Jerry Reynolds~Prestige Ford
Interview by Michael Roscoe
Jerry, tell us how you got into the car business.
I grew up in a suburb of Dallas. My dad was in the wholesale automobile business. There was a Ford dealership, Horn-Williams Ford, in our community and he bought most of the trade-ins that came through there. I had been hanging around with him since I was about six years old. When I turned fifteen, Horn-Williams Ford asked me if I would like to come to work washing cars, so I did. When I got out of high school, I went to Northwood University, which has a campus here in the Dallas area. I would go to school from 8 o'clock to noon and I would sell cars from one o'clock to nine o'clock at night every day, including Saturdays. I got an Associate of Arts Degree at Northwood, which was the most you could get at the Dallas campus and the day that I graduated with that degree, Horn-Williams Ford made me the Assistant Used Car Manager. The next step was Used Car Manager, then New Car Sales Manager and at 23, in 1981, I was made General Manager.
Twenty-three year old hotshot General Manager...what happened next?
In 1982 I got an opportunity to go to a larger Ford dealership, Champion Ford in Dallas. We took it to number one in Dallas and eventually, number one in Texas after a couple of years.
Tell me about the first dealership you owned.
I bought a Buick dealership in 1987. I was 29 years old. Was not a very good decision, to be honest with you.
And the reasons for that was?
I like to play with product and Buick didn't have a whole lot to sell at that time. Plus, I had always been a guy that was huge in trucks. I made my whole living, my whole career in the automobile business since that time in pickup trucks. Eventually, I realized my mistake and I sold the store. I came to work here at Prestige Ford in early 1990 as the General Manager.
So you had gotten to the point where you had your own store and then you realized that store was not going to be what you wanted it to be. Then you had to take a step backward.
I did and it was the worst time in my life. My Buick store marked the first time that I had not taken a store and improved it dramatically. It was a hard thing for me, it was a very hard time in my life. But I was still young (32). I worked hard and in late 1996, the gentleman who was the dealer here sold his shares to me.
Jerry, I have found that most of the top dealers in the country have one thing in common and that is, they know how to sell a car. What is your personal selling philosophy?
My philosophy has always been built around relationships. I train my people to get on common ground with the customer right off the bat. Make them feel like you're their friend. If you look them straight in the eye, if you're honest with them, if you convince them that you're gonna be there for them if they have a problem, they'll buy the car from you.
Tell me about your approach to advertising.
We don't do any television advertising. We do a lot of radio.
What is your reasoning behind that?
Dallas is a driving town, everybody drives in Dallas. Everybody is in their cars for hours every day, traffic is horrible. I've made the conscious decision to go with radio and newspaper. We're the largest radio advertiser in Dallas. We do more radio than our Ford dealer group does. But what we do that probably is different than anybody else is that I don't do any canned spots. All of our spots are done by disc jockeys. The top three morning DJs in the market do commercials for me. We never, ever talk price or payment on the radio. I have a philosophy-if you run a spot and you have to have a disclaimer at the end of it, don't bother. All we talk about is selection, the fact we're number one in Texas, that we're good people to do business with. That's all we talk about. I'll never, ever put a price on the radio. Never put a payment on it.
I give the DJs total flexibility. I know these guys on a personal basis. They know me, they've been to the store many, many times. They know my people. They know what we're all about. It's been largely successful. Most of our customers come through radio.
What about newspaper?
We do some newspaper. Not as much as most dealers do. We run a full-page ad on Saturdays.
Jerry, what's your approach to the Internet?
We've done a great job on the Internet, but we got a really early start. We've had our Web page up for six years, even though it's been in the last three years that we've been real serious about it. At this time we're getting between 80 and 100 sales a month through the Internet.
Do you use any of the car buying services?
No. I never have.
And you're selling 80 to 100 a month off your Web site?
No, I'm not. I know people quote all these numbers of how many cars they're selling over the Internet. They're not selling over the Internet.
They're generating leads.
Correct.
How do you generate traffic to your Web site?
We took a philosophy three years ago and we got serious about this. We put our Web address everywhere that we put our address and phone number. Every envelope that goes out, every repair order that goes out, every parts ticket that goes out, front lot displays, billboards, every newspaper ad and every radio spot that runs, our web address is there.
