Industry News

Process Drvien

Process Driven
February 2014, F&I and Showroom – Cover Story
By Paul Chavez

The sales and finance teams at Puente Hills (Calif.) Toyota operate under a single motto: “Be easy to buy from.” It sounds simple enough, but in Nicholas Cardin’s 25 years of selling Toyotas, delivering on that promise has been anything but easy. He believes the problem is endemic to the industry.

“We make it hard. We’ve trained customers to be jerks,” says the general manager for the sprawling Toyota store. “What I’m trying to do is untrain them. That’s why our No. 1 rule for salespeople is to always agree with the customer and be easy to buy from.”

The tall, lanky Cardin has a soothing voice and a quick smile to go with his laid-back personality, a combination that has guided him through his almost three-decade career in the car business. Delve a little deeper, however, and one quickly realizes that his simple approach to sales is the result of years of studying his customers and the data that tells him what they want out of the car-buying experience.

“It’s more than just being nice to people,” he says. “Anybody can smile and be nice. It’s about giving customers the ‘Wow’ experience, giving them a handshake and telling them, ‘Take all the time you need. If you’re on a time schedule, we can accelerate the process.’”

General Manager Nicholas Cardin’s No. 1 rule for his salespeople is to always agree with the customer and be easy to to buy from.

General Manager Nicholas Cardin’s No. 1 rule for his salespeople is to always agree with the customer and be easy to to buy from.
Be Different
At 56, Cardin remains a student of the game and is always tinkering with his process in the name of improving the customer experience. His sales and F&I process averages about 3.2 hours per transaction, which is on par with other Toyota dealers in the Los Angeles region, according to a study J.D. Power and Associates conducts for Toyota’s dealer network. But that’s not good enough for Cardin. The same study found that his customers were forced to wait for their vehicle to be washed and detailed after leaving the F&I office. Cardin noticed, and he came up with an action plan to correct the issue. But that’s not the only action plan he’s working on.
“For years, dealerships have had a 10- to 12-step sales process. I’m trying to get that down to four,” he says.

Cardin decided to train his sales team to avoid making customers “jump through hoops” to get pricing, payment and trade appraisal information.

“If the customer wants a payment on an Internet quote, give them a payment. But on the very next email, ask them, ‘Did I win? Am I in the game?’ You’ll be surprised how well that works.”

Asked if he’s afraid of being “shopped,” he adds, “The customer may have shopped several dealers and we may be the only one who got back to them with a price.”

So far, Cardin’s approach has been winning over customers. The dealership ranks in the top 5% for new-vehicle sales among Toyota franchises across the nation. Last year, the dealership realized a 20% year-over-year increase in new-vehicle sales, growth that outpaced other Toyota stores in the Los Angeles region by nearly double. And Puente Hills Toyota is doing that in a market that claims four of the Top 10 Toyota dealerships in the nation.

Agreeable Sales
Cardin, a Southern California native who was delivered by the same doctor in the same Los Angeles hospital as his father and two brothers, started out in the 1980s at a Toyota store in nearby Irvine, where he quickly became the top sales producer. He then joined Toyota of Cerritos in 1987 and was promoted to sales manager within a few months of his arrival. Under his leadership, the store weathered the economic downturn of the early 1990s and became one of the most profitable stores in the United States.

In February 2001, Cardin was recruited by Wilson Automotive Group to rebuild its sales and F&I departments at South Bay Toyota. It took eight years to lift the dealership from obscurity to profitability, setting the stage for his arrival at Puente Hills Toyota, one of a half dozen dealerships operated by Hitchcock Automotive Resources.

Cardin joined the Toyota store in 2009, just as the country slid into the worst economic downturn since the Great Depression. “I’ve gone through three recessions in my career with Toyota, but this one stung,” Cardin says. “It may go down in history as a depression.”

Puente Hills Toyota had more than 250 employees before the economic crash, a count that dropped to as low as 140 employees during the nadir of the downturn. Sales have returned to pre-recession levels, a feat he credits to the dealership’s partnership with JM&A Group.

“We have been using the proven JM&A finance process with great success for over 12 years,” he says, noting that the store’s headcount is now up to 150 employees. “The level of training that our team receives from JM&A is second to none.”

Proven Process
The one thing the Southern California native is not laid back about is process. That’s why JM&A’s script- and process-heavy approach works at his store. At the time he talked to F&I and Showroom magazine, the general manager was prepping to join his F&I team and four sales managers at a mid-February compliance seminar offered by the Deerfield, Fla.-based firm. In fact, all of his current sales managers were groomed as F&I managers before assuming their current role.
“The best finance manager makes for the best sales manager,” Cardin says. “They undestand the paper flow, so when they go to the desk, no one is running to finance for rates and deal structure.”

Cardin describes his management team as being “fanatical” about training, developing and cultivating their sales staff. The dealership is currently using a weekly, Grant Cardone-run online training course that features 10 three- to five-minute videos that all salespeople and managers watch. “The salespeople have all enthusiastically embraced the weekly training. They are all getting more customers written up and ultimately are closing more deals with their newfound sales techniques,” Cardin says.

Cardin isn’t so stuck to his process that his sales and F&I producers can’t infuse their personalities and make his scripts their own. But there is a rhyme and a reason to what he expects. “We work on scripts and word-tracks because you need to get past the ‘I’m just looking’ [response],” he says.

