Jay Cimino is one of America's most forward-thinking dealers. Typically ahead of the curve on technology and the evolution of retailing, Jay has taken Phil Long Dealerships to the rarified air shared by the top dealer groups in the country. During this interview, we discussed Jay's philosophy on business development centers, competing with John Elway AutoNation and, of course, selling cars.
How did you get started in the automobile business?
I was born in Trinidad, Colorado, a small coal-mining town of 9,000 people. My dad was a sales manager for a Chevrolet dealership. Because no cars were being built during the war, he had to get out of the car business and he bought a funeral home. He still loved cars and some of his enjoyment with his new job was buying the Packards and Cadillacs used for the funeral home. He had five brothers and before the war he had hired three of them in the dealership as salesmen. After the war, they all got back in the car business and became dealers. My dad was the oldest of 13 kids in a big Italian family. He built his home right next to my grandparents' house and every Sunday they would all gather together for a traditional spaghetti and meatballs dinner. Every Sunday all of my uncles and their families would drive up in their shiny new Chevys or Fords looking like a million bucks. This made quite an impression on me. So as you can see, I was born into the business.
To be honest, I got my fill of it as well. I graduated from the University of Denver with the intention of not getting into the car business. That is what motivated me to get my degree. I worked my way through college selling cars and I wanted to do more with my life than just that. I wanted to get a job with a "big corporation." I joined B.F. Goodrich Tire Co. and became a territory manager. I would sign up car dealers to become tire dealers. After awhile, Jess Hunter, from Pueblo, who used to sell my dad his Packards, was selling Fords and somehow talked me into joining his dealership. My first day on the job he gave me accounts receivable. You talk about selling and car dealers, this guy sold me on the idea to give up the "big corporation" and come to work for him, not even knowing what I was going to be doing. I then moved up to finance manager. I didn't like that much so I started selling cars for him. I worked my way up and in 1972 I was offered a partnership in my uncle Carl's Pontiac-Buick-GMC store in Santa Fe, New Mexico. He was my father's younger brother. I stayed with him for three years. While I was there Phil Long called me and asked me to come up here. When I was sales manager at the Ford dealership in Pueblo, we got leadership for the first time in car and truck sales for Ford. When you move out of a deal like that and you are still healthy, people will seek you out. Phil wanted me as an employee but I said "No, I want to be a partner." In 1975, he offered me the position of general manager and a partnership. Phil Long was a WWII naval fighter pilot who fought the Japanese in dogfights. When I told him one day we have the opportunity to get Mitsubishi he said, "What, are you crazy? They made the planes who used to shoot at me!" He had no intention of being a Japanese dealer-ever. When I came, the store was in a red position but we turned it around pretty quickly and became profitable. Phil is now 81 years old and has always had a great reputation. Gradually we took on some other manufacturers. Of course we made mistakes, but we picked up some really good people in the process. We bought a store in Irvine, CA, called Jim Click Ford. In 1984, we bought another Ford store in Denver. By that time we had also gotten Nissan, Mitsubishi, Isuzu and Suzuki. In 1991, we picked up Saturn, Mercedes and Audi.
How did you get Phil to go along with Mitsubishi?
We have a real good relationship, and Phil eventually said to me "If it were me, I would not do it, but if it makes sense to you and it is good for the business then you have my support." He has been a great partner.
Will there be a point where you buy his portion of the dealerships?
As it stands right now, I own a little less of our dealerships than he does. We have now brought on other partners-it is not just he and I. We have tried to not have this become a family business. We have family in the business. I have two sons in it. But it is not a family business, and that is a big difference. I have three general managers who are partners. One of them has been with Phil longer than I have, another I hired about a year after I got here and the youngest has been here for fifteen years. I also have a CFO and a COO who are partners. That makes a total of seven of us.
Jay, what is your personal sales philosophy?
My personal philosophy is to win. That is my philosophy. The question is, "How do you win?"
OK, so how do you win?
