A third-generation car dealer, Lee Certilman, president and dealer principal at Nardy Honda Smithtown, New York, was nominated for the 2017 TIME magazine Dealer of the Year Award. A year earlier, his dealership won the Honda 2016 Council of Excellence Award, an honor earned by only the top 15 percent of Honda dealerships. Nardy Honda, the longest-running Honda dealership on Long Island, also received Honda’s Environmental Leadership Platinum Award for its eco-friendly policies.
Currently, Lee serves as the Chairman of the Board for GNYADA (Greater New York Automobile Dealers Association), an organization whose members provide thousands of jobs, pay millions in tax revenue and donate to hundreds of charities. The GNYADA owns and produces the New York International Auto Show, the largest international auto show in North America and one of the oldest auto shows (now in its 118th year).
In the following interview, Lee, a former television and ad agency executive, shares his unique perspectives on marketing in today’s digital world. He also talks about legal issues important to the survival of the dealers and why he is a strong believer in the franchise system.
Thank you for agreeing to talk with us today, Lee. You currently serve as chairman of the board for the Greater New York Automobile Dealers Association (GNYADA). Could you start by telling us more about the association and what it does for car dealers?
The purpose of the association is to represent franchised new car and truck dealers and their interests in the greater New York City area advocating a pro-business agenda in state and local legislature. Educating lawmakers and opinion formers on the complexity of our business is a large component of our advocacy work.
I think it’s important for organizations and dealers to support their associations in order to maintain strong dealer franchise laws. There are thousands of individuals in this country who have spent a lot of time and invested a lot of capital in real estate and buildings, people and processes, and machinery and fixed assets to set up dealerships to provide manufacturers with the ability to market and sell their vehicles. It’s very important that dealers have a strong franchise bill to protect their investments because the market changes all the time. It would be a terrible thing if the manufacturers bypass the dealer system and decide to sell directly. I don’t believe it would serve the consumers very well and I think it would be very harmful to the market. I am completely supportive of very strong dealer franchise bills.
We are dealing with a number of issues in our area that I’m sure resonate with dealers around the country. Sometimes New York presents unique challenges, but most our issues are the same as other dealers around the country. In New York, they are just magnified a little!
One issue we are dealing with right now is an explosion of unregulated auto brokers. In some areas there are more brokers than actual dealers. The odd thing is people buying cars from unregulated brokers, who are not part of the franchise system that dealers participate in, often pay more than if they had gone to a franchise dealer and that’s the crazy thing.
Another issue of importance for our members is the used car recall situation. Since 1968 the federal government requires manufacturers to pay 1% per month on new vehicles that have a stop-sell order against them because of a recall, but there is no such provision for used cars. Without the provision, manufacturers have no incentive to assist the dealer to find a solution to fix in a timely manner. This can end up costing dealers and customers hundreds or even thousands of dollars on each car, so in New York, we’re working hard to get a used car recall bill passed. The cars are depreciating. We can’t take them in as trade-ins from consumers, because we don’t know what kind of number to put on the car, or what it’s going to be worth. Those cars could sit around for months, with dealers unable to sell them while tying up their capital. So, it’s important to keep the manufacturers motivated on getting fixes for used cars as quickly as they do for new cars.
Most importantly for New York, we need to get our documentation fees raised. We’re the second lowest in the country, at $75. It’s not a profit center for dealerships; it’s actually an expense. I think it’s important for dealerships in New York state to be compensated for the work they do, in providing DMV paperwork and plates to customers. We have not had a fee raise in almost a decade.
I’d like to back up for a minute and ask about your background. Where did you get your start, and why did you choose to become a dealer?
I’m a third-generation auto dealer. My grandfather owned a Chrysler – Plymouth dealership in Brooklyn in the early forties and my father was a Pontiac dealer on Long Island by the time he turned 25. He had Chrysler-Plymouth in 1954 and subsequently picked up Pontiac in 1964. Through the 1970s we had a bunch of imports including Triumph, MG and Jaguar and even Subaru, at one point. Those were crazy times and over the years we either sold the franchise or they stop selling cars in the U.S. We took on Honda in 1971 and by 1999 we became a single-line Honda dealer; the oldest Honda dealership on Long Island.