What is your URL?
Prestigegarland.com We built the Web site ourselves. It is informative and fun, not overly fancy and quick-loading. We felt that quick-loading was going to be a real key in keeping people on the site.
What is the purpose of your Web site?
I don't view a Web site inquiry any different than I do somebody calling us over the telephone. We're seeing more and more people choosing to communicate with us that way, maybe because they feel it's safer. But we take it seriously. Plus, it's manned every hour that we're open. We have an interactive chat area on our Web site, you don't have to e-mail us to communicate. You can go in and actually chat with us back and forth in a chat room. I make my personal e-mail address available to the public, for people who might have a problem.
Tell me about your business development center. Number one, you have one, so you're ahead of most dealers.
We're 10 years into it. We chose Stuker & Associates to help us set it up. We've got eight people in it. We're right in the middle of adding two more people for service. We didn't start getting any e-mail addresses on our repair orders, until about six months ago. So the database isn't big yet. At some point it will be. Through our BDC, we take all incoming sales calls, we make all the follow-up calls after we sell the cars and make sure that the customer was 100% completely satisfied. If they're not, then that goes to the General Manager. It will eventually end up on my desk once it is resolved. When the phones aren't ringing, the BDC department is calling on previous customers. We've got thousands of previous customers that should be in the market today. On the numbers we've been selling the last few years with just keeping in touch with them, just reminding them we're here, letting them know we want their business, we can do a lot of business.
Do you do any conquest-type car marketing that way?
We have not. Without expanding it I think we're just staying so busy on the phones. Right now, 48% of my business is either repeat business or referral business. I'd like to get that number up into the 60's and that's what we're concentrating on with our BDC.
Jerry, tell me about your "international" division.
Dallas has a large Hispanic population. We've started marketing directly to the Hispanic population, separate from the other things we do. We have 22 salespeople who speak fluent Spanish. They wait on all of the Hispanic customers who come in here. Our Hispanic department right now sells about 150 cars a month. It has been a big part of our growth. We just weren't geared up for it before. We had a few Spanish-speaking salespeople but we didn't do anything to draw those folks in here. So we took the same philosophy that we took with the rest of the dealership, which was getting involved. Everything we do with them, we do in Spanish. We do a lot of research on what radio stations they listen to, what TV stations they watch and that sort of thing.
Is your approach on Spanish radio any different?
No, not at all. Exact same thing.
What are you doing in sub-prime finance?
Mike, that's an area that we have not actually targeted, but because of where our store is, we do a lot of it. Our area is blue collar, particularly on the used car side. About 40% of our used business goes to special. We're the largest dealer Ford Fairlane Credit has in the country.
What is your reason for not targeting special finance?
We get so much walk-in traffic that we'll go that direction but I don't think we're really trained for "targeting" it. I think it's hard to ask your salespeople to wait on a guy that is the president of a bank who wants to come in and buy an Excursion and turn around and wait on a guy that filed bankruptcy three months ago.
So you don't have a separate sub-prime department?
No, we do not. I have two separate finance managers, both for sub-prime. What I'd like to see happen here, to be honest with you, is I'd like to see every customer treated the same. They walk in the door, we give them a great product presentation, we give them a tour of the service department and we show them all the customer satisfaction awards we've won. Then when we sit down and we start working numbers. If we find out they're sub-prime, we go to the sub-prime managers to figure out how to structure the deal. My fear is that if you have salespeople who only wait on sub-prime people, those people are not going to get treated the way I want them treated.
Jerry, you're the number one Ford truck dealer in the country, you're the number one Ford dealer in the state of Texas. Why on earth would you get involved to the level you have with the Ford Dealer Council?
Insanity (laughter). To be honest with you, as National Dealer Council Chairman, I really wanted to make a difference with the Dealer Council this year.
How did you think you could make a difference?
Well, I felt like this year's dealer council would probably be the most challenged dealer council since this thing started 46 years ago. There's more change coming at us right now than ever before. I have a good relationship with Ford. I think Prestige Ford's size is an advantage for me. I think I have the ear of Ford executives; as Chairman, maybe more so than some others because I already had their ear.
