Latest / What's Working in Auto / Convenience Is Survival | Robert Larson on Competing With Carvana
Transcript
- Jake Hughes: Welcome to What's Working in Auto. Today on the show we have Robert Larson. He runs Larson Ford in Lakewood, New Jersey. And he's the third generation of his family to run this tour. It's been around since 1956. So it's I want to get a perspective of a family owned dealership on the show this week. Their performance in reviews is so good that it takes them 129 positive reviews to get one negative review, if you can believe that. So we talked, it was a good conversation. Three things are going to take away. One, what he does when the customer isn't right and how to maintain that relationship without giving in fully in all scenarios. Two, why he disagrees that the single point family store is finished. I think Larson Ford's going strong and he proves that case. And three, convenience is survival. we talk about the threat of imp independence quite a bit. And part of that wedge from a independent perspective tends to be convenience in a lot of scenarios. And so we go through what Robert's doing in order to increase the convenience of the services that he offers at his dealership to support the community. Welcome to the show. Let's get into it. All right, I'm here with Robert Larson, president of Larson Ford in Lakewood, New Jersey. How are you doing today? Robert Larson: Doing great, happy to be here with you. Jake Hughes: Thanks joining me. So I asked you to be on looking at your review data of your dealership. Incredible rating, four point eight nine, thirty-eighth in the country, which is wild. When when you look at your negativity rate, point eight percent, which means for every hundred twenty nine reviews you receive, you get one negative one. So today today Robert Larson: I'd love to hear that. Jake Hughes: we're here to get the story behind those numbers. I wanna learn a little bit more about your business and what the you know, what how you're running things to achieve those numbers. So for those who aren't aware of of your business, please take us through just some some of the basics. Robert Larson: Third generation Ford dealership, like you already said in Lakewood, New Jersey. you know, we take a lot of pride in what we do, have a lot ton of great employees that have long tenures with us. you know, have a really good commercial fleet business, have great fixed operations and you know, the team is what make you know, what drives our success. And we a we have a a great team here that we've established and we work together really well and we're committed to our customers a hundred percent. So Jake Hughes: Larson Ford was founded in nineteen fifty six, is that correct? So Robert Larson: That's correct. Yes. Yep. Jake Hughes: you just celebrated your seventieth seventieth anniversary. Congratulations. Robert Larson: Yes, we did. Very, very proud of that too. Jake Hughes: And you're telling me that you've have a number of people on staff that have been at the business as long as thirty years or more. Robert Larson: That's correct. Jake Hughes: I think staff retention is a key challenge within the industry. What are what are some approaches that you've taken over the years to produce that sort of commitment to the business? Robert Larson: I think we've built culture around you know family and we respect the time and effort that our employees you know give our business and I I think they understand and appreciate that. you know, we do Employee recognition. We have a really strong relationship with all of our employees. You know, we are familiar with with their families and everything that are going on with their life outside the dealership. And you know, we have an open door policy here, you know, as an owner. Any employee can come in, no matter what your title is, what your position is, and express to us how you're feeling about your job or things that we can do better to help improve. And I think that kind of that kind of culture promotes longevity. amongst your staff. Jake Hughes: How do you maintain that level of openness and not completely lose your day and get everything done? Robert Larson: It's not always easy, but you know, you just you gotta have the door open, you gotta you gotta give people the time, you know. you know, they're they're the ones there's only an owner can only do so much. They're the ones that make it happen. So you know, if there's something on their mind or something in their life that's getting in the way of their performance, you know, you you want them to have that ability to come to you and maybe you can help, you know, overcome, you know, whatever challenges that they're dealing with, or whether it be business or personal. Jake Hughes: What's your coaching technique and approach and how has it evolved over the years? Robert Larson: So we don't have a very defined corporate like coaching strategy with manuals and and all things like that. you know, we hire, you know, based on someone's reputation and and how they present themselves and you know, that they have a track record of of strong performance and and great, you know, customer satisfaction. And we really just try to set the tone, I think, from day one, what we're looking to accomplish here, and that's exceeding the automotive needs of our customers every single day. And And if someone doesn't fit into that culture, I mean we're gonna address it quickly and deal with that. But most of the people we hire, I think they they see how we operate here and they appreciate it. And then that it's kind of like a magnet. It just draws everybody in and everybody, you know, works to accomplish our goals. So Jake Hughes: You're telling