Friday, October 12, 2007

Earl Stewart Is Responsible for Car Dealers’ Bad Reputation?

The private feedback I get from other car dealers who read this column, listen to my radio talk show at 9 AM every Saturday on www.SeaviewAM960.com, or see my advertising [view all my TV commercials at www.YouTube.com/EarlStewartToyota] is that I am causing damage to their reputations. Let me hastily add that they won’t state this publicly. No car dealer has ever written a letter to the editor of Hometown News. They will post negative statements on my Blog, www.EarlStewartOnCars.com, but always anonymously. I’ve had only one call to my radio show from a car dealer and he wanted to remain anonymous.

First let me say that I have been doing my Hometown News column for less than two years and my Blog for about the same time. My advertisements against the dealer fee and such have only been running for 3 to 4 years. My radio show is less than a year old. Given this, how did car dealers earn such a bad reputation before I started talking about it?

I’ve been a car dealer since 1968 and I can never remember car dealers not having a bad reputation. Comedians joke about car dealers as much as they joke about lawyers and politicians. In fact, car dealers have even had movies made about their slimy way of doing business. Two of them are Cadillac Man, starring Robin Williams and Used Cars starring Kurt Russell. I’ve always been acutely aware of the generally bad image that car dealers have. That may be because I wasn’t always in the car business, although my father was a car dealer. I studied Physics in college, earning my BS from the University of Florida and my MS from Purdue. My first real job was as an Electronics Engineer for Westinghouse Electric Corporation. I had those early years working outside the car business to give me a better real life perspective when I came to work for my father in 1968.

Surely other car dealers are aware of their generally bad reputation. How do you suppose they think it came about? Can they believe that our reputation is a mistake and that most car dealers really treat their customers with integrity, courtesy, and respect? Do they believe that customers are simply not telling the truth about their bad experiences with car dealers? Anybody who has ever been to a party or other social event has to have overheard at least one horror story about someone buying a car or having their car serviced.

I’m going to assume that car dealers really did know that they had a bad reputation even before Earl Stewart came along. I think they are simply angry at me because I’m calling more attention to a problem that everybody already knows about. And they’re mad because I’m offering advice to customers about how to avoid the pitfalls in buying a car and having a car serviced. But the biggest reason they are furious with me is that they see my business growing relative to theirs. They see their customers coming to my dealership to buy their next car because they know they will be treated with respect, courtesy, and integrity.

I had one anonymous email from a dealer say that “the only reason I have four red phones around my dealership that customers can call me directly on is because I don’t trust my employees”. My answer to him was “the only possible way I would dare to have four red phones that customers can call me directly on seven days a week is because I do trust my employees”. Think about this. My dealership sells 400 to 500 cars every month and services thousands more, making it one of the largest car dealerships in the World. If my employees did not take very good care of all those customers, how could I possibly personally answer all those complaints? The fact is that the reason other dealers don’t allow customers to have direct contact with them is because they are afraid. In every organization there is a mentality of “never let the boss hear a complaint”. Of course, that could be a good thing if she never heard a complaint because all of her customers were happy. But 40 years of experience has taught me that the normal way that the boss never hears the complaints is by not allowing the customers access to the boss.

That’s your problem, Mr. Car Dealer. You think (or maybe you just want to think) your employees are doing a good job satisfying your customers because you don’t hear any complaints. Or maybe you think you are doing a good job in this category because the factory customer satisfaction surveys look good. Have you read the expose in Automotive News about how car dealers routinely rig customer satisfaction surveys? Salesmen offer customers a free tank of gas if they will bring them their “blank” survey so the salesman can fill it out themselves. Or, the salesman gives the manufacturer a phony email address so that the survey comes to a PC at the dealership instead of to the customers. There are lots of tricks like this to make a dealer’s customer satisfaction score look a lot better than it really is.

The only accurate way to measure customer satisfaction is by measuring how many customers who buy a car from you buy their next car from you…customer loyalty. In your service department how many customers bring the car they bought from you back to you for service…customer retention. Toyota has told their dealers that they will begin to measure customer satisfaction in this manner in 2008. My customer loyalty and customer retention is very, very high. If you are one of those car dealers who thinks everything is hunky dory, maybe you better take a look at these two numbers.

19 comments:

  1. Another great car dealer movie is "Suckers". It's a classic! Also that scene in "Analyze This" when Robert Deniro is a car salesman - very, very funny.

