F&I Director Tom Wilson (left) said he was convinced to join Riverside Auto Group after Tim Dagenais (right) told him, “We’re a family company. We put more value in family and in people than we do in profits.”
F&I Director Tom Wilson (left) said he was convinced to join Riverside Auto Group after Tim Dagenais (right) told him, “We’re a family company. We put more value in family and in people than we do in profits.”

Spread across four markets in two time zones, Riverside Auto Group might be the best dealership the rest of the country doesn’t know about. At least, that’s how Tom Wilson, the group’s corporate F&I director, describes it. Now that the 44-year-old operation has been named 2010 F&I Dealer of the Year, anonymity is no longer an option.

Wilson joined the Escanaba, Mich.-based group in 2006, after five years directing F&I operations for a high-volume store. Having seen it all in his 18 years in the dealership world, he knew exactly what he was looking for. And as he describes it, his meeting with the owners of Riverside — brothers Matt, Tim and Paul Dagenais — was as much about him interviewing them as it was about them interviewing him.

“I’ve got an obligation to myself to start with, and I have certain moral, ethical and legal boundaries that I don’t cross,” Wilson says. “I told Matt, ‘As long as you’re OK with that and you allow me to do business that way, I’ll show you how to make more money, and we’ll do it straight up and clean.’ Since that matched their philosophy and way of doing business, he agreed.”

What sealed the deal for Wilson was a conversation he had with Tim as they drove around to each of the group’s seven locations. After opening up about his experiences, his highlights and lowlights, Tim turned to Wilson and said: “We’re a family company. We put more value in family and in people than we do in profits.”

“The way this company is structured is, we’re boots-on-the-ground,” Wilson says. “You don’t have to dial 1-800-ivory-tower to talk to the assistant who locates them on the yacht. More often than not, you’ll turn around and bump into the brothers because these guys have worked from the ground up, learning the industry.”

(Left to right): Technician Joe Bellmore — the first technican hired by ‘Papa’ Dagenais — Service Manager John Malnar, Parts and Service Director Dan Berry and Matt Dagenais share some laughs.
(Left to right): Technician Joe Bellmore — the first technican hired by ‘Papa’ Dagenais — Service Manager John Malnar, Parts and Service Director Dan Berry and Matt Dagenais share some laughs.

A Tribute to Dad

Riverside might not be known to the rest of the world, but it’s a household name in the Escanaba community. The brothers are also well known to the 20 Groups, industry associations, vendor advisory boards and auction houses. 

“We’re definitely a ‘show-me’ organization from the top down,” says Matt, who, at the time of the interview, was on his third day of monitoring call volume to his Marquette, Mich., and Marinette, Wis., stores. “We’re that way because of the training we got from Dad.”

“Dad” is Robert “Papa” Dagenais. He was born in Escanaba in 1940 and began building his Dagenais Enterprises in 1966 after the purchase of Riverside Auto Sales. His wife Jeanine was involved from day one, while his boys began their dealership training as soon as they could walk and talk. What their father instilled in them was that no job was beneath them.

The family patriarch’s teachings were put to the test in 2008 when he passed away unexpectedly at the age of 67, leaving the brothers to oversee a business that now counts seven dealerships, a local banking institution, a shopping center, three manufacturer housing communities, a residential subdivision, numerous commercial real-estate holdings, and a community foundation under its banner. As Wilson recalls, Robert’s passing was difficult not just for the family, but for many of the employees as well. Many of them had known him for 25 years.

“He was simply an amazing guy,” Wilson says. “The boys were at a loss when Bobby died, but because of the way the company has its processes in place, we were able to push that auto pilot button for awhile and know that things would continue.”

Wilson says the spirit of Robert Dagenais is alive and well through the three brothers, not just in their expectations for how customers are treated, but in how the company deals with the rest of the industry.

“Matt’s been instrumental in helping a lot of vendors develop their products. In fact, people come in from all over the country to see how our CRM works,” Wilson says. “The fact is, the brothers have done a lot in this industry, but they are low key about it. That’s how their father brought them up.”

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Industry Celebrity

Hugh Abernethy, a DealerTrack executive, is a fan of Riverside. The dealer group was one of the largest organizations to embrace the company’s dealer management system (DMS) back in 2004. Abernethy describes Riverside as a well-run management company that has successfully blended a local approach to customer service with a modern view of technology.

“Matt is very passionate about our solution and he’s been a huge reference dealer for us,” notes Abernethy. “If I tell him a dealer is looking to sign up with us, he’ll say, ‘Give me their phone number. I’ll make the phone call for you.’ And in this dealer world, nobody does that.”

Riverside also runs its entire business development center through the DealerTrack CRM system. DealerTrack also helped create a seamless connection between the DMS and the F&I office, which has brought accuracy and efficiency to the department.

“I really worked hard with those guys to make it work, and we’re constantly working with them on system enhancements,” Matt says of DealerTrack. “The best thing about it is, they actually listen.”

Out of the 1,000 dealers Jeff Stafford has signed up to the MenuVantage solution, the business development manager has never seen a dealer who was so involved in the selection and integration of a menu system. What struck him about Matt and Wilson was how confident they were that the new menu would be accepted throughout the organization. There is one thing, however, that Stafford wouldn’t want to see from his other customers.

“Up to the point where Matt was trying to get our software for free, he was trying to trade a hunting trip for MenuVantage software,” Stafford jokes about Matt’s negotiating prowess.

(Left to right): F&I producers Mark Barbeau, Jim Anderson, Diana Weber, Deanna Lawson, Marty Kulack and F&I Director Tom Wilson gather for a team huddle.
(Left to right): F&I producers Mark Barbeau, Jim Anderson, Diana Weber, Deanna Lawson, Marty Kulack and F&I Director Tom Wilson gather for a team huddle.