me that you like to hold a standard internally of celebration within and self respect among among the team. Is that part of your onboarding process or is that more just picking the right people to hire and setting a good example? Robert Larson: I mean picking the right people is is always a part of it, but you know, in our onboarding process I really like, you know, whoever the new hire is to spend some time with our team. you know, I all You know, I'll do a formal interview, but I like to have like a little round table discussion and give everyone, you know, on our management team the opportunity to talk about their experience at Larson Ford and you know, how we conduct our our business here. And I think it gives the new employee like a really good perspective of what our culture is like, how we operate on a day-to-day business, et cetera. Jake Hughes: Tell me more about your local market and local market dynamics. Where are you in the country? What's the competition around you like? What are the challenges that that poses on a regular basis? Robert Larson: We have an enormous amount of competition. I I think we have the most amount of Ford dealers in a concentrated area more than anywhere in in the country. you know, Jake Hughes: How well? Robert Larson: I don't know that's you know a hundred percent fact currently, right now, but I know it has been for many years. So no shortage of competition. We can't skip a beat here. now there's four, you know, three four dealers that we could basically throw a rock and hit their store and you know if we if we mess up, we're gonna lose lose the business. Jake Hughes: Do you have a relationship with with your competitors locally? Or is it is it tense? Yeah. Robert Larson: Of course. Of course. I mean, ev it can get intense at times. that's the nature of the business. It's very competitive. Jake Hughes: Mm-hmm. Robert Larson: but we we've always believed in keeping a great working relationship as best we can with everyone with everyone around us. So Jake Hughes: When you look at your team, so how many people are are employed at at Larson Ford? Robert Larson: We have about seventy employees full and part time. Jake Hughes: Mm. And what's driving the business today and w how is that different from the the kind of peak COVID area a few years back? Robert Larson: Well what drives our our business today and has for a long time is our repeat referral business. You know, we have a very solid book of business that continues to come back with us and you know through the ups and downs and you know of this industry and the you know cyclical movements in the economy, you know, having that established customer base is really what will keep you going in difficult times. And that's how we've been able to survive, you know, servicing and you know an entire family, you know, and getting referrals from them. you know that that's what separates us from the competition. Jake Hughes: What freedoms do you think being a family owned business and having a certain level of independence gives you as a leader and and affords the team generally? Robert Larson: So it's it's it's our culture that we've talked about a a little bit already. I think it's the the way we approach our customers is we're looking to build long lasting relationships. So you know, your your your corporate owned stores, your private equity stores, they don't have that kind of a culture. It's just all about the data. They have high turnover rates, they d they mistreat their customers. and you know, it helps us sometimes 'cause they end up coming to us, which we love that. but But yeah, that we we have an advantage. We're much more nimble. We can change quickly. We check our egos out the door and just focus on delivering for our customers every single day. Jake Hughes: So the the cliche is the customer's always right. What what's your perspective on the nuance of that and and how do you balance keeping customers happy and driving return business with defending your team and making sure that they feel covered and it's you know, you have their back and they'll stick around because of it. Robert Larson: So the reality is the customer is always right as sometimes you have to say no, unfortunately. there is circumstances where customers come to the table with unrealistic expectations and demands, and you know, this is a business. And you know, I've always had the philosophy that I stand behind my team 110%. if a customer is, you know, accusing them of doing something wrong, you know, my immediate response is, you know, we'll I'll look into it. We're gonna if there's a mistake, we're gonna correct it. And I believe there's a solution. to every problem, but you cannot please everybody. So I think some of the success of our data with reviews is you want the positive reviews to f you know far overwhelm the negative. And I think we're accomplishing Jake Hughes: Mm-hmm. Robert Larson: that. Jake Hughes: When we look at your reviews on the fixed off side of the house, you're generating a lot more positivity around the quality of the repair work and the outcomes associated with that than we see compared to a typical dealership. How is your fixed off department structured and is there anything unique about the way that you run that business? Robert Larson: Well, it comes down to having a great team of people. that's number one. we have incredible technicians, a lot of longevity there, amazing amount of experience. you know, I just I feel so confident in the work that we do every day. I have a you know, my service director has been with us for, you know, close to 30 years and got a great team around him as well. And our our technicians work together really well and they