Just over one year ago, Rick Hendrick — the former race car driver, owner of a winning NASCAR team, and honoree of the NASCAR Hall of Fame — took a gamble. He challenged his auto group to convert each of its 96 franchises to a new technology designed to streamline his retail empire within approximately one year.
Hendrick Automotive Group, one of the largest privately held automotive groups in the United States, took what some might consider a risky large-scale action to import technology to streamline business operations built on a comprehensive retail and digital platform that would transform his way of doing business.
Their partner was Reynolds and Reynolds, a leading provider of automobile dealership software, services, and forms. The goal was to install the Reynolds eWorkflow system along with 350 computer-driven tablets called docuPADs in every new-car store in 14 states stretching from the Carolinas to California.
The two companies announced the joint venture in March 2017 with an implementation date of July 2018. Hendrick Automotive Group employs more than 10,000 people, all of whom participated in a massive change — dealership by dealership — from pens and paper, to Reynolds’ digitalized operation as the backbone of all franchise operations.
A Fast-Paced Legacy
What some dealer owners might view as a mammoth risk, chairman Rick Hendrick reportedly took in stride. But then, Joseph Riddick “Rick” Hendrick, has spent the last six decades gambling on the future.
Hendrick was born July 12, 1949, in Warrenton, N.C. He won his first drag race at the age of 14 in a self-built 1931 Chevrolet. At 16, he won the Virginia division of the Chrysler-Plymouth Troubleshooting Contest, including a written exam and a timed hands-on diagnosis of planted car defects. As an entrepreneur at the age of 26, he took a chance by selling off his assets to purchase a struggling franchise in Bennettsville, S. C., thus becoming the youngest Chevrolet dealer in the country.
Early on, he drove in four NASCAR races, and today he is the owner of the American NASCAR team and chairman of Hendrick Automotive Group, a dynasty, offering new and pre-owned vehicles, financing, warranties, automobile parts, accessories, service, and body repairs. According to the website, last year Hendrick Automotive retail sales exceeded 200,000 vehicles and $9 billion in revenue.
His latest race, the technology venture, a business decision, was built on a partnership. In an April announcement, Reynolds Chairman and CEO Bob Brockman stated, “I’ve always admired Hendrick Automotive Group as disciplined and well-run.” He added that the new technology involving the docuPAD system to their F&I functions will help the automotive company to “take another step forward.”
In return, Rick Hendrick called the people at Reynolds “true partners who share many of our company’s core values.” On several occasions, he has said, “Continuous improvement has been a longstanding focus for our company.”
Between March 2017 and July 2018, training assistance and some 347 docuPADs were implemented in all existing 96 franchises. In that time, upwards of 70,000 deals went through the system. While the experience was an upheaval, David Foster, a veteran of 28 years with Hendrick Automotive Group, recalls it as overwhelmingly positive.
“We know that the company doesn’t jump into anything unless they know it’s the right decision for our customers and employees,” Foster said from his office at Hendrick Porsche in Charlotte. “They researched and found it to be the best tool to enhance customer experience — not having to spend a lot of time and energy in the F&I office — but also helping us with efficiencies at the dealership level. We had deployment teams that went out to each market area group to train us individually.”
As installations progressed, software and training teams from both the Reynolds and Hendrick companies met weekly to review the status of implementation, training needs, and individual questions from dealer sales, finance and insurance, and service departments. Robert Taylor, vice president of Hendrick Automotive Group, explains why the company wanted to make the corporate change in the first place.
“We needed a way to become more efficient and thus reduce expense that we endure during the sales process. We also wanted a set of tools to focus more on product in F&I, and improve the customer buying experience. Adapting to the customer needs and reducing our costs per sale represent a win-win for both us and them.”
“People like it, because it’s fun,” says Tom Schwartz, the corporate communications contact for Reynolds and Reynolds.
“Customers get excited,” agrees Mark Solomon, F&I business manager at the Charlotte Porsche store. “Over the docuPAD, I explain, and visuals come up. You don’t need a brochure to illustrate, because the documents, and even videos, are there and easily seen. You can zoom in for enhanced print size and clarity. The docuPAD presents the options — the service contract, prepaid maintenance, your selected car exterior and interior. It shows your payments, depending upon number of months, and keeps the customer and the dealer on track to ensure legal compliance. Customers are engaged, because they are looking at it, making choices. And they can continue at their own pace.”