I came into the industry in 1995, at the age of 34, after working in the television and advertising industries. After college, I joined CBS and then ABC Television and then to J. Walter Thompson to work in advertising in New York. I later returned to CBS where I was the director of affiliate relations. In 1994 CBS was in transition and they were just starting to talk about the “information highway.” At that point, there was no clear path about the direction that television and the internet would make and, recently married and with a young baby, I decided that the time might be right to strike out on my own. My father, after 40 years in the business, was ready to slow down and I was ready for a new challenge.
What was the transition like, moving from working in TV to owning a dealership?
Interestingly, there are similarities with the relationship between television stations and the affiliates and automakers and the dealers. The television networks create programs and arrange for distribution through a group of affiliates across the country. The vehicle manufacturers produce the vehicles and distribute them through a group of dealers across the country. The transition itself wasn’t difficult, because I grew up in the car business, but I didn’t realize just how much work it was really going to be. I took a dealership that, at the time, was in a 30-year-old building and over time totally redid it into the Honda image program. I bought the property next door and turned it into a Honda Certified Used Car dealership and I had to completely revamp the staff, buildings, and processes from the ground up. Other than our DMS, we weren’t even computerized.
In 2017, as president and dealer principal at Nardy Honda Smithtown, you were nominated for the 2017 Time Magazine Dealer Of The Year Award, one of the automobile industry’s most prestigious and highly coveted honors. What do you like most about running a dealership?
Solving problems. People come to my dealership because they need transportation. I think satisfying this need can and should be satisfying for both parties involved. When it’s done right, there’s a huge amount of satisfaction in helping people who maybe never have bought a car before or don’t buy a car very often, and they should be very excited about their purchase. I want to take the sting out of the process and make it fun.
What advice do you have to offer to someone thinking about getting into the car business?
You will definitely not be bored, but my best piece of advice is to do more listening than talking. People will often tell you exactly what’s going on if you are actively listening to what they say. If you’re a manager, a dealer principal, or if you’re going to buy a dealership, the best thing you can have is good staff. You need to surround yourself with good, smart, motivated people because it is impossible to do it by yourself. Don’t hire people exactly like you. Strive for an eclectic blend of people. Just make sure they are of good character. The better the people you have around you, the better your dealership will be.
As someone with a strong media background, how has the world of marketing changed for dealers over, say, the last decade?
It’s been cataclysmic. In fact, over the last 10 years, there has been a greater change than the previous 25. Marketing used to be about consumer behavior, identifying what a consumer motivation might be and then developing a communication on a media platform, to address it. Now, everything is about data and trend analysis. You now have many millions of people having the same platform, the internet, to send their messages. The one-to-many paradigm has clearly shifted to a many-to-many paradigm. We’re all bombarded by thousands of media messages every day. So, it’s not about finding as many people as you want, instead today, it’s about finding only the people that you want. With digital, the process is getting closer and closer to the point where you are actually able to answer the age-old question: what part of my advertising is working?
If you could only choose one technology tool to help your store succeed, which tool would it be and why?
It would be search: keywords, SEO, SEM, digital advertising. People go on Google with the intention of looking for a specific car or to research a car. Search is all about intent. If you can merge your search strategy with theirs you can at least leave impressions and get in front of those consumers who are looking.
I’d like to shift gears for a moment and talk about management. What is your management philosophy?
I am a decentralized manager. I believe in hiring good people and training them well. I don’t believe in standing over people and watching them, making them do things only my way. I believe in saying this is where we are, this is where we want to be, and you get us there. When the process works, it works well. If it doesn’t work, we look at it and makes changes. I believe by decentralizing myself from the process and by delegating authority it empowers employees to take responsibility for their actions and to own the results.
