Street Toyota is the top selling dealership in both new and used in the Amarillo, TX market. But it wasn’t always like that. More than 10 years ago, the Toyota dealership with 37 employees was selling about 1,200 a year. Owner Joe Street, knowing he had to make a change, brought in Mike Good as General Manager, previously a Gulf States consultant, to oversee the transformation.
Today, Good manages 150 employees working in a 70,000 square foot facility located on 13 acres alongside Street. The dealership is now selling more than 5,200 vehicles a year outselling the other 18 dealerships in their market.
The two implemented a strategy that upended what was a staid culture, by hiring nice people and then teaching them the car business. That’s 150 employees with a servant’s heart who are consumed with helping the customer and love their jobs. The happiness is evident when calling the store. Good shares with Dealer magazine how he helped transform the culture and turn the store into a sales juggernaut.
An exclusive Dealer magazine interview with Mike Good.
Mike, before we begin, I must compliment you on the way your receptionist answered the phone – professional, polite, and she sounded happy. You could hear the smile in her voice. I only mention it because the phone is such an important area for dealerships but it’s one of the toughest to solve.
Thank you for mentioning that. We know that we’re in the car business. We sell and fix cars. But we really are in the people business. We know if we can give people a better experience than they can get anywhere else, and it starts with the phone call, then we know our business is going to be good.
How did Joe Street get started in the business?
Joe Street is an Oklahoma native, born, raised, and educated in Oklahoma City. He graduated with a B.B.A. from the University of Oklahoma. After graduation, he entered the automotive industry where he was employed in automotive retail sales and management for 10 years. In 1982, he purchased Street Toyota, moving his young family to Amarillo, Texas. In 32 years as a Toyota dealer he has earned the coveted President’s Award 8 eight of the last 9 years and 11 years total.
He is also very involved in his community, isn’t he?
Joe is a strong supporter of numerous local charities and community events. He was subsequently named 2013 Amarillo Man of the Year.
Business has been good for Street Toyota the last several years.
It has been. When we began focusing on that philosophy over 10 years ago, we were selling about 1,200 vehicles a year. Last year, we sold over 5,200 vehicles. We’re blessed with wonderful associates, though. As Jim Rohn suggests, we used to hire people and train them to be nice. We found that it was easier to just hire nice people and teach them the business. So that’s what we try to do.
You have been in the automotive retail business for several years. You started with Gulf States Toyota, correct?
Actually, I was in the retail business before Gulf States Toyota – I started in the Toyota business in 1990. I worked for Gulf States Toyota as a Contract Process consultant 14 years ago. I’ve been with Street since leaving Gulf States.
How did you start working for Street?
They were one of the dealerships I worked with on behalf of Gulf States Toyota. Prior to that, I lived in Amarillo but had spent five years traveling North America as a sales trainer.
I had called on Joe Street while with GST for nearly two years. He called me one day and asked if I’d be interested in going back into retail. I told him “No” as I enjoyed consulting along with Saturdays off for the previous six years. The offer began to intrigue me as I prayerfully considered the needs of my family and 15 year old son. You may know how 15 year old sons can be! I needed to be home nightly and especially on Friday evenings instead of in New Jersey or California trying to get home.
Additionally, it gave me the opportunity to again put into practice the concepts and ideals I had been sharing with dealers since 1997. I told Joe I’d do it for three months and help him find someone to run the store. After two months, I decided I wanted to stay. I realized the potential and it was fun. That was about 12 years ago.
The dealership has had strong run since then. Walk us through what changed and how the dealership was able to increase sales so drastically.
At the time, it was a small store with 37 employees selling 1,200 vehicles a year. I just happened to be full of unbridled enthusiasm and that’s what Joe wanted running his store. It was a great opportunity and he’s become one of my dearest friends. It’s been a fun ride.
As we looked at it years ago, we realized we were in a town of 200,000 people and just 65% sales efficient. There was tremendous opportunity for growth. We decided we needed to be in the experience business, not just the car business.
We began to change direction by first analyzing our values, beliefs and behaviors. Joe clarified what his business values which gave birth to a new “business vision”. We created a culture of service – we are in the service business. That really is it in a nutshell.
Today, Street Toyota has 150 employees in a 7 year-old facility. A dozen years ago we were on 2 ½ acres with 26,000 square feet. Today, we’re on 13 acres and about 70,000 square feet. We sell about 15% of all the new car sold in our PMA – against 18 other dealers. We’re 175% sales efficient and the top used car dealer in the market.
