An Executive Perspective on Changing the Customer Experience

Customer experience has recently become a common theme throughout retail. DrivingSales introduced its yearlong customer experience survey with a series of findings beginning early this year. Subsequent reports from major automotive players, including J.D. Power, Edmunds.com, AutoTrader and more all confirm that buyers are frustrated and fed up with methods dealerships use to sell a vehicle.

With facilities and technologies built for processes that are not appealing to consumers, many dealers are wondering where to begin this seemingly daunting, but inevitable transition.

Eighteen years ago, Wes Lutz, owner of Extreme Dodge Chrysler Jeep in Jackson, Michigan completely overhauled his sales process.

“When I travel, I always go to 3 or 4 dealerships to see if I’m missing something,” Lutz said. “I would walk into stores and I hated it. I was intimidated by the process and thought, “This is what people think of me. And I was compelled to change that.”

Employee Empowerment

Quality employees, above all else, drive Lutz’s sales process and business model. Salespeople are expected to structure deals, understand gross throughout departments, and complete compliant paperwork.

If a car is sold at a loss, Lutz takes time to describe a better way to structure the deal and moves on. “We look first at what the salesperson did right. Our culture is not about penalizing for mistakes,” he said. “And they don’t make mistakes twice.”

Lutz blatantly expects more from his team and his lean operation of only 39 employees is proof of that. Comparable dealerships employ an average of 65. Compensation throughout the dealership is above industry averages.

When Lutz began the transition over 18 years ago, he began by seeking out the most talented managerial-level employees from dealerships in the area. Now, when the infrequent opening becomes available, he says he does not have to advertise.

One Salesperson

Salespeople are treated very much like independent contractors. Each has a personal office, a direct email, and a direct fax and telephone line. Lutz laughs at his naïve facility construction 18 years ago, which excluded management offices. They still operate with no sales manager and without an F&I department.

Once a salesperson helps a customer they become that salesperson’s customer for life. The service department is structured with the same emphasis on the personal relationship.

The dealership sells an average of 180 cars a month. Referral and repeat business account for over 80 percent of dealership revenue.

Customer Centric

Salespeople sell vehicles by listening and allowing the customer to dictate how they want to buy. Pairing that mentality with an empowered employee focused on building a lifetime relationship with a customer is their recipe for success.

If a customer walks in knowing the car they want, the transaction can be completed in 45 minutes. Support staff make it possible for the salesperson to give the customer full attention without leaving their office throughout the sale.

Lutz said the biggest change he has seen in customers over the years is that they are more educated and shopping fewer dealerships. Therefore, the dealership puts less emphasis on Internet leads. Their priority is nurturing the walk-in and phone leads, and striving to make each deal.

Driven by Executive-Level Servant Leadership

Lutz simplified the dealership into two types of employees: producers and supporters. He said, “As the executive, I’m the first in line in the support role.” Giving all team members the tools they need to create an efficient work environment to serve customers is paramount.

The building does not have Lutz’s name on it. Advertising dollars are spent on showing the personality of salespeople. Until very recently, Lutz’s photo was not even on the website. “I’m just 1/40th of why we are successful,” he said.

For dealers encountering this change, Lutz warns it was not easy. He began with an elite sales team and a facility built for the process. He advised a more gradual approach, beginning with a top performing salesperson or two and allowing them to structure their own deals. Lutz believes, start-to-finish, the transformation takes a 3-year commitment.

“At some point you have to ask yourself, do you want to be the biggest or do you want to be the best,” he said. “In my case, I want to be the best.”

What’s Next?

We spoke with Lutz following Presidents Club in April. He said, “Jared (Hamilton) confirmed that my sales process is right. But we haven’t told our story very well.”

The future at the dealership is twofold and the process mapping has already begun. Brian Robinson, who handles the Business Development/Marketing at Extreme Dodge Chrysler Jeep, is taking the lead on this project.

The first step is an adjustment in marketing strategy that more accurately communicates the dealership’s value proposition. The dealership website, advertising, and newly incorporated video marketing will utilize experience statements that communicate their model. Advertising discounts and pricing will become less of a priority.

The next step is harnessing social media for its full value as a point of friends and family trust-transfer. “It’s not about what we’re saying on social media,” Robinson said. “It’s about what our customers are saying.”

Lutz and Robinson are taking a deep dive into increasing their customer-originated and community presence online. The details are not firm, but wordsmith-ing the “ask” and as Lutz put it, “retraining the dealership on what it takes to make a customer feel important” will be key in facilitating positive customer reviews.

This offensive approach on reviews will also be incorporated into the pay plans. Lutz recently introduced the forthcoming requirements to the team and was met with some skepticism.

“We’ve been successful as a company so I’ve earned their respect; they’re willing to give it a try,” Lutz said. “If we make our customers our advocates in the market, we might be able to stay ahead of the competition for a couple more years.”

DrivingSales will be continuing to cover Extreme Dodge Chrysler Jeep as they integrate the new strategy of “telling their story.”