For Earl Stewart, the customer comes first, but everyone else is catching on

LAKE PARK, Fla. — Earl Stewart considers himself a recovering car dealer.

For the dealer principal of Earl Stewart Toyota of North Palm Beach, dealership practices that harm consumers are an addiction. He spent decades in the car business before he broke the habit himself. High-pressure haggling, hidden fees and deceptive tactics are among the "tricks" of the trade Stewart now eschews. He's also dedicated to helping fellow dealers kick those habits, too, by calling them out on his radio show, "Earl Stewart on Cars."

"Back in the day ... I was a thief and I was surrounded by a bunch of thieves, so I wanted to be the smartest, best thief in the market," Earl recalled in his office Aug. 29. "And I was."

It's hard to imagine Stewart, 78, as a thief. He's about 6-foot-3, with white hair, blue eyes, and a well-defined and deeply soothing radio voice. In a modern-day retelling of It's a Wonderful Life, he would be well cast in Jimmy Stewart's role as George Bailey. If the Bailey Bros. Building & Loan empire included a car dealership, it would never sell a vehicle above sticker price, regardless of demand. It might also offer an unconditional, seven-day return policy. And, like Earl Stewart Toyota, that Bailey dealership might even talk a customer out of deal if a better one could be secured elsewhere.

Such practices have helped Stewart and his sons sell nearly twice as many new vehicles a month than the average U.S. Toyota dealership. But if any worry rises above the concerns at this dealership, now in its third generation, it's the fear of no longer standing out. As more dealers adopt digital technology, and transparent processes become the norm, the family fears its edge may be lost.

"I tell my people— my sons and everybody— we have a lead now, but we have to continue to improve because the competition is gaining on us," Stewart said.

Stewart's "recovery" started with a Toyota Executive Quality Management retreat in the early 2000s. Earl connected with a mentor whose devotion to customer service prompted Earl to question his practices.

Earl set to work changing the way he did business. He dropped the costs that some dealers list on paperwork as document fees. The vehicle advertising dropped the "fine print" that would change the offer, or require customers to jump through hoops to qualify for the lowest price.

Around this same time Earl survived stage 2 colon cancer. And he became a grandfather.

His public stance, which rival dealers have described as holier-than-thou, has gotten Stewart into trouble. But it also fuels the pipeline of loyal customers.

His radio show was canceled for a time when the station lost its dealership advertisers. Surrounding dealers banded together to stop doing dealer trades, or swapping vehicle inventory, with his store because of his comments. Consumer advocacy has embroiled Stewart in lawsuits with fellow dealers and insurance companies over the years, with Earl as both plaintiff and defendant.

In 2008, Stewart sued Ed Morse Automotive Group over its advertisement claiming Stewart didn't eliminate his dealer fee but hid charges in overall costs.

In 2014, Stewart became involved in antitrust litigation against a slew of insurance companies including Allstate, Nationwide and Geico, alleging conspiracy to suppress reimbursement rates for collision repairs. The case is ongoing.

In 2016, Stewart filed a suit under the Florida deceptive and unfair trade practices act, accusing neighboring dealer Arrigo Dodge-Chrysler-Jeep-Ram West Palm Beach of selling Takata airbags. Stewart lost.

At the time of his recovery, which Earl gauges around 2003, the store sold about 1,400 new vehicles and 900 used a year. Today, the store averages sales of 3,300 new vehicles and 2,000 used a year. Last year's new-vehicle average for U.S. Toyota stores: an industry-leading 1,718.

Part of what drove Earl Stewart's transformation was the knowledge that his sons abhorred his previous business tactics. Before they came on board, Earl said, he considered selling the Toyota point. He had already sold his Mazda dealership, his father's Pontiac store and an independent used-car lot.All three of his sons —Earl Stewart III, 51, who goes by Stu; Jason, 48; and Josh, 43 — are co-general managers. Only Jason was attracted to the business at a young age.

Stu wanted to be an artist. He worked with his mother and her friend, a successful muralist, painting celebrity homes, such as designer Gianni Versace's in South Beach and Cher's on the private La Gorce Island and other ritzy enclaves in downtown Miami. Stu joined Earl Stewart Toyota in 1998, at the age of 29.

As a kid, Josh was oblivious to the reputation car dealers had in American culture. His dad was just a businessman; he left home in a suit and tie, and came home to a martini and cigar every night. But the more he learned about his father's line of work, the less Josh considered it. He wanted to be a schoolteacher, but wound up managing a nightclub for a real estate developer. That's when his dad asked him to help with the construction of the new Toyota facility, which was completed in 2004. He was then 28.

