February 2014, Auto Dealer Today - Feature
The customer comes first at McCloskey Imports, Truck Town and Truck Repair, the three-rooftop operation owned by veteran auto dealer “Big” Joe McCloskey. The group is based in Colorado Springs, Colo., and McCloskey relies on a customer base that is largely dominated by military members, defense contractors and their families.
“If you get a bad reputation with the military, you get found out in a hurry, and you get your business in trouble,” McCloskey says. “The military leaders in our community are very conscious of how their soldiers and soldiers’ families are being treated. And what they want is to be treated like every other customer.”
Thanks in part to a longstanding partnership with SouthWest Dealer Services in Irvine, Calif., the vast majority of McCloskey’s customers are protected by an in-house certified pre-owned (CPO) program to protect them after they drive off the lot. All vehicles that are 10 years old or newer and have 130,000 miles or less are qualified for the program, which protects consumers from mechanical breakdowns for 60 days and includes a three-day or 500-mile return policy. Many additional protection products are available, but McCloskey says that initial coverage helps give his customers confidence in their purchase and assures them they are buying from a reputable dealer.
“We control the expense of the repair. The customer is frustrated that the car broke but pleased that there’s no hassle,” he says. “It allows us to be very competitive with our pricing.”
McCloskey has been fascinated by cars since the age of 8. That’s when he took his first job in the automotive industry, pumping gas and sweeping up at a filling station. By the time he was in high school, he was selling cars. In 1989, after putting in several years with both of the major dealerships in town, he was starting to feel discouraged. He enjoyed the work, but he wanted to do it his way. He told his wife, Ann, who encouraged him to start his own business.
The couple started small, opening an unnamed, alley-facing garage that was lit by a single light bulb and had no phone. McCloskey bought used cars and ran ads featuring the number to his voice pager. He returned calls from a payphone at the shopping center across the street. “I used to carry around a roll of quarters,” he says. “I would get cars, get appointments and get customers in. Ann would detail the cars and I would sell them.”
Before long, the McCloskeys opened their first used-car lot, on the site where Truck Town currently sits. The other rooftops followed, and sales grew. They would eventually add a Suzuki franchise and an Isuzu franchise, both of which disappeared when the OEMs left the market. No harm done, says McCloskey, who credits his relatively brief experience as a franchised dealer with expanding his used-car business.
“We got a franchise to sign up more lenders,” he says. “We were ranked No. 1 or No. 2 in our state with each franchise and were nationally ranked as well. … Now, we have lenders who have been stakeholders and partners. Some have been with us for two decades.”
As front-end profits on new-vehicle sales have continued to shrink, many franchised dealers have had to rededicate themselves to selling used cars and trucks, often to credit-challenged customers. Thom McCloskey grew up in the business as one of Ann and Joe’s five children, and is now the group’s finance director. He says McCloskey’s managers and staff faced a role reversal when the franchises were added.
“It’s harder to sell new cars. It took away the independent aspect of being able to put up signs on a Saturday do what we wanted to do with our advertising,” he says. “But we had a leg up over everybody else. A lot of new-car dealers would send a 600 credit score away because they didn’t know what to do with them.”
Seventy percent of McCloskey’s sales are to subprime or nearprime customers. The group’s sales and finance staffs are trained to discuss financing with each customer and make sure their paperwork is in order. If the customer is missing proof of income or residence, for example, the sales consultant will suggest they use the test drive to swing by their home or office to get it.
“There’s a very blurred line between sales and F&I for us,” says Mike Phillips, McCloskey’s general sales manager. “We call our sales managers ‘sales drivers.’ They’re pushing to close the deal and having that conversation up front.”
On the back end, the stores offer a number of products tailored to used-car buyers. Joe McCloskey is as dedicated as any new-car dealer to creating lifelong relationships with his customers. He is particularly proud of his “loss leader,” a program that offers three oil and oil-filter changes for $30; for $45, each change includes an inspection; for $60, customers get three full-service oil changes. For most customers, the price is too good to be true; for McCloskey, each loss is worth the opportunities it creates.
