Joe Myers Toyota is among the top 15 dealers nationwide in Internet sales, with 2,531 new and used car Internet sales units in 2010, and close to that number in 2011.
The dealership received the 2010 Toyota Board of Governors Award for being among the top 60 dealers in non-fleet vehicle sales volume nationwide, and the prestigious Toyota President’s Award for 2010. The dealership has won both awards numerous times in the past decade.
For the past eight years, Joe Myers Toyota has been Toyota’s top used car volume dealer in Houston and a top three new car Toyota dealer in the entire Gulf State region.
Jerry Rocco, general manager, partner and vice president, and Lance Lewis, general sales manager, recently shared with Dealer magazine their formula for success.
Jerry, how did you get into the car industry in the first place?
In 1974, I started working for Lone Star Ford of Dallas. I sold cars for two years and worked in the finance office for six months. Another dealer bought the store and wanted me to stay there. But another dealer wanted me to come to Houston, where he had four stores.
I elected to go to Houston, where I sold cars for six months; then a position came open in a Dodge store. I worked there from 1977 to 1980. Then I worked at Joe Myers Ford for seven years as a sales manager. Then I left to work at Lone Star Ford for two years before coming to Joe Myers Toyota, as general manager, in December of 1989. Now I’m GM, partner and vice president of Joe Myers Toyota.
This store had a 500 unit new car planning volume when I came onboard in 1989, and last year we sold 3,200 new cars and 3,200 used cars.
Lance, what is your background?
I’ve been at Joe Myers Toyota for 21 years. I started out selling cars and worked my way up to my current position of general sales manager in 2001.
Growing up I had no idea I’d ever be in the car industry, but I was always intrigued by the business.
I had been working in the banking industry for eight years. Then, in 1990 the banking industry was in turmoil; I worked for a large bank and my job was being phased out. I took a severance package offered to me and tried to decide what to do next.
I was looking for something different and I always loved automobiles. That’s when I saw the ad in the newspaper for a car salesperson. After talking it over with my then fiancée, now wife, I decided to apply.
After meeting Jerry, I knew this was where I wanted to work. Jerry held a training class for all the new hires for a week. The first month on the floor I sold 16 cars and I was hooked. I worked as a salesperson here for five years earning numerous sales awards including Master Sales Award in 1994. That is the award for the top 50 Sales Persons in the nation for Toyota. There was even a story in the local paper mentioning me.
Soon afterwards, in 1995, I was promoted to new car manager. I was then promoted to general sales manager in 2001. The industry has been very rewarding for me and my family and I’m glad I pursued my interest in the business.
You two have worked together as a team for a long time and your dealership is highly successful. What’s the foundation of that success?
Jerry: We basically have no turnover. We treat all the guys and gals with respect that work here. They like working here. We pay them well, and there’s a lot of longevity in the store.
I’ve been here for 23 years; Lance has been here for 21. We have three new car managers, three used car managers, and three finance managers and all of them have been here five years or longer. One finance director has been here over 20 years.
I think one of the most important things a car dealership can do is keep the turnover low and not lose your upper management, because when they leave, they take people with them.
I believe it’s unhealthy for a company to have turnover, so we do everything we can to keep people here. All of the people I just mentioned started selling cars at this dealership. Nine managers sold cars here, and five of the seven finance producers started here selling cars.
We promote from within. This gives us more stability. Our people know what and how management thinks. And if we’re not here, they know how to make decisions. We’ve all been working together for so long that basically we are going to make the same decisions. It works well with everyone on the same page.
Lance: An important part of our success is our consistency in our management style. Jerry and I have the same philosophy on making things work and that is clear to our entire management staff and sales team. Everyone knows their role and they are encouraged to handle any issue they encounter personally. As Jerry says, we always look from within when we need to fill positions. When we can’t fill a spot internally, we are extremely selective when interviewing applicants.
We have been very successful using an ASM system to sell vehicles. These assistant sales managers run their own teams of five to seven salespersons. We have a total of seven ASMs currently who have all been promoted from the sales floor due to their exemplary performance. These ASMs are crucial in getting new hires up to speed quickly and effectively. They help hire, train, and manage, and close deals whenever needed. They are an important part of our management team.
How did you weather the economic downturn?
Jerry: Our used car business stayed about the same. Our new car business, with the Tsunami and the Toyota recall, and subsequent bad press, was not as steady. And, we didn’t have as much product to sell, because they weren’t making enough of them.
So, we had to cut expenses. We cut back mostly on advertising to get our expenses in line, but we also tightened our belts in other areas. As a result, last year we had the second best year in the history of the store for net profits. And the best year for net was 2010. In 2007, we sold a lot more cars than the past two years, but our net wasn’t as much.