"I kind of had a very extended adolescence. I thought the last thing I ever wanted to do was go into the car business. But then Stu did it. And maybe I was a little jealous that they were making more money and having some fun," he said.

Jason, meanwhile, began detailing vehicles and working in the parts department at 13. He officially joined the Pontiac store in 1991 at age 20. He attended Northwood University, and after a brief stint at an Ohio dealership, moved to Earl Stewart Toyota in 2001. "I always had an interest in the business; I don't know why," Jason says of the family enterprise that began as a Pontiac store 82 years ago. "This business is kind of rough on you."

His son, he adds, wants to be a car dealer, too. "And I say, 'Well, you should consider something else because I don't know how long we'll be around.' "

Earl Stewart Toyota does little advertising. It relies on its reputation to attract customers. In the showroom, posters advertise The Earl Stewart Code. Among its commandments:

• "Do whatever our customer asks if they believe they're right."
• "Your first loyalty is to our customers, not to Toyota."
• "Always answer all calls, emails, texts, and messages of any kind from our customers ASAP."

Josh Stewart gestures to the messages. "Every one of them is one of our unique selling propositions," he says. "We want to set ourselves apart from the competition, and not with come-ons and gimmicks. You can't put a dollar amount on the red phone — how much value in there is that?"

The infamous "red phone" — actually five landlines throughout the dealership — connects customers directly to Earl's personal cell phone. Calls from customers are never ignored, whether Earl is in a meeting, on the beach — or in the shower.

"He'd say, 'Get that,' " recalls Nancy Stewart, Earl's wife of 16 years. "I'd answer the phone and say, 'I'm really sorry, the recovering car dealer's in the shower. I'm standing right in front of him; can I take your message?' "

Over the years, Nancy's role at the dealership has increased. She is on a mission to abolish sexism in auto retailing through education and empowerment. She spends much of her time on the showroom floor, meeting customers and shooting videos.

Outside the dealership, she hands out business cards at every opportunity. Nancy, 76, is also a natural on the radio show, facilitating listener calls and driving the conversation.

To boost female listenership, she personally gives $50 to two first-time female callers on each show.

She's an advocate for the store's current goal of staffing as many women as men. Parity, however, has been difficult to achieve. Of Earl Stewart Toyota's 167 employees, 22 percent are women — only a little better than the industry average.

Earl owns the majority of his business — 56 percent — while the remaining 44 percent is split evenly among his sons. The store's day-to-day operations are managed by the three sons, while Earl remains an active overseer. Occasionally joined by Nancy, the Stewarts meet every Monday to talk shop and come up with ideas for Wednesday management meetings."We say there's always a Stewart in the dealership. It's part of our brand," say Earl. "In what other company — much less a dealership — can you always walk in and speak to the owner?"

While Earl's practices drive business to the store, they are also costly. Once, a Toyota Tundra owner had trouble fixing a mysterious vibration. Earl refunded the entire deal, even paying to transport the 1-year-old pickup back to the store from Pennsylvania.

"Everyone was like, 'No, you're crazy; that's insane.' But that story was like ripples in a pond," Josh said. "Everyone the guy knew who still lived in Florida came here to buy cars from us."

Service technicians occasionally make house calls, or replace items for free. On the morning of Aug. 30, Hillary and Franklin Maldanado called the store seeking help with their 2-week-old Toyota RAV4 that was on cinder blocks after the tires were stolen. The Toyota Care roadside service denied their claim because, on blocks, the vehicle couldn't be towed.

The Maldanados were desperate. Hurricane Dorian was threatening Florida's east coast, and they hadn't gathered emergency supplies. Jason Lady, one of the store's new-vehicle sales managers, found three more spare tires. Alongside technician Sam Guillaume, Lady borrowed a floor jack from the service department and headed to the Maldanados' home in a loaner vehicle. They jacked up the car and installed the tires.

Yet for all the success that the Stewart name and its strategy has brought, the family worries that it won't be enough to carry it forward as auto retailing transforms. Earl Stewart established his code of ethics in a Wild West era, son Stu says. And like a U.S. marshal on patrol, his dad set out to keep tabs on the worst offenders.His radio show, in addition to being a branding tool and an extension of his consumer advocacy, operates as a unique tool to track the cultural shift in retailing. For 15 years, Stewart has taken calls nationwide to discuss auto industry trends, lean on employee expertise and chat about what's going on at his store.

Every episode has a mystery shopping report, where an undercover agent goes through the motions of a vehicle purchase at an Earl competitor and reviews the experience.

On a Saturday broadcast in late August, Earl, Nancy, collision center manager Alan Nappier and master diagnostic technician Rick Kearney sat in a small studio a few miles away from the store. At a table cluttered with microphones and laptops, web cameras trained on each of their faces. Each week, the show is livestreamed via Facebook and YouTube.