Our associates deserve the total credit for our success. We built it brick upon brick, one associate at a time. It took us about five years to grow the store to where it is now. But then 2008 came along – and we had the recession, the recalls, and the stop sells with Toyota. We had the earthquake and tsunami in Japan. All of that put a dent in our business for about three years. We dipped a little but now we’re back to where we were before the recession hit.
How do you build out a service philosophy throughout an existing store?
Let me say we believe culture eats strategy for breakfast. With that in mind, it helped that I had been in the store a half day each week for a couple of years under the auspices of Gulf States working as a process consultant. So I knew the people and knew where the challenges were.
In those two years, we charged associates with examining each of the 14 customer impact areas. We then began aligning each process with customers’ expectations as decided upon by the associates involved in the processes. Buy-in and mental ownership are key components participants in the process enjoy.
That exercise started the ball rolling and helped raise the level of consciousness about the importance of customer experience, and I think that’s why Joe called me. He saw the value of having that process and mentality in the store five days a week. Being in the store for five or six days a week provided the opportunity for us to create the melody – the background that builds that servant’s mentality. We were able to measure it and create accountability. Customers began experiencing the difference and word travels fast in a city this size. Our reputation became our stock-in-trade.
Did you change the sales process? How did you get people to buy in?
It’s all about the people. I like to ask associates if they believe in the hereafter. They ask, “What do you mean?” I tell them, that if you’re not here after what we’re after, then we’re going to be here long after you’re gone. It may be cute, but there’s a lot of truth to it.
We did sit down and try to find out why our employees were there. We call it “What’s your why?”. The prostitution common in many workplaces of exchanging dollars for hours that has 55% of the American work force, according to JD Power, has to change. So we did go through an elimination process – one by one of several employees and that took a while.
We just had to find the right associates – people with enthusiasm, energy, a great attitude with intelligence and integrity. Those were the qualities I looked for. The rest — I can teach someone the basics of the automobile business. They just have to mirror our values and have a servant’s heart.
What we did was change the culture and in doing that, we brought people on who have the right attitude and share our common beliefs. That’s what changed behaviors, customer service, and ultimately the dealership. It made it fun to come into work.
So, as you changed the culture at Street Toyota, you saw its reputation get stronger and, as a result, sales increase. How did you measure that?
I’ve mentioned some of the numbers earlier. We are humbled as we know very well we’re not without our problems. But as I look back at how far we’ve come, I then look forward and see how awash we are in a sea of opportunities. For instance using a tool called The Next Up, suggested in our 20 Group, helped us begin holding our sales people accountable, counting opportunities better than we ever have– the type of thing very successful stores do.
We rode the wave of success based on our reputation in the community — our no-hassle, transparent approach. But now it was time to tighten up some of our processes. We’re able to measure what our salespeople are doing and become better at time management. The Next Up has been key in helping us improve in that area. There is always room for innovation and improvement in our operation.
I like a book called Drive by Daniel Pink that talks about autonomy mastery and purpose – motivating employees with something other than the carrot and the stick. Today’s worker doesn’t want to be micro-managed – they want autonomy. We can provide that by building them up within an investment culture that helps them discover and accomplish their purpose. This goes beyond just trading dollars for hours, as we discussed before.
Second, we want to provide our employees with mastery of their chosen endeavor. Again, this is part of that investment culture in which we’re growing our team members. We believe you grow a dealership by growing people.
For example, we just returned from a two-day trip where I took all of our department heads to Brent Brown Toyota in Orem, UT to learn how to sell accessories – something that store does very well. That’s an investment some might claim is too expensive. We believe a wise man learns from his experiences but a wiser man learns from others experiences.
Once we provide autonomy and mastery, then we can link what they doing to their life purpose. And purpose can be really deep. We can dig down and learn why someone is really here. If they have a servant’s heart, then we can give them what they want, which in turn, helps the store get what it wants – which is happy, truly satisfied employees.
I like to quote Joe Street who says “I don’t have a dealership to make money – I make money so I can have a dealership and help 150 of our associates fulfill their life purpose and add to our community.” That’s what people want.
Let’s talk about how you were able to become the top franchised used car dealer in your market.
