Here to tell us how to start your year off on the right foot in 2020 is Mark Tewart, president of Tewart Enterprises, best-selling author of “How to Be a Sales Superstar”, and host of On The Mark every Friday right here on the CBT Network.
VIDEO TRANSCRIPT:
Jim Fitzpatrick: Today I’m really excited to have in our studio a good friend of ours here at CBT News, Mr. Mark Tewart. I know that you know this young man right here because he’s got his own show right here on the CBT Automotive Network, which is On The Mark with Mark Tewart.
Jim Fitzpatrick: Mark, you criss-cross the country helping dealers, all size dealers, mega dealers and publicly-traded companies and the guy and girl that have one or two stores. Right?
Mark Tewart: Absolutely.
Jim Fitzpatrick: It’s funny because we were just talking before we got shooting, some of the problems are all the same. Right? Might be an attitude from the dealer on down about what needs to change in the store. Sometimes you were saying how you go in and you have to smack the dealer in the face and say, “Hey, something’s got to change here.” Right? Talk to us about that for a second.
Mark Tewart: Tough love. I mean, that’s part of what we do, unfortunately. Sometimes we’re not going down the path we need to, and we all get used to doing certain things.
Jim Fitzpatrick: Yup, absolutely. I’ve been there myself.
Mark Tewart: A bad habit can be that you’re willing to go to your grave doing the wrong things. So, sometimes the conversations aren’t always as friendly and as nice you want them to be.
Jim Fitzpatrick: Right. That’s right. And dealers, they do live in somewhat of a … I know that when I was running stores, I lived in this cocoon, which was my store, and I didn’t venture outside my store within the industry. Sure, I’d go to NADA or what have you, and I’d read Automotive News or watch some videos here and there, but really, I lived in my own world at this Toyota store that I was running, and I needed to get smacked in the head every now and then with a brick to say, “Hey, dummy. You’ve gotten way off course and you need to get back on,” because I was buying into some of the things the managers were telling me about the marketplace, or about salespeople, the right salespeople we couldn’t hire because they’re not out there, and all of these crazy things, maybe our pay plan wasn’t as good as the next Toyota store down the street, and we needed to change that.
Jim Fitzpatrick: After a while, it got very demoralizing to be the dealer principal, to be sitting there going, “Wow, nothing seems to be working,” when you talk to the managers. And, of course, their goal is that they’re protecting their lack of productivity, whether it be in used car sales, new car sales, F&I, or service. Right? Because you go to them, you go, “Hey, these numbers are off,” and they give you a litany of excuses as to why that’s the case, and after a while you start to buy into them.
Jim Fitzpatrick: I found myself repeating them to other people in the industry. Well, the market’s off right now. Well, you really can’t get good people. Well, nobody wants to buy credit life and disability anymore or extended warranties. It’s a thing of the past. After a while, I’m like, “What am I doing? This is crazy.” I’m buying into all of this mumbo jumbo about the industry that just isn’t true, is it?
Mark Tewart: It’s pride.
Jim Fitzpatrick: Yup, yeah.
Mark Tewart: All of us have a great deal of pride or ego or we wouldn’t be successful.
Jim Fitzpatrick: That’s right.
Mark Tewart: But sometimes your strength becomes your weakness, and that pride and the ego that drives you there becomes your weakness, so you start making excuses.
Jim Fitzpatrick: You do, exactly.
Mark Tewart: You want to buy in and say, “Well, it’s really not my fault.”
Jim Fitzpatrick: That’s right.
Mark Tewart: It’s really tough for us to have a teachable spirit and for us to be critical of ourselves and say you know what? We can’t hold anything to be true. It’s like an erase board. We’re going to erase it, go back, rework it-
Jim Fitzpatrick: That’s a good point.
Mark Tewart: … and make sure that we can do something better.
Jim Fitzpatrick: That’s right.
Mark Tewart: I talked about football in some of the shows that I did, and you’ll find the best of the best of the best coaches, they become friends with even people they compete against, and they’ll go and spend days and weeks to learn from their competitors.
Jim Fitzpatrick: Wow. That’s pretty cool.
Mark Tewart: Some of them. I know this happened after a national championship game that Nick Saban said he was bewildered about what happened to him at Ohio State, and he brought in the offensive coordinator to learn what they did to him in that game-
Jim Fitzpatrick: Wow.
Mark Tewart: … so it wouldn’t happen again.
Jim Fitzpatrick: Wow. That’s pretty cool.
Mark Tewart: He was going on to be a head coach, I think, at Texas.
Jim Fitzpatrick: Okay, yeah.
Mark Tewart: So, opening up your mind and being willing to say, “Hey, even if we’re doing good, the best of the best are always looking for something to worry about.”
Jim Fitzpatrick: That’s right. That’s right. And we talk to dealers that we’ll say, “Well, how was your 2019?” “Oh, it was a great year volume-wise. Yeah, we sold a bunch of cars. We didn’t make a lot of money. Our average gross profit went down. It seemed like we gave more cars away to chase a number that the manufacturers wanted.” The manufacturers are big on that. They don’t care how much a dealer makes. They just know that they want to sell that wholesale car to you, or wholesale that car to you to sell at retail.
