Matt Lasco, Vice President of the Lasco Automotive Group, based in Fenton and Grand Blanc Michigan, grew up in the automotive industry. He is the son of a 35-year Ford dealer and was fortunate enough to watch his father develop a great company atmosphere as well as a core employee structure and loyalty that Matt has kept as a key part of his current business plan.
Matt operates a Ford dealership retailing 2000+ new and 2,400+ pre-owned vehicles a year, along with a pre-owned dealership in Grand Blanc, retailing 125 units a month and projected to sell over 1,800 units in 2016.
Matt attended Michigan State University, where he studied Pre-Law but felt more passion for the automotive industry. After a year he switched to Northwood University where he studied Automotive Marketing.
In 2,000, shortly before graduating college, the manager of the Ford store had health problems and Matt’s father approached him about taking over and running the Ford dealership. Matt left college two months early, finished his studies online and helped run the store, quickly boosting sales from 80 units per month to 200.
As a young 21-year-old, new cars were his passion. However, in 2002 his father wanted to move Matt to used cars. His father had been in the business for a long time and seen it all. He knew that if the market turns and there is not enough to survive, the one thing you can always control, no matter what, is the ability to sell pre-owned inventory.
Matt committed to pre-owned and it became his specialty. In just 18 months he took the dealership from 40 total pre-owned units per month to 200+.
Despite a challenging location, in a small city in the middle of Michigan with a population of less than 10,000, Lasco Ford regularly outsells its competition. It has been the #1 volume Ford dealer in pre-owned sales in the state of Michigan for the past five years, consistently selling 2,000 new and 2,500 pre-owned per year.
Matt recently talked with Dealer magazine about how working hand-in-hand with his brother Jay to stay ahead of industry trends, along with a strong focus on company culture, employee satisfaction and ensuring that his is a desirable place for millennials to work, has rocketed new and used sales. Perhaps the most telling statistic is the dealership’s employee retention figures, which are practically unheard of in this industry. Three years ago Lasco Ford had an 80 percent employee turnover rate in sales. That has completely reversed and the dealership now enjoys just 20 percent turnover, with 80 percent retention.
Tell me about how you run the dealership Matt.
My brother is an IT genius and together we are big on starting, rather than following trends. While most dealers are copying the latest trend, we are 6-12 months ahead and have always been among the first to find a new avenue so we can capture the market before we find our competitors there.
We make advertising and marketing adjustments weekly based on what we find works and what does not.
Tell me about how a recent change in culture has positively impacted your dealership.
18 months ago we decided it was time to take a really good hard look at our operations. We found that we needed to listen to our staff and customers more. We had to be willing to change our processes and style of interacting with the customer.
Over the past 18 months we have gone through some significant culture changes with a huge focus on employee retention and the customer experience.
We work in shifts. Everyone has two evenings off each week, ending off at 5, and every other Saturday off. We also close on Sundays so each employee has two evenings to go to dinner with family, or attend their kid’s baseball games; and then every other Saturday off so they can enjoy a full weekend off.
The company culture really continues on from what my father established. He was smart enough to know that rather than fight a battle that is impossible to win, it is better to let go and stand back. If sales plateau, step back, take a look around and study what is really going on to see what the next step should be.
As a result of the significant changes to our working hours, high-quality salespeople have come from other stores to work with us because our hours and work conditions are better. Years ago we were open every day, all day and were a tough place to work. Employees still came seeking jobs, as it was a paycheck. But today’s employees want more of a balance in their work and life and not just a paycheck, they want a decent working environment that makes allowances for the fact that they have families and a life outside of work.
We also have a full HR department, which we launched along with our culture change. HR is the key voice for our employees and keeps track of the reason anyone leaves. Now when we hire new salespeople we have great data about what might make the person a poor hire, such as if they have to drive too far they will only last six months. Refusing to hire the wrong employee is just as important as hiring the right one because the cost of employee acquisition and training is very high.
We offer a better working environment and I honestly feel we are more than a year ahead of 90 percent of other dealers. This leads to happier employees, which is a big deal when it comes to customer loyalty and CSI.
How has this culture change affected CSI and customer retention?
Customer Repeat Loyalty is up eight percent year-over-year and our Customer Experience Index (Ford’s term for CSI) is up 11 points in new car sales and 21 points in fixed operations.
Has the change in employee hours affected overall operations?