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  2. Earl,

    Dealers continue to have bad reputations because of you and people like you. Many dealers are very honest and fourthright, however you choose to make blanket statements that cover all dealers. Not everything you acuse dealerships of doing is done in all dealerships. You can not even possibly know what happens in other dealerships. You look at an add and that makes you an expert. You have started a war with your own peers and one day may have to deal with the outcome. You continue to point out what YOU feel is wrong with this business when this is in reality one mans opinion and an opinion I might add that is geared to do nothing but put more money in YOUR pocket. I applaud your effort on educating customers but the way you go about it degrades ALL dealerships when that is not fact in ALL dealerships.

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  3. Peace be with youOctober 15, 2007 12:50 PM

    Earl,

    In every business there are horry stories from customers. What makes the car business so different. When you are dealing with people there will be times you can not satisfy everyone. The majority however are satisfied. If they weren't every dealer would be out of business. Customers would buy cars from brokers and internet and service their vehicles with independent Joe. That market has decreased rapidly over the last several years. Every year more and more customers service their vehicles with dealers versus independents. Slimmy sales tactics of years ago have changed dramatically. Usually when a dealership has someone like that he/she doesn't last long. They are thrown out.

    No one has 100% satisfaction in any business but we all strive. You don't point that out however you only point out the negative one or two experiences. In your case you say 100 a month. That's a lot. If I had 100 complaints a month I think I would hang myself. Instead I enjoy increased business, one of the highest retention rates in the region, legions of loyal customers, tons of complimentary mail from customers, a tremendous growth in our service and parts department year after year, fantastic survey scores, great employee retention, and a relatively great place to work. This will never sink in with you. You have found a niche to put done others while trying to profit from it. It is wrong and you should be ashamed of yourself. I am sure if your father was alive and well and still ran his dealership he would be distraught with the crap you are pulling now. I am sure he was not a succesful business man by bashing other dealers in his area. He was probally well liked and respected unlike yourself.

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  4. Why did you install the red phones in your dealership? You wanted to hear from your customers yourself that they have had a bad experience. Why not allow your managers to handle your customers? The answer is you don't trust them. Why is your retention in the lower half of the region instead of the upper half of the region? You have red phones don't you? Customers can tell you all about their problems can't you? The answer is no matter if you have phones or not, if you don't satisfy your customers they won't come back. Phones or no phones this is fact. No red phones in our dealership, but every customer can reach a manager and every customer gets treated with respect and we strive every day to have them come back and continue to do business with us. I don't need red phones, I don't even need the owener. I can just do it myself. Maybe I can call you for advice when my business starts to decline, but until then I think I like my systme better.

    By the way I have spoken to some of your people and the red phone situation. Most of your employees say they hate it. They can't do the job they were hired to do. They try and sell something to a customer, the customer doesn't like it, they pick up the red phone and you give it away. You have trained your customer if they don't like something they hear to call you and get it for free. There is another dealership in town that has an open door policy and allows customers to walk in and see them at any time. Same problem. They still suck by the way and their retention is in the toilet, but you can speak to the owner if you want to. Keep up the good work, it seems like you are doing a great job.

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  5. Dear "happy go lucky" and "Peace be with you",

    Why is it that you car dealers [or manangers] always wish to remain anonymous? If I'm as unpopular as you say, why not just call me or visit me? You will just be another member of this large majority that hates my criticizing the way many car dealers do business. We can have a chat and discuss our differences of opinion.

    Join the crowd that will be attending my talk, "How not to get ripped off when buying a car" this Wednesday, 10-17-07 at the Palm Beach County Library in Palm Beach Gardens. If you can't make that, I'm appearing at County Libraries in Greenacres and Boynton in the next few weeks. You can even ask me questions. I do a lot of Q&A with the audience. Here's your big chance to embarrass me and prove me wrong in public!

    Come and see how "unpopular" I am with prospective car buyers, some of whom were likely YOUR customers.

    Come out of the closet, Mr. Car Dealers, and face me like a man.

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  6. I Love Car DealersOctober 15, 2007 3:53 PM

    Earl, what's your problem? Can't you see that the other dealers just don't have a problem with customer complaints? At their dealerships the customer is never suckered in with bait and switch advertising, never subjected to high pressure and pricing games, never charged over sticker, never hit with a dealer fee, never refused a return if they're not happy with the car, never lied to, and always treated the way they'd treat their mother. Earl, shame on you for suggesting otherwise. It is obvious that dealers reputations are not deserved. They are saints and are trying there little hearts out to make up for all the bad things other dealers did years and years ago. Shame Earl shame.

