Fred Salinas, the owner of Friendly Ford in Crosby, TX, got his start in automotive on the manufacturer side. After going through Ford’s minority dealer program, he completed one of the fastest buyouts in the dealer development program’s history. His store, Skyline Ford, earned Ford’s President’s Award twice in its first five years.
That success put Salinas in position to acquire Friendly Ford in 2002. After weathering the difficult years of the recession, his dealership today is up more than 145% over last year, and is on pace to sell well over 2000 vehicles this year. He’s also on Ford’s National Dealer Council and is involved with the National Association of Minority Automobile Dealers.
He recently talked with Dealer magazine about being a single point dealer in a market filled with stores owned by large dealer groups; and his store’s use of social media and how it has transformed his business.
Fred, how did you get your start in the auto industry?
I started with Ford Motor Company upon graduation from the University of Kansas in 1979. I spent three years with Ford before jumping ship to Chrysler. I was there seven years.
Ford had a training program for potential minority dealers. I wanted to become a car dealer and had an opportunity to participate.
After graduating from the program, I ended up having to wait a few years before being offered a new Ford point in Dallas. But two gentlemen who owned another store nearby protested about the new dealership. It worked out, though. Ford ended up putting us together as partners.
As a result, we started Skyline Ford in Dallas in June of 1996. We won the President’s award twice in the first five years. We also had the fastest buy-out through the dealer development program for a Ford franchise in the Dallas region – thirty months.
Thirty months is quick – that is impressive. I knew some guys who went through the program about that time who didn’t make it.
This was the late 90’s and if you remember, it was a strong market at the time. Dallas was really growing. We were in a blue-collar neighborhood so the demographic was perfect for the Ford buyer. We sold a lot of trucks. And we sold a lot of small cars to first-time buyers.
We were very aggressive in the market – that sector had several demographics. We served Garland, Mesquite and the East side of Dallas. We were right on the interstate which brought us plenty of traffic.
We also had a real good management team in the showroom. Since it was a brand new dealership, we relied on the front end of the store to carry most of the revenue. Service did ok but we just didn’t have many units in operation at that point.
You had that store for five years?
Yes. My two partners also owned Town East Ford store which they later sold to Van Tuyl.
When did you head to the Houston area?
After they sold their store, one of the partners wanted to buy me out so I took his offer in the summer of 2001 and then I sat on the sidelines for 18 months.
I kept a good dialogue going with Ford and eventually they contacted me and asked me to take a look at a deal in the Houston area. I had a good reputation after winning the President’s award twice and doing the quick buyout. It was owned by Elvin Hayes – a former basketball NBA player and Hall of Famer.
He had just built a brand new facility the year before. I did a market study and knew the potential of the dealership. So we met and I agreed to buy dealership. We actually struggled here for four or five years. But since 2012, the store has really rocked. Right now, we are up 145% year-over-year.
We just sold one hundred and fifty new Ford’s in April.
So, you are not feeling any of the pressure with the oil industry being down?
Well, Houston has certainly been affected by the energy crisis, but it is a diverse city now and I am out here where there are a several petro chemical plants that refine more than just crude oil.
This sector of Houston on the east side is really growing with a lot of new homes. We are pretty excited about the future of this area of Houston.
When you did your market study, were you envisioning that kind of growth in that area?
I was actually, because Ford had told me that the city was planning to cut a new road in from Houston–which they did about five years ago. That really helped getting us a new artery in from the city.
It’s turned Crosby into a nice bedroom community with the median income more than $70,000.
That’s a good place to be.
Yes, I was shocked when I saw that number. Every quarter Ford supplies us with a report detailing all the demographic studies –the median income, the units in operations, where we are pumping in from, what neighborhoods we need to pump into.
There is a lot of good information on that report, so I review that with my management team.
What has helped get us to this level is social media and our online presence. My entire management team is under thirty-five years old, so they are very social media savvy. And much of that now has moved to mobile. My sons like to tease me about being old school because I still read the paper.
My oldest son, Austin is the General Sales Manager, and my other son Blake is a sales manager. He spent five years as a Captain in the Marine Corps and did a tour in Afghanistan. He has been a real good addition for us. He has a real in depth understanding of the numbers.
One of the key factors is our online reputation – We’re running a 4.8 out of 5 stars on Google right now. That actually pulls in a lot of people from within an hour of our location because they read our reviews and they also read our competition’s reviews. It gives the customer an idea of what to expect and what type of business we run.
Just in terms of your marketing, obviously, you mentioned social media, the dealership reviews on Google, but how else are you getting people to get to your store, to bypass some of these other dealerships, and come to you?
We have a large Hispanic market, which is 40% of our business. We advertise a lot on the Spanish radio, and in the Spanish newspapers here. We also generate a lot of word-of-mouth, since that community talks more than others. Half of our dealership speaks Spanish and that is an advantageous for us.
Ford is really in that arena too; they do a great job of multicultural advertising, and marketing
But everybody fights for this market — Chevrolet, Ford, Toyota, and Nissan. So we have to really work at it.
In researching for this article, Fred, it appears that you put yourself out there with the dealership. Not many dealers have such a public persona.
I grew up in a small farming community in Kansas, and as I mentioned, went to the University of Kansas. I never forgot where I came from. After high school, I went into the Marine Corps for a couple of years, and that was a good experience for me. I took advantage of the GI Bill and graduated in four years. I like to give back and recently started a scholarship at KU to help kids obtain their degree.
You’re working for Ford and then Chrysler. At what point did you decide or know you wanted to become a car dealer?
