Glen Drobney, General Manager/Partner of Sands Chevrolet in Glendale, AZ is the second generation of his family to work in the retail automotive industry. His father owned multiple body and restoration shops in Steamboat Springs, CO., Henderson, NV, and Rochelle Park, NJ. Glen attended Colorado State, earning a Political Science Major, and swore he would never take over the family business, as he did not feel well suited for a small town lifestyle.
After college he did work in the family business for a while, but opted for bigger city living and ended up in Jacksonville, FL. His father was acquainted with Luther Coggin, President of the renowned Coggin Automotive Corporation, a subsidiary of Asbury Automotive Group, which is the 5th largest automotive retailer in the country with over 85 stores and over 31 brands. So, in 1991 Glen started his career working under Todd Seth at Coggin Nissan, who served as a wonderful mentor. The dealer group is a respected training pool with an emphasis on training and mentoring to ensure a solid future. This instilled a strong belief in the value of in-dealership training, which has continued to this day and is a key foundation to his success at Sands Chevrolet.
After numerous promotions, in 2000, Glen was offered a promotion to Director of Used Car Operations, overseeing the implementation of the used car process into the Tampa Platform (12 stores). Within one year he helped double all previous used car records.
In 2004, Glen was recruited by Larry Van Tuyl (Berkshire Hathaway) and remained with the group for two years. At that point he ventured off with a partner to Atlanta and purchased two Dodge Chrysler stores. However, the timing was unfortunate with the terrible market crash, so the stores were short lived and he went back to Asbury and oversaw used car operations for 27 Florida franchises for the Coggin/ Courtesy brand.
He had great success, attracted the attention of Sands Chevrolet, and was recruited by the dealership in December of 2010.
Glen recently talked with Dealer magazine about how his strong emphasis on training, referrals and customer reviews, along with a unique digital marketing strategy, has produced a 40 percent increase in profitability since 2010. It has also helped grow the dealership into one of the largest Chevrolet stores in the USA, allowing the dealership to maintain a leadership role in the Western zone, where it has been ranked in the top 5. In 2010 the dealership netted $3.2 million and is on track for $7 million this year.
Tell me about the foundation of success at your dealership?
I think the first foundation is that the dealer principals, Jerry Moore, Buzz Sands and I have a good working relationship. We do not always agree, but always do what is best for the company and the ground is fertile from there on.
Our challenge is that we are surrounded by so much competition – 14 other Chevy stores. We can never spend as much as our largest competitors who budget $400,000 in advertising each month. We have to compete with a quarter of that budget so we rely heavily on our salespeople to do a better job. The right skill set is vital and they have to be really good at asking for referrals. As a result, we have the lowest customer acquisition cost of any dealership I know.
Our salespeople are consummate professionals, have to constantly network and part of that requires acquiring positive online reviews. We require that they perpetually solicit reviews from each customer. They have to live and breathe it as part of our culture.
We spend less than $115,000 to compete in a market against stores as big as the largest Berkshire Hathaway stores, but we are winning at this game. Fifty percent of our sales leads are self-generated, allowing us to spend a fraction of the budget of most dealers.
We also realized that review sites help in organic rankings so we capitalize on ratings on Google, DealerRater and other sites consumers use throughout the buying process. Consumers now visit just 1.2 dealerships before they buy. And we know 8 out of 10 customers go to review sites prior to making that decision. It is clear that reviews go hand-in-hand with the buying process.
How has your background in training influenced how you run your store?
Training is a huge part of our culture. We work hand-in-hand with Alan Ram’s Proactive Training Solutions. Through our partnership and a strong focus on training, we have experienced a 40 percent increase in profitability since 2010.
I came out of the public dealership world which has a huge amount of turnover. As part of our training process we focus on acquiring younger employees and millennials so that it is not all about chasing the collar. It’s more about how to win every day and that there is something bigger than just the sale. 10-15 years ago it was all about money and money alone. But now our sales guys get as much satisfaction out of being part of the team and seeing the team win.
We train on various versions of Road to the Sale and constantly practice phone skills. All calls are recorded and our managers listen to 10 inbound and 10 outbound calls daily to find mishandled leads and lost opportunities. Everyone takes an active role in growing the business.
We do not have a BDC but rely purely on our sales team for appointments. Our Salespeople make an average of 18,000 minutes of calls per month. It took quite a culture change as in both good times and bad times we have to depend on our salespeople being successful and making sales come in– everything is internally generated by sales.
