Growing up as the daughter of a dealer principal, Jane Vaden Thacher never imagined following in her father’s footsteps. But as she stood on the stage inside the Paris Las Vegas’ Champagne Ballroom, waiting to hear if the efforts of her F&I departments had propelled her Savannah, Ga.-based dealer group to the top of the F&I world, memories of her father raced through her mind.
The road to the F&I Dealer of the Year award began exactly 20 years ago this past June for Vaden Automotive Group. That’s when Dan Vaden, who passed away in December 2010 at the age of 83, made one of the biggest sales of his career: He convinced his daughter and son-in-law to break their vow to never work in the car business.
“When I texted all our employees about [the award], several of them who have been with us a long time responded, ‘Your dad is smiling on you from heaven today,’ That kind of gave me the chills,” she says. “Everyone knew what he stood for and what a quality dealer he was. In a small way, I was living up to that.”
Big Shoes to Fill
Thacher’s father was the quintessential car guy. He was the 1992 TIME Quality Dealer of the Year, which the city of Savannah celebrated by naming April 1993 Dan Vaden Month. He was inducted into the Savannah Business Hall of Fame in 2008.
But nothing is more telling of his love for the business than the line etched into his headstone: “Just an old used-car salesman.” Hardworking and blessed with an entrepreneurial spirit, Vaden remained active at his 46-year-old dealer group until he retired in 2008. And by all accounts, the apple didn’t fall far from the tree.
“There’s that stereotype that second- or third-generation dealers don’t always earn it,” says CEO West Beaver, a 20-year Vaden employee. “That wasn’t the case with Jane. She earned her way, working every department in the dealership.”
The family patriarch was hired out of college as a used-car trainee by Riverside Chevrolet in Jacksonville, Fla., in 1952. Over the next 15 years, he became general manager and part owner. But Vaden knew he was destined for more.
“My dad always wanted his own dealership, so he approached General Motors because he didn’t have the funding to do it himself,” Thacher said. “GM helped him start his dealership, which, at the time, was the second Chevy point in Savannah.” That dealership opened in 1968 on the site of an old dairy farm. Today, that stretch of Abercorn Street is called “Car Row.”
Vaden ran the dealership singlehandedly, and his wife, Jane, whom he referred to as his boss, approved his marketing campaigns. His daughter joined the team as a teenager.
“My dad was big on work ethic, so the summer I turned 13, he decided it was time for me to go to work. And I wasn’t happy,” Thacher recalls. “All my friends were at the pool, and I was operating the switchboard, filing out service ROs and basically doing all the grunt work nobody wanted to do. And I did that every summer until I went off to college. That’s when I decided I wanted a career of my own.”
Vaden became the first Isuzu dealer in the nation in 1980, then opened a Datsun point in 1983, a Suzuki franchise in 1988, a Hyundai franchise in 1991 and Vaden Volkswagen in 1993. He also opened his first store outside of Savannah in 1989, a Chevrolet-Oldsmobile dealership located in Brunswick, Ga.
The more successful Vaden became, the more he gave back. It’s a legacy Thacher continues today. The group supports a host of causes, including the Leukemia and Lymphoma Society, the Wounded Warrior Project, the Humane Society and Ronald McDonald House.
Thacher says her father loved the business. More than anything, he loved talking to people and solving problems. And he was big on customer service. In 1994, he told the Savannah Morning News, “I always wanted to give the customer more than they paid for. In other words, if they spend a dollar with me, I want them to get at least $1.10 in value.”
“I guess I coined the term ‘the Vaden Way,’ which is the way my dad did business,” Thacher says. “That means doing it the right way.”
A Daughter’s Return
Thacher spent most of those expansion years in college at Vanderbilt and the University of Georgia, where she earned a master’s degree in journalism and mass communications. She then landed her first job at Ketchum Inc.’s Atlanta office, where she specialized in consumer products and marketing. But her father kept trying to lure her back to the family business.
“My dad was a very good salesman, and he kept on selling my husband and me on the benefits of coming back and going into the business,” Thacher says. “It took him about two years to get us to make that decision.”
Thacher chose to start in F&I. “I felt if I could master that, it would be a great stepping stone for understanding how everything worked,” she says. “But more than anything, I knew it would give me the street credibility I needed in order to eventually take over the business.”
Thacher began her F&I training at the group’s Nissan store. She also attended F&I school at Resource Dealer Group, a subsidiary of The Warranty Group. She then floated from store to store until she decided the group needed somebody to oversee F&I for all stores. So in 1996, she became F&I director and immediately instituted a system for monitoring F&I performance, CSI and contracts in transit (CIT), with every F&I office faxing her reports on every deal handled that day.