Jim Fitzpatrick: And then we’ll talk to other dealers that will say, “No, we’re making a ton of money per car, but the volume isn’t there.” It seems to me to be there’s got to be this medium that says we’re selling a bunch of cars and we’re making a bunch of money. You can do both. Right?
Mark Tewart: You absolutely can, and what we’re seeing this year has been a little bit different. In years past, the margin compression has been talking about new cars, but this year, really for the first time, maybe last year but more this year, people are also saying, “Wow. This is happening in my pre-owned, and that’s one of the ways I was making the money.”
Mark Tewart: You can do both, but you have to change with your times. You can’t treat your used cars like it’s 1980. You can’t procure them. You can’t price them. You can’t merchandise them. You can’t set it and forget it and just say, “Okay, if we sell it, we do. If we don’t, we don’t. We’ll sell it eventually.”
Jim Fitzpatrick: That’s right.
Mark Tewart: It doesn’t work. It’s dramatically different. If you’re not paying massive attention to detail to pre-owned right now, you’re going to get smacked, and your margin compression’s going to be real.
Jim Fitzpatrick: Right, right.
Mark Tewart: And, of course, F&I’s very important. So, people that are paying attention to it and adapting are still doing well and as good as they’ve ever done in their gross margins, but there’s a whole bunch that aren’t, and they’re holding onto the excuse of, well, you either can’t make gross or-
Jim Fitzpatrick: It’s volume or gross. Right?
Mark Tewart: … it’s got to be one or the other, but I’ll go to the next store, they’re doing both every single day, and they won’t allow, they won’t allow, they won’t tolerate not doing both.
Jim Fitzpatrick: That’s right.
Mark Tewart: They figure out a way to make it happen, and if you’re not adapting every day, you’re going to get behind.
Jim Fitzpatrick: That’s right. That’s right. This week I had the pleasure of speaking with Jeff Dyke, who’s, as you know, the president and CEO of Sonic, and, of course, we were talking about EchoPark, their used car division. They had a record-breaking year this year. You know the average EchoPark store, I think there’s nine of them now, sells 550 cars a month? 550 used cars a month, and that came right out of the lots of all the new car dealerships that surrounded these EchoPark stores. It had to. Right?
Mark Tewart: It comes, more importantly, from the excuses of those dealers that allow those. Don’t be mad at these disruptors or the people doing different things. You’re the one that created it. You’re the one that allowed it. They were smart business people that saw the opportunity that you gave them. So, you can either adapt or you can say, “Well …” and get beat.
Jim Fitzpatrick: I know. And here’s a company, EchoPark, that doesn’t negotiate one red cent. If you’re looking to negotiate, they tell you right up front, “Then we’re the wrong dealership for you,” and they’re making great gross profits on used cars. They’re not buying into that sense that, “Oh, you can’t make a lot of money on a used car,” as some used car managers or salespeople will be the first to tell you, because some wise guy came up and said, “Oh, I can buy that car for less on Autotrader,” or Cars.com, whatever the case might be. It should be meaningless, and yet, more times than not, that salesperson or the manager buys into it, don’t they?
Mark Tewart: It’s fear, and we ingrain it, and it becomes emotional built in to our subconscious, and it becomes a reality that’s not a reality, and we hold onto it, like we’re trying to protect it. If we just let it go, get out of our own way, almost everything that we hold as a desperate reality is not true. Once we let it go, we find out, “Wow, that wasn’t true at all.”
Jim Fitzpatrick: That’s right. That’s right. It’s incredible. Let’s talk a little bit about 2020. What are the top three things that you think sales managers can do to become better leaders from your perspective?
Mark Tewart: Communicate better and more often. Clearly communicating. And two, it’s a cancer right now that … I call it a cancer because it’s a stringent word. It’s a harsh word. Accountability. We have gotten to the point where we think the new school of it is that we can’t hold people accountable. I find every great organization has high accountability and high expectations and others are making excuses saying, “Well, you can’t get good people, because if we hold them accountable, they’ll leave.”
Mark Tewart: The answer is no. The poor people will stay because you’re not holding them accountable and, therefore, all you’re going to attract is other people that don’t want to be accountable. This is about the weak leader, not about the person not wanting to be accountable.
Jim Fitzpatrick: Yeah. What we allow, we teach. Right?
Mark Tewart: And the biggest thing of all is just having a much better game plan, written and executed, on how you’re going to recruit, hire, onboard, train, and retain people. It is all people. For all of the technology that we have, we’re not really using that technology to the way that we should.
Jim Fitzpatrick: I know.
Mark Tewart: I don’t go into a dealership where we’re 100% using our CRM, we’re 100% using our trade tools. Why? A lack of process because the people. It always goes back to people.
Jim Fitzpatrick: That’s right, yeah.
