited to ensure no signature is missed and every figure matches. Compliance training is conducted monthly. And recently, the business began requiring every F&I, sales and general manger to be AFIP-Certified.
“If properly trained, you’ll do a good job of presenting and selling the products,” Click says. “And that’s a big part of the dealership’s income. It doesn’t do any good to not sell in the proper fashion or to not dot your i’s and cross your t’s. In the end, it’s just good business — if you’re going to do it, then do it right.”
If the present can be used as an indicator of the past, Jay Carley, Jr., executive manager of ABC Nissan in Phoenix, Ariz., was that overachiever in school that set the pace for everyone else. Always ahead of the curve with industry trends, it didn’t take Carley long to jump into e-contracting, and to incorporate today’s leading innovations.
With his business averaging 150 to 200 e-contracts per month, around 40 percent of its total deals, Carley believes e-contracting is not just the future, it’s the present. ABC went the way of e-contracting only nine months ago, and Carley said he already sees the positive impact it has had on his dealership, such as improving cash flow and inventory management.
“I think it’s a mindset,” he said. “When we started, we had only three or four deals a month. That’s when we realized that it wasn’t just about e-contracting, it was about a way of life for our operation. Once we understood and committed to that, we went from three or four contracts a month to 100 or 200.”
Carley said his dealership’s goal is to get transactions down to an hour using e-contracting — an achievement ABC Nissan is quickly closing in on. The dealership is currently averaging one hour and 15 minutes per transaction.
While faster isn’t always better, customers seem to appreciate the consistent and organized presentation that e-contracting allows. “The CSI in our dealership had been below zone by about one to three points,” Carley said. “Right now it’s 4.1 points above the average in customer satisfaction. In F&I, we’re at 96.3, which is five points above the district average.
“You can really tell the difference between being two or three points below vs. being four to five points above,” he added. “That’s a major swing in customer satisfaction.”
Maybe it’s the four years he spent in the Army that taught him to adapt quickly and to embrace the challenges of the ever-changing auto retail market. Regardless, Carley’s dealership is one of Nissan’s most successful e-contracting shops, setting new records nearly every month. So, you can bet that Carley will continue to lead the pace — no matter what comes next in terms of industry innovations.
North Houston Infiniti
With eroding margins, Fernando Somoza knows that excelling in F&I is a must. “From smart buys to leases, you have to know how to do it all,” says Somoza, co-owner of North Houston Infiniti’s parent company, Paramount Auto Group. “Every dealer has to realize that financing is an integral part of the profit picture.”
Difficult market conditions and beleaguered domestic manufacturers only bring out the best in his company’s sales team. Somoza and business partner Kirk Franceschini exited 2006 with a stellar sales month. The North Houston Infiniti dealership finished fourth in the nation in December, and their two Saturn dealerships also led the region.
Somoza attributes his dealership’s success to his systematic approach to business. Several years ago he and Franceschini developed a roadmap to synergize their employees and focus their collective attention on achieving set objectives.
“It was a plan of action,” he said. “We made everyone accountable for what was on the plan, from F&I and product sales targets to the penetration we wanted to achieve.”
An accomplished businessman, Somoza is not shy about admitting that his initial success in the industry was the serendipitous result of being in the right market at the right time when he opened a small Porsche/Audi dealership in 1980. That’s one of the reasons Somoza takes pride in his role as co-founder of the General Motors Minority Dealers Association, an organization established with the aid of General Motors.
“I am very proud to be a part of the association’s mentor program,” says Somoza, who mentors a small minority dealership in Louisiana. “It is very difficult to get into the business, especially today. Your percentage of survival is a hell of a lot less unless you’re given a Lexus or BMW franchise.”
With countless contributions to his community and a business focused on providing quality service to an “undesirable” market, it’s hard to imagine that Robert Bessam, owner of the Washington, D.C.-based Easterns Automotive, doesn’t believe in karma. It’s even harder to believe he doesn’t believe in karma when you hear his dealerships have a customer satisfaction index (CSI) of 94 percent — and that’s while servicing the subprime market.
“The customer experience we provide is the main thing we focus on,” he says. “We’ve been doing a CSI now for the last seven years. The first time you think about doing a CSI for subprime, you ask, ‘Do I really want to know what these customers think of me?’ We were never ashamed of it. Since we began it was at 90 percent, and now it’s above 94 percent customer satisfaction.”
