Sunday, January 25, 2009

Car Dealers’ Only Thing to Fear is Fear Itself

Believe it or not, I hate to brag, but it was baseball player Dizzy Dean who said, It ain't braggin’ if you can back it up”. I’ll add to Dizzy’s sage observation the fact that bragging isn’t bad if there is a good reason to do so. My good reason is that car dealers are afraid. They are afraid to abandon their dealer fee because it would hurt them financially. Car dealers are afraid to not run bait and switch advertisements because they fear that prospective car buyers won’t respond to honest advertising. Car dealers are afraid to make themselves readily accessible to their customers because they fear being overwhelmed by complaints. Car salesmen are afraid to give the real price to their prospective customers for fear the prospect will shop and compare his price with the competition.

Well “listen up” car dealers! Earl Stewart Toyota has grown from one of the smallest car dealerships in Palm Beach County in one of the smallest towns, Lake Park [population of 9,080 as of 2004] to the #1 retailer of autos of all makes in Palm Beach County. Earl Stewart Toyota is the largest seller of new Toyotas from Orlando to Coconut Creek [south of Ft. Lauderdale], the 11th largest in the Southeast USA (out of 172), and 59th largest in the USA (out of over 1,300). The way my dealership was able to accomplish this was by putting our fears aside and doing business the way we knew, in our hearts, was right. As most everyone knows, up until about 5 years ago, my dealership charged a dealer fee too. Dropping that “extra profit” was one of the scariest business decisions I ever made.

How does a little car dealer in a little town earn so many customers? By doing those things that most other car dealers are afraid to do…don’t charge a dealer fee, don’t advertise cars that you won’t sell for that price, quote your best out-the-door price to any prospective customer who asks and encourage that prospective customer to shop and compare. We treat each customer with integrity, courtesy, and respect. We encourage total unfettered communication with our customers by not screening any phone calls and having a live person taking calls 24/7…no answer machines. Even I, the owner, take all calls directly and I don’t have a secretary. Talking about scary, how about my giving my home telephone number to all of my customers, printed on my business card!

This all sounds simple, doesn’t it? I agree, but why do so few car dealers get it? Why do they see the incredible growth and success of doing the business the way we do and still stick to their old ways? The answer for most dealers has to be “fear”. I hear some car dealers who say, “Sure, easy for him to do business that way because he sells Toyotas. He wouldn’t be so successful selling Chevys”. Well, of course I couldn’t sell as many Chevrolets as I sell Toyotas. But I measure my success against those who sell Toyotas or equally good product like Honda. I’ve grown from the smallest volume Toyota store in Palm Beach County to the largest. All the Honda dealers used to outsell me and now I outsell them all. I wasn’t even top 300 of Toyota dealers nationally and now I’m #59. If a Chevrolet dealer did business like I do, I can absolutely guarantee him he would sell at least twice as many Chevrolet as he is now.

During this severe economic crisis, Americans have been more prone than ever before to deal with those they trust. That’s why they are buying American treasury notes and bonds at unprecedented levels. They aren’t buying bank stocks or most other stocks because they don’t trust those who run these companies. This phenomenon is known in Wall Street as “a flight to quality”. It could perhaps be more accurately described as a “flight to trust”. Buyers are driving from all over Florida and beyond because word of mouth has spread that they will be treated with integrity, courtesy, and respect at my dealership. In the worst economic recession since the ‘30’s my dealership is growing its market share by leaps and bounds. I have to admit that this has even exceeded my expectations. I never dreamed that I would one day be the largest retailer of automobiles in Palm Beach County.

Any car dealer with enough courage can follow my proven formula and increase his volume and profitability. With business so bad for so many car dealers you would think they would have nothing to lose by giving it a try, except their fear.

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