“I was tracking everything and I found out pretty quickly that by simply tracking it, you improve it,” Thacher notes. “I didn’t realize how uncommon that was at the time until I was invited to present my process to a group of dealers. I just thought it was the normal way you should conduct business.”
On Her Own
Thacher had big plans for the group’s F&I operations, but her father had even bigger plans for her career. He promoted her to general manager at the original Dan Vaden Chevrolet store in 1997, then executive manager for the group’s Nissan store. The experience did exactly what her father had hoped.
“I wanted a dealership of my own that I didn’t inherit,” Thacher says. “So in 2000, I went to General Motors and petitioned them for another Chevy point, and my dad heartily agreed the market could handle another Chevrolet store.”
The OEM agreed, but on two conditions: The new dealership couldn’t be branded with the Vaden name, and it had to open by mid-2001 — which wouldn’t have been a problem if Thacher wasn’t pregnant with twins and caring for her one-year-old son.
“The twins were born at the end of March ’01, and we opened Coastal Chevrolet that July,” she says. “It was challenging, but it was such a neat experience. I was able to build it from scratch.”
Coastal Chevrolet is now one of eight Vaden stores, which include two Chevrolet-Cadillac stores in Savannah and Brunswick, Ga., a Chevrolet-GMC-Buick store in Beaufort, S.C., three Nissan outlets, and a Volkswagen franchise. They all average about 100 cars per month and have earned several awards, including five-straight Mark of Excellence awards, six straight Nissan Owner’s First Awards, and Buick’s Honor Award for operating one of the Top Three Buick dealerships in South Carolina.
“Jane has done a great job of continuing her father’s legacy in terms of how we treat our employees and customers,” says Beaver, who was hired as CFO the same year Thacher returned to the family business in 1994.
“We came in as the second generation. Our approach to the business was more about accountability,” he adds. “We wanted to be the best, and we established a goal of being No. 1.”
Even as Thacher’s role evolved and the group added more stores, she never lost her passion for F&I. The reason, she reveals, dates back to the days when she and her husband of 23 years, Peter Thacher, were dating. He bought a car from her father, who insisted he add a service contract.
“As it turned out, we needed a new transmission as we were driving from Atlanta to New Mexico on a camping trip,” she recalls. “It was $3,000, but we had the service contract and it was covered. … I remember thinking, ‘Everybody needs one of these.’”
The group’s acceptance rate for vehicle service contracts through October was 56%, but Thacher’s F&I team was running at 60.9% penetration through August. GAP also leads the way with a 57% acceptance rate, while prepaid maintenance penetrates at a 33% clip. As for profit per vehicle retailed, the minimum expectation for Vaden’s 14 F&I managers is $1,200 — “We’re way over that,” Thacher notes.
“Our pay plans are structured where you don’t get paid unless you are at 40% penetration on service contracts,” she adds. “Then we set it up so it’s very appealing to be at 50% or better.”
The expectations are high, but F&I managers don’t operate on an island. In fact, the entire organization is keenly aware of how important F&I is to the success of the operation. That’s why the group won’t hire or promote a sales manager unless he or she has done F&I successfully for a minimum of six months.
F&I managers conduct preliminary interviews before customers enter their office, but Jeremy Jimenez, who was hired this year as the group’s sales director, says the process really starts with the first pencil. “F&I is the most profitable department in any dealership, so it makes sense to do things this way,” he says. “All of our F&I managers are very strong. What we’ve been able to accomplish is amazing.”
The F&I-friendly desk also ensures deals are properly structured. In fact, desk managers will often submit deals to finance sources so F&I managers know what they have to work with and have the time they need to run through the menu. “We really want our F&I people focused on the menu,” Thacher says. “We want them to have the time and ability to thoroughly review the menu with every customer.”
Truth or Consequences
There’s another reason Thacher wants her F&I managers focused on the menu. “We do menu audits every month. And if you’re not 100% menu compliant, you’re not eligible for any kind of bonus,” she says. “If you get caught twice, you won’t be part of the team.”
Every Vaden F&I manager is sent to F&I school, must sign a formalized code of conduct and must complete the group’s compliance checklist on every deal. But not all compliance and ethics controls come from within. The group has locations near two Army bases — including Fort Stewart, one of the largest bases in the eastern half of the U.S., and Hunter Army Airfield. There’s also Parris Island, a military base in the group’s Beaufort market. And each one keeps a blacklist of local businesses.