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  7. Finally you said it. You said "many of the dealers" not all. This is what I have been trying to say. The reason why I stay anonymous is because I am not going to give you any fuel for the fire. As far as me losing customers to you. I doubt it. People are treated very well at my store and can even buy cheaper than from you. You are not the first showman to come around and try to profit from bashing others and you certainly won't be the last. I love competition. It is the main thing that keeps me coming back day after day. One day you and I WILL meet face to face. I am sure we can have a very nice and polite conversation and be able to agree to disagree.

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  8. I love car dealers,

    Don't be a smart ass. If you know anything about the car business and not just Earl Stewart Toyota than you know not all dealership go to work to decieve their customers. A vast majority of dealership and their employees enjoy working with customers and taking care of their automotive needs. Don't put your two cents in without back up, it makes you sound like an idiot.

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  9. i love car dealersOctober 15, 2007 7:48 PM

    I guess you feel like you're taking back a little of Earl took from you by sniping on his blog. I don't think it's having much of an effect. It's called momentum - inertia. You're way too late. No matter how loudly the wind howls, the mountain shall never bow to it. Besides, kid yourself all you want: you know who you are and what you do and so do consumers. It's not all lost for you, your style will last another generation I think. You can still prey on the uneducated, poor, elderly, and those who cannot defend themselves. There are so many new residents pouring into south Fla that you have a practically unending supply of fresh prey to take advantage of. Bon apetit!

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  10. customers in the middleOctober 16, 2007 3:23 PM

    you're stupid. no you're stupid. I think you all are stupid. all of you, including Earl Stewart, are proving to the car buying world that ALL dealerships are ridiculous. you all need to get out of the business and start over. Earl, I am sure you are no better than the rest and all the crazy anonymous people are just nuts. I will ride a bike.

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  11. Irving Silverman, Boynton BeachOctober 17, 2007 5:44 PM

    Mr. Stewart,

    I would like to make a point. I have serviced my car at Al Hendrickson Toyota and at Delray Toyota. Al Hendrickson himself and his son walk through the dealership in the morning and say hello to all the customers. They ask if they have any problems that need to be addressed. Hardly ever does a customer have to speak to them. I have called the dealership and asked for them and right away either Al Sr or Al Jr get on the phone and take my call. At Delray Toyota they are the nicest people I have encountered in the car business. Their service department has been one of the finest service centers I have used since I moved down here. Anytime I have had a question I can ask for a manager and I have always had my issues resolved. I moved down here from New Jersey and live in Boynton. I used to be a snowbird but now I reside here full time. I have enjoyed doing business with Toyota for years. A friend of mine told me about this blog. I can tell you that I will buy my next car from Al Hendrickson or Delray because of the fine service I have always recieved. They don't need a red phone and it doesn't seem like I have to speak to the owner to get a fair shake. I will say that after reading this blog you have stirred up a little controversy among your peers. I don't know if that is the kind of place I would like to do business with. I am sure you are a fine person, but it seems to me that you like to fight a little with the Toyota dealerships. I don't like that.

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  12. Myron Rothberg, Boca RatonOctober 17, 2007 7:29 PM

    Mr. Silverman, my fraynd. Please take me up on this suggestion- Call Earl Stewart. My whole community makes the trip to North Palm. We brave I-95 to do this. We are not fools, we do this for a reason. Call him. 561-844-3461.

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  13. The fault is the other dealerships bad reps. I'm a happy owner of a new Prius from Earl Stewart (which I hear they are the #1 dealer of that car outside of Cali)... I shopped around, and nobody else even came close. Toyota of Palm Beach, when I walked into there, the place was like a ghost town. Maybe two customers walking around the lot. When I walked into ES, there were people everywhere signing their purchase papers. The price difference was huge. It was clearly the best place to buy. Plus the tire deal, that rocks. I'll definitely be back once this Prius starts feeling old (Or if Toyota has something really neat up their sleeve for the 3rd gen!)

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  14. Dear Mr. Silverman,

    I’m very glad that you are having a good experience having your Toyota serviced at Al Hendrickson and Delray. You obviously have formed some positive relationships with those that you deal with in their service departments and this is working for you. In fact, I posted an article to my Blog on this, “Minimizing the Pain of Having Your Car Service” last March.

    I have never said that “all car dealerships are bad”. Dealerships, just like all companies, are made up of people. Some people are caring and competent and others not so. Some car dealerships employ too many of the latter and too few of the former.

    My main “bone to pick” is with the owners of those dealerships, who are probably very nice guys, but live in the fantasy world that everybody who works for them treats all their customers with competence, courtesy, respect, and integrity. Al Hendrickson and his son Al Jr. are exceptions to the rule of dealerships owners not being accessible to their customers. I’ve know Al Sr. for about 40 years. He worked for Pontiac Motor Division back then and signed me up as a Pontiac dealer. This is when I first started in the car business. The next time you see Al Sr. or Al Jr. walking through the service drive tell them Earl said “Hi”.