I've sort of been under the microscope with them for the last three years because we found a very unique balance between big volume and high customer satisfaction. I think the traditional wisdom was that you couldn't do both. We won four chairman's awards back when they were still around. We're the only dealer in Dallas County last year to win the president's award and we'll win it again for '99, so we've always been a high visibility store. And when you take our truck sales, then you're talking really high visibility. So I felt like I could probably make a difference this year. I think this council has made a difference. We have been a council that communicates. I've got roughly 3,500 people on an e-mail list right now, mostly dealers, probably 100 of them are Ford people. I don't say anything to these dealers that I wouldn't want anyone else to know, but we have been a communicating council. I think that's been a problem with the Dealer Council in the past. Many dealers, in my opinion, thought that the Council didn't do anything. In reality, the dealers just didn't know what all the council did.
Unless something went wrong.
Right. But all the good things the council did, the dealers didn't know about. In their defense, up until a few years ago, the council logistically just couldn't communicate with the dealers. The dealers could not communicate with each other. I get 50 e-mails on a light day, up to a hundred from dealers all over the country with questions or comments or something that they want to know or they need help with and every one of them gets answered. A lot of them I'll forward out to one of the five committees on the Dealer Council. I forward them out to the committee chairman for response sometimes, just because of time. But I really wanted this job because I felt like it was going to take somebody leading us through these waters who could really communicate. I think one of the things I'm good at is being able to communicate. I talk to people and am sincere and disagree in a way that's not confrontational.
One thing I wanted to do this year, I wanted to find out what Ford's long-range strategy was with the Internet and we accomplished that. We got that done last month at NADA in Orlando. I had asked and actually begged and pleaded with top Ford management to make a statement to the dealers that they would not sell directly on the Internet. They were hesitant to do that because, to make that statement, and mean it, and for it to be long-term, that's quite a commitment. Ford came to me and said, "Help us draft what you want to hear," and that was huge.
That doesn't sound like "the factory."
They asked me, "What would you like to hear us say?" I said, "Step one, it's got to come from Jack Nassar and step two, it's just got to plainly say that you are not going to sell cars direct to the customer now or in the future." And they finally agreed to that. I got to make that announcement at the NADA meeting and that was one of the highlights of my life. You could just feel the relief and how much better dealers felt about their futures because of that.
Jerry, what if five years ago someone told you that a 20-year old kid in Austin, Texas would get $100 million so he could go out and buy dealerships to deliver cars he sold over the Internet? What would you say about that?
I'd say that's crazy. There's no way that could happen.
Well, what do you think of it today?
I think two years from now it will be sort of like AutoNation's used car superstores, it will be gone.
Can you see them having any prayer of a chance if they decided they wanted to compete with you in your market?
They can't compete with me in my market because they're not gonna do what I do. It really angers me that these people think that this is such an easy business. They think they can just walk in here and take it over and change it. Wayne Huizenga, the guy is smart, I'm sure in many ways he's brilliant and you can't take anything away from a guy who's made the kind of money he's made, but for a guy to stand up and say, "We're going to change this business," well, I've got news for him, this business is gonna change him.
What do you see in the future for Jerry Reynolds?
After my Dealer Council term is over...
They ought to send you on a nice trip somewhere.
Somewhere besides Detroit! That's my second home. Actually, I don't see anything changing much. We were up 16% in '99 over '98. I'd just like to keep it on a firm, steady growth pattern, concentrating on the repeat referral business, trying to get this business to the point that I don't have to do as much advertising as I'm doing today. If I can get my repeat referral business up to 75% I can cut some overhead. I'd like to concentrate on employees more.
In what way?
Reduce the turnover. We don't have a big problem with it, but I think any turnover is bad. We had a meeting this morning and we talked about that at length. We were talking about how to attract new salespeople and I said, "You know, if we put as much energy into keeping the ones we have as we do trying to hire new ones, we might be better off." You know, taking underachievers and making overachievers out of them, that sort of thing. I don't see a lot of change for me in the future other than I just want to get better and better. And our goal, of course, being fifth in the country, is to go to number one. We've got our sights set on fourth place this year and will continue to climb the ladder.
I know all of the guys ahead of you. Good luck, you're going to need it.
Thanks, I'll take it.
