Accessory sales boost profits, store morale
Some general managers come up through the dealership ranks. Jeff Daniels came straight from Toyota.
Five years ago, Daniels was working as a regional manager for Scion in Cincinnati when he decided to switch to auto retailing.
Now, as general manager for Toyota of Muncie, in Muncie, Ind., he's putting his corporate experience to work on the showroom floor.
"I've always had the confidence of having witnessed how the company is run," said Daniels, 36, who also is a partner in Kia of Munice. "A lot of those lessons have stuck with me on the retail end."
One lesson stands out: how to bring in some extra business selling accessory parts -- spoilers, tinted windows, body-side molding, etc.
During his time at Toyota, Daniels was part of a team that helped roll out Toyota's youth-oriented Scion brand in the Midwest. He enrolled and trained dealers and hosted local marketing events targeted to buyers in their 20s and 30s.
Giving customers the ability to customize their vehicles was a big part of the Scion model, and Daniels found that this generation of buyers was particularly keen on accessories.
He has carried that over to his store, turning it into a profitable line of business that not only brings in an extra $20,000 to $25,000 a month in revenue but also helps generate return business.
Customers who know they can get accessory parts at their dealership are more likely to come back if they want something, Daniels said. They keep the store in mind rather than go straight to a national chain or other outlet, he said.
"My corporate position at Scion was an 'aha!' moment that this is a significant part of the market that dealers aren't capturing," Daniels said. "It was never a question in my mind whether we were going to do accessories or not."
Daniels' logic: If his customers have to go elsewhere for this service, "I lose more than an accessory sale," he said. "I could lose a service customer or potentially a sale down the road."
Daniels says the store's accessory business is profitable, but he wouldn't disclose exact figures.
'A part of the culture'
Daniels, who grew up in Indianapolis, took over the Muncie store in 2007 soon after it was purchased by Gates Auto Group of Richmond, Ky. It was his first major move into auto retailing.
He started at Toyota right out of college in 1998, working as a management trainee in sales and marketing.
At one point Daniels said he was placed at a desk on the executive level right outside the door of Jim Press, then president of Toyota Motor Sales, U.S.A. "I made some solid contacts early on in my career," he added.
From there he moved to Toyota's regional office in Cincinnati where he rotated through a variety of positions -- all of them working with dealers.
He estimates that over his career with Toyota he must have visited several hundred dealerships.
The experience introduced him to the retail side of the business, and eventually his entrepreneurial spirit drew him in. He decided to give the job at Toyota of Muncie a try.
Daniels' business partner, dealer principal Steve Gates, said he started rebuilding the store soon after Daniels came on board. During construction, Gates made sure to carve out a space in the store for selling accessories.
The dealership has a counter and slat wall about 20 feet long dedicated to accessory parts, as well as a Web site with a menu of the store's offerings. Accessories also are on display throughout the store, along with promotional material.
Service customers have to walk by a retail parts display after dropping off their cars. So marketing of these items isn't restricted to one area of the store.
"I've always done a mediocre job of selling accessories," said Gates, who also has Nissan, Hyundai, Kia and Audi franchises. "He just got it. He just figured it out. It became a part of the culture."
A morale booster
Daniels says that when car buyers decline an invitation to shop for accessories, he encourages his staff to follow up with them in subsequent visits.
All salespeople are required to do an accessory presentation with each new and certified-used vehicle sale. In this session, salespeople are trained to present customers with options and ask what they might want if money weren't an object.
"Every buyer will at least consider it," Daniels added. "It's as simple as asking it to become a part of the road to a sale."
He admits this line of business isn't for everyone. It requires extra attention and buy-in from the staff, as well as coordination across multiple departments: sales, service and parts.
Daniels said he also has to be fastidious about pricing and his supply base. He won't, for instance, negotiate an accessory's price or go with a supplier who requires him to keep certain inventory on the shelf.
Rather, the dealership keeps frequently requested items in stock and seeks vendors that can deliver within 24 to 36 hours. And Toyota has improved overnight delivery of parts, he added.
To motivate his staff, he offers everyone, regardless of where they work in the dealership, a commission of 8 to 10 percent on the total installed price. He said it's not uncommon for him to hand out monthly commission checks of $800 to $1,000.
Said Daniels: "It's quite a boost to employee morale."