Dry Ridge Toyota is a Kentucky dealership retailing nearly three-quarters of a million dollars a year in accessories sales. Dealer Principal Rob Marshall credits the store’s exceptionally successful accessories program to two key factors: technology that helps consumers visualize accessories on their vehicle and an aggressive accessories sales policy. Dealer magazine spoke to him recently to learn more.
Here is the full story from Rob Marshall:
First off, Rob, how does a rural dealership generate $700,000 annually in accessory sales?
We made it a priority. In 2010, we put in the right accessories sales processes and invested in the right training. As a result, we now sell an accessory of some type to two out of three new-car buyers and to about a third of our used-car buyers for about $700,000 a year in accessories sales.
What triggered the new emphasis and why has it succeeded?
I’m a real numbers-driven manager. Every month I want us to out-perform the prior month in every department and in CSI. Complacency is the kiss of death in the car business.
I knew we weren’t maximizing our accessories opportunity. We had an accessories display near the F&I office to appeal to buyers as they waited to complete their paperwork. We certainly weren’t proactive about accessory sales, only if a customer asked. As a result, we sold maybe $180,000 a year.
We discovered too that most sales people shut down when the deal gets to the price or payment phase. They do not want to, in their minds, jeopardize the deal closing by introducing accessory purchases.
That’s the way we ran, scared away from accessories. We allowed our competitors –Pep Boys and the aftermarket people — to sell all that stuff to our customers.
Then Toyota challenged us to raise the accessories-sales bar. Toyota had approached us along with seven other dealerships in the Cincinnati and Kentucky market to participate in a pilot accessories sales program. The program offered a selection of three digital accessory tools to help us market and present accessories more professionally. We selected izmocars’ AddOnAuto tool for our dealership.
What does this tool do for you?
This tool, in kiosks placed around the dealership, uses digital technology to help customers visualize and personalize various accessories from Toyota and third parties. The software shows how these accessories will look when installed on their particular make and model vehicle. It then lets them configure that vehicle with thousands of different exterior and interior accessories, from tinted windows to custom wheels, in real time. This tool also shows how the accessory price can be easily and quickly rolled into the customer’s overall vehicle financing package. It also helps us leverage customer wait times by entertaining them with all the different ways their vehicle can look when accessorized various ways.
As important as this tool is, what makes it so successful is how we’ve rebuilt our sales process and compensation plan to promote assertive accessory sales. We remodeled our showroom to resemble an Apple store to promote accessories sales. In other words, there are no sales desks, but instead round tables between the showroom vehicles and AddOnAuto kiosks.
When we sell the car, the salesperson has the option of showing the accessories to the customer. Either way, the customer is always introduced to our 300 square foot accessories display room and to our personalization specialist Angie Fannin. I enable every individual in the dealership, from salesperson to lot helper, to talk accessories and sell accessories to a customer.
The person who sells the accessory gets 10 percent of the accessory’s sale price. We do not negotiate on accessory prices; and we install all accessory purchases, except for sunroofs and leather upholstery upgrades.
Every accessory sale is a three-way split on the gross profit, between the new-car department or the used-car department and then parts and service. F&I does not get a part of this split, though if the F&I manager sells an accessory he or she does get 10 percent of the sale price.
Was it difficult to reframe the importance of accessory sales to your staff?
It has to be done correctly; izmocars provided the training, in our training room, which acquainted all showroom staff with how to use this system. Of course, training’s great, but the mentality is, “Show us the money.” That’s what motivated them to get behind and promote these products to every sales and service customer. Moreover, our process is such that if a salesperson doesn’t present accessories and somebody else in the dealership does that individual gets the 10% of the sale price.
When the staff noticed there was money to be made – and that anyone could make that money – the program really took off. By making the decision and setting the policy that whoever sells accessories is rewarded, we created internal competition and keen personal focus on making accessory presentations important. This attitude and behavior is practiced by the person at the parts counter, the technician, and the lot attendant helping a customer. A customer will ask a question of anyone, so if it’s an accessories question, I want everyone in my dealership able to handle that question properly.