Our dealership has a total of 45 salespeople between new, used, and Internet, who make outbound sales calls and they are all trained to ask for referrals with each call.
How has training influenced turnover?
Turnover at our store is 42 percent annually, which is lower than the usual dealership average of around 50 percent, and for our particular area is really low. Phoenix has a turnover of about 400 percent in many stores, as it is a transient community; 4,000 move in and 4,000 move out each month. It is very unique and has people with diverse backgrounds coming through. We aim to slow down and keep people long term. Hire slow, Fire fast.
Every process in our store is predicated on the correct talent for that particular position. I know the right person I am looking for, find them, get them plugged in and get them trained well to do what they do.
How do you find good employees for your store?
Most prospects come from our managers and salespeople who get referrals from people they know. I also use LinkedIn and network with other people I know in the marketplace. Currently, the environment is such that people want to move from big box dealers and public stores. There is a lot of frustration with how these dealers run their employees as they are held to really tight numbers for compensation and if it goes over 2 percent, they have to cut this or that. As a result they look past qualified people rather than go above that 2 percent margin. Consequently, there is a migration of employees that are attracted to entrepreneurism and creativity
It is a little bit different here for our entry-level salespeople as we have zero walk-in traffic. So you will not make any money unless YOU make customers show up. Therefore, we hire people who have the propensity to be good at sales, such as telemarketers, collections agents, etc., and they work out better for us. And that is also why training is so important.
Tell me about the unique challenges you face in your market and how you overcome them?
We are in a blighted area around downtown Phoenix — there is no natural walk-in traffic. Also, most of our customers are subprime and secondary. 65 percent of our customers have really rough credit so we train our guys to embrace it. Our biggest fear is that we get that good credit customer and treat them like a subprime customer and we train our employees to treat all customers as though they are 700 and above.
We realize we cannot attract and drive in customers from more than 25 miles way. We have to focus on a radius of under 20 miles to have the frequency of visit and get the maximum reach with the few ad dollars we do have.
Every salesperson is also keyed up and taught how to focus on the fact that the customer knows another customer, even if they do not buy. These days only 1.2 dealerships are visited before the customer makes the deal. It is either the salesperson, price or selection. When you look at it like this, it makes it easier to identify how to satisfy the customer’s need.
Tell me about the process improvements you made in Fixed Operations?
Our average service customer only comes in 1.5 times a year, and that means we have to be much more strategic when we approach those customers in the service department, especially with the defection rates being what they are for service.
We average 250-260 a copy from our Customer Pay ROs. It’s because we run it more as a sales process. And again, it’s all about having the right people.
Our service department does around 4,000 total RO’s a month, 80 percent of which are appointments — it’s a large shop.
A lot of service departments rush for quick lube oil change and service writers talk to 20 people per day. However, if you talk to more than 12-14 people per day, there is no way you have time to upsell. Therefore, we have 2 choices:
- Service the customer fast and make no money
- Slow the process down and make more money from each customer
We are not in the best neighborhood so I choose to give a great experience. 12-14 customers per day gives the service writer time with each customer. Our customer feedback is positive, because they love the less hostile approach.
A proper write-up (MPI) takes about 7-12 minutes. It’s fast enough that a hard RO is written up and presented to the customer before they become anxious and want to leave. Our Fixed Ops employees act more as salespeople than order takers. We offer loaners for time issues and negotiate on price. We also have a second phase and each customer gets a T.O. process to the service manager or assistant service manager if they decline the recommendations.
What about Equity Mining?
We sell 40-50 cars out of the service drive each month. This is done through processes and not technology. We had an equity-mining tool a year ago but it was causing the sales guys to ignore a lot of prospects as they did not seem qualified, so we were not getting the volume of sales that we could have. Now, every day, each salesperson has to get two names and numbers of customers to meet in service. They have to keep touching our customers.
Our salespeople now work their call list and walk around with flashlights and trinkets as gifts. We want them to start building names and numbers. We do not want to have any customers servicing vehicles here that are not touched by someone and followed up with.
We produce around 1,800 Customer Pay per and 1,100 Warranty Pay ROs per month. Our sales ups average about 900-1,000 per month, which includes 600-650 appointment shows, advertising ups and walk-ins.
Working service effectively triples our up count and it is much cheaper to get a customer in to use, or try, our service department, then switch to a sales up. This is the opposite of the model of most stores which is more along the lines of, “spend a lot to get them in for the sale first, then convert them to a service customer.” We focus on the service to get them and retain them, then sell them a vehicle after we have won them over.