It was just in talking to the dealers. Many of the dealers I interacted with in the 70’s and 80’s had started selling cars on the showroom floor. I knew I had the resources to secure some seed money and I knew the right people to help me get involved with one of the minority dealer programs offered by Ford Motor Company. Like any entrepreneur, I had my concerns early on because I had a young family, a mortgage, and all the other responsibilities that come along with raising a family. But I was encouraged early on by my mentor and former Ford dealer Ric Middlekauff. He played a major role in the early stages of my career on the retail side of the car business.
That’s a great story. You said the dealership has taken off in the last five years as social media has really helped the dealership reviews. How hard do you have to work the dealership review angle?
Well, it all stems from our process. We train our people to first be knowledgeable about the vehicles. Second, we have to be telephone savvy because we are talking to customers that have already been on different websites and often times know more about the vehicles than we do. The internet has made the public very knowledgeable and we have to be on our game in order to capture their business.
When customers come in, we want them to be comfortable – we are Friendly Ford – we want our customers to know this is where they want to come to get the vehicle they want.
We have an easy process for our customers. As I mentioned, we are a 4.8 out of 5 stars on the online review sites. We have the best scores in the city. So that has really helped us. And we often lead the region with our CSI scores. We focus on those CSI surveys daily because those are the factors we are concerned about – how our customers are treated.
You are a single point dealer in a metro area that has several large groups. How hard is it to compete with them?
It is real hard. We have to mix it up with the big boys if we are going stay in the arena. 5 of Ford’s top 25 highest volume dealers in the U.S. are within 50 miles of my dealership. It is an ultra competitive market and we have to fight for everything we get.
I have to give a lot of credit to my management team. I decided about three or four-years ago to give the young guys a shot. They were showing me things they could do online or with their phones that just blew me away. And they rewarded my trust in them with great results. My management team is young, energetic, and most importantly they are engaged in the business. The numbers don’t lie.
How many employees do you have now?
I started with 40. We have 76 now.
How do you manage employee retention? Every dealer I talk to tells me it is one of their biggest challenges.
Well, I try to let people do their jobs. I am not a micro manager.
I hold a weekly staff meeting and we review all the numbers — where we are at, how were tracking against our objectives. Every night I get a sales report with the production of that day and then in the morning I look at the service numbers from the day before.
I stay focused and I work six days a week. I come in every Saturday for part of the day just to show my face and interact with customers. We do a lot of service business on Saturdays because we do a $14.95 oil change, so the drive on Saturday mornings is packed. I like to spend time out in the service drive. It gives me a chance to meet our customers and at the same time to make sure our process works for them. Our customers like being able to connect a face with the name. They like that we are family owned and operated. I think that gives me a leg up on the corporate stores.
Let’s talk about service. You have had to grow that business significantly since taking over the dealership?
You’re right. We have grown it considerably just in the last several years. My Service Director, who has been with me six years, is really honed in on Ford’s policies and procedures with warranty. He also on top of our customer pay business.
Our absorption has improved every year for the past 4 years. We are still tweaking that to get it to 100%. We are going to get there because of all the units we are selling.
Sales has just gone through the roof the last two or three years. We had a record year last year and already we are up 145% this year.
It is very competitive on the technician side here. I lost a lot of technicians when the oil was at a hundred dollars a barrel. The oil companies were hiring those technicians for five days a week, not six days a week, and they were paying them more money, so anybody down here that was good made that jump.
We are back up to par now. We have some really good technicians and it has really helped our business. We have two or three master certified technicians and people certified in a specialty like transmissions, tune-ups, AC or electrical. We have a strong team of people. And my service manager works hard to help the tech get the repair out the door.
That is another thing that is important for us – getting that vehicle out in the time promised. One of our biggest challenges lately is the Parts shortage. We are working closely with Ford on this but this is an industry issue, not just a Ford issue.
Yes, and with all the recalls, those parts getting harder to get in a timely manner.
There are times we can’t even get them. We have to put customers on waiting lists. We have to tell those customers that we don’t know when the part will be here. That does create some friction out there on a very small percentage of our overall business, but we overcome it.
But Ford is in a good spot right now. Everything they are producing we can’t get enough of. Across the board, it is strong lineup. We can’t get enough Explorers. The F-150 is my biggest seller so I do have plenty on the ground.
The Edge sells well; the Mustang sells well; our Super Duty business is tremendous with the blue collar market in Houston,
The Taurus is a good car, the Fusion is our best seller on the car line.
You’re on Ford’s Dealer Council. The dealers have had your challenges through the years, back in the day. Are you happy right now with where Ford is at with the dealer relationship?
We have a great dialogue with Ford. Ford works very well with the Dealer Council and although we do have our battles, each side compromises to come up with solutions that work out fair for everyone. We have great leadership with Ford. Mr. Fields and his executive team are running an extremely efficient and profitable business and that has a trickle-down effect to the dealer level.
As you look to the next three, two to five, maybe ten years, what is your perspective of the industry? Everyone is talking massive disruption from the likes of Tesla or other players.
I do think about that a lot. We, as car dealers, are heavily invested in this business. And along comes some techy with a website who wants to change the way we do business and how we interact with our customers.
TrueCar, Carvana, and Tesla all come to mind. I think some of what they are doing is good for the business and some of it is not. But at the end of the day it comes down to what the customer wants. We will make adjustments as needed to meet customer demands.
I think driverless vehicles will be available at some point, but how much will they disrupt our industry, it’s hard to say.
On the facility side, I do like Ford’s new design. I plan on expanding our store because of our growth. I really need more service bays and more customer parking. We are busting at the seams now, based on the return and the volume we are selling. This store was built for a thousand units, new and used. We doubled that last year and this year we are on pace for an even better year. I’m a happy camper.
Author: Digital Dealer
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