Some older salespeople must still resist this sale.
The younger salespeople are certainly more comfortable with this sale. They are very competitive and very aggressive. They prefer to close these sales themselves without getting Angie, our personalization specialist, involved. They easily move the customer to the izmocars’ kiosks and encourage the customer to play with it. It’s not uncommon for them to sell one or two accessories from the kiosk itself and then still take them to meet with Angie.
The salespeople who have been with us for years still prefer to complete the vehicle deal before they introduce the customer to Angie. Yet one of our veterans who wanted nothing to do with accessories sales for the first 90 days of this program is now my top accessory salesperson. On average, a typical accessory sale is $737.91 per new Toyota sold.
How did your results compare to the other Toyota dealers in Toyota’s accessory sales challenge?
We were the only dealership to meet the 100% sales objective. Not only did we meet the goal, we far exceeded it, achieving 412% of the sales goal. For perspective, the next runner up achieved only 92% of its sales objective. Coincidently, we were the only dealership in the pilot that chose the izmocars tool.
In the midst of a recovering economy, this process for selling far more accessories to far more customers – and without the hassle and cost of having to carrying a large inventory — has helped make accessory sales here a key profit-driver for our dealership.
Let’s shift gears; describe Dry Ridge Toyota and your history with the dealership.
We are located at Exit 159 on I-75 in northern Kentucky, between Cincinnati, Ohio to our north and Lexington, Kentucky to our south. We have been in this area since ’92 and in our new Image II facility since fall 2010. Our county, Grant, is home to 15,000 people, a rural area. We sold 813 new Toyotas and 1300 used vehicles retail last year, and are pacing ahead of that this year. We have 70 employees. I have been the dealer principal here since 1996.
Most of our customers drive in excess of 30 minutes to buy a vehicle from us. We have a Toyota sales efficiency of 550 percent, meaning we sell five-and-a-half cars in our market for every one Toyota sold by Toyota dealerships in similar markets. We’re a 10-time President’s Award winner, and we have won Sales Excellence, Service Excellence and CRM Excellence a number of times.
To what do you attribute such achievement, Rob?
Our people; I’m no one without my people. It means hiring the right people who will be loyal and who will work hard, and because you compensate them well, they make good things happen. We are a Toyota Signature Program Top-Performing store, which recognizes our commitment to the customer experience. This program is about daily improvement and daily training.
Under this program, we create process maps or job descriptions so that all departments that deal with customers have a standard, structured process, like: “Here’s how we greet our customers” and “Here’s how we show them a car” and “Here’s what we do when it’s time for a test drive” and “Here’s how we do a walk-around.” This makes training and applying these skills very simple. By using this structured process, it is very easy to spot when someone isn’t being consistent with the process. When a CSI score drops, we can look at that individual’s CSI score and see when someone has dropped off the process.
My daily routine is to get on our CRM – we used an ADP CRM integrated with our ADP dealer management system — and look at our ups count for the previous day and our appointments for today. Then I go on the Toyota Dealer Daily web site to track how we’re performing. I pull the surveys every Friday and review every one. Then I get with my managers and hand back to them the surveys for their departments and we review these every Monday to make sure our performance standard remains high. We take our survey scores very seriously. We actually take our comments even more seriously because they actually tell us how we’re performing. It’s a daily, non-stop process. Then, of course, I go in my Dealer Matrix systems and do all the financial statistics reports and make sure everything is in line.
What advice might you share with dealers considering accessory sales?
The best practices are: 1) enable everyone in the dealership to sell them, so you’re guaranteed it will not fail; 2) make sure the price is consistent – stay on list or some other set price structure, especially in a small market where people might compare pricing; and 3) stock impulse accessory items. Keep a small sample of items in stock – spend a little capital – because people will buy these and you had better be ready to install them.