The way to win in this business is to make sure you are very disciplined in terms of the sales process. You cannot take shortcuts in this business. It all starts with people and relationships. We have to characterize people, and we have to have goals. We also have to have passion and knowledge. To have knowledge you have to have a "student" mind set all the time. Always ask, "How can I improve?" You have to be alert to your strengths and weaknesses. You have to listen and look for opportunities to be successful. You always have to be asking yourself, "how can I do this better?" Passion needs to be supported by process. If you don't have process, the passion goes away. I have always had discipline as a salesman. If a customer walks in and says, "Look I don't have time for all that, just give me the price." I say "When you have time, lets talk". Of course you have to have the right product and that starts with you. You are your best product. Inform, motivate, realign, be accountable, and proceed in a timely manner. It all lines up in five steps: deduction, qualify, presentation, demonstrate, close and follow up. I am a firm believer in this. I have never found a great salesperson who did not follow the five leadership steps. Show me a leader who does not have a vision and I'll show you a non-leader. You can have all the makings of a great leader but unless you have vision you cannot be one. As fast as our industry is moving, if you don't have a view towards the future you will be dead. You have to start with it and challenge that vision, and not just yourself but also the people around you, your team. I think that where big corporations have made mistakes is that they have a vision and they may challenge that vision but they have not successfully communicated that to their people. They have not gotten alignment in place. We have seen that in some of the big retail public companies. A big part of it is getting your people lined up with that vision and challenging and then executing it.
Is this something you have come up with to enable your salespeople to sell like you do?
Exactly. Always a student, that is our philosophy. We teach it at Phil Long University.
At one point does someone go to Phil Long University?
As soon as we hire them. It is a two-week course. We customize the course to the person. Everybody takes the modified form, some are longer than others.
Jay, how is your business development center set up?
All of our stores use it. We set it up four years ago. We decided to do it all at one time. It was very difficult at first to change our whole culture and how we did business. There are some big advantages to that and there are some disadvantages also. It took longer doing it this way but today, four years later, we are very organized with it. We have meetings that are designed to look at individual people and we rate the individual by looking at their performance. How many people did they talk to, how many people did they demonstrate, how many did they select, how many did they close, and we rate them A, B, C, D. We bring a select number of people into the meetings and not because they were good or bad but because they need to be exposed to what we are doing and they are team members. We meet every Tuesday, without fail. The whole mission of that meeting is to see how we can get better. We critique ourselves.
Does the business development center do follow up for your sales people?
Yes, it is all computerized.
So if someone, for whatever reason, is unable to close on a sale today, does the business development center follow up with a phone call?
Yes. Every store that we have built has the same desk configuration. We have the heart and brains together. We took salesmen out of our offices and off the floor and put them in there.
Why do you think dealers are hesitant to do something like this, is it the money?
We spent about $1.3 million. We questioned spending that much money. There is more to it than money. There are some dealers who, it doesn't matter to them who is on the floor or who is talking to who. You should not put a Business Development Center in unless you have a foundation. That foundation has to be solid. You have to have a showroom profit control system that works, and you and your team must believe in it. Unless you have that, don't try it. Those who have a strong showroom traffic control system and don't put in a BDC, I do not understand. If you are doing showroom traffic control then you are trying to figure out what is going on your showroom floor. You are trying to find out what your salesmen are doing. How many people is he talking to, how many people are going by the wayside? The BDC simply automates the process. Now it is automated and we are able to take it to a new level. You basically have to be a cop, but there are some people who don't want to be a policeman to their salespeople. But you have to be.
I noticed the kiosk you have here, do you have them at all your dealerships?
We bought old gas pumps, converted them into information kiosks and are in the process of putting them in all of our stores. They are not just in the dealerships, they are also in shopping malls and airports, wherever we have a car on display.
How do you expect the kiosk to benefit the dealerships?
They are salespeople 24 hours a day seven days a week. We all know that people love to look at a TV screen and when they are interactive, that makes it even better. These are designed to give people information. Information they want without having to jump through hoops to get it. If I have a Saturn on display at the airport, the kiosk will tell the inquiring prospect something about Saturn and our store. It tells them about the car, payments, so forth and then gives a name to contact.
Do you have a Web site for your dealership?