It has let us bring in three of the best service advisors we ever had. The fear of the long hours that we had in the past was what kept them away. So, when we shortened our hours we were able to bring in better staff who do a superior job. Efficiency went up and thereby customer satisfaction.
As a result our monthly labor sales average $226,000, which is up 15 percent YOY; and our average monthly parts sales are $225,400, up 12 percent YOY.
What are the top three things that make you stand out from the competition?
- Employee satisfaction: This is key, as without this you cannot have good CSI. If employees are not happy, then your customers will not be.
- The customer experience: We truly care about the customer experience. We are not just trying to win a good score. To have great customer loyalty you have to have a good culture and this took some time to develop.
We focus on running our staff as a team. Our management-level meetings are inter- departmental with someone from every department. In our sales management meetings we have sales managers, HR, Parts and Service. All attend the meeting so that other departments know why and what is driving sales. It gets department leaders to interact and speak in front of the dealer and they learn things from each other. And the same applies to the other meetings for service department, etc.
We also run our sales department as teams. Each desk manager has a team of their own and that team is reviewed monthly and we run contests each month of team against team – not individuals. The team can win prizes as a team. In this way, when a customer comes in, every salesperson treats that customer as though it is their own. So they get the exact same level of service regardless of when they come in. There are no off days.
- Millennials: They now make up a large part of our workforce. This is a younger group and we have learnt that they have more of a balance between income and a desire to have freedom and life outside of work. In the past, it was mostly just about pay and performance incentives. But now it’s about making our employees happy and ensuring that family time and work-life balance is more accessible.
What made you become part of the TrueCar Dealer Council?
I joined before they made some major changes and at the time they were being beat up pretty badly by dealers. However, we were having great success with them, making profit on cars and our customers were very happy with the process. One day I was on Auto Dealer Live and dealers were talking about TrueCar and how they disliked it. I spoke up and said that was crazy, as they are good or better than any other third-party lead provider I had.
I can’t speak highly enough about Chip Perry and what a savant of business he is. Here I am working to change my culture and he is truly changing the culture at TrueCar and dealers are embracing it.
What did you do differently at your dealership that made TrueCar work so well for you?
A lot of dealers brought into the negative press against TrueCar that happened at the start. However, all we really wanted was customers to deliver a good price to and a supply of customers to talk to so we could offer that good price. TrueCar markets really well and does a great job of funneling those customers to us. We pay our salespeople a salary and then commission and a volume incentive. So, regardless of if they get a giant profit or small profit on TrueCar, they embrace it. Whereas when confronted with the customer who is trying to beat them down on price, our competitors say, “fine go to that other dealership and pay that price,” as they are afraid of losing money on the deal.
At our dealership we are very into used car sales. TrueCar customers have trade-ins and we want them. Therefore, we live up to our prices. We were completely transparent before transparency became a big deal as that is how the customer wanted it to be and we maintain that philosophy today. We put up good prices, but not lowest. We beat out the competition by our service and customer experience and are the quickest to respond. We don’t play games and clients embrace that and come to us willing to pay more.
I understand you are also a consultant, tell me what drew you to that.
I consult with a few dealerships on the East Coast and in Texas. I currently have six active dealerships to which I continuously provide marketing help.
As the VP of a dealership I am entrenched in the middle of a 15,000-square-foot facility largely built of glass – basically accessible to everyone. I appraise 300 used cars per month and desk 100 deals. I call the bank 50 times per month to work out approvals. And not just me, but also my brother – that is how we get the current pulse of the industry, stay ahead of the market and maintain our competitive edge. In many dealerships the leadership is not close enough to the real action to know what is going on. That is why I consult. I am familiar with day-to-day operational problems. We have the same problems and in many cases have already worked out solutions for them.
Tell me about Training at your dealership.
We have an in-store trainer who has worked for me for three years. He came from the bottom up and is also the floor manager and the lead recruiter/interviewer for sales. We train from 8:00-9:00am five days per week and he heads up two stages: one for new hires coming on board and one for veterans that slip behind minimum numbers. They get training until numbers are back up.
Which marketing tactics do you find are the most successful for your dealership?
My brother is an IT technology-wiz and we have a heavyweight digital strategy that my brother runs, but that is secret sauce that I would prefer not to spill at this time.