Actions speak louder than words and Bessam’s commitment to his community is evident by the more than $250,000 in sponsorships and donations Easterns gives out annually. For the last six years, Bessam has also played Santa Claus to several needy families in the D.C. area, giving away 12 cars this last holiday season.
“I call it a homegrown business, as D.C. is now my adopted town,” he says. “And that’s part of the reason why we give back so much — because this is the same community that’s made it all happen for us.”
As for processes, Bessam protects his dealership from overzealous employees by paying them hourly wages instead of commission. This prevents anyone from getting “deal happy,” he says. “In the subprime market, what makes a lot of owners uncomfortable is the fact that they have to chase the money and chase their deals, and it adds up very quickly for them,” he explains. “Being that that’s all we do, and knowing that every customer that walks in is in a subprime need, we get to control the deal from the start.”
A career waiter until 1990, Bessam never imagined he’d be working in the auto retail industry. Getting his start in wholesale, his transition to retail would be quick.
“We closed for the Fourth of July and threw an employee party, and we had 1,300 people attend,” he recalls. “I guess I still see myself as a waiter; I can relate to them. And when I saw 1,300 people — well, that’s a lot of people feeding off this old waiter.”
Davis-Moore Auto Group
“If it’s not right, don’t do it.” That bit of homespun wisdom may come across as self-evident, but it’s a rare individual who can muster the inner resources to live steadfastly by it. For Dawson Grimsley, it’s a motto left to him by his former boss and mentor, the late Grant Davis — the man who put the Davis in Davis-Moore Auto Group.
“If faced with a choice between making $500 honestly or $2,000 dishonestly, or even borderline dishonestly, I’ll make $500 every time,” Grimsley says.
In keeping with this business philosophy, Grimsley, now president and co-owner of the Wichita, Kan.-based operation, has implemented a variety of policies and practices to keep his finance office compliant.
Two years ago Grimsley appointed a full-time compliance officer. In 2006, Grimsley required all 16 F&I employees to become AFIP-Certified. In May 2006, each F&I office was equipped with a camera to record every transaction, with every recording reviewed daily by employees and management.
Although the cameras are certainly critical in protecting both Davis-Moore and its customers, they’re used primarily as a training tool. “We can watch our guys and use it in our training sessions to correct mistakes,” says Grimsley, who was introduced to the idea by reading F&I Management and Technology magazine. “It all goes back to ethics. We want to be as ethical as possible.”
Another way Davis-Moore expresses its commitment to high ethical standards is its involvement in the local community. The dealership supports a number of charitable causes, such as the Wichita Children’s Home, the Muscular Dystrophy Association and Juvenile Diabetes Foundation.
Even Davis-Moore’s marketing campaign is light on selling and heavy
on giving. The dealership’s radio advertisements consist of awareness-raising safety tips designed to promote safe driving practices in the community. “For the last eight years, our public service announcements have cautioned customers about drinking and driving, not wearing their seat belts and road rage,” Grimsley says.
Balise Motor Sales
When it comes to philanthropy, Mike Balise of Balise Motor Sales says it’s a defining factor for his dealership. “It’s a big part of who we are and what we do,” he says. In the last year, the dealership donated $60,000 to rebuild a local skateboard park and gave $10,000 to the community children’s hospital. Coming up is a fund-raiser for Camp Safe Haven, a camp for disabled and special needs children in Cape Cod.
Balise, whose grandfather and father both worked in the automobile industry, now operates 18 dealerships. Balise Motor Sales, which opened in 1913, is now one of the largest new- and used-automobile retailers in the New England area.
Balise Motor Sales strives to raise the bar for regulatory compliance and ethical practices through the use of electronic menus, e-contracting, F&I training and AFIP-certification for both sales and F&I employees. Balise prides himself on the fact that the dealership requires menu presentations on every transaction. He also says that every deal is audited and that the dealership has worked to reduce the time it takes to work a deal. Right now, he says, the average time per transaction is approximately two hours.
Each dealership also holds monthly F&I meetings for training on sales techniques and products. In order to make compliance training continuous, the dealerships also stage a weeklong compliance seminar every year, and employs an F&I trainer on a quarterly basis.
“We are very straightforward with our dealings, because that’s who we are. And that’s not just because it’s our company’s policy,” says Balise. “We do what’s right regardless of the profit we might leave on the table. We don’t want to take advantage of anyone.”