We are in transition like most everybody else. We will direct the Ford customer to our dealership closest to him. We also have what we call Five Star. That is Saturn, and Cobalt is helping us with this. We have two Saturn stores here, and one in Denver. In a couple years there will be two more in Denver. The other is our own used car franchise, Value Car. Then also we have our imports. They each have their own Web sites. So if somebody went into one of your stores they could look at all of the inventory in your other stores too?
What is Value Car?
When you have a Ford franchise the first thing people think of when they want a used Ford is a Ford store. But it is not the first place they think of when they want a used Chevy. We sell everything at Value Car, a wide spectrum. They are all no hassle. We are going to go with what we call benchmark pricing. It is still no hassle, but we are not going to say we will not negotiate.
Sidetracking here a little bit, I thought that in most instances one Saturn dealer got one market.
No, Denver is 2.3 million people. We have kind of like the western part of the city and the southern. They have the north and the east. It is broken up like that.
The Credit Resource sub-prime store you have, how do you go about marketing that?
Like a separate entity.
It is not mentioned in any of your ads for Ford, Saturn?
It says it is a division of our Ford, Saturn or whatever stores. We don't feel we will lose any credibility. A lot of these people have had bad luck. Not everybody has gone through this journey of life flawlessly. Some people have had problems and that does not mean that we will not sell to them. We sell about 125 of these cars a month. This has been very good for us.
Have you been approached by consolidators?
I have had phone calls and was asked if I were interested. I really have never had a serious discussion with anyone about it. I think most people know we are not for sale.
What is your opinion about John Elway and AutoNation?
They certainly have stirred up the market. We have had by far the best year we have ever had in Denver this year. The last time I looked the market was up 22% in Denver. Our profits are much better than they have been. I think that on paper they have a great plan. I think they have really done their homework on the horizontal marketing and all their concepts are terrific. As far as execution though, in my humble opinion, I think they have forgotten one big thing. I feel they may have failed in the alignment. You have to have the team to pull it off. If you don't have the team in place then you have to start building the team. I think that their team will get weaker rather than stronger.
Do you mean their local team?
Yes. Remember this is a customer-based business. These guys are looking at it from a financial standpoint and Wall Street happens to be driving that. The people who drew up the vision are not the ones taking care of the customer. The people who are taking care of the customer are the ones having to line up with their philosophy. They have to be good people to do that. I'm talking about salesmen, managers, middle managers, etc. That is where it is lost. 100% of your people must be lined up with the vision. I believe that as time goes on and they run into the bumps they will lose even more good people. Some of the real strong general managers who ran those stores are already gone.
You can keep growing through acquisition but at some point, when you have acquired all you can, then you have to execute and the people who are involved in making that store successful today are only going to be there so long.
That is because they are missing the passion. If passion is driven by money in this business, you probably won't be successful in the long run. The customer still has to talk to the salesperson and the sales manager. Last month we sold almost 900 cars and trucks in Denver out of one store. There was a time a couple years ago when 600 would have been a good number. The point I am trying to make is that they are not taking care of the customer. If a customer walks in and there is a salesman who is confused about the process, who is confused about the management, management is giving him confusing directions, the customer sees and feels all of that. Even though he wants to buy a Ford F-150 he does not sense that passion from the salesperson to sell him that car. Then he is going to walk. He is going to go to one of seven other Ford dealers. That is part of what is happening right now, I believe. The speed of the engine is always the speed of the caboose. The people who are driving the ship determine the direction of the ship. If they leave and are replaced by corporate people, what happens to the rest of the crew? What happens to the customer?
What is your advice to dealers when AutoNation comes in big to a market?
There is only one thing you can do and that is get better at what you are doing. You have to have better vision than you ever have had before, and better execution.
Your company is the seventh largest privately held
corporation in the state of Colorado. Jay, it looks like you accomplished the goal you had in college. You are working for a big corporation.
You know Mike, I guess that is true. And yet that was never a mission, but we are 1,200 strong now. Our sales will get into the $650 million this year or more. And we are still growing, this year we opened a new Saturn store along with a beautiful new Ford store in Colorado Springs. We continue to have our focus on the customer, which results in our making every effort to improve the way we do business.