Russ Darrow, now 72, started in the auto business as a salesperson in 1962, and in 1965 he started as a Chrysler dealer – and he’s still going strong, loving the business.
Russ, tell us about your dealership group.
We are a 14-dealership, 23-franchise group headquartered just outside Milwaukee, WI, in Menomonee Falls. We proudly sell Honda, Mazda, Toyota, Scion, Nissan, Mitsubishi, Kia, and Chrysler, Dodge, Jeep, Ram products. We’re fortunate to have five Kia franchises and three CDJR franchises, and one of each of the others. We retail about 13,000 new and used vehicles a year, from our dealership division, plus we have two other divisions in our overall company; a fairly significant truck leasing company, and six JD Byrider/CNAC franchises – four in Wisconsin and two in Colorado.
I’m still active in the dealership operation, but my son Mike is president and COO. My son Russ is in charge of our five Kia dealerships, my son-in-law, Harry Mains, is the national sales manager for our Russ Darrow Leasing Company, and Ivan Lawler is in charge of sales for five of our other dealerships.
How did you fare during the recent recession?
We’ve survived the recession and the General Motors and Chrysler bankruptcies. Because all manufacturers are doing well again, we’re also doing well again. The auto industry is very lucky; it survived the downturn and most dealers are doing very well today. The styling appeal of our automobiles, their safety and reliability is excellent, across most all manufacturers. The consumer fleet is getting old – now about 10 years – and that is driving sales and service today.
One change we often don’t give credit to for the industry’s new perception, and reality, is today’s media coverage. Media is talking about new, hot vehicle styling and fuel efficiency. This is all good news for a car dealer, and the ongoing love affair with our industry.
Like most dealers, our service business is seeing changes, as the quality continues to improve in all makes. Warranties have become longer, and we are shifting by doing more internal work, new car prep work and used car reconditioning, as new and used vehicle sales have spiked back up to where they were before our recent recession. In addition, we’re selling a lot of tires and other accessories, with the factories’ strong encouragement.
You’ve been a Chrysler dealer since 1960. It has been a bumpy franchise, hasn’t it?
Until Sergio Marchionne and Fiat took over Chrysler, the ride had been quite bumpy, especially the last six or so years. Being a Chrysler, Dodge and Jeep dealer today is very, very rewarding. It is enjoyable. Marchionne is a brilliant thinker and he has great loyalty from the people in the company, the executive decision makers.
This change with Chrysler feels a little like it does with Nissan since Carlos Ghosn took the helm. These guys are worldly and global – they live on airplanes. They bring that little extra from a worldly understanding and knowledge. They understand different governments and cultures and how they work and, they delegate very well. As such, they’re doing great marketing jobs for those companies.
In ’05 Isuzu was troubled and you dropped it. Then you’ve sold Cadillac, GMC and Chevrolet. Any others?
We gave back Suzuki, two years ago. We picked up Mitsubishi. I trust that brand will get its sales and marketing act together before too long. The current sales slump is one of the saddest. It’s like, “OK, what are we going to do here?” Great products, good dealers…but not enough sales, today. Again, we love their product, and Mitsubishi customers are so loyal.
Suzuki took off strong for a few years too.
These companies have great names and great worldwide divisions, but they cannot handle the retail car business. My conclusion is failure of leadership. Some refuse to heed the advice of their U.S. sales executives who are trying to help them succeed here.
I just had a similar discussion the other day at the grand opening of our newest Toyota store. The Asian car companies that are doing well here have almost all put an American into the top U.S. sales positions. These are people respected by the U.S. dealer body. These leaders know how to communicate with the Japanese, and their excellent results prove it.
How are you maximizing your sales opportunities today?
Huge advancements have been made in the world of the Internet and electronic marketing. We’re utilizing these now to market vehicles, service and parts. We’ve consulted the experts, read the literature, and are now maximizing our marketing and merchandising for our service customers for routine maintenance, and of course, for incentives, discounts, and service specials by leveraging our database.
Another new area we’re developing is our service department quick lanes, fast service lanes offering a 30-minute guarantee. These are more than lube, oil and filter places, and feature clean and pleasant wait rooms with Wi-Fi and coffee, big-screen TVs and other amenities a customer might expect only from a large metropolitan dealership. Now, here at Russ Darrow Auto Group, customers find this kind of service in smaller towns and our big cities alike, where we’re driven to make it fast and pleasant for customers to have their vehicle service needs taken care of.
