I’m deeply honored to be asked to speak to you this afternoon. I do a lot of public speaking at civic clubs, churches and synagogues, libraries, and chambers of commerce. I do a live radio show every week with my wife, Nancy. Normally I speak extemporaneously. I’ve never written out a speech, and I rarely even use notes. But I have to confess, addressing a group of young women and men who will graduate from high school in a few minutes “scares me to death”. And, as you can tell, I’ve written out my words and I will read them to you. I want to be sure that I say the right things and give you the best advice I possibly can because you're beginning one of the most important phases of your lives.
When I was asked to speak to you, I was naturally very flattered, but I was also surprised. I wondered why I was chosen out of all the very qualified people that would be just as honored as I to speak to you. Then it came to me that I’m a successful businessman, a car dealer that is very different from most other car dealers. Not only am I different, but I’m far more successful than most other car dealers. But the reason I'm more successful is not that I’m smarter, or that I work harder or even that I sell a better product. I do sell a good product…Toyotas, but I also outsell all of the Toyota dealers in my market.
I haven’t always been different from all other car dealers; In fact for most of my career I was just like them. I started in the automobile business in 1968, long before any of you were born, and probably before most of your parents were born. I was successful for many years doing business just like all the other car dealers. The conventional, simple formula for success of car dealers was then, and still is today: (1) Advertise whatever it takes to lure prospective customers into your dealership. (2) When they arrive, do whatever it takes to sell them a car at the highest possible profit.
Back in the day when I was just like every other car dealer, I didn’t think I was doing anything wrong. There’s a sociological phenomenon that makes many of us think we’re doing the right thing because everybody else is doing the same thing. Two extreme examples of this are Nazi Germany in the thirties and forties and the Southern USA during the slavery era.
When we were kids, almost all of us used this excuse to our parents when we were caught doing something stupid like smoking or drag racing. “But, Mom…EVERYBODY IS DOING IT!” Then your Mom would say, “If everybody jumped off a cliff would you do the same thing?”
I’m not really sure when I began to “see the light” and realize what I was doing was very wrong. It wasn’t an overnight revelation; it was more of an evolution. Twenty years ago, only one of my three sons had any interest in my business. The other two didn’t want to do what I did for a living. About that time I came very close to selling my business and retiring. Thirteen years ago my first (of five) grandchildren were born. About that same time, I married Nancy, the second marriage for us both. She loved the business and has taken an active role in it. A little over 10 years ago, I contracted colon cancer and thought I might die. These are “life changing events” in a person. My evolution from a “run of the mill” car dealer began back then. I began to “clean up my act”. I stopped my bait and switch advertising and I reformed from deceptive sales practices. My youngest son, Josh, and oldest son, Stu, joined me in the business. I remember one day my oldest son, Stu, told me that his children, my grandchildren, told him that they were proud of what he did for a living and that they would like to be car dealers one day. This had a very powerful impact on me and when I think about it today, it still brings tears to my eyes.
A funny thing happened as I began to treat my customer with more respect and integrity. My business began to improve. The customers that I sold for the first time began to come back again and again. They even told their friends and families. I was becoming more successful than I had ever been before. Suddenly it dawned on me! Being honest and respectful of others is GOOD FOR BUSINESS. Not only was I able to have my family with me, sleep better at night with a clear conscience, but I was making a lot of money.
I discussed this with my family and we decided to do what we were doing even better. Our company motto is “Kaizen” the Japanese word for “continuous improvement”. The next major step we took was to eliminate the “Dealer Fee”. The dealer fee also known by many other names like doc fee and dealer prep fee, is car dealers’ dirty little secret. It’s extra profit added to the price of a car making the customer believe it's an official state or federal fee. It’s the single most profitable component of most car dealers’ income. In my case, it amounted to about a $150,000 monthly. I was taking a huge chance by eliminating a source of profit that could literally bankrupt us. But, we agreed that if our goal was to be totally honest with our customers, the dealer fee had to go. Our profit per car did drop but the number of cars we sold increased so much as to offset the loss. Almost every car dealer in Florida and the USA, still charges a dealer fee.
Our next major step was to stop making high profits on those who could least afford to pay them, the less educated and sophisticated members of our society, and making low profits on those who are highly educated, shrewd negotiators. This is the hassle and haggle way of selling cars which is still prevalent today. For the past 3 or 4 years we have posted our lowest price on every car we sell. We encourage our customers to shop and compare our price with other dealers. Everybody pays the same price when they buy a particular car from us.
