Banking on a New Customer Experience

New Customer Experience

Bernie Moreno, founder and president of the Bernie Moreno Companies, draws upon his days with Saturn Corp., to build Ohio’s largest luxury auto group. BY CAROL WHITE

When Saturn was founded back in 1985, it truly was a “different kind of car company.” Some would argue that it was a company way ahead of its time, and its success in the early 90s seemed to indicate a bright future for the newest General Motors brand. Despite the company’s demise in 2012, it brought ideas to the automotive table that many dealerships are starting to embrace today.

Saturn’s forward-thinking ideals and its teamwork philosophy is exactly what attracted a young Bernie Moreno to the company. As a college student, he interned two summers with Saturn and eventually went to work for them for three years before making the move to retail. Today he still draws upon his days with Saturn and its avant-garde ideology to operate his highly successful Cleveland, Ohio-based Bernie Moreno Companies (BMC), formerly The Collection Auto Group.

From its beginning in 2005 as a one-store Mercedes-Benz dealership in North Olmsted, Ohio, the organization has grown into a 16-rooftop company representing 24 brands, employing 834 people with 13,587 vehicles sold in 2014. Not too shabby for a dealership led by a Colombian native who moved to the United States at the age of 5 not speaking a lick of English.

Moreno’s story is not your typical “coming to America” tale. “Both of my parents were wealthy,” he explained. “My mom thought we had it too good in Colombia and she didn’t want us to become useless trust-fund babies. So she rebooted our entire family.” In 1971, the Morenos gave up their farm, several houses, domestic help and drivers to move Bernie and his six older siblings into a two-bedroom condo in Fort Lauderdale, Fla., with his grandparents. Moreno remembers very little about his family’s well-heeled life in Colombia, but he does remember vividly being enrolled in kindergarten – not being able to speak English – with a teacher who didn’t speak Spanish. His mom, a hard-nosed, driven businesswoman, wouldn’t allow him to become the victim, so her advice was, “learn English.”

“So I did, listening to Schoolhouse Rock!” he said laughing, breaking into a fine version of “Conjunction Junction.”

The Reluctant Dealer

Moreno’s love affair with cars began during his early childhood in Colombia. His father, a surgeon, is especially fond of Mercedes-Benz, and Moreno shares that passion for nice toys. So it seems fitting that his first dealership purchase was a Mercedes-Benz store in the Cleveland suburbs. Ironically, working for a dealership, much less owning one, was never on Moreno’s radar. His dream was to become the chairman of General Motors, which led him to attend the University of Michigan, from where many of the corporation’s executives graduated. “I never intended to work in a car dealership ever. Ever. Ever. Ever. In fact, I hated car dealers…I thought car dealers made the car-buying process horrible.”

Moreno was on the fast tract at GM working for Saturn when an executive from the Herb Chambers Companies in Boston, Mass., approached him about joining the team as the general manager of its Saturn dealership. One thing led to another and next thing you know, the 25-year-old Moreno, who had zero experience in retail, was managing the company’s Saturn dealership. Because the Saturn brand was so unique and different, it made sense to hire someone who didn’t have the traditional baggage from another dealership, he said. “It certainly was a scary proposition for both of us, but it worked out really well because that dealership became one of the most successful Saturn dealerships in the country, and one of the most profitable dealerships in Herb’s company.”

Moreno eventually moved on to manage other dealerships within Herb Chambers Companies and was the vice president of sales overseeing nine dealerships when the Mercedes-Benz dealership in North Olmsted, Ohio, became available. Again, owning a dealership was not on Moreno’s radar when the manufacturer approached him about jumping in the ring with a handful of other minority candidates to vie for the dealership. Having never visited Cleveland, Moreno thought it might be an excellent idea to go there to get a feel for the area before moving forward in the deal.

He and his wife traveled to North Olmsted, stopping by the dealership – posing as car shoppers new to the area – to check it out when he met a “Debbie Downer” salesman who strongly encouraged Moreno to run as fast as he could back to Boston. “He told me, ‘Cleveland had the worst people, the worst economy, the worst weather,’ and because it was a blue-collar town, nobody buys Mercedes. That was his sales pitch,” said Moreno.