“Thank goodness we’re not on those lists,” Thacher says, noting that at least 30% of the group’s business originates from the military bases. “That would be the kiss of death.”
Even the group’s monthly bonus program is designed to drive the group’s expectations for CSI and CITs.
“You can sell a lot of product, could be No. 1 in PVR, and you won’t get paid a bonus unless you meet our benchmarks for CSI and CITs,” Thacher says.
She didn’t reveal what the benchmark was but said the group’s current F&I director, Toby Howard, calculates each department’s CSI based on a 30-day average. It’s that attention to customer satisfaction that earned the group the Better Business Bureau’s 2006 Diane Wahrman Torch Award for Marketplace Ethics. “We work really hard on those relationships,” she says. “And our BBB scores stay pretty top of the food chain.”
As for the other qualifier, producers can’t have CITs over 14 days. If a producer has one at the end of the month, the gross profit goes to the management company. “We don’t have a CIT problem anymore,” she says plainly.
Lee Perez is an area manager for Resource Dealer Group, whose relationship with Vaden Automotive dates back 20 years to the Pat Ryan days. He has only missed two of Vaden’s monthly variable operations meetings since he arrived eight years ago. And it was during one of those gatherings earlier this year that he witnessed Thacher withhold bonus money because five of her stores didn’t satisfy the group’s CSI and CIT qualifiers.
“She just waved it in the air and said, ‘I hate it, but we’re not going to pay,’” he recalls.
Perez and his team, including District Manager Charles Petty, have played a critical role in Vaden’s F&I success. Petty serves as the group’s F&I trainer. He also conducts deal audits and will even “spin deals” when needed. “He’s got to be able to show he can do it,” she says.
Thacher leaned on Perez and Petty during the Great Recession, doubling down on F&I training and looking for efficiencies in their sales and F&I processes. It was about this time that Thacher added service tours and first-appointment setting to the sales process. The steady stream of new business convinced her that she had an untapped source for vehicle and F&I product sales.
Having unsuccessfully tried incentivizing service advisors to drive the process, Thacher knew a more calculated approach was needed. So in 2010, the group sought out a programmer to develop software around a process Thacher and her team would develop that year and perfect in 2011.
The solution is dubbed “Revlink,” and the process is simple: The sales team, now called Revlink specialists, are notified when a targeted customer arrives in service. And it requires minimal involvement from service writers — they simply log into the Revlink system when a service customer is waiting for his or her vehicle to be repaired. If the specialist’s F&I pitch gets a bite, they turn the customer over to F&I.
“We have prescreened customers coming to our business that we don’t have to spend advertising money on,” Thacher explains, noting that each specialist is armed with scripts and trained on the group’s rules of engagement so they’re not pitching customers too often. “We know their trade is going to be there, so we appraise it while they’re there. We know they’re spending money on their car, so a service contract would be appealing to them. It’s a no-brainer, but like everything else, it’s all about accountability and process.”
Last year, the program generated $1.98 million in gross profit, helping the group sell an additional 494 vehicles and a combined 581 service contracts and prepaid maintenance plans. The group was also able to acquire 404 vehicle trades and save $323,000 in acquisition costs.
This year, the group broke off the Revlink program into a separate company managed by Beaver, who is currently working with more than a half a dozen stores. It’s an exciting time, Beaver says, but it wouldn’t be possible if not for Thacher’s leadership.
“During the downturn, she wanted to rally the troops, and she asked me to set up a video conference for a weekly video message,” he says. “And I remember her telling them, ‘We’ll get through this thing.’ Getting to see that the dealer was in the trenches every day was so impactful.”
The Warranty Group’s Perez adds: “I’ve been on this side of the business since 1999, and I’ve never had a dealer like Jane. She’s approachable and she’s forthcoming with everything. And if I have an idea, she wants to hear about it.”
The morning after Thacher flew back from Las Vegas with the F&I Dealer of the Year award, her team surprised her with a welcome celebration. “They asked me to wear a Wonder Woman costume, which is kind of my trademark. And I said I’d play along,” she says, noting that her F&I team is on pace to deliver the highest F&I gross profit in company history.
But Thacher is already working on her next big project. In January, the group hopes to bring its maintenance program in house to use it as more of a retention tool. She’s also seeking out partners to help grow the Revlink business. And in the next few years, she’d like to increase her store count to 10, then 12.
After all, she says, “My dad always used to say, ‘There is no finish line.’”