For the last two or three the years the market has sort of flip-flopped as pre-owned cars are holding their value tremendously. But again, it goes back to the associates. We had a gentleman come to us who knows the market and is tremendously talented in what we term the “select market”. The highline luxury vehicles such as Lamborghini, Bentleys and Ferraris aren’t a big part of our business but we made a commitment to maintain $8 to $9 million worth of quality pre-owned vehicles.
When you’re displaying the nicest inventory of any dealer in a 200 mile radius, it draws the customers. We also enjoy a very strong online presence. It creates excitement on the lot – every Saturday we line the “select vehicles” up along the front of the dealership. It’s a mini car show and draws people to the store. We market them online and have sold cars in the Middle East, Europe, Canada, and Mexico. Again, it goes back to the quality of the manager running that for us.
Once they enter our domain, we know how to treat the customer, and that’s where we win. There are a significant number of people who value their experience – and sometimes, will value that more than a discounted price.
Another thing, which the guys in my Twenty Group laugh at me about– and I have some great dealers in my Twenty Group, but I’m not so quick to turn that inventory and get some of those vehicles off my lot. I want to have the biggest inventory and the nicest cars in the market. We watch it and make sure we don’t get under water, but I’m not as focused on moving those vehicles in under 45 days.
What about pricing? The one-price system is getting a lot of play in the media today as Sonic Automotive pilots its initiatives. What are your thoughts?
It’s about the buying experience and then the ownership experience. I’d call it a total value proposition. The car has to be nice and the experience has to be trouble free, even incredible. That circles back impacting your repeat customers, your referral customers, and the experience. It multiplies your business exponentially.
I don’t believe price is the most important part. I have good friends in the business who are one-price – some of them run other Toyota stores. I believe we’re moving in that direction and that’s where we want to be, but I’m not ready to go there yet.
I want to perfect our buying process and get that transaction time down to an hour. Just this morning we were talking about that here. I’m not a leader in that area, I’m learning from others.
How do you reduce that transaction time?
I think the sales and F&I departments will evolve to where the customer will deal with only one person. I have six senior sales people that work their own hours and handle the entire process from beginning to end, except for the F&I portion. There are stores where the salespeople that are involved in the F&I transaction today. I believe that’s the future. We’re looking at different areas. Again, I am convinced you grow a dealership by growing people and we’ve proved it.
You’ve talked a lot about experience. Tell us what differentiates Street Toyota from other dealerships.
For one, we have a staff of concierges. Several years ago at a Toyota meeting in Hawaii I remember walking up to the hotel and seeing on the building signs in English and Japanese saying “Concierge.” I thought, that’s what we need.
We set about hiring a staff – in fact, the person that you mentioned had answered the phone is one of our concierges. They’re receptionists, greeters, and guest attendants. They meet and greet sales and service customers making sure they have a beverage or snack and help take of whatever needs they may have. They create a friendly, welcoming environment meant to enhance every guest’s experience.
We put concierges on golf carts and their only job is to drive throughout the property with hot coffee and cold water for customers. Our experience begins with the concierge – people whose job it is to make guests smile. Most are retired people who’ve already found comfort and happiness in their own lives.
The sales associate’s job description fails to contain the words “sell” or “wait”. Their job description is to find 200 (or so) people, out of a 200,000 person trade area in the next 12 months that have a transportation need and help them fill that need. The key word in that description is “find”.
You mentioned training, explain to us this process.
We have an associate on staff who handles our PR, but he also trains our salespeople on the product and he trains our delivery specialists on the delivery process. We have another associate who is a great sales process and skill trainer. We also have a couple of outside folks that come in and train from time to time.
We also encourage and train our people to get out in the community and get involved in nonprofits and community centered causes. We offer tuition reimbursement to attend Dale Carnegie and other similar courses. We also encourage and reimburse the cost of joining organizations like Rotary, Leadership Amarillo, and Amarillo 101, which educates them on the inner-workings of city government and operations.
Tell us about your service department.
Right now it’s our Achilles heel. We have great retention – almost 70%, but it’s still our greatest area of opportunity. We do 2,700 oil changes a month so with our retention and increased space, we know we can do a better job. We are the least profitable service department in our Twenty Group, but I think we’re getting that fixed. We’re working with an extremely talented consultant and she’s got us headed in the right direction. Life is full of challenges and opportunities. Call me in 90 days, and it will be a different story.