Mark Tewart: Raise your game. Have higher expectations for … I just worked with a dealership said, “You can’t get good people. We can’t get good people.” I said, “I’m going to get you people.” Hired two of the best salespeople they’ve ever seen in their entire life. I said, “What happened to you can’t get good people? You had got it into your mind that it wasn’t even possible. You weren’t even willing to try anymore. You’d just given up.”
Jim Fitzpatrick: That’s right. That’s right. And you see so much of that out there, don’t you?
Mark Tewart: I tell people, “You either got to change yourself … I don’t want to be harsh, but change yourself.”
Jim Fitzpatrick: That got [crosstalk 00:09:43]. I love it. So, dealers out there that are listening, change your dealership, your approach, or sell your dealership. Right? Let somebody else go in there and succeed.
Mark Tewart: Yes. It’s a harsh reality, but it’s true.
Jim Fitzpatrick: Yeah, there’s no question about it. With regard to communicate, I mean, that is a major area of a dealership that seems to be … for dealers that are struggling in that area. Right? Because they’ll want to be able to bring down the ideas of the dealer and the GM, and it’s got to flow through all the way to the detail guy. Right? Or girl. And everybody’s got to be sharing that same vision for the success of that dealership. Right?
Mark Tewart: It’s all about vision, and it comes from the leadership. I have a little saying that if it’s not written down, it does not exist. We’re not formalized people in the car industry. We’re entrepreneurial. We’re kind of as you go. You got to start to formalize things. You got to put it on paper, then execute.
Jim Fitzpatrick: That’s right.
Mark Tewart: You have a playbook if you’re playing football. You don’t go out on the field and go, in the dirt, “Hey, you go right. You go left.” You have a playbook.
Jim Fitzpatrick: That’s right. It is exactly right. And that’s really what we need in 2020, isn’t it? I mean, you really need to tighten up every area because the business is going to be there again. Already the experts are saying we’re still going to have on target to do another 17 million in 2020. We’re coming off now of a incredible … but now it’s really time, as it always has been now since we’ve been running and gunning 17 million vehicles, for dealers to tighten up. Get more efficient. Get more dollars.
Mark Tewart: Absolutely.
Jim Fitzpatrick: Squeeze more juice out of that orange. Right?
Mark Tewart: You cannot be just a great entrepreneur. In the car business, we’ve always been great entrepreneurs. You now have to also be a really great business person, and you have to watch everything and have massive attention to detail. And if you do that, you’re going to do as good or better than you’ve ever done. And if not, you are going to be the person that will be selling.
Jim Fitzpatrick: Yeah, for sure. For sure. For the dealers that are watching us, right, or the GMs that say, “Hey, Mark, everything you’re talking about today, we have those same issues, low gross profit, we can’t find the right people. There’s a high turnover in our store.” Can they call you and have you either come out to their store, I don’t know if you charge for that, or a conference call or whatever to just kind of get an overview as to how you work and how you can help them in 2020? Do you provide that for dealers?
Mark Tewart: That’s exactly what we do. We don’t take on everybody that calls. We’ll have at least a two-hour call with the leaders.
Jim Fitzpatrick: Okay. No charge for that. That’s more of an overview, where are your problems, to see if Tewart Enterprises can even help them with it. Right?
Mark Tewart: And if we’re the best fit. We go through that, and we tell you honestly what we think we could help you with and assist you with or not, and what your areas of opportunity would be and give you a full game plan, and then let you decide with the investment if it works for you.
Jim Fitzpatrick: Sure. And the cool part about bringing you in, as I started out by saying I lived in this cocoon, as a dealer is that you’re exposed to all of these other successful situations. So, when they bring a guy like you in, you’re going, “Dude, step aside. Let me show you what we’ve done at these other dealerships that have succeeded off the charts.”
Mark Tewart: You know, they say the teacher learns the most. So, if I go to a store that’s not doing well, shame on me if I don’t learn why. If I go to a store that’s doing really well, shame on me if I don’t learn why.
Jim Fitzpatrick: That’s right.
Mark Tewart: So, every place that we go, we do have an advantage that we’re going to pick up good things, bad things, and it begins to be like a puzzle. There are certain tried and true things that if you do this, I don’t care where you are. Don’t use the fallacy of our marketplace is different. Our people’s different. Our brand is different. The reality is those things, there are certain tried and true things that work everywhere, every time.
Mark Tewart: There were other things you have to adapt and bring in, but it’s not all that hard. It’s about bringing a puzzle, but you need a coach. Everybody needs a coach.
Jim Fitzpatrick: Yeah, for sure. For sure. Well, this was a great one. Mark Tewart, president of Tewart Enterprises, bestselling author of How to Be a Sales Superstar and host of On The Mark, right here at the CBT Automotive Network, I want to thank you so much for coming in and spending some time with us. We really do appreciate it.
Mark Tewart: Thank you.
Jim Fitzpatrick: I know our dealers get a lot out of it, so thanks a lot.
Mark Tewart: Thank you. I appreciate it.
Jim Fitzpatrick: Let’s have a great 2020.
Mark Tewart: All right, bye-bye.
CBT Automotive Network, the number one most-watched network in retail automotive. This has been a JBF Business Media production.