Another change we made was to offer unconditional money back guarantees on every car we sell. If a customer changes his mind for any reason, maybe they found a lower price or don’t like the color, we refund 100% of their money. No other car dealer I know of offers unconditional money back guarantees. On the contrary, most car dealers do everything they can to persuade you to take the car home the same day that you visit the dealership. “Taking delivery” is a vital component to making the car purchasing contract legally binding. It’s called a “spot delivery” by car dealers and most sell virtually all of their cars this way. You are rarely ever allowed to return the car and get your money back.
Our next change, in the spirit of Kaizen, will be to become the Amazon.com of car dealers. Very soon we will make it as easy to buy a car as it is now to buy flowers or a box of candy online. We will offer our customers the ability to choose their car, trade in their old car, and finance or pay for their car on their computer or smart phone. We will accept credit cards for a down payment or full payment and approve credit online for financing. We will send our appraisers to the customers’ homes to establish the trade-in value and we will also deliver their purchased car to their home. Our unconditional money back guarantee will take all of the risk and fear out of buying a car, even online.
I mentioned earlier that I do a lot of public speaking, just like I’m doing now. In recent years my role has changed from that of a car dealer to more of a consumer advocate. Because we’ve built the Earl Stewart brand so solidly to represent integrity to the car buyers of South Florida, I’ve moved to the “next level of trust” from a seller of Toyotas to an educator to buyers of all makes. In any business this is the highest level of trust attainable. I’m betting that you have a great amount of trust in your teachers that worked with you over the past twelve years to bring you to this great moment in your lives. Your parents also had a great deal of trust in your teachers in choosing this high school that you attended.
In addition to my weekly radio show and my regular speaking engagements, I write a weekly blog and newspaper column. I am looked upon by the local and national media as a source of candid, truthful information about the retail auto industry. I’ve been quoted by the Wall Street Journal, USA Today, CNN, Fox News, US News and World Report, Fortune Magazine, Forbes and many local medium. I’ve written a book, Confessions of a Recovering Car Dealer, that I sell on Amazon and I donate 100% of the proceeds to charity. In fact, tonight, as a graduation present to each of you, I will give you a copy of my book. Just email your address to firstname.lastname@example.org and I will mail you a copy of Confessions of a Recovering Car Dealer.
So, you might ask, what has all of this got to do with me? What it has to do with you is that I’ve shared a “secret” with you…a secret that is “hidden in plain sight”. You’re mother always told you to be a good person, "do unto others as you would have them do unto you", "never say anything about anybody else unless you have something nice to say", "honesty is the best policy", don’t be a bully, and so on. We see and hear this advice often and from an early age, but what we don’t see is the majority of people around us, friends, family, and most others, following all of this advice themselves. You can compare this to the speed limit signs on I-95. Everybody sees and understands their meaning all the time they are driving, but very few pay any attention including the Florida Highway Patrol. J
The reason that you don’t obey the speed limit is that you want to get where you’re going faster and you know that if you exceed the speed limit by just 5 or 10mph, you won’t be issued a ticket. You also notice that everybody else is exceeding the speed limit and they aren’t being ticketed either. In fact, your trip is actually smoother if you stay in the flow of traffic. If you slow down, other drivers continuously pass you and some might tailgate or even blow their horns.
But what if, counter intuitively, you discovered that, for whatever reason, you actually made better time by rigidly obeying the speed limit? Do you see where I’m going with this? I discovered, almost by accident, that all other car dealers were doing it wrong! And remember, this phenomenon isn’t confined to only car dealers. This applies to all businesses everywhere.
This is because the world is changing at warp speed. At the end of WWII, human knowledge was expanding at the rate of doubling every 25 years. Remember that in 1945 we had no computers, no Internet, and there wasn’t even any television. Today the sum total of human knowledge is doubling every 12 hours and that rate is accelerating as I speak! Today, the smart phone you hold in your hand has more computing power than was available to the President of the United States twenty years ago!
\Some of you will be going on to college next and some won't, but all of you will be looking for a job at some point. You might be tempted to take job with the company that offers or promises you the most money. You must overcome that temptation because, in the long run, very few 21st Century companies will prosper without transparency and integrity. This is because of the "knowledge explosion" I've told you about. Today's consumer is far smarter, more sophisticated, and more demanding than the consumer of just a few years ago.
My advice to you is to look for a company to work for that believes, understands, and applies the "secret" that I've shared with you this afternoon. Good companies always try to hire good people. That’s what makes them good companies. In your job interviews let them know that you strongly believe in total transparency and honesty and that you chose their company because they have that reputation. It goes without saying that a strong work ethic, high energy, and a good education are prerequisites for most jobs. But, what will make you stand out from the crowd at a good company is your ability to fit well into their culture of transparency and integrity.
Thank you for honoring me by asking me to speak to you today. Good luck and God bless.