Monday, August 17, 2009

The Achilles’ heel of Car Dealerships [and even good businesses like Costco]

I’m often asked why my Toyota dealership in North Palm Beach is so successful. My dealership is actually located in the tiny little town of Lake Park [population 8,721 as of the last census]. I’m on the city border of North Palm Beach, so I advertise my location there so people can find me. I mention this because Earl Stewart Toyota sells more cars than any other car dealership in Palm Beach County. We are the 7th largest seller of Toyotas in the Southeast USA. People can’t understand how we can sell so many cars in such a small population area.

Furthermore, people are mystified by our high customer satisfaction ranking. Last year, for example, we were honored to be selected by Toyota as one of just 12 dealers [out of 1,277] in the USA for the President’s Cabinet Award. The award is based on sales volume and customer satisfaction.

I know that I sound like I’m bragging and I guess I am. A lot of people have been quoted as originating, “It ain’t bragging if you can back it up”. I first heard it when Mohammed Ali said it, but he probably wasn’t the first. In this column, I’m going to reveal the secret to my success. All car dealers and all businesses can use my secret to become at least as successful as I.

First, let me relate an incident that happened to me just recently at the Costco Wholesale Club on Northlake Boulevard in Palm Beach Gardens. Costco is my favorite retail store and my wife, Nancy, and I shop there almost every Saturday. In fact, I’m also a stockholder and, for readers of this column, I recommend you buy some Costco stock.

In the past several months we noticed that the shopping carts at Costco were littered with trash…used napkins, used tissues, paper and plastic bags, and unidentifiable “stuff”. This is partly caused by the free food samples that are passed out in paper cups or plates and with napkins and toothpicks sometimes. Customers eat their samples and throw what they don’t eat into their carts. When Nancy and I come into Costco on Saturday mornings and pick up our cart, we have to take the trash out of the cart with our bare hands and find a trash receptacle. This would be a nasty enough a task even without the Swine Flu pandemic in the news every day. Because I’ve been a regular member of Costco for 25 years or more, I know many of the store’s employees and regard many of them as my friends. I mentioned this to several of them and they promised to bring it up with upper management.

When nothing changed and the carts were still filthy, I spoke to a Costco employee who I knew very well and who I especially admired for his special concern for his customers. He suggested that I fill out a written suggestion and put it in the suggestion box in the front of the store. He said that all of these suggestions were sent to Costco headquarters in Issaquah, Washington. I did that, but two months later there was nothing done. At this point I took it upon myself to speak to the “weekend manager” because I shop at Costco only on Saturdays. He listened but didn’t seem very concerned. He told me that the reason the carts were littered with trash is because Costco customers left their trash in the carts. I told him that I understood the reason, but I thought the carts should be cleaned for the next customers. I asked him why the employees who picked the carts up from the parking lots and brought them back to the front of the store couldn’t clean the carts out first. He didn’t have an answer for that but he said he would “take it under consideration”.

About a month has passed since my last conversation. Last Saturday, the carts were still filthy. In fact, I cleaned out two carts for ladies waiting for carts plus my own cart. For those of you familiar with Costco, you know that you have to show your membership card when you enter the store. When I did this, I asked “the shopping carts are still littered with trash. Why can’t Costco clean them out?” The Costco employee replied, “It’s the customers’ fault that the carts are dirty”. I have to admit that I briefly lost my cool. I turned to him and said incredulously, “Are you blaming me because your shopping carts are dirty?” He looked at me angrily and said again, “It’s not our fault; It’s the customers’ fault.” Immediately after this, I went to men’s room so that I could wash my hands.

By now, you may have guessed what my secret to success is. You can sense my frustration with Costco which is still my favorite retail store, by the way. That frustration is that I, their customer, cannot communicate with higher management. When I advised the local lower level Costco employees, it went no higher than the weekend manger. When I send a written complaint to their headquarters, who knows what happens to it? When I spoke personally to the weekend manager, it stopped right there. Most of the employees in Costco are great employees who care very much about their customers. These employees agree with me that the shopping carts should be cleaned before they are returned to the customers. In fact, one employee said that they should emulate Publix which, not only cleans their carts meticulously, but provides sanitary wipes in a dispenser so customers can clean the cart’s handle.

When a customer has any kind of a problem in my company, I hear about it 99% of the time. As most of you know, nobody in my company, including me, screens their calls. All calls to me and all of my employees are put immediately through. If I’m not in the dealership, the calls are put through to my cell phone. You probably know that I have 4 red phones strategically located through my dealership. A red phone is always within a few steps of every customer. The sign on the phone says, “If we have not exceeded your expectations, please pick up this red phone; The buck stops here”. There is no dialing required and when the customer picks up that red phone it automatically dials my cell phone. If all of that isn’t enough, I give every customer my home telephone number which is printed on my business cards.

So there you have it, CEO’s of companies all over the world. This is the secret to success. LISTEN TO YOUR CUSTOMERS. You all say that but you don’t walk the talk. You have layer after layer of insulation between you and your customers…secretaries, assistants, middle managers, executive managers. All of them are telling you what they think you want to hear but not what’s going on “in the trenches”. It’s not easy, but who said success was supposed to be easy. How bad do you want it and how much are you willing to sacrifice to get it? Am I worried that my competition will read this and be able to compete more successfully against me? What do you think? LOL!


  1. Earl,

    Great post. I have found the shopping carts dirty at Costco to and its annoying.

    Total accessibility to senior management for any company is the key to success. I love the fact that either myself or my wife who both have bought new Toyotas from your dealership can reach you at anytime for any reason. I think most executives are fearful that they would get a bunch of angry phone calls from customers and thus the reason that they make themselves inaccessible to the customer. My hunch is the opposite happens. The fact that every employee knows that you are a call away puts the frontline employees on notice that they better take care of the customer well. If they don't the customer will call you and then the employee will have to face reprecussions for bad customer service. Thus your employees are taking care of the customers the moment any issue arises. This in turn creates customer loyalty, customers who will continue to buy Toyotas from your dealership and refer new customers to you as well.

    Your company is very different than Costco. An organization that is completely inaccessible and doesn't hear what the customer wants. Which creates situations like the weekend manager who heard an upset customer, but didn't do anything to fix the problem.

    Thank you again!

    Ben Fowler

  2. Dear Ben,

    Thanks for your posting and for the compliments regarding our accessability to our customers at Earl Stewart Toyota.

    I've got some good news for you about Costco! It took lots of persistence, probably more than the average customer could have tolerated, but I finally got through to the top execs at Costco headqarters. The word got back down to the Palm Beach Gardens Costco store and you will now find the shopping carts are immaculate!

    I guess the moral to that story is to persist "going up the executive ladder" until you find a manager who cares about her customers.


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