With doing so well, in the past two years, have your advertising budgets returned to prior levels?
Lance: We had cut back somewhat on newspaper and other advertising during the economic downturn, but now that business is coming back, we are going back to doing more advertising. We currently run newspaper advertising five days a week. We are also spending more on electronic although we are very selective on sources and look for a very good ROI when reviewing budgets. We have also started doing some direct mail over the past six months with good results. The message has to be timely and aggressive to get the responses we are looking for.
Why, in the digital age, are you still doing so much newspaper advertising?
Jerry: Everyone has asked us: ‘Why are you still in newspapers?’ All the bigger volume stores in Houston are still heavily into newspaper advertising. I don’t know if we are doing the right thing or the wrong thing, but I know when we have ads in the newspapers, especially very aggressive ads, it brings traffic to the store.
It’s been working for us for years and we’re very successful, and that’s why we do it. We know that if we put a great offer in a newspaper, we sell a lot of cars. We might not make a lot of money with today’s margins, but we sell a lot of cars.
What percent of your total advertising budget is traditional vs. Internet advertising?
Jerry: About 75% of our budget is for traditional advertising. Of that, 25% is for radio, 35% for cable TV and 40% for newspaper ads.
I do all the radio commercials, and my daughter Lauren and I do all our TV commercials. Lauren is 26 now, and we started doing TV commercials together when she was 16 in high school. We’ve had a good time doing them.
On average about 25% of our ad budget is spent on Internet. Internet historically has a great ROI vs. traditional advertising. We are continually reviewing our opportunities in Internet advertising and making adjustments as needed.
Where do most of your Internet sales leads come from?
The majority of the leads we work are from our distributor, Gulf States Toyota and from our own website, which is managed by Gulf States Toyota. These are also the best quality leads versus buying them from some lead provider.
We also have a new Toyota mobile website and a new Scion mobile website for our dealership. All have separate contact information and phone numbers and we can monitor that. We even have a free Apple app for customers to download.
How do you drive traffic to all these websites?
Jerry: Our corporate management company handles our SEO and SEM. We just set the budget for them on a monthly basis. It’s $3,000 per month right now, but we might increase SEM and SEO spending this year a little bit.
Lance: Once consumers are on our website, our use of photos, prices and good selection draws them further into the sales funnel. We have pictures of our new cars and used cars on our website and on AutoTrader, and we also have discounted prices on new and used cars on AutoTrader and on our website. That’s not the case with competing Toyota dealers – most of them do not advertise a discounted price on new vehicles. We do it to increase our leads – to get more phone calls and e-mails.
How many Internet leads per month do you get?
Jerry: We get 2,000 Internet leads per month, and that includes phone calls that track from our websites or our third-party lead providers.
If we sell 600 new and used cars per month, 180 will come from Internet leads. It’s 30% of our business on a regular basis.
How do you work those leads?
Lance: When the leads come in, they go to our CRM, DealerSocket, right away. We’re very happy with DealerSocket. Our response time target is 15 minutes. We don’t use an auto-responder. We have two Internet directors, one for new cars and one for used and they make the first response call or e-mail. We have 10 Internet salespeople, who specialize as either new or used car sales – five of each. We are working on building that back up to seven or eight in each department.
We keep leads in our system until we mark them lost – until the prospect says: ‘Don’t call me anymore, don’t e-mail me anymore or I bought a car.’
If our Internet salespeople give up on a lead, those leads are turned over to our BDC manager and he passes them out to salespeople on the sales floor for follow-up.
We have a very active BDC. All of our salespeople for new and used cars are required to spend at least one hour every day doing their follow up and prospecting.
Are you doing anything new with parts and service on the Internet to increase business?
Jerry: Parts and services have come up quite a bit in the last few years too, as a result of the email blasts we send to our customers. That’s very cost-effective. And, Gulf States Toyota has done some very effective e-mail blasts for us as well.
How do you handle online reputation management?
Jerry: We’re on DealerRater.com and if we get a negative review – as all stores do once in a great while – we get a notification before it goes live on the DealerRater website and we have 10 days to rectify that issue with the consumer. If it’s sales-related or finance- related, I respond myself, or if it’s service-related, our service director would respond.
How about social media?
Jerry: We’re really getting into Facebook. We had a membership drive last year and did a free TV giveaway. Everyone that registered on our Facebook page was eligible. It went well. We added hundreds of new members.