Cardin expects his salespeople to uncover their customers’ situations upfront rather than landing them on a car and backing them into a deal. The JM&A process decodes the customer’s motivation for buying using a scripted line of questions. Not only does that benefit the customer by shortening transaction times, Cardin says, it tees up his F&I process. “The customer is immediately put at ease from this transparent process. They, in turn, are much more open to purchasing the F&I products we then offer.”

The Turnover
The F&I process starts with a discussion between the F&I manager, salesperson and sales manager. Cardin’s F&I producers are looking for each customer’s hot buttons — what the buyer likes and dislikes and what motivated them to visit the dealership.

“This gives the F&I manager the ‘sixth sense’ needed when he presents the menu,” Cardin says. “We want to look at the whole picture. If a customer comes in and he’s trading in a car and he owes more on it than it’s worth, I know this customer is a good prospect for GAP insurance.

“And this is something we don’t need to ask the customer about,” he adds. “We can look at the credit bureau to find this out.”

The next step is for F&I producers to meet and greet customers in the showroom — “on their own turf,” as Cardin describes it. The goal here is for the producer to explain what will happen next. It is a scripted process, but F&I managers can personalize it as long as the body of the script is followed.

Once their showroom visit is complete, customers are led to the F&I office. Verifications are made before customers are presented with a menu, which producers have already customized based on what they learned from their discussion with the sales department. Designed by JM&A, the menu is broken up into four columns: “Premium,” “Preferred,” “Basic” and a la carte options. Cardin says the fourth column allows the most flexibility in monthly payment and is responsible for the most product sales.

Last year, the F&I department at Puente Hills Toyota averaged north of $1,200 per copy, with producers averaging more than 1.5 products per deal. “Their pay plans are more focused on products than reserve, because it ties customers to the service department,” Cardin notes, adding that the dealership emphasized product sales vs. rate long before the Consumer Financial Protection Bureau (CFPB) began scrutinizing rate participation programs.

“That’s a political powder keg,” Cardin says of the bureau’s activities.

In the Mix
The F&I department at Puente Hills Toyota has a slew of lending options for buyers, with Toyota Financial Services getting the lion’s share of deals, Cardin says. Capital One Auto Finance ranks second, and Cardin says the dealership’s sales and F&I managers are on a first-name basis with the whole Capital One team.
“Since we are in the land of spot delivery, we can get approval from Capital One on a busy Saturday literally seconds after submittal,” Cardin says. That type of response has proven invaluable at Puente Hills Toyota, where car sales can exceed 75 vehicles on a typical weekend.

Puente Hills Toyota has reached and maintained “Executive”-level status with Capital One’s Diamond Dealer program, which supplies the dealership with its own dedicated loan officer and funding team, among other features. Cardin says Capital One has filled the niche by meeting the needs of his mid-prime customers, providing competitive advances and rates. The instant approvals don’t hurt, either, he says. “I’m proud to be part of their ever-evolving Diamond Dealer program,” adds Cardin, who represents California dealerships as a board member on the Capital One Auto Finance Dealer Council.

The feeling is mutual. “Nick is a tremendous dealer focused on taking care of his customers, and we are proud of our partnership with him,” says Steve Braskamp, managing vice president of Capital One Auto Finance.
Puente Hills Toyota opened its doors in 1981. It’s located right off the Pomona Freeway, which carries 250,000 motorists each day. During the store’s opening weekend, they offered new “ready-for-delivery” Toyota models such as the Cressida, Corona, Starlet, Celica, Supra and Tercel. A lot has changed since that time, particularly the dealership’s 100,000-square-foot showroom.

Cardin describes the showroom as “sticky,” with customers able to enjoy free Wi-Fi Internet access while they peruse the dealership’s inventory or wait for their vehicle to be serviced. The dealership also houses a Subway sandwich shop, two play areas for kids and an in-dealership theater with stadium seating. Playing at the time of the interview was the latest James Bond movie, “Skyfall.”

The dealership also touts a 1,600-square-foot parts and accessories shop. There’s even a red-and-white striped tent set up on the dealership lot to allow car buyers to transfer their belongings from their old vehicle into their new one while being shaded from the elements.

Toyota has set a challenging goal for the dealership to increase sales by 5% in 2014. Cardin estimates that will require selling about 400 more new cars than last year, but he believes his processes and employees are up to the challenge.

Puente Hills Toyota draws from a multicultural customer base with a demographic makeup of nearly 50% Latino and 30% Chinese-American. The dealership’s employees reflect their customers, with several staffers able to speak Spanish or Mandarin. There’s even a dedicated eight-person sales team specifically for Asian customers.

Cardin describes his general manager position as a “dream come true” and has worked hard to get his employees to feel the same about their roles at the store. “We have practically zero turnover in our entire dealership because of the high level of respect and constant acknowledgement we give each and every employee,” he says. “I learned years ago to be equally concerned with keeping your employees as happy as your customers.”

In his experience, employee satisfaction usually spills over to the customer. “People will almost always respond in kind. We teach people how to treat us.”

Another reason for employee longevity is that Cardin sticks to a policy of promoting from within, allowing his staffers to grow with the company. “We try to compensate our employees a little more than needed,” he says. “As a result, when times are slow, nobody is out looking for a better job because they know they already have that better job.”

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