Pittsburgh-area retailer grows despite tough economy
Cochran: "We are laser-like in recruiting and developing staff. We get the type of person who fits in our culture. Our level of talent is the best it's ever been."
Rob Cochran, CEO of #1 Cochran Automotive, has had double-digit growth at his Pittsburgh dealership group the last three years even while the economy slumped.
In 2008, the group was No. 83 on the Automotive News list of the top 125 dealership groups in the United States, based on its 6,851 new retail unit sales. By 2010 the company had climbed to No. 68 with 7,846 new retail unit sales, and it's on track for an even bigger growth spurt this year.
The second-generation car dealer keeps a close watch on critical financials and runs a centralized operation that emphasizes teamwork.
He also holds his staff accountable for committing to the company's core values. Last year, #1 Cochran became the first automotive company to win the Pittsburgh Business Ethics Award.
Cochran, 45, spoke with Staff Reporter Donna Harris.
Q: Your business has boomed over the last few years. What's your secret?
A: We've been able to grow even absorbing the loss of Pontiac, Hummer and Saturn. Our Hyundai, Kia, Nissan and Subaru franchises carried the load for our company through 2009.
We also build relationships with customers and we attract and develop the best talent we can in key positions.
What are you doing to build relationships with your customers?
We can talk about tactics for customer retention like our service clinics and our sales process that's evolving to a more transparent process, but customer satisfaction starts and stops with the people you have in the stores.
What have you done to encourage strong customer service?
We are not a group of individually run dealerships. We have one common mission and set of values that we hold our people accountable to carry out. We had a set of values before, but I would say three years ago we spent a lot of leadership time looking at them and deciding what do we want to do.
What did you come up with?
Five simple values: One: Act with integrity. Two: Build a winning team. Three: Deliver results. Four: Always improve. And five: Breed customer loyalty.
We spend a lot of time talking about those values. We have a ways to go, but we have made great strides these past few years.
How do you keep everyone behind those values?
We have refined a profile for the roles we are looking for. We are laser-like in recruiting and developing staff. We get the type of person who fits in our culture. Our level of talent is the best it's ever been.
Do you also have specialized training?
We have a lot of off-site training to learn about where we want to go. We have leadership training and customer care training using modules we set up ourselves. We sometimes bring in a facilitator.
What type of person fits in your organization?
The people we see in the industry are individualistic, me-first types. The people who succeed in our company see themselves as part of the overall company.
It's not their store vs. everyone else's store. The entire whole has to be successful. That mind-set is not commonplace in our industry.
You've said the dealerships aren't individually run. Do your general managers have a stake in their stores?
We're centralized. We don't have general managers. At the store level, we have a general sales manager over new and used vehicle sales and we have a service and parts director over the fixed operations at the dealerships.
We also have a finance and insurance manager. We have a corporate structure with a chief financial officer, human resources director, chief operating officer and fixed operations director. We feel we're nimbler this way.
Did you ever have general managers and, if so, why did you do away with that role?
We had them when we were a much smaller company, about eight years ago. But we are in one geographic area, with stores east, west and south of Pittsburgh, and our leadership team can visit all those stores on any given day. We can bring them all together for group meetings. There are no silos in our structure. Senior leadership and store management give feedback. It's a nimbler way of operating.
What's different about your sales process?
We're looking at methods that allow us to become more transparent.
It's an evolution.
Does that mean no-haggle pricing?
We're studying what customers want and where the industry is going. We're trying to make our process simpler.
What else do you think makes you a success?
We are metric-driven. We look at new vehicle market share for every brand. We look at a cumulative market share. Every general sales manager is accountable for growing share. We also look at customer satisfaction scores, the ratio of used units to new units sold, use of the F&I menu, and service retention -- how many times people come back for service. We want them back twice a year.
Do you have rewards to reinforce those metrics?
Yes, general managers can earn more for reaching their goals. We recognize our top salespeople with what we call our "Circle of Honor" award. We take them and their spouses on a three-day trip. Last year they went to Tucson. We've taken them to the Caribbean and to New Orleans.
We also reward our top service, parts and collision people with our "Top Gun" award. We take the top people and their spouses to a local resort.
Tell me about your new electronic parts storage and retrieval system.
We have the Hanel Parts System. We have some facilities in an urban setting where space is such a premium. It looks like a big ATM machine. You can punch in a parts order and the parts are automatically retrieved. It cuts down on labor, allows us better inventory control and allows us to free up space.
How much space?
At our flagship Buick-GMC store in Monroeville we've been able to re-engineer parts space and add four additional bays. That's a big revenue stream. We've committed to installing five machines.
Will your sales increase this year?
If we don't hit 12,000 this year it will be close. We're encouraged and excited about the future.