Automotive News - October 17, 2016 - Supplement - S27

OCTOBER 17, 2016 ❙ 27 A U T O M O T I V E A S S O C I AT E S O F AT L A N TA , U N I O N C I T Y, G A . Dealer embraces factory targets Sales, satisfaction goals are retailer's templates for growth Printed in Automotive News Aug. 1, 2016 Jamie LaReau jlareau@crain.com cott Smith has made a practice of investing in poorly performing stores specifically to hit manufacturers' sales targets and earn dealer incentives. But instead of pocketing the payouts, he plows the money Ⅲ Earn and reinvest back into his business. factory "We've invested half the incentives in money we've made in gains, dealerships back into the business," said Smith, CEO of Automotive Associates of Atlanta. "The dealers who hit the factory's numbers are the ones who are investing all or half of their incentive money back into the store." While many dealers dislike stair-step programs and customer-satisfaction targets, Smith sees them as guides to help him develop better business habits and raise profits. He studies the data on which the factories grade him, especially the satisfaction surveys posed to customers. From those, Smith and his managers have gleaned creative ways to invest effectively in people, processes and advertising to boost business. Automotive Associates of Atlanta owns three Nissan, two Kia and one Toyota store. It sells about 15,000 new and used vehicles a year. S Money talks Smith, newly elected president of the Southeast region of the Nissan dealer advisory board, has focused on his Nissan stores because, he said, Nissan has the toughest performance objectives of the brands he sells. But Nissan also offers the biggest payouts to those who hit them, he said. Of Smith's Nissan gains, he has reinvested more than $400,000 into his Nissan dealerships' people and advertising. In 2013, Smith began one of his first investments by hiring nine service valet greeters, three at each Nissan store's service drive. He armed them with iPads so they could imme- TODD W. BARRON PHOTOGRAPHY A service adviser at Nissan of Union City, one of dealer Scott Smith's stores, uses an iPad to get a customer through the service lane quickly. Use of iPads is among changes that Smith says have helped his stores' customer satisfaction scores to rise. diately check in arriving customers and get them serviced quickly. He also eliminated cashiers. "Nissan told us if a customer had a conflict about their bill, they got Smith: Staff frustrated having to wait shares rewards. for the service adviser to come to the cashier window to explain it," Smith said. "The service adviser does it all now. It eliminated a lot of the price issues." The cost to hire the greeters and buy the iPads was about $150,000 annually, but eliminating the cashiers saved him about $70,000. The result is his Nissan stores consistently rate in the top three of his region for customer satisfaction scores. That helped him earn a bonus check of $765,000 from Nissan in the first quarter of 2015. Around that time, he started washing and vacuuming every car in for service. Smith said he pulled that idea from Nissan's customer survey, which asked: "Was your car delivered to you washed and cleaned?" "That's one of the questions we're graded on," Smith said. "We basically used the template they gave us as a playbook to exceed the customer's expectation." The car wash and vacuuming costs $60,000 to $70,000 annually at each Nissan store, which is expensive, Smith said. But it's funded from the incentive gains he earns from hitting other service objectives, and adding the perk has helped raise his average customer satisfaction scores by two percentage points per store. He has now added the service at his Kia and Toyota stores. Little extras Smith also restructured his business development centers early last year, creating one center to focus on sales and another on service at each Nissan store. He hired six additional people. Their main job: Hit Nissan's customer retention objectives. "There is a dealer in my district who missed the retention number by one car and it cost him $104,000," Smith said. "So by hitting it, that more than pays for their hours." c

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