What qualities do you look for when hiring new employees?
Number one is character. I want to be around people that I want to be around and that other employees want to be around. If we’re talking about sales, I look at it from the customer’s perspective. Is the salesperson friendly and engaging? Is it someone who makes the process enjoyable? I like people with who are well-spoken, highly motivated and respectful and part of respect is making time for people. Giving your time is what makes people feel important.
How important is training to your store’s success?
I think on-going training is important in all areas of the dealerships. Each manufacturer has things they expect from their dealers. We have a process that everyone will go through in their department and then we review training on a case-by-case basis. If we hire a new salesperson, for instance, he or she needs to know our systems and processes. This makes it easier on everybody downstream and reduces the chance of error dramatically. To me, it’s a responsibility of everybody in the dealership that they do their own job well; everybody else’s job is depending on them. That’s what I mean by mutual respect. Do your job, do it well, do it the way you were trained and let the process run its course. It saves time and reduces errors.
What is your customer service philosophy?
My father had a sign that used to hang in his waiting room in the 60s and it now hangs in my office: “The only difference we believe… is in the treatment that folks receive.” That sense of mutual respect is central to our customer service philosophy. People come in and if they are dealt with professionally and respectfully, and their car purchase is terrific, they’ll go and tell ten people. In New York, if it’s done poorly, they’ll tell a hundred people.
Your dealership won Honda’s Environmental Leadership Platinum Award. What does it mean to be a “green” dealership?
It means we care about not wasting natural resources. I think it’s important for my local community and the country at large not to waste electricity, gas, water or any resources, so I initiated a program to reduce our energy consumption. When you can replace a 1,000-watt outdoor lightbulb with a 400-LED fixture that gives brighter and better light—and you’ll never have to change that bulb again—what is there not to like? We installed solar panels on our building and after all the federal tax credits and the electric company rebates, I think our break-even was two years. It provides a 15% offset of our electricity costs every year. Where can you get a return like that?
Ultimately, how do you measure success?
Usually, I say if I don’t get hit on the head, it’s a good day, but the true measure of success for me is, customer retention and how do my employees feel about working at the dealership? I believe happy employees make for happy customers. My family has been successfully selling cars since 1944, so we’ve obviously been doing something right.
What will be the biggest changes or challenges facing the industry in the coming years?
On the changes side near term, I think autonomous driving and subscription services will arrive first. I think our business models are strong enough to adapt to all the changes because everything doesn’t happen at once. Autonomous functionality will arrive in cars the way cruise control did but people will continue to drive their cars for some time. Yes, they may be able to switch to autonomous driving on certain roads under certain conditions and that will be fantastic. The long-term knock-on effects of self-driving will not just affect dealers but municipalities, real estate the handicapped…it’s huge. With subscriptions services, if it catches on, it will be treated as another form of payment. Personally, I don’t see people changing in and out of their cars that often. Cars and trucks are our personal spaces. Regardless, of what transpires, the franchised dealers already exist. Fleet companies, mobility as a service companies, etc. will still need to have their vehicles, prepped, titled, registered, washed, delivered and serviced and who better than the over 16,000 new car dealerships in the U.S.? It’s a very exciting time to be a dealer.
If you could choose one word to describe your experience as a dealer, what is that word & why?
Eclectic. There are so many things that a dealer has to be aware of to run their dealerships and manage their investments well. There are international issues, national issues, state issues, and local and regional as well. These issues all intertwine within the dealership every day, from finance to healthcare. I think you’ll find that most dealers are a pretty eclectic group. They come from all different areas and have different disciplines. At heart, they’re all entrepreneurs. They are all managed risk-takers who are looking to be successful. They basically want to leave their part of the park a little cleaner than when they got there, because often in this industry, it is another family member who will pick up the torch.
Author: Digital Dealer
Digital Dealer exists to help dealers and their managers sell more vehicles more profitably by creating the best live events and media in the industry.