A trip to a competing Lexus dealership down the street delivered a completely different experience for the couple. “My wife said, ‘It’s too bad you’re not buying a Lexus dealership,’ and I said, ‘No, we’re buying the right one.’”

Moreno was able to convince the manufacturer that he was the right guy for the dealership, and with a loan and every penny he could muster, he became the proud owner of a dealership on May 11, 2005 – a dealership that had sold only 24 cars in the previous four months. He brought with him about a dozen people from Boston, and recruited several from that competing Lexus dealership to help turn the store around. That same month, he and his team sold 80 vehicles and never looked back. “We were the largest Mercedes-Benz dealership in terms of units sold from May 1 to May 31 in 2005. Ten years later, we’re still the No. 1 dealer in the Midwest, and we outsell all our competitors combined,” he said.

“I tell you, we have absolutely, bar none the best leadership team of any dealership group anywhere. I firmly believe that. I’ll put my guys up against anybody in terms of philosophy, effort, hard work, everything.”

New Customer Experience Rapid Growth

Shortly after the purchase of the Mercedes-Benz dealership, Moreno went into acquisition mode. “We had been a dealer for a whopping seven months already, so we knew everything,” he said, laughing, “So we bought a Porsche dealership.” From there, the company continued to grow at an insane pace adding mostly luxury brands, including Saab. “You learn more from your failures than from your successes, so we learned a lot with Saab. We lost $3 million, but I don’t regret it one iota. I wouldn’t change anything because you are an accumulation of your experiences – good and bad.”

Moreno is a firm believer in supporting the communities that support his company, which is why he has never taken a tax incentive to open a dealership in any of the 15 municipalities in which he operates. “We believe in making the community that we serve better than they were before we got there.” In addition to dealerships in Ohio, BMC has stores in Fort Mitchell, Ky., and Burlington, Mass. Construction will begin later this year on a new Infiniti dealership in Coral Gables, Fla., bringing the number of team members to well over 1,000 and sales in excess of $1 billion. “Our strategy now is to lay back and take a breather on the acquisition front. A, because we want to optimize what we’ve got; and B, dealerships are trading at ridiculous multiples right now. I prefer to buy low.”

There’s No ‘I’ in Team

When Moreno speaks about his company, he always uses the terms “we” and “ours” to reflect the “team” philosophy. And don’t use the word employee – he hates that. “‘Employee” insinuates a hired gun, somebody who’s just there for a paycheck,” he said. “I just wanted to do something different. The reason I went to work for Saturn was because that was their philosophy – the idea that you’re part of a team. I call it our company. We’re in the customer service business we’re not in the car business. We need our team members to be engaged and that’s a key foundation. My job is to serve them and their job is to serve our clients.

BMC’s culture has a lot to do with its less than 10-percent turnover rate – well below the industry average. That same culture attracts the younger talent coming into the workforce today. “Millennials care about quality of life,” said Moreno, adding that none of his stores are open on Sundays, and every team member is given a company-paid day off each year to volunteer for a cause of their choice. “The work-life balance is critical. If it’s tipped too far to the work side you just burn out that team member. We don’t want our people to be burned out. Our sales consultants work about 50 hours a week. That’s why we’re able to attract a lot of female team members.”

Screen Shot 2015-08-18 at 11.13.15 AMA ‘New’ Buying Experience

Moreno has incorporated many of Saturn’s sales processes into his dealerships. “What buyers of luxury cars are looking for is the experience,” he explained. “The product is already the best so it’s about making the experience match.”

This type of experience is one which Moreno feels also appeals to younger car buyers. “Those customers aren’t going to put up with a four-hour sales process. They’re not going to put up with a 40-minute sales process. They’re not going to put up with you not being on social media and not revolving around the way they want to buy a car. They’re not going to put up with a service experience that’s anything other than quick, simple and easy with a lot of technology baked into it. They just won’t.

New Customer Experience“The negotiation should be 30 to 60 seconds and that’s it. If it takes you longer than that, you’re doing something wrong. It doesn’t mean we don’t negotiate, I’m not a believer in one-price, but I believe the negotiation should be quick, simple and seamless for everybody involved.” And that’s an ideal that came from Saturn.

General Motors might not have been able to take its “different kind of car company” to the next level, but Bernie Moreno Companies is taking many of Saturn’s philosophies all the way to the bank.