October 2015, Auto Dealer Today - Cover Story
Photo: Robin David
If you’ve been around the car business for any length of time, you’ve seen ideas and best practices for pay plans, processes and personnel come and go almost as frequently as the sun rises and sets. But at Merchants Auto in Hooksett, N.H., there is a long-running and steadfast vision. It’s so crystal clear that any employee can describe it in detail. In fact, it’s less a vision and more a way of life: Merchants Auto is winning.
By “winning,” I mean they are in the top 1% of independent dealers in the nation. And throughout 2013, 2014 and, so far this year, Merchants Auto has had zero turnover in the sales department. The dealership is one of Business New Hampshire magazine’s “Best Places to Work” and they are breaking sales records every month. In the past four years, Merchants’ sales have increased 89% and are still trending upward as I write this.
Success is nothing new for this dealership. Founded 53 years ago by Irving Singer, a chicken salesman who decided he wanted to try something different after his barn burned down. He decided to become a car dealer. Singer had trouble getting the money he needed to get started. With no experience and no capital, he had a hard time getting a business loan. Finally, an executive at Merchants Bank said “Yes,” so he named his dealership in its honor.
From the very beginning, the Singer family displayed their loyalty and grew the business. They’ve had new-car franchises but sold them. At one time, Merchants had the largest car rental operation in New Hampshire and sold it to Enterprise. Even today, Merchants Auto has a fleet of thousands of 15-passenger vans rented across the country. Even though they are no strangers to success, it’s different right now. Records are being broken, new benchmarks are being established and a good company is becoming great.
New Plan, Same Results
At the helm now is General Manager Adam Secore. Secore has been with Merchants since 2007 and General Manager since 2009. He has a knack for making something most of us see as complex seem very simple.
“We have a plan that started back in 2009. It involves our people, our processes and our product,” Secore says. He decided to put the last item first. “I realized I couldn’t attract good people to work here if we weren’t selling really clean cars.” So he fixed it, and the other benefits followed. “We started seeing better grosses, happier customers and fewer repair claims,” he says, noting that Merchants has had a 30-day guarantee on their cars since Irving Singer made his first delivery 53 years ago.
“We really focused on being transparent about condition and price,” says Secore, who authorizes every RO and has spent a lot of his time managing the inventory. Once the product was straightened out, he started building the team.
“I don’t buy into the ‘green pea’ way of building a sales team.” Secore says. “We only hire seasoned professionals from the car business or proven professionals from other fields. Every one of our salespeople were managers or even GSMs at other stores, or they came from another profession like banking or real estate. Either way, they know how to manage their business and, more importantly, how to close deals.”
Merchant Auto prides itself on careful hiring and very low turnover. The dealership has not lost a sales-department employee since 2012.
You may be wondering exactly how Merchants recruits such talented people. According to Secore, they buy into the culture and he makes sure they never want to leave.
How’s this for a job description? Sales employees get a 40-hour workweek with a two-day weekend (Friday/Saturday, Saturday/Sunday or Sunday/Monday) every week. Accrue three weeks’ vacation your first year and get one day a month paid volunteer time to help out in the community.
“It’s an opportunity to have a great quality of life, earn a great income and work with a bunch of great people” says Secore. “Back in 2009, we had 20 salespeople and were selling just over 100 cars a month. This year, we have 14 salespeople and are averaging 222 cars a month, with a very healthy average commission. It’s not hard to see the opportunity.”
Merchants Auto also provides their employees with college reimbursement. … I’m not kidding, and neither is Secore. “Want to get a college degree? We will pay for it,” he boasts.
Merchants also believes in training and has a very significant training budget. Secore said he cross-trains his employees extensively. Sales managers go to the fixed ops 20 Group meetings and fixed ops managers go to the sales 20 Group meetings. Secore wants everyone to understand the business as a whole so they help each other be successful. He pays his sales and fixed ops managers based partly on the performance of the other department. It’s just a part of their pay plan, but large enough to matter, and it creates a real win-win relationship between sales and fixed ops.
One of the coolest things Merchants does with their employees is require all new hires to read Jon Gordon’s “The Energy Bus: 10 Rules to Fuel Your Life, Work and Team With Positive Energy” before they start work. Check out the book yourself and you’ll learn why Secore has a sign above the time clock that says “No Energy Vampires Allowed.”
Process is king at Merchants Auto, at least according to General Sales Manager Marcus Luce.
“We created a process that revolves around providing an experience, not a car sale. The car sale is simply the end to what we do,” Luce says. “We spell out expectations to our customers so they always know what we are doing, why we are doing it and how long it will take. We provide an environment that is positive, optimistic and happy. Negativity is never welcome with our staff.”
And for the guys at Merchants, the process really starts with their advertising budget. All advertising directs customers to their website, which produces enough leads and phone-ups to account for more than 50% of their sales.
Secore outsourced his business development center in 2012 and says it was one of the best decisions he ever made. It allowed his salespeople to focus on the showroom. As a BDC proponent, I can tell you Merchants is a perfect example of a dealership that seamlessly and very effectively converts their appointments into closed sales.
“The BDC is key to our process and our success depends on it since that is where all the advertising dollars are going. Our BDC treats our customers with professionalism and courtesy, which makes people want to do business with us,” says Internet Manager Scott Rienert. “When BDC appointments arrive, a manager greets those customers. We sit down and review everything that’s happened so far, and go into great detail about our process and encourage customers to ask questions. The result is a high close rate, higher customer satisfaction and 500-plus positive online reviews.”
The truly exciting thing about Merchants is it just keeps getting better. Secore is focused on service. He’s given the phones to the BDC, invested in training for his service managers, advisors and technicians, and has moved his office to the service department. It is the same simple game plan for a different department.
People. Process. Product. Winning. It works.
Greg Wells is president of AllCall Automotive Contact Center. He is a 25-year industry veteran and a nationally recognized expert in BDC and Internet sales. GWells@AutoDealerMonthly.com