Sam Flippo has arrived at a crossroad.
Having spent 30 years in the automotive industry, he's used to hardship. In 1983 he bought BRI Imports, a single-franchise Alfa Romeo dealership on Oklahoma City's Broadway Extension - just in time to ride out the harsh economic winds that uprooted a large segment of Oklahoma's businesses through the 1980s.
In 1995, when the recession was only a memory and electronic commerce began to percolate, Alfa Romeo pulled out of the United States. Two years later, highway workers started ripping apart the Extension, cutting the main artery to BRI.
But having earned his wings on the service side, Flippo knew how to soar when the winds turned sour. When he entered the BRI deal, he already had assembled a core clientele that had relied on him for service. That reputation helped him build a strong sideline selling high-end European and Japanese used cars.
A bit of luck
And fortune was kind to Flippo. As Alfa Romeo pulled out of the United States, the Oklahoma City franchise for Saab became available. Flippo acquired it in 1996 and found himself enjoying stronger sales than Alfa had ever provided.
And when the highway construction cut out a huge chunk of his service business, Internet outlets provided an unexpected boost to sales. Indeed, BRI's used-car sales through August equaled the total for all of 1999.
But even with a record year of used-car sales, things are not rosy. While the Broadway off-ramp leading to BRI has reopened, road workers have another two years of construction in store for the Extension around his dealership. He also is feeling pressure from Saab to upgrade his 18,500-square-foot quarters - an expensive proposition as analysts warn of another economic slowdown ahead.
But Flippo expects his strengths as a single-point survivor will sustain him, even as the oncoming downturn should provide new opportunities for growth.
Flippo pins his future success on three elements: overhead management, personnel retention and, most important, customer satisfaction.
'Small dealers will have to live by their personal handling of the customer,' he says.
For BRI, that includes little things such as a quarterly newsletter prepared by his staff and frequent inquiries to check on how customers feel about his operation. There also are loaner cars for Saab service customers.
Flippo pays his workers a salary in addition to commissions. 'I think it's cheaper to pay someone who's been with you a long time rather than staff your sales force with people who make just enough to get by on and are always looking for something better,' he says. 'Customers like to see the same faces when they come in.'
That strategy has helped Flippo maintain a low turnover ratio. His staff of 18 - which includes his wife, Karon, son Brian and sometimes son Jon - has lost only four workers in the past two years. One of those was his sales manager, who had been with him 12 years.
Flippo's overhead management has been tested by the continuing road construction. It has slowed his cash flow and cut his service department's revenue stream to 63 percent of his gross profits (he targets 80 percent, which he previously achieved).
But having jumped on the e-bandwagon in 1995, BRI has enjoyed the fruits of the Internet. As one of two Saab dealers in Oklahoma, his new-car sales remain at about 50 annually. But his used-car sales have jumped to about 25 a month, and he attributes about half of those sales to electronic commerce - not just from his Web site, www.briimports. com, but from eBay, AutoTrader. com and, most important, the Get Auto Internet site, www.getauto. com.
While acknowledging his facilities are small by some dealer standards - his 3,000-square-foot showroom accommodates only a handful of new cars - Flippo sounds reluctant to expand his dealership too much at this time. When Broadway construction is complete, he believes his location once again will be a prime sales spot, since it rests along the main artery connecting downtown Oklahoma City with Edmond, its well-to-do northern suburb.
At the same time, he foresees potential opportunities to acquire a better facility in far north Oklahoma City or Edmond - opportunities provided by other expanding dealers caught in the possible economic undertow to come.
One area in which Flippo has scheduled growth is his Web business. He remains happy with the site, which he says has a very high return on its monthly $2,000 investment.
'I get e-mail (sales inquiries), at least three to four a day, from the Web site,' he notes. He oversees them all, which requires about an hour's work each day.
But those sales, up to 20 a month, still end with phone calls, office visits or contracts by overnight mail. The new Web site will do away with much of that because of its financing and insurance options, and will add a service department scheduling system.
Says Flippo: 'I see in the near future a day when all of that will be electronic.'