Tell me about your unique digital strategy?
About three years ago Google allowed us to serve up highly targeted messages to consumers with video pre-roll. Sands Chevrolet is now the poster child for video pre-roll. We decided we are giant slayers and we can take down the big guys’ share of voice. If 10 people are sitting in a room, they only hear the loudest voice. We are surrounded by big box stores screaming $400,000 worth of marketing messages. We have to be where they are not and find a way to get our message to a distinct customer base.
Phoenix is a major metropolitan market with around 6.5 million people, of which at any given time only four percent are in the market and of that only 13 percent are GM, so you see why so many dealers turn to a “spray and pray” strategy – it comes back to that share of voice and dealers spend thousands and thousands on this. It’s really a waste of dollars. We wanted to come up with a delivery system that would target in-market GM intenders and deliver our message. Pre-roll allows us to do this at a much higher level than normal SEO and SEM.
For the same ad dollars we are able to penetrate and hold at 135 percent market effectiveness. We are consistently holding our numbers above what is expected while spending the same amount of dollars and delivering on our sales numbers. Our year-over-year gains are substantial.
Our Digital Marketing Manager, Drew Ament, completely believes in the power of these video pre-roll ads. They are essentially Short 10-60 second promotional videos to sell a vehicle, which precede YouTube videos the viewer has clicked on to watch. For example, a baseball fan seeking a video of a great catch is first served a dealership commercial for a 2015 Chevrolet Malibu. They typically cost a fraction of other advertising, including click-throughs on Google searches.
We began using Video pre-roll heavily in October of 2014 and by May 2015, our website traffic was up by 20 percent. We also attribute a 15 percent rise in dealership walk-in traffic to our switch from traditional advertising, particularly on cable TV, to a reliance on pre-roll.
Each month, we work with Dealer Preroll of El Segundo, Calif., to create 12 videos of vehicles which are posted on YouTube, and then used as pre-roll ads on other YouTube videos. There is still little local competition for the ads, so the costs are not being driven up. On average we pay less than 15 cents per watched ad. That compares with $5.50 per click to Sands Chevrolet for a fairly generic Google paid search ad using keywords such as “Chevy dealer Phoenix.” Paid search is so expensive because of intense competition among Chevrolet dealers in the Phoenix market (14 Chevrolet stores surround us).
Another advantage of pre-roll is that we can use Google and YouTube browsing behavior to target people who are looking for a vehicle. For instance, Google can tell when a shopper is looking for a pickup by attaching tracking cookies, or pixels, and bits of software code, to the shopper’s Web browser, then anonymously track other shopping behavior, such as visits to third-party auto shopping sites. The data allow us to set up a campaign that gets the pre-roll ads in front of the shopper when the consumer goes to watch videos on other sites, including non-shopping news sites.
Before starting pre-roll in October 2014, we were spending more than $50,000 per month for advertising on cable TV, and network. Now, a large portion of our store’s advertising budget is directed to these video pre-roll ads. If a consumer is looking to buy a car today, they are probably going to watch a video. We spend more than $25,000 per month on pre-roll advertising, money that has come out of the cable budget. We also spend more than $20,000 for paid search and Facebook advertising.
Overall, we have wiped out as much expense structure as we could and challenged our employees to move forward. It has worked beautifully: In 2010 when I took over the store, we sold 1,459 new and 1,233 used. We are currently on track to sell 2,375 new and 1,856 used in 2016.
How do you see the industry changing over the next five years and how do you plan to address this at your dealership?
Staying relevant is my most important goal for the coming years. As many have written already, I believe that over the next five years there will be more changes for dealers and how we conduct business than we have seen in the past twenty years. Being nimble enough to move ahead of the industry has to become an instinctual ability.
When I worked for the large public companies, I had access to a nationwide pool of best practices and could call and converse with the best people working directly at the front line. Nowadays, to stay on the front end of progress and trends, I find myself dependent upon my 20 group, LinkedIn group conversations and information that is leaked out of the public companies. This network of information will become increasingly important to small groups like ours and independent owners as industry leaders and manufactures are predicting a flattening out of SARs for the next few years. Meanwhile, the manufactures will certainly not let up on market share expectations, retention or CSI.
So, we will be called upon more than ever to train ourselves and our staff to a much higher degree, and quickly embrace new technology that we once thought could be outsourced. We will have to run our business as though it is 2008, as far as expenses are concerned, yet continue to find ways to get more net out of every transaction in both sales and service.
Author: Digital Dealer
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