Lance: We take a photo of every new car delivery with the consumer and their family in front of the car. We generally take the photo with the consumer’s own phone so they post it on Facebook.
We’ve found that if we take the picture with the consumer’s phone, we don’t even have to tell them to put it on Facebook. They put everything else on Facebook so why wouldn’t they put a brand new car on Facebook?
If they don’t have a camera phone, the sales person will take a photo and e-mail it to the customer and they can do whatever they want from there.
This is a great way to get our name out there in front of customers’ friends and families. We have had numerous incremental sales from this and our customers love the process.
What is your biggest challenge?
Jerry: Probably making gross in the new car department. It’s very competitive everywhere, but we have some very large stores competing here in Houston. And, it’s making the amount of return we should make on each car a little less than we’d like. It should be higher than it is. The manufacturer has lowered the margins considerably over the years.
What is your typical day?
Jerry: I get here around 8 a.m. and drive the lot. I go back through service. I’m involved in used cars, and go through make-ready.
We have a managers/save-the-deal meeting every morning at 8:30. We cover anything we need to discuss from the day before and review the deal board to see what deals are pending, what deals are cleared up, and solve any problems.
Every day at 9 a.m., we have a sales meeting with the team that’s onboard that day. We have 30 different training sessions scheduled throughout the month. So whatever the training session is that day, the manager that handles the meeting that morning does the training.
Sometimes I attend the sales meeting and sometimes I don’t. Then I do a used car walk with the used car salespeople to decide if we should keep each used car or wholesale it. After that, we mark the cars and have a list for make-ready and start sending these cars to the shop. We stock about 150 used cars at any time, and we sell about 300 per month. So that process has to be efficient.
Every Monday we have a 1 p.m. CSI meeting. On Tuesdays and Thursdays at 2 p.m., we have CSI meetings for the salespeople, technicians, service writers, F&I personnel and managers that didn’t have a high enough CSI score the month before. Gulf States Toyota has given us a way to measure our employees’ effectiveness with an objective survey of performance.
Each individual turns in his/her survey response, and if the score for that month isn’t above the green standard that Gulf Toyota sets, that person has to attend the CSI meetings. The meetings are basically training sessions and they know why they’re in there. We already know what customer issue brought the score down.
After that, I go to auction every Tuesday. I buy cars at various places in the afternoon.
I also visit every department at least once a day and sit down and go over what we’re doing, what we could do better, what we did the day before, and see if there are any issues or problems.
The controller and I sit down every day to go over numbers, projections, issues, problems, and expenditures.
As for selling, I get calls all the time, and when they come to see me, I’ll turn them over to a sales person and they do all the leg work.
Lance, how does your day go?
Lance: I arrive at the same time of 8-8:30 every morning. We start the day with a general manager meeting lead by myself or Jerry to discuss any outstanding deals and our progress for the month so far.
After that meeting, we hold our sales persons’ meeting at 9 a.m. and another one at 12 p.m. for the late shift. I frequently lead these meetings, along with my management staff, and discuss advertised incentive packages and month-to-date progress, along with any pressing issues in any departments.
We have a training schedule posted the beginning of each month and have a training topic preselected for each day. Each manager knows the topic in advance to arrange their meetings.
We have CSI meetings three times a week that I often attend. We discuss any issues that may present a problem for our customers at every contact point.
I am continually reviewing our advertising to remain competitive and design the ad with our creative agency. I often help appraise trade-in vehicles, especially on Saturdays. I review our new car inventory frequently and make sure our mix and stock levels are correct.
I never miss a chance to fill in on a desk in the sales tower and desk a deal when I have time. I have a lot of customers that still come in to see me on a weekly basis, since I’ve been here so long, and I always try to stay involved with their deals to make sure they are handled correctly.
A large part of my day is being mobile and making sure all our processes are being followed and all customers are being handled correctly. I also personally interview any prospective employee before they are offered a position with us. This helps to ensure the culture we have built continues to thrive.
Jerry: As a dealership, we also do a lot of community work. To cite just one instance, we donate to the Children’s Art Project here in Houston by purchasing 10,000 cards every year for Christmas for customers. We spend about $15,000 – most of which is a donation to the Children’s Memorial Hermann Hospital.
What do you see for the future of the dealership and the future of the industry?
Jerry: We are remodeling in the Toyota Image USA II, and we project that will be complete in 2013.
Both for us and for the industry as a whole, I think 2012 will be a great year. There’s a lot of pent up demand right now. The average car on the road is about 11 years old. So there are consumers that are going to have to trade. A lot of the trade-ins we see have 150,000 or 200,000 miles on them. So I think it’s going to be a better year than last year.