The group donned headsets in the minutes before the show went live. The theme song to The Good, the Bad and the Ugly played as Earl Stewart's prerecorded message filled the studio: "Good morning. I'm Earl Stewart. I welcome you to 'Earl Stewart on Cars,' a live talk show all about how to buy, lease, maintain or repair your car without being ripped off by a car dealer."

Throughout the two-hour program, Earl and the group answered questions from callers across the country. Many of them were local, focused on how to protect vehicles from the hurricane. Later, the group evaluated the mystery shopper report on Wayne Akers Ford in Lake Worth, Fla. Earl read the report in first person, and then the group voted.

Agent Thunder, Earl's spy, was able to procure a Ford EcoSport at the advertised price, earning high marks — despite some dealer fees. By contrast, reports read on the show in the 2000s were unanimously negative, says Stu.

"Every single mystery shop was just a horror show. Lied to by the salesperson, bullied by the manager," he said. "That's becoming much less common. We're actually getting good experiences."

Social media forced dealers to clean up their act, Stu said, in a time where negative reviews and a lack of digital presence can seriously harm a store's reputation.

"It's definitely harder to distinguish ourselves," he said.

A great customer experience is Earl Stewart's mission, but other dealerships have wised up to the practice.

"The lies are there. The false advertising, but the people have figured out you've got to really treat people well. They're not coming out being jerks, hiding the keys and all the old stuff," Jason Stewart said at a Friday sales meeting.

When consumers shop out-the-door prices online, Earl believes, hefty dealer fees will be harder to swallow. But digital adoption has been slower than expected. The dealership's customers can order vehicles online today, or at one of the kiosks inside the store, but online purchases are not catching on the way Earl had hoped.

"We thought it was going to be maybe 10 percent of our business, and now it's about 2 percent," he said.

Meanwhile, only 7 to 8 percent of online leads translate to a sale, according to Stu. Improving that number to 12 or 13 percent could mean an additional 60 new vehicles sold a month for the store.

Though adoption of digital auto sales has been slow, other forecasts spell a future where physical dealerships will be all but redundant. Florida dealerships are protected through strong franchise laws, Stu said, but it won't be long before those laws are propping up a system that otherwise would have collapsed under marketplace demands.

"We just spent $15 million on a brand-new facility. That's a heavy capital investment in real estate so we can accommodate large inventories. True online retailing is probably not going to require big lots of cars lined up on display," Stu said.

The growing share of electric vehicles is also among Stu's main concerns, a challenge he considers unavoidable. But it will have serious repercussions for parts and service, the store's main profit generator. Dealerships will lose revenue as customers wait longer between service and repair visits.

At a management meeting several weeks before Dorian, Jason later recalled, the discussion over what the dealership landscape would look like in the next decade was grim. One fear: The very idea that brings Earl Stewart Toyota its success — giving customers what they want — could one day put it out of business.It may also be the key to survival. Disrupters such as Netflix and Amazon are often cited by experts as the models to emulate. But when it comes to interacting with customers, the Stewart family looks to Apple Inc. A large portion of the store's recent renovations was devoted to redesigning the sales floor to resemble a Genius Bar.

Desks on the showroom floor no longer have drawers and offer limited space for employees' personal belongings. Instead, they are given lockers in another area. The offices surrounding the showroom are similarly spartan, save for a few family photos behind desks. The unwritten message: Customers and their concerns should be the only things on the table at Earl Stewart Toyota.

In a sales meeting, Jason described his experience at an Apple store. While awaiting a repair, he heard an employee give a TED Talk-style presentation on the Apple Watch.

The salesman "is telling me what's wrong with my phone; I can't help but listen to the [presentation on the] Apple Watch. I don't have an Apple Watch. But after half hearing this guy, I'm pretty sure I'm going to get an Apple Watch," Jason said.

He wants to do something similar in the store, where salespeople would demonstrate the technology in Toyota vehicles. His brothers share that viewpoint. "My sincere hope is that we can really become experts because the cars are getting more and more advanced, just like our phones are," Josh said. "We could maintain our relevance in a quickly changing industry, by offering an amazing customer experience." In the meantime, there's a solid, if threatened, foundation to work from.

While the novelty of Earl Stewart's message may have faded over the years, the devotion to the concept — and the man behind it— still resonates.

"He'll actually say, 'I believe in my heart, if people knew what we did, that nobody would buy a car from anybody else,' " Stu said. "He's dead serious when he says that. He's not P.T. Barnum.

"I think that gives us a little bit of a leg up, the ability actually to achieve some of the things that we hope to achieve — because we've got a true believer at the head of the organization and buy-in from everybody else."