As the technological future churns forward, does Solomon fear that the docuPAD will replace him?
“Never thought about that,” he answers. “It’s a sales tool, but our customers expect and like the human interaction, as well.”
The Three Es
In this technological Tomorrowland, directors say, the emphasis is on three “E”s — ease, expertise, and efficiency.
After the customer has made their car choice, they sit down with their business manager to discuss matters of finance and insurance. But instead of a lecture, the customer receives a stylus. The manager gets one, too. Together, they gaze at what looks like a rectangular card table encased in glass on the desk between them — the docuPAD. Loaded by Reynolds’ technicians, the docuPAD contains documents and visual images related to the customer’s new vehicle.
The business manager acts as a coach, monitoring choices, answering questions, explaining terms and ensuring that the customer understands exactly what he is selecting and what it costs. Reynolds’ software displays information as pictures, videos, and printed forms. The consumer uses his stylus to click on items or to sign integrated documents which are instantly stored by an efficient eWorkflow system across the dealership, providing immediate visibility and eliminating yesterday’s transport of multiple paper documents around the dealership by hand.
The docuPAD with the eWorkflow process of electronic handling enables the dealership simultaneously to store any document; it also affords efficient retrievability because each transaction is labeled with a unique barcode to define its location in the system.
Customers leave the Hendrick dealership along with a new car and a souvenir — a thumb drive. This small object is the complete record of the transaction — every decision made, and agreement signed. Yet it’s the size of a human thumb — not a one-inch thick fistful of paper.
Hendrick Porsche general manager David Foster is keen on this. Not only does the new system save floorspace once dedicated to files in file cabinets, but also it affords easy retrieval.
“If I want to look at a deal from last night,” he says, “I can sit at my PC and pull up all the documents scanned into the eWorkflow system, as opposed to walking into the finance office and looking through file drawers for papers. Accuracy is enhanced, because no one has to re-key information. That gives us more confidence; our employees are all on the same page.”
The ‘Wow’ Factor
Robert Taylor, vice president of Hendrick Automotive Group Information Technology, oversaw the installation of Reynolds’ eWorkflow system. For customers, he describes not only a seamless, interactive F&I process, but the ability to customize deals to fit the needs of customers and improve the overall dealer visit. Plus, something more:
“There’s definitely a ‘Wow!’ factor to it,” he says. “On the leading edge of implementation, it’s not something customers probably have seen in the past, so this is likely their first experience with it. They get excited about what’s going on; they have a pen, a stylus, to sign and navigate the process, so they feel more in control of the situation.”
Foster agrees. “The primary thing is it allows customers to get in and out of the finance office a lot quicker. It’s absolutely working.”
Reynolds reports that in 2017, dealerships across the industry closed approximately 1.66 million vehicle sales using the docuPAD system, an increase of more than 30 percent over 2016. The company predicts the numbers will grow. Reynolds’ corporate communications representative Tom Schwartz says that dealers on average are seeing a lift to overall sales — between $200 and $225 per-vehicle improvement in gross profit for dealerships and their F&I people.
Hendrick employees uniformly express enthusiasm for the new Reynolds eWorkflow technology, enumerating what they see as advantages. They note that yesterday’s informational lectures by sales people are replaced by pictures, diagrams and informational displays, which clients negotiate at their own pace. The eWorkflow system reduces errors caused by paper handling and delays due to deliveries. Federal compliance requirements are guaranteed as the point-and-click system won’t advance until the necessary federal forms are signed.
Rick Hendrick maintains that he works to serve his employees, an “upside down” management pyramid, that places trust and respect for those who daily represent Hendrick Automotive Group and Hendrick Motorsports. Having celebrated 250 wins in the NASCAR Monster Energy series and having been inducted in 2017 to the NASCAR Hall of Fame, Rick Hendrick continues his racing pace in his automotive business endeavors.
The recent reorganization of his automobile empire in 2017-2018 appeared upfront to be a strategic risk and at “not a trivial amount of money,” as Hendrick’s Robert Taylor admits. But he acknowledges that the change has Hendrick Automotive Group executives already betting on future success by determining the date when the company will recoup its investment. Taylor won’t nail it down publicly. Still, he confidently assures, “We have picked a date and we’re on target for it.”
Janet A. Martin is a freelance writer based in the Washington, D.C., area.