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  15. Thank you Mr. Stewart for responding with positive comments.

    Irv

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  16. Earl,

    Dealers bad reputations come from customers thinking they are not allowed to make a profit. I can tell everyone out there reading this that if you invest 30,000 in something you expect a return. Why should a dealer invest money in a vehicle and turn around and sell it to someone for no profit. Stop being unrealstic about pricing and payments and maybe you will have a better experience at a dealership. I am not saying you should pay MSRP but don't be so greedy to think the dealer should be making zero. And to add to that - how do expect the salesperson to get paid when they just got done spending hours of his or her day with you in the hot sun searching for the vehicle that is right for you. Do they not deserve to make something? Also, when you have a problem with your vehicle who is there to help you? The guy across the street or the salesperson you insulted by treating them like a counter clerk at walmart? What tyoe of customer service do you think you can expect when you treat the employees of the dealership like third class citizens?

    Customers do not need lessons in how to buy cars - they need lessons in how to treat people. Why would you drive further from your home to save $10.00 per month when you could spend that money with your local dealer and get a salesperson who will be there for you throughout your ownership? These are the types of questions you need to ask yourselves before going to the dealer. Check prices on line and allow people to make a fair profit. With all of the information the dealers can't hide anything from you anymore.

    P.S. - If the $10.00 per month is that important to you - go look at something less expensive.

    Wake up and realize the people that are selling you a car might be working harder and longer hours then you can imagine and they have families and car payments to make just like you!

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  17. Dear "it's the customers fault",

    Thanks very much for your email. I couldn't have a done a better job making a case for my Customers for Life way of doing business than you just did in your email.

    If any car buyer wants to know why they get treated so badly in many dealerships, all they have to do is read your posting. You are blaming your customers for your problems just as you are blaming me for not doing business with a "Buyers are Liars" mentality.

    Your message gives a new meaning to the word ARROGANCE. How dare you suggest that your customers should not shop for the lowest price so that you an earn a bigger commission!

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  18. Earl,

    Again if you read my entire comment I did mention the customers should go online and gather their resources and get a good deal. At no time would I suggest a customer to walk in a pay sticker. What I did point out is that way would anyone feel that a dealer should not make any money on the transaction. I have also read Mr. Sewell's book and I have read the comments you have made. There is a lot I agree with. I was hoping to reach out to the customers reading this and hoping that they would understand we work for a living just as they do.

    I do not blame my customers for any problems I have - as a matter of fact I have been in this business for a long time and feel honored to know that there are a vast majority of us who take pride in our work and do not use the tactics you describe to sell cars. I do it honestly and straight forward and that is why I am very successful at what I do. As a matter of fact my CSI is 100%.

    To revert back to my original comments, what I am trying to get across to the people reading this is that we are here to make a profit - not retire off one sale.

    Maybe you should share the fact you just cut the pay plan for some of your employees - costing some of them up to $10,000.00. Is that fair? Or does it just mean a bigger bottom line for you. You may have the ability to woo the community with your kind words and thoughtful buying skills. But soon things can come back to bite you when they find out the real man behind the mirror is simply a greedy business man. One who is trying to make profits by bashing the other dealers in his area in an attempt to make himself look better than he is?
    The silver lining here is that you have done a good job of trying to get rid of dealer fees - I agree. If I have to fight for them then why aren't I paid on them? But in the end I earn a great living and I too can sleep at night knowing my customers are taken care of better than the rest. Thank you for your kind banter. I can appreciate both my customers looking for a good deal and your want to help them do that. However, there are many times the customer takes your advice puts their own spin on it and becomes unrealistic. To the customers out there who feel I am too harsh think about what you are paying for next time, get a good deal, and please remember we all work hard for our money no matter what the amount may be.

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  19. I recently purchased a new car at Al Hendrickson Toyota, and while I was pleased with the way I was treated by the sales staff, I cannot say the same about the Finance Department.

    I have been trying to contact Michael St. Clair, who is one of the business managers in the Finance Department, but I can never get through to him when I call, and messages left for him are never returned.

    Al Hendrickson Toyota may be a good dealership, but employees such as Mike St. Clair are inconsiderate jerks who are helping to damage their good reputation!

    Al, Sr. - Since you are ultimately responsible for the way your employees treat your customers, please straighten out this St. Clair character and live up to your motto "It's all about you".

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