Business at Legend Auto Group of Amityville, N.Y., was going fine just as the recession of 2008 started to set in.
But owner Wayne Siegel started paying extra attention to his operations, particularly to the emails that came in through the dealership group's business development center.
One day, a customer emailed, saying they were interested in leasing a specific year, make and model of vehicle. The customer asked several specific questions. Would the dealership be able to accommodate this request? How much would the lease cost?
The BDC automatically sent back its typical generic response: It thanked the customer for their interest and asked what questions they had. No answers to the specific questions the customer had asked.
A light went off in Siegel's head — not so much how to save his business from the pending economic downturn, but how he should have been conducting business differently all along.
"If I'm going to have less people to talk to, I better do more with the people I'm speaking to," said Siegel, whose group sells Audi, Nissan, Porsche and Volkswagen vehicles.
Siegel started looking at how to change his operations from the top down. His goal was to design a system "that would work for me that I could impart to the people who work here."
Siegel considered his own role in his dealership group and taught himself strategies to improve closing ratios. Instead of making employee cuts, he wanted to improve the work ethic of those who were already working with him — and Siegel emphasized his employees work with him, not for him.
- Title then: Dealer principal
- Dealership group: Legend Auto Group
- Where: Amityville, N.Y.
- Survival strategy: Rethink all dealership practices.
Siegel started looking at how to improve performance ratios in the BDC, analyzing the number of leads that came into the center and what percentage of those leads led to customers coming to the dealerships.
Then, Siegel considered the closing ratio of his salespeople, how they were approaching customers once they came in and how they were using customer relationship management tools to follow up. Siegel combined his self-taught knowledge and his use of metrics to design systems and improve internal training for his staff.
Siegel thought: "If I can do that, then the person who's working with me would most likely appreciate that I'm investing time in them." Their paychecks would get bigger and turnover would drop, he figured.
At the time, Nissan rewarded dealerships that had the highest customer satisfaction index scores. Siegel wondered why his group's CSI scores weren't higher. He concluded that because he had only one employee talking to the customers the group serviced each month, that employee was only able to reach a small fraction of customers who had visited the service department, resulting in a less accurate CSI.
Siegel realized he would need at least three employees to be able to make calls to and get customer satisfaction surveys from all of those who were serviced. After these hires, Siegel's CSI rewards skyrocketed.
Timing is everything
As soon as Siegel had an idea for business, even if it was after hours, he would write it down or call his office phone and leave himself a voice message to revisit in the morning.
Siegel asked himself question after question about his operations.
"If I went into my showroom and had my salespeople give me a presentation on a car, would I be satisfied with that?" Siegel asked himself. "How often do we practice what we're supposed to do before we actually do it?"
He credits coming up with new strategies to simply allocating time to spend on the process.
"What did it for me — the way in which I was able to find the path and processes — I started to spend more time at the store when the store was closed," Siegel said. "I came in earlier."
Siegel worked with his employees to rectify their unintentional lack of efficiency, built up by accepting the status quo for years. The recession forced him to look critically at the way business was conducted.
"It's not an epiphany. It was just logic that started to kick in," Siegel said.
"I would laugh to myself," he added. "This really isn't that hard."