“The key for us is, in our competitive market, it gets the customer to come back two or three more times,” Joe says. “Where we make money is repeat business in our service department. If we do find a credible repair, we can point it out and perform the repair if they want it. That’s the best tool in our arsenal.”
Thom McCloskey says he is quick to tell customers he takes advantage of the oil-change program and has a service contract on his own family’s vehicles. “We always look at service contracts as customer service. That’s one thing I always tell customers: We’re not selling it for profit, we’re selling it for customer service. Three years from now, if they’re broken down on the side of the road, we’ll pick them up, tow the car and take care of them. Hopefully, when they trade in the car, they’ll trade it into us.”
Joe McCloskey says he is proud to serve a market that is largely populated by service members, and notes that it presents several unique challenges: He estimates that as many as 25 percent of on-base customers will move away in a given year; each wave of departures is followed by an influx of new, often first-time car buyers. His reputation, he says, is his stock in trade, and he believes the bases’ commanding officers have faith in his stores.
“Every dealer in our community is very conscious of the way we treat armed forces and families,” he says. “Nobody wants to get a bad reputation with any branch of the military. That would be very difficult to remedy and the civilian community would frown on that as well. We’re very patriotic and very proud of our armed forces.”
Occasionally, Thom McCloskey says, a commanding officer will get involved when military buyers find themselves in over their heads. But the COs rarely demand that the dealership unwind the deal. “The commanders will say, ‘You did sign the contract.’ But we always try to make it as fair as possible. A lot of times that means they get the car they bought. In rare cases, we’ll unwind, usually because they thought they’d have the down payment but didn’t.”
He adds that many, if not most, of the finance staff is prior military themselves. The group thrives on hiring staff from other industries and teaching them the McCloskey approach to selling vehicles.
“Probably 80 percent of our staff is new to the automotive business,” says Joe McCloskey. “We sometimes don’t get the quick sales at the outset but, in six months, we have salespeople who only know one way to do business.”
Awards and Accolades
McCloskey’s way of doing business has paid off in more ways than one. The operation has been showered with performance and community-service awards. In recent years, McCloskey was named an F&I Pacesetter by F&I and Showroom magazine; was a finalist for Small Business Person of the Year by the Colorado Springs Chamber of Commerce; won the Association of Finance & Insurance Professionals (AFIP)’s Eagle Award; and received multiple “Quality Dealer of the Year” awards from the NIADA, including last year’s top prize.
To those who know him, the accolades — and McCloskey’s characteristically modest response — come as no surprise. Matt Bitler has been the group’s principal contact at SouthWest Dealer Services since they signed the group in 2002. He says McCloskey’s success is the direct result of the founder’s focus on customer service.
“Joe is one of the foremost experts on pre-owned cars. He’s certainly one of the best I’ve seen at managing inventory and reconditioning the inventory,” Bitler says. “But whatever happens, Joe’s first concern is to take care of the customer. If something happens to the car, Joe stands behind what he sells.”
Phillips says he and the rest of the staff enjoy the same level of dependability. McCloskey takes an active role in inspiring the entire team to succeed, he says, from the mundane tasks of reporting numbers to his weekly leadership training sessions. “It really is focused a lot on how to leverage our most important asset: the staff. … Everyone will take something home. It’s his business and he’s awesome at it.”
The specter of “Big” Joe’s retirement is a “running joke,” Thom McCloskey says with a laugh. Joe says he still loves to come to work, and will continue to work for the group and the community for as long as his health allows. After all, he says, perfection is a goal worth striving for.
“I’m here almost every day and so is my wife,” he says. I do most of the buying of the inventory and a lot of the interaction with co-workers and customers. There are a lot of dealers that are hands-on. For me it’s more the thrill of working side-by-side with great people. We’re a team on a crusade to be the best.”