Eric Savage: My Dealer Group Improves Lives

Eric Savage’s view on retail automotive is that a specific mission is necessary. Speaking to DrivingSales News, Savage said, “A lot of dealerships, unfortunately, operate in a mission-less environment. Or worse, operate in an environment where the mission is just make as much money or sell as many cars as we can.”

Eric Savage is the president and CEO of Freedom Auto Group. Savage has over 23 years of experience in the industry. His Freedom Auto Group has a mission to be a life improvement company, not a car dealership. In an interview he said his goal is to make his stores do much more than sell and service cars.

“In the end I just feel that there’s a lot more to life than just dollars and cars,” Savage explained. “We touch people. We touch lives and our real job is to make sure that we’re having some kind of influence over them in that process, that we’re actually helping their life in some way shape or form.”

Trying to fully implement their culture of being in the life improvement business has been dangerous for Savage and the Freedom Auto Group because as he noted, not everything that takes place in retail automotive is a life improvement exercise.

Savage noted, “It’s also been very dangerous because some of the practices that have existed in our industry are really not life improving practices and we’ve had to come face-to-face with those realities and say do we want to operate like that and to who does this process serve and how does this process improve a life or does it at all?”

There are two common practices in retail automotive that Savage found to not fit in with the Freedom Auto Group culture of life improvement, and it all starts with trying to control the consumer.

Talking about customer control Savage said, “When the customer gets here, we try to control the process and lead them into a certain box step that takes them around in the way that we want to go in the time that we want to go to reveal the information that we want to reveal when we want to reveal it. Do we start at list price on a car and who does that serve because we really already know the answer, no ones going to buy the car at list price, so why do we start at list price and this is a holdover from all the years in our industry that we have to horse-trade these deals with such ferocity that we have to start at the time every time…and geez, who does that serve exactly? Well, that serves us; it really doesn’t serve the customer to try to create all that antagonism around this transaction.”

Another common occurrence in retail automotive is the disappearing keys for a trade-in. Savage noted not giving customers their keys back ultimately only benefits dealers, not their customers.

Savage explained the key hiding processing by saying, “Keeping the keys to the appraised car. So, we appraise the car. The used car manager grabs the keys, goes and appraises the car and brings and brings the keys back where … to his desk. And why do we do that, because we don’t want the customer to run on us, right? I mean that’s what we’ve always been taught. We just started looking at it like; who does that process serve by keeping the keys? Are we increasing trust and security with the customer, which would serve them? Or, are we keeping control of a deal, which serves us? And it’s just changing those types of dynamics.”

Changing Dynamics doesn’t happen overnight. The Freedom Auto Group has been in the process of changing their culture for the past five years. When customers come into their store, they are greeted with the information that Freedom Auto is a life improvement company. As you can imagine, customers are skeptical.

“Most customers look at that with at bit of disbelief and say, well that sounds good, but I’m not sure – then it’s up to us to prove that out,” Savage explained. “Which is a difficult task, you know it’s a high hurdle to set. And the expectation from the consumer is that you’re saying nice things to me just so that I’ll look this way while with sleight of hand you’ll do something over here and so we have to work really hard to show that there’s good reason to trust. But that’s what we do is open it up with a first statement that this is who we are and this is what we do and we are a life improvement company not a car dealership.”

The big question is, what kind of results is Savage and the Freedom Auto Group seeing from their customer-focused take on the dealership business? According to Savage, the volume between his four rooftops has been steady, however, earnings are another story.

Speaking about the success at his group, Savage said, “Our growth in earnings has been pretty, pretty great. So we’re definitely bringing more dollars to the bottom line. I think the process is yielding more steady and stable margin, so our average gross pre-owned in F&I has really taken a leap and we’re full disclosure in F&I, everything is menu-driven but I think that the point is that because there’s so little fight and so much and there’s so much more friendliness and comfort that’s delivered in the sales process that it’s really reduced the anxiety of going to meet the finance manager, so that’s probably contributed to some bottom-line there as well.”