Bergstroms' pledge: 'Treat everyone like guests'
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Printed in Automotive News Aug. 1, 2011
The foundation of Bergstrom Automotive's empire in Wisconsin was forged early in the lives of John and Richard Bergstrom. Mom insisted that gracious hospitality included tidy and well-dressed sons.
"The extended family came over for dinner every Sunday, so we better have our shoes shined, hair combed and say, 'Welcome' when we answered the door," recalls Chairman John Bergstrom.
That Norwegian hospitality became the central principle when they opened their first Chevrolet dealership in Neenah in September 1982. "Treat everyone like guests" is the motto that guides Bergstrom Automotive today, from fresh flowers in the bathrooms of all of its stores to technicians empowered to approve make-good repairs, including even engine replacements.
Bergstrom Automotive has 48 franchises in 31 stores, all in Wisconsin.
The Bergstroms' 1,150 employees are trained to refer to all customers as guests. Every department and worker is measured monthly on customer satisfaction.
Bergstrom Automotive participates in the certified used-vehicle programs of its 34 brands and also self-certifies used vehicles. "We even certify seven years old," John Bergstrom says. "Philosophically, we want a long-term relationship with a guest. By building a relationship, we're building a relationship with his family and his friends."
The Bergstroms sell every volume brand except Kia and Suzuki but are heavy on General Motors brands. As young hoteliers not many years out of Marquette University in the early 1980s, the brothers repeatedly were rejected by GM as undercapitalized. Then John sent a handwritten letter to Chairman Roger Smith, who asked the Milwaukee branch of General Motors Acceptance Corp. to meet the Bergstroms. "We had a banker willing to build a store, and we came out of the GMAC meeting with an offer for floorplanning," John says.
Today the group has 15 GM franchises. "GM is home," John says. "They gave us a chance."
That GM concentration slammed the Bergstroms after the automaker's bankruptcy and brand purge. The Bergstroms' two Pontiac franchises were dualed with Buick and GMC, but their six Saturn and four Hummer stores were stand-alones.
"Saturn was all about treating customers like guests," says Tim Bergstrom, COO and John's son. "Dad loved Saturn. Closing our Saturn stores was very painful to him."
The family has regrouped, reopening several former Saturn and Hummer stores for other brands or as used-vehicle centers, and selling or leasing some to other dealers. The group has acquired new franchises and bought out other Wisconsin dealers. Since 2008, Bergstrom Automotive has added 10 stores -- "back to where we started," says John. It was an opportunity "to rehire as many former employees as we can," adds President Richard Bergstrom.
There's the practical aspect to rehiring: "Not having to train them on treating people like guests because they already know how," says Richard. The brothers' employees tend to last. Of the 25 original 1982 Chevrolet store employees, 11 are still with the group.
The group is growing again. A 2007 goal of hitting $1 billion in revenue in 2008 died with the industry's crash. Now, says a more cautious John Bergstrom, "Hitting $1 billion is part of our five-year plan."
One key to growth is systematic self-examination. Dealerships and departments compete each month on customer satisfaction. An annual banquet honors top performers. The group's top 50 managers meet for four hours each month to share notes and reports from secret shoppers.
Part of the monthly meeting also involves charting Bergstrom Automotive's performance against the seven publicly owned U.S. dealership groups, including used-vehicle specialist CarMax.
"From CarMax we learned to spend more on setting up used inventory, so now we put new tires on almost every car," John says. "From publics, we learned how to get more out of F&I."�c
You can reach Jesse Snyder at jsnyder@crain.com.
