Starting Position
Selling 350 new and used cars every month
- Schomp acquired the Denver-based store in 2018
- #3 Subaru dealer in Denver
- The lowest front-end gross in the market
- Higher than average finance PVR based on a high-pressure sales process
- Finance director made over $350k per year
The Spark
Looking to displace the traditional sales model
- Low customer-satisfaction sales process
- Schomp was looking for change
- Schomp believed the traditional sales model was antiquated and in need of change
- Converted to a “One Price / One Person / One Hour” approach
The Goals
Build trust, stronger F&I, and service retention.
- Management wanted to provide legacy customers with a unique and differentiated Schomp Automotive customer experience
- Once the customer experience was established, the focus moved to profitability
- Assimilate the acquired dealership staff to the Schomp culture and way of doing business
- Key goals: consumer trust, higher customer satisfaction, stronger F&I penetration, better service retention, more referrals/WOM, and more repeat purchases
The Approach
Clear, transparent communication with staff and team
- Reset the store’s business model to produce higher front-end gross with healthy, balanced back-end PVR
- One Price was installed first, with One Person℠ Selling coming after 60 days
- Extensive F&I training for client advisors and leadership training
- BDC was dismantled with leads distributed to client advisors by team leaders
- F&I process was dismantled, lead F&I director left immediately, and other F&I managers became team leaders
- Management set up an attractive 2-month pay plan after the acquisition
- IT integration went smoothly with all APIs handled by A2Z
Keys to Success
Total commitment from the top down is a requirement
- Assign a program champion on the leadership team with strong accountability on tracking progress and coaching to new KPIs
- Extensive training on F&I with help from F&I vendors
- Insisting that all deals must go through A2Z was essential
- Hiring new tech-savvy, consultative client advisors help bring along legacy salespeople: “Seeing newcomers being successful helps convince veterans to get on board.”
The Learnings
Plan ahead for early adversity
- Anticipate turnover and get ahead of it with recruiting
- Open and fearless communication is key in aligning the team
- Compensation guarantee was critical to minimize uncertainty and gain buy-in
- It’s impossible to overtrain on F&I
- The elimination of commission-based compensation built consumer trust
The Results
Plan ahead for early adversity
Total net PVR per unit is now over $10,000 per car, higher than the NCM Average Net PVR (which is defined as total front and back gross profit less total sales and finance personnel expense on a per unit basis) and is well above the 75% percentile benchmark of NCM 20 Group data.
Salespeople: “A2Z and One Person℠ Selling not only simplifies the process and saves time for both parties (huge advantage over traditional stores), it creates an atmosphere of positivity and excitement rather than one of conflict and mistrust.”
Insights from the leadership team.
“Our One Person℠ Sales Model lets us differentiate much more strongly vs. competition. Our higher market share, better closing ratios and stronger online reputation all come from consumers citing their different and better buying experience.”
-TJ Joyce, General Manager at Schomp Automotive
