It is not uncommon for Philadelphia dealer Jim Peruto to raise eyebrows when discussing the auto business.
Peruto, president of Keenan Motors (Mercedes) and Keenan Honda in suburban Doylestown, Pa., is a lawyer from a family of lawyers. He opted to give up practicing law to enter the car business 15 years ago. Peruto has been a dealer champion, an advocate for change and a maverick in the business.
Peruto, who is this year's president of the Auto Dealers Association of Greater Philadelphia, has outlined his goals for the dealer group during his term. One objective is to define the roles of the manufacturer and the dealer in the retail market.
'We are going to work to keep the manufacturers out of the retail business and to keep them from giving a competitive advantage to one dealer over another,' he says.
'I see dealers as part of a bigger process. The market is very competitive, and the cost of distribution has to be kept to a minimum.
'It is inevitable that there will be changes in the retail environment to reduce the cost of distribution, while keeping the customer base. I see a lot of consolidation. Volume and lower unit prices are the keys to reducing the cost of distribution. The dealers are their best solution to keeping distribution costs in line. I want to be part of that picture.'
Kevin Mazzucola, executive director of the association, which is made up of 235 dealers in the five-county Philadelphia market, says of Peruto: 'He is progressive, innovative, a very strong dealer. He is always looking for new ways to improve his business specifically and the industry as a whole as it relates to the retail side. He wants to be ahead of the curve.'
High on Peruto's list as head of the dealers association is the success of the area's auto show, set for Jan. 29-Feb. 6. Last year's attendance was 180,000, and he estimates it could top 200,000 this year.
But the primary objective Peruto articulated in his role as president of the association is to 'broaden and strengthen sales recruitment and training.' He says, 'I lost good people I wanted to keep, and it made me sensitive to the issue.'
Training is critical in sales staff retention, Peruto says. He employs 11 salespeople at his Honda dealership and seven at his Mercedes store.
Recognizing the importance of sales staff retention, the dealers association in May 1999 established a sales training academy to attract and train quality salespeople.
The Auto Dealers Association Sales Training Academy offers an intensive four-day course that addresses every aspect of automotive sales. At the end of the course, the names of the graduates are distributed to 70 participating dealers. The academy has trained 400 people to date, Mazzucola says.
'We hired someone who took the training course and (that person was) an exceptional new hire,' Peruto says. 'We also sent someone (on staff) who was struggling, and he took off. He lit up!'
His sales staff also participates in in-house training by a sales manager. An emerging trend is to hire a full-time, in-house trainer. 'I am looking right now,' he says. 'It is that important.'
SPIRIT OF SERVICE
Creating a friendly, familylike dealership environment also is instrumental in retaining sales staff.
'I came from a legal background, and my first job (in the automotive business) was as an owner,' Peruto says. 'I didn't learn the tricks of trade, and I'm glad. I always put myself in the place of customer, and I thought, `How would I want to be treated?'
'We encourage a spirit of service. Helpfulness, honesty is what we want to project, and that came from a lack of alternative strategy. Now, I know it was the way to go, and it is the way the industry is moving.'
A friendly environment has led to a substantial repeat and referral business, which forms a significant part of total business.
'If your philosophy is to attract people with lowball ads, and you do everything to sell them, that approach is stressful to salespeople, and you'll see high turnover,' Peruto says.
'If you have a cordial, friendly, accommodating environment, and you are not out to get over on the customer, it is a less stressful environment, and it is more rewarding to the sales staff. There is a higher likelihood of keeping people. That is a major factor; it is an intangible, and it doesn't cost money.'
For salespeople, Peruto adds: 'Loyalty is a form of gratitude, and gratitude is the shallowest and shortest felt of all human emotions.
'The dealer's challenge is to make sure it is in that person's best interest to go to work for you that day. What happened yesterday may engender loyalty, but today other auto dealers and other industries are vying for your salespeople, and other industries, including computer companies, pay more. You have to make them want to come to work.'