These techs are trained to sell?
They’re trained and incentivized to deliver not only fast service, but to look for other ways to be of service to the customer, and they are scored on how well they do that. Our motto is that we’re in the people-pleasing business. We don’t want any tough selling, any hard selling, but having said that, it’s nice when you have a comfortable service write-up area and you have well trained people who legitimately and honestly can help customers see additional service needs they might consider having done while the vehicle is in the fast lane. One of the most important things for all of us is time; for so many of us it is more important than money – and customers just want service here to be pleasant and fast, and that’s what it is.
How is training provided?
It’s a blended approach, with internal resources and talent and outside training help too.
Our consulting partner, Ken Coker of Coker Consultants handles much of the responsibilities of a fixed operations director for us. Because he has other dealer clients and facilitates key fixed operations seminars and conferences, he brings us considerable value, both from a local level and from a broader industry perspective.
What is the foundation of your company’s culture?
Good work ethic and honesty. We’re in the people-pleasing business and people are pleased only if they’re happy. In a retail business, everything starts with happy employees and consistency. Consistency means looping back to check and make sure best practices are being followed. If you can create an environment where employees are happy to show up every day and who can convey that happiness to customers, you’ll improve your retention with both groups of important people.
It’s the same basic formula no matter how large an organization you operate. Our obligation is to sell the brand and make sure the brand is well represented. If you make that happen, if you build the right reputation for your stores, customers will come into the dealerships. If we do that, then it’s up to the people in the dealerships to execute our culture and to execute sales methods and plans for desking deals in a way that’s pleasing to the customers and at the same time results in car and truck sales.
We partner with the best vendor partners in the industry, and we must absolutely use the latest and best information to cull out the relevant from the irrelevant messages so that our marketing is delivered in a laser approach for today, vs. the older-fashioned, shotgun approach.
In terms of a sales process, what do you think today’s car buyers want?
I’m very sensitive to the reality that time has become so important to the car buyer. Because time is more important to most people today than money, we had to find a way to service them faster.
And from a salesperson’s perspective?
I also was concerned that the old way of selling cars was chewing up too many salespeople. Because of the Internet and this emphasis on time, the window for sales people to develop the right skills and behaviors to sell cars well enough to make a good living was closing fast.
Sales people have to be so knowledgeable — more than ever today — and those who learn to be will succeed. Car sales are very measurable. Every sales staff has good, better and best level sales people. Any sales associate who wishes to get better has only to grasp the resources available. That includes training, all the latest tools for sales and prospecting, and mentoring from a respected peer or sales manager. Success in this business has always been based on having the desire to be the best.
Let’s not forget too that money drives salespeople, and like customers they want things faster and they want it now. They want job satisfaction sooner. But, some things, like career success, take time to achieve.
We spend lot of time with sales managers focusing them on why it’s important to observe every customer who comes in. Only when they’re aware, will they be able to read what’s going on at a sales associate’s desk. They’re trained to jump in when it’s time, based on how much time the associate has spent with the customer and based on ‘Let’s get it done.’
With so many sales today originating off an Internet lead or at least the shopper having evaluated vehicles on the Internet, customers come in pretty far along in the sales funnel. With tools we have here from vAuto to price and market more competitively, we’re keeping aging down and turn high, and even though we may let a vehicle go for what seems on paper a loss, we’re improving turn.
We also present every prospect with a paper file on the model they’re interested in. This paper folder contains that vehicle’s CARFAX and everything the customer will want to know about that particular car. It really helps our credibility when the customer comes in and says, “Boy, this is really the real deal here. They’ve got 20 pictures on the Internet and I saw those before I came in. Now they’ve got a folder that shows everything about the past owner, the repair history and all that…”
As I said, we’re in a people pleasing business. We’re taking the guess work out of working with customers by focusing on transparency and speed, in a deal put together by an intelligent sales person – and when you do that, bingo, you’ve got a sale.
You’re 72 now Russ. Plans?
My son Mike is president and COO of the organization. My son Russ runs our five Kia stores. We have a sales director, Ivan Lawler, who’s in charge of seven or eight of our stores. The majority of the people in the car business today are between 25 and 45; a guy at 72 really has to scramble to stay on top of this business…and I love it! I love the action, the surprises, the latest Internet and social network challenges…and how great all those new tools work. It keeps me younger – mentally and physically. And finally…I’m still a leader, not a follower.
Much different today from when you started.
It’s all changed around, but it’s still a thrill!