Hummer dealer Jim Lynch often quotes trade-in allowances over the phone, sight unseen. But when one Hummer arrived at his store here, it looked as if every one of its 1,800 miles had been logged in a swamp. Lynch still honored the price he had promised.
'(My sales manager) really wanted to call that guy,' says Lynch, who in nearly six years selling Hummers and quoting trades over the phone has never reneged on a deal.
'I said, `What good will that do? We'll still have the truck. All it will do is cause a fight between us and (an) owner (who's) driving one of our Hummers with our name on it.' '
In an industry often accused of putting the customer last, Lynch, 37, has become the most successful Hummer dealer in the world by turning that notion on its head. In fact, he has upended most conventional approaches to automotive retailing.
His payoff: Of about 6,000 Hummer owners worldwide, Lynch says he has done business with 1,500 of them. He is the top Hummer dealer in new sales, used sales, parts sales and customer satisfaction. Owners nationwide refer friends and strangers alike to him; some even truck their vehicles in for service to his small hilltop shop just off Interstate 70 in O'Fallon, Mo., a suburb of St. Louis.
But his world is about to change.
Last year, General Motors bought the right to market, sell and distribute Hummer from AM General Corp. in South Bend, Ind. Lynch expects to hold on to his franchise. But he will be thrust back into the world of mass-market automotive retailing because GM is nearly certain to add more Hummer dealers. It's a world he left behind to sell Hummers full time after working for his father, also a dealer, since right after college.
'(Hummer) was an opportunity to (sell vehicles) differently,' Lynch said. His mantra is 'doing it right' even if that means sacrificing productivity - and some profit - to meet his standards for no-gimmick sales and no-shortcuts service.
DOING IT RIGHT
Approaching Lynch Hummer from the east, a Hummer sign is visible first, rising high in the sky. Then, a lone Hummer appears, parked at the sign's base. Finally, in a lot in front of the store, Hummers are everywhere, and there is little room for visitors to park.
Lynch keeps as many as 35 used vehicles in inventory, up to 50 new and used combined. He has sold nearly 600 new and used vehicles since he opened in 1994. In 1999, he sold 162 Hummers with list prices ranging from $30,000 for the oldest used trucks to more than $100,000 for fully loaded new vehicles. Parts and accessory sales topped $1.7 million last year.
He applies his do-it-right philosophy to all areas of his operation.
His prices are readily available. Lynch updates inventory and prices daily on his Web site. 'Somebody calls us; we tell them everything,' he says. 'We don't argue with them. We don't lowball them.'
He quotes trade-in allowances over the phone and honors them regardless of the vehicle's condition when it arrives at the store.
'We trust people to tell us the right thing. And if something's a little bit off, we eat it,' he says. 'Because (not doing) that looks like you're baiting them in here for something else.'
On used vehicles, Lynch tells his mechanics he wants every truck they prep for sale 'to be something that you'd sell to your mom when you get done.' All used vehicles are covered by a 30-day, 3,000-mile warranty that covers any work that would have been covered by the original factory warranty.
He sometimes spends thousands of dollars reconditioning a single truck and refuses to sell any 'as is.'
'There are problems we fix that people (who) drive a truck for a year-and-a-half, two years never know we (fixed),' he says. 'I don't know that that's really smart business. But it's doing it the right way.'
The same goes for repair work. Lynch's service department handles about 1,500 repair orders annually. He looks for mechanics who consider their work a craft and pays them for 40 hours even if he can bill only 15 of them to the customer or back to the factory.
BIG PICTURE FOCUS
When Lynch talks about his product or customers, his words come quickly. But ask him what his margins are, or his close rate, or whether he makes his money on sales or service, and he hesitates. His response is a surprise: He is not sure.
He laughs as he says it, conceding it may prompt other dealers to question his smarts. He knows as well that skeptics may dismiss his methods and oft-repeated commitment to keeping customers happy - even if he loses money because of it - as too good to be true.
But he concentrates on the big picture, he says, keeping an eye on gross profit rather than the net of each department. He wants to make money and says he makes a good living. He just does not want to make short-term decisions based strictly on financial targets.
Whether other dealers applaud Lynch's approach or criticize it, his customers are so impressed they sound like apostles.
Keri Quinn of Garland, Texas, a Dallas suburb, didn't buy his 1994 Hummer from Lynch. But he buys all of his parts from him and recommends him to anybody who asks. He estimates he has referred 25 to 30 people to Lynch - at least half a dozen of whom went on to buy Hummers.
'In all of my dealings, he had so much integrity,' says Quinn, a 44-year-old software engineer who admits to being 'a little leery' of car dealers.
Quinn says many Hummer owners are computer-savvy and talk up Lynch on mailing lists and other Internet-based tools.
'Dealers can't hide anymore,' he says. 'If they provide bad service or if they're doing something underhanded it will come out in a hurry. (Lynch's) reputation continues to climb.'
Jim Graber, 49, of Austin, Texas, is one of those who found Lynch via the Internet. The Dell Computer business systems analyst bought his 1999 Hummer sight unseen but enjoyed his phone relationship with Lynch and his 11-member staff so much he flew to St. Louis to pick up his truck just so he could meet them. He compared his Hummer-buying experience with his purchase of a Toyota 4Runner.
'It took me about six hours of very heated negotiations in the dealership to get what I wanted on the Toyota at the price I wanted,' he says. 'With Lynch, any question I asked, the information was there.'
UNDER NEW MANAGMENT?
GM is preparing to add to the Hummer product line, beginning with a smaller, less-expensive Hummer H2 in 2002. Plans call for annual sales of about 40,000.
The automaker has made no decisions about how many new Hummer dealers it will need, whether the franchise will be offered only to GM dealers or what happens to existing Hummer dealers.
But Lynch knows he'll at least face more competition, and his business may change in other fundamental ways. Still, he plans to stick with his do-it-right philosophy.
'It's not going to be harder to do,' he says, '(but) it's going to be harder for it to make a difference.'