we have team leaders that you know, techs can go to. to get a second opinion to overcome an issue on a repair. And I think that level of communication and teamwork is is really what drives the reviews that you're seeing. Jake Hughes: Do you have a culture of interdepartmental communication? And is that would you d define that as a strength of your business? And if s yes, how do you facilitate that? Robert Larson: So we do. Can it be improved better? Absolutely. And going into the new year, that's something that I've already discussed with my team. You know, I want to have a quarterly meeting, if not more, between the sales department and the fixed operations to discuss ways that we can work better, we can promote business for each department more. Jake Hughes: Mm-hmm. Robert Larson: how can we overcome issues and then It will be management to begin and then I'm thinking about, you know, where they could invite, you know, a salesperson to the meeting or a technician to the meeting just to get some more you know, voices in the room and Jake Hughes: Mm-hmm. Robert Larson: think about how we can help all of you know, they can help all of each other to be more successful. Jake Hughes: Have you observed some I don't want to say problems, but opportunities within the sales to service handoff that can be improved through communication? What's what's prompting that? Robert Larson: absolutely. absolutely. That's something they need to work on. And you know, we're we're pretty good at a lot of things, but you know, that's an area that definitely needs improvement and I've d identified that and I'm looking forward to, you know, seeing it become better and more constructive and it'll only benefit everyone. So Jake Hughes: In your opinion, what is the table stakes the basic half have to do for the handoff? And then what's elite performance in terms of of driving that handoff? What's what's the range there? Robert Larson: I think at you know at the t at the delivery process, you know, reviewing the services that we offer in fixed operations, what from Mobile service, Jake Hughes: Mm-hmm. Robert Larson: pickup and delivery, you know, talking about our our our team of people that we have to help service them after the sale. Our competitive pricing, you know, we do a lot of you know market analysis that we we price competitively for all of our repairs, and we encourage all of our our sales team to make that clear. and then the introduction to service and which is what I'm looking to improve on as well. you know, that the the best peop people that with that handoff, you know, they they spend the time they go down to service, they interview st introduce the customer to an advisor. They're really good at at giving a brief overview of all the the products and services that we offer in fixed stops. So you know that's that's the top bar, that's the goal. We get there with everyone. Jake Hughes: You mentioned mobile service. How's that going? Is is that I believe that's been newly implemented at your dealership. Mm-hmm. Robert Larson: Yeah, it's a work in process. I mean, you know, there was a big pu push from Ford for us to to jump into this and all the Ford dealers and You know, we always try to be supportive of what Ford, you know, how they want us to deliver for our customers. And we made we've made big investments and you know, w it's growing. We're we're finding the the right niches for it, that can give us the best return on investment. but it it's definitely still a work in process. You know, it there's a lot that goes into it with scheduling and having the right manpower and and and everything that comes along with mobile service. Jake Hughes: How do you deal with pulling a tech off the floor and getting them out into the field and how that impacts your ability to deliver service at the store? How are you balancing that right now? Robert Larson: It's never easy, you know. we we would prefer to have all of our technicians in a bay 'cause you know, that's where we can accomplish the most. like I said, with our level of communication with the expertise that we have, you know, we can really get through complex repairs quickly. so when you take someone, you know, away from the dealership out on the road, you know, they don't have that knowledge and expertise around them than it helped assistance around them. So you know, it pr s can present some challenges, but I think you have to be selective of what repairs that you send out and the times of day that that you do those repairs. we tend to be a lot busier in in the mor first thing in the morning, so you want your team you know here on site as much as you can and then maybe throughout the day send someone out to do those smaller mobile repairs. Jake Hughes: What sorts of repairs or would be examples of good good repairs for bubble? Robert Larson: So we we're doing a lot of simple recalls and things like that with mobile, that people just don't like that they have to come in to get something that that doesn't take that long for a recall. it's frustrating Jake Hughes: Mm-hmm. Robert Larson: to the customer and then You know, we can do some d some brake repairs and and and and some you know my more minor type things, maintenance type things you know on mobile service as well. but yeah, we're really trying to l you know take the recall frustration away from the customer by doing those minor recalls with mobile. Jake Hughes: Do you market mobile in specific scenario? So if you're trying to get people into to fix a recall, do you promote a mobile offering with that, but then not as upfront maybe with something that's larger? Robert Larson: Yeah, we always try to give the mobile option, you know, on with each