One thing we have that is a little bit more traditional, but that works very well, is that we print and circulate our own monthly paper within our local community, the Lasco Press. The content is one hundred percent from our community. Local parents send in pictures of their kids at events and we have items from local charities. Our dealership is branded heavily in the publication and it has a circulation of 10,000. It also has its own Facebook page and about 2,000 email subscribers.
It makes us part of the community, spreads news about what we do for our community, gets across the message that we are continuing to grow and gain market share, and ensures that everyone knows that we are their hometown dealer.
What is your biggest marketing challenge?
One of our challenges is tracking and genuinely sourcing our leads so we can see true ROI. It is the hardest thing as there are so many tools available that you can waste a lot of money. So we hone in on what works. We have our own internal sourcing process with four checkpoints.
We train our greeters and salespeople to ask the customer at the initial contact how they heard about us and what brought them in. It could be two or more sources and we make sure we get all of them. As we work the deal the sales manager then reiterates the question and asks the customer what brought them in, so as to better hone into the exact source. And we cross reference that versus any lead or Internet lead information. Then the finance manager again verifies the data and asks something like, “Mr. Jones, it looks like you came in after you saw a vehicle on TrueCar?” They verify that source. And last thing we do is a sourcing study that asks about all the things that lead to the customer’s decision. It could be one thing but have 4-5 different sources, so this helps get the data as to which one.
We want to know which areas influence the customer and we then apply that data to our marketing, which is why we do so well. We can be very precise about where we place our marketing dollars.
The sourcing study is done as a survey on an iPad. Each month we offer our customers a chance to win $100 for less than five minutes of their time. The survey includes a giant list of consumer sources. We usually have our customers do it while waiting for F&I, to help kill some time.
It helps us verify every source and drill down. Perhaps the first source mentioned is not the originating source and as the transaction goes along we ask the customer again about other things that might have influenced their decision. We collect all analytics and get ROI and cost per sale of each vendor.
Did you update your facility recently as part of an OEM mandate?
Yes, we spent seven million dollars and built a 45,000-square-foot service and 20,000 sales facility. We can now do indoor demos and vehicle delivery. We also have a gorgeous customer longue and are able to offer an experience similar to the Ritz Carlton. We have a state-of-the-art TV, games for the kids, you name it. We make the experience pleasurable for the customer regardless of if it’s a quick oil change or a vehicle purchase. We want them to be 100 percent comfortable.
What technology or products have you recently purchased that made the biggest difference?
Covideo is a wonderful tool and we use it everywhere – from the customer’s first intro to a vehicle to our lube tech showing the customer a bad brake rotor or dirty air filter. It works really well for upsell in fixed operations. We can show the customer the actual problem and it makes it so credible.
Our sales guys love to use it to send their customers and prospects videos as it has so much more impact – the customer can see the strong passion in their eyes.
I even use it internally to send messages to staff. A visual message can work so much better.
What else can you tell me about your service department?
We are blessed with an amazing service team. We recently acquired one of the nation’s best parts manager, along with the best service manager in the region. They do a really fantastic job preparing anything we need to ensure the best possible customer experience.
If a giant recall is breathing down our necks they are all over it and know how many vehicles we have sold with open recalls and what parts are in stock. They make sure that they set appointments based upon parts availability and our capacity. As a result we end up doing recalls for other dealer’s’ customers as we embrace the process, whereas other dealers are not as committed. It’s a win-win for us — in the long run I want to sell that recall customer their next vehicle.
What else sets your dealership apart from the competition?
Our dedication to the customer experience. And we promote that all over our marketing — We do it the way the customer wants it. From initial contact to finance, to sale — whatever, we do it your way and keep you happy.
Other dealers try to do it their way and are combative. There are now so many avenues available to the customer that they can go to another store. So we are very strong on ensuring a great customer experience.
Our management is one hundred percent invested in the store and will get their hands dirty and talk to anyone at any time. We ensure that the customer is not handed off. I personally take phone calls from customers, answer emails, welcome walk-ins and talk to customers so the customer does not have to suffer multiple handoffs and a lot of back and forth when they get here. We establish their goal and get to it quickly. That keeps our customers happy.
Looking ahead, what do you see as your biggest challenge?
Over the next couple of years controlling the cost of business will become a big deal for dealers as margins are challenged and expenses grow, what with federal compliance, healthcare and floor plan costs. These will continue to grow so we have to be good at maintaining profits and staying lean. We can’t waste anything in the car business anymore.
Author: Digital Dealer
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