Building a F&I Operation

The running joke at the dealer group is that Wilson’s office consists of a steering wheel and windshield. That’s because he spends most of his time on the road visiting his stores providing guidance and training. His typical morning starts with a review of each dealership’s F&I log, which he uses to identify issues he must address at one of the stores. It’s one of the practices Wilson brought to Riverside.

When Wilson joined the dealer group, Riverside had been without an F&I director for some time. Compliance was already a big deal, especially since the group is one of the more visible operations in the Upper Peninsula. The brothers also had established strong relationships with the group’s lenders. As Wilson says, the stage was set for him to take the reins of the group’s F&I operation.

Coming from a high-volume store, Wilson knew he could find balance between being aggressive and customer-centric. The key, he says, was getting his F&I departments to follow a single process, one that would make it easy for him to identify strengths and weaknesses.

Wilson also modified pay plans so producers would be paid on a per-copy average of the store instead of on individual accomplishments, which bred teamwork and made life for the group’s controller easier. Wilson did raise some eyebrows when he employed a bonus program, but, for the most part, he’s found support every step of the way. That’s not to say that there weren’t some hiccups.

“Coming from a market that routinely held two points or better [in reserve], I said, ‘Guys, mark that rate up a little bit and hold some reserve,’” Wilson recalls. “Every one was, ‘But, but, but.’ Well, six months later I’m pulling my own foot out of my mouth when I’m tracking these loans that pay out within 30 days because the customer is refinancing with the local credit union. I was like, ‘Uh oh.’”

That incident made Wilson’s push to replace the dealership’s homegrown menu even more important. Working side-by-side with Matt, Wilson sought out a menu that could be loaded with all of the company’s service-contract information, and could cover 10 different brands. He also wanted it customizable, and wanted it equipped with all the compliance safeguards he could get his hands on. After looking at five other options, Wilson landed on MenuVantage in 2007.

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As for what sells at Riverside, the company’s Midwest Protection Package — a five-step process that includes rubberized undercoating, Teflon paint sealant, a wax-based rust inhibitor, a resin-based interior treatment and Crystal Fusion windshield protection — leads the way. In a market in which only one-third of the roads are paved, protective measures are an easy sell.

“I found a statistic that noted, for every paved mile of road in the UP, we put down four tons of salt every year,” Wilson says. “So we use that stat to sell the package, and it certainly helps.”

Two years ago, the brothers decided to reinsure the company’s service-contract offering to provide more flexibility on claims approvals. The group made another change six months ago, adding wrap coverage to keep pace with their manufacturers’ basic powertrain coverages. Other products on the menu include prepaid maintenance, GAP, credit insurance, a spray-in bedliner, and a combo offering of tire-and-wheel protection and key replacement.

“We don’t make a lot of money on reserve, but we have a nice profit center with F&I because we have a very good suite of products to offer,” says Wilson. He adds that all contract and title work is handled at the corporate office, which frees up his F&I managers while ensuring compliance, accuracy and timely contract funding.

After the success it had with its F&I and fixed-operations directors, Riverside added Curtis Polley (left), who serves as used-car director. He works closely with Paul Dagenais (right).
After the success it had with its F&I and fixed-operations directors, Riverside added Curtis Polley (left), who serves as used-car director. He works closely with Paul Dagenais (right).

Pushed to the Edge

With business up 25 percent so far this year, Riverside is emerging from one of the darkest periods in its history. It all started three years ago, when gas prices hit $4/gallon.

“[Fuel prices] had a bigger impact on sales than the credit crisis,” says Wilson. “I did have some major lenders tighten up, but our long-established relationships with the local lenders allowed us to just move the paper.”

Strong ties to the local credit unions and banks, including the Dagenais-owned First Bank Upper Michigan, allowed Riverside to push 70 percent of the group’s paper to the local lenders during the crisis. For his part, Wilson met with his managers regularly to identify which lenders were active and which weren’t. And if a lender’s terms didn’t fit his markets, Wilson didn’t hesitate to cut them off.

Things took a turn for the worse for Riverside after the elder Dagenais passed away in 2008, as the situation at General Motors and Chrysler worsened and bankruptcy became a real possibility. In the summer of 2009, Riverside found out three of its dealerships were on the chopping block. Two of the dealerships were saved by arbitration, but one of the group’s Chrysler-Jeep-Dodge dealerships was shuttered.

“The last couple of years have been the most challenging, frustrating and educational years in the car business, and it all started with Dad passing,” says Matt. “Yeah, there were some sleepless nights, but we’ve always been proactive in everything we do. That was just something that Dad was very adamant about.”

Wilson points to the addition of Dan Berry in the fall of 2009 as an example of how the group kept things rolling. Taking over as the group’s fixed-ops director, Berry not only brought profitability to the department, but consistency as well. In January, Riverside also added a used-car director, Curtis Polley, a move that’s already paying big dividends.

“I’ve seen a 100 percent improvement in the used-car situation since he’s come aboard,” Wilson says. “And that’s a good thing because a large part of the market right now is looking at those late-model used cars.”

Wilson didn’t let the economic woes slow him down either, as he did all he could to keep the recession out of his F&I offices. These days, Wilson’s biggest challenge is the influx of cash customers. He hopes the evidence manuals he created will improve his operation’s chances, but the one thing he can count on is the support of the Dagenais brothers.

“There’s never been a question in my mind that they support my efforts and my decisions to do things straight up, honestly and ethically,” says Wilson. “This is one of the best companies you’ve never heard of. We don’t have the glory of the major metropolitan locations, but this is the most decent group of people you’d ever want to meet.”

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