appointment. Jake Hughes: In all scenarios. Robert Larson: In all scenarios, yes, we try Jake Hughes: Okay. Robert Larson: to we try to offer that option. But but you know, it's all it depends on the conversation with the customer as well, you know. you Jake Hughes: Right, right. Robert Larson: know, they might have more things in mind that they wanna get done, so it it won't, you know, it it's not net it at that point it's necessary to bring the vehicle in or do a pickup and delivery. Jake Hughes: So let's zoom out a little bit and take just a broader look at the industry. You've been in the industry a long time. when you look at the next two to four years, what do you think the biggest moves are gonna be? And then going out further than that, where do you see the biggest changes coming in? Robert Larson: So there's a lot of challenges and and threats to this business, you know, outside players coming in, you know, tech companies and Carbana buying up new new car dealerships and Jake Hughes: Mm-hmm. Robert Larson: and it it just it never ends in this business. Like you you have to be ready to adapt and change. and I think you know if if you're not, it's gonna be hard to survive. You know, you know, plenty of people out there are saying that, you know, the single point family dealership can't survive anymore. But you know, I I disagree with a lot of those philosophies. I think that if you can continue to deliver for your customers better than the competition and offer them more convenience. no, you're you're gonna win. You're gonna be able to play ball with any of these newcomers coming into the business. And I look forward to the competition as well. I it's a driving force, I think, for me and my team. And you know, I think we're gonna prove to everybody that, you know, there car dealerships can car dealers can do a lot, just as much as anybody else is bringing to the table. Jake Hughes: It must piss you off a little bit, people saying that family dealerships can't survive. Robert Larson: It definitely does, but it's a motivator, it it creates energy and you know, we talk about it a lot amongst our team and we get excited when, you know, a a big dealer group or a private equity buys up a dealership near us 'cause We are confident we can smoke them in sales. They're th they're gonna spend tons of money in the market and have like a six-month impact, but then you know, they start to upset their customers and they start coming our way. Their talent wants to leave the dealership and they come to the family-owned store where they're gonna be treated the right way. So Jake Hughes: When you look at Carvana's approach to the business, is there anything that they're doing that that you look at and think that's a good strategy and I should apply that to my business? Robert Larson: Absolutely. I think they're on to something with, you know, offering new and unique ways to purchase a vehicle with less points of contact. I guess less face-to-face negotiation is what the customer is demanding and you know, I I think we're gonna offer that service as well through, you know, digital sales tools and providing a different type of sales experience, much quicker, much more efficient, which we've we try to improve that every single day as it is. But you know, Carvana is is is bringing up a new and showing a new way of doing business and you know, we're gonna have to adapt to that quickly. Jake Hughes: Do feel any threat from independent repair shops and how are you guys communicating the value of what you offer to to counter position against them? Robert Larson: Yeah, the loss of business to the independent shops is you know, a a top concern for dealers and the manufacturer as well. And I think that's where you're seeing this huge push for pick-up and delivery, mobile service, and just overall providing a a great customer service experience. and and that's where we can win in that area is the convenience and the customer service. At the end of the day, that's what wins. Jake Hughes: Yeah, I hear this theme of convenience all the time. And Robert Larson: Absolutely. Jake Hughes: I have to think what's the cost of convenience to you and your team? 'Cause it it seems like it adding convenience to the customer means removing convenience from your life and how do you balance that? Robert Larson: Convenience is survival, you know, at at the end of the day. you know, if if if we want to continue to do what we do, this is a great business and car dealerships, you know, do a lot for their communities and the states that they're in and you know, we want to survive and be successful, and I think that we will, but convenien the cost of convenience, whatever that is, is something that we have to take on. Jake Hughes: What are you the most excited about looking ahead to twenty twenty seven and where are you concerned? Robert Larson: I'm most excited about seeing my team continue to evolve and grow. I have some great young new talent that I think is gonna do really, really well here. And you know, I think we we have a great future ahead of us. We have some really exciting new products coming out, that I'm looking forward to serving that those products to our market. I have big Jake Hughes: Yeah, you got the fathom, right? Robert Larson: The Fathom and you know different other some other vehicles on the way as well. And in our fixed stops, I'm I'm really looking to continue to expand and grow our fixed operations you know, to you know take that to the next level. Jake Hughes: All right. Well, Robert Larson is the president of Larson Ford in Lakewood, New Jersey. Thanks for joining us on the show today. Appreciate it. Robert Larson: My pleasure. Thank you for having me.