Kistler Ford wants its product specialists answering questions, not chasing commissions. BY JON MCKENNA
The ranks of dealers experimenting with salaried salespeople are gradually growing. It’s doubtful that any of them other than Bobby Jorgensen can trace their decision to a trip to Las Vegas.
Jorgensen, the president of Kistler Ford Sales Inc., in Toledo, Ohio; his wife and another couple decided to take a side trip to the corporate headquarters of Zappos.com, an online seller of shoes, handbags and clothing that is owned by Amazon.com. A one-hour tour turned into a six-hour visit, as Jorgensen peppered Zappos execs with questions about their approach to customer service, corporate culture and staff training. Back at the hotel, he feverishly scribbled notes.
That eventually led to his cloistering himself in his office last year with white boards, sketching out how he thought car buyers really want to be treated by dealerships. In turn, that led to something of a repurposing of Kistler Ford last November as a “customer experience center” (to use Jorgensen’s words) staffed by “product specialists,” not commissioned salespeople.
Ironically, he shook things up at his store during a terrific year. Kistler Ford would finish 2014 with a 20 percent jump in new car sales (for context, YTD new car volume through August under the new approach was up 8 percent). Profitability was excellent, CSI scores were consistently solid.
“I just felt … call it an intervention from God, if you will. I felt things dealers were doing were just wrong,” Jorgensen recalled. “I believe the way consumers have been purchasing vehicles is broken. There’s a better way to do it, and we’re going to make more money without money being the main reason we’re here.”
Lessons Learned From Retailers
Even among converts to salaried salespeople, Jorgensen is a different kind of guy. He draws his business inspiration from Zappos, Starbucks and Chipotle Mexican Grill, not from uber-successful car dealerships. He’s into meditation. He let his 8-year-old son create his store’s “Fast, Fun and Fair” slogan.
He bought Kistler Ford in 2004. It sits on an auto row in Toledo, which is the major business and population center in northwest Ohio; and Jorgensen competes with three other Ford stores in his region.
Before last November, the dealership had 10 sales representatives on its payroll, all working on standard commission. Now, it does business with six product specialists who draw annual salaries of either $45,000 or $55,000, depending on whether they are willing to work more evenings and Saturdays. Under a point system, they could eventually bolster their salaries by another $5,000 to $10,000, he said.
“If you want 100 grand a year, we really don’t want you working here, because your only motivation is money.”
Who Fits This Dealership’s Job
Instead, Jorgensen believes the job description (which he thinks is something of a misnomer, since nobody specializes in a particular make or model; someday it may be called “consumer advocate”) appeals to former teachers, healthcare workers and non-profit outreach specialists – people familiar with working for a higher purpose.
So far, Kistler Ford has been able to fill vacancies without posting a job ad, relying on its Facebook page and employee and customer referrals.
During a newcomer’s first two weeks with the store, he or she is trained on how to treat customers and taken for tours of local outlets for companies whose corporate cultures Jorgensen admires (like Chick-Fil-A and Chipotle). During the next two weeks, Jorgensen and his managers lead discussions about what they believe is going through the mind of a visitor to the lot.
Emphasizing A Customer’s Experience
Once on the job, a product specialist spends a lot of time roaming the dealership toting an iPad, because Jorgensen wants him or her answering lots of questions – not just about Ford models but also about other vehicles that might be a better fit with a customer’s lifestyle and budget, and about how the loan application and trade-in processes work. A customer might be advised to check out a competing dealership, and if so the Kistler representative will brief them on how the various facets of the car buying experience probably work at that store.
“At that point, a customer often will say, ‘Stop, I just want to buy a car from you.’ Or, they might go to the other dealership but like the way we treated them so much that they come back to us for a car,” according to Jorgensen.
“Our main goal every day is not sales but the experience. That’s a definite difference in our store. We don’t come in every day focused on how many cars will be sold; it’s about what kind of experience will you deliver today? The car sales will come. That’s the by-product.”
How Product Specialists Are Evaluated
How Product Specialists Are EvaluatedUnder the points system, product specialists are encouraged to spend as much of their slower time as possible back on the phone setting appointments or in the service department, chatting with customers and even giving them rides home. If they enter a customer contact into the CRM, and that person eventually buys a car from Kistler, the product specialist earns points even if a colleague closes the sale. “The points are all tied to customer interaction,” he said.
The dealership is carefully monitoring and managing the product specialist ranks to keep their salary costs below 18 percent of gross revenue. So far, Jorgensen would give the team an A grade for customer service, based on unsolicited reviews from car buyers on social media. He awards a B for knowledge about the customers; “we’re still learning what they want.”
At any rate, while he concedes with a laugh that “I could be totally wrong,” Jorgensen refuses to make conclusions based on less than a year of sales numbers.
On his drawing board for next year is phasing out the F&I office and letting his product specialists guide customers through the loan process, although that will require special web pages.
Long Term Will Tell The Tale
It would be a mistake to compare year-to-year new car sales and conclude the non-commissioned sales approach is not working at Kistler Ford, Jorgensen stresses. First, September and October were big sales months in 2014 and will probably improve the numbers this year, he said. Second, the economy has been a bit tough in Toledo, and two of the other Ford dealers in the region have suffered sales drops.
“As the owner, you’ve got to be able to look down the road. I am focused five years ahead, thinking about what the store will look like in 2020. If you’re only concerned with today, you’re on a scary slope.
“I don’t know how to put it in words, but I know this is the right way.”
Kistler Ford At A Glance
Total revenue: $42.1 million
New vehicle sales revenue: $20.3 million
Used vehicle sales revenue: $14.5 million
Parts revenue: $4.3 million
Service revenue: $1.5 million
Body shop revenue: $1.5 million
F&I revenue: $1.1 million
New vehicle sales: 670
Used vehicle sales: 1,122 (including 353 wholesale)
Source: Kistler Ford. All numbers are for 2014. Revenue numbers may not add up due to rounding.
