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Continuing the Legacy

Lessons learned from her late father, Sam Swope, have primed Patti Swope to take the auto group to new heights. BY CAROL WHITE

Sam Swope was known in his community and the auto industry as a savvy businessman. To his daughter, he was a wonderful mentor who taught her the principles she needed to pick up where he left off. “My father was a very disciplined person,” said Patti, who took the helm of Sam Swope Auto Group in January. “He believed there were certain things you did and certain things you didn’t do, and he knew exactly what those were. So I learned a lot of really great, solid business principles that are a foundation for me.”

In a 1985 interview with the Louisville Business First, Sam Swope was quoted as saying, “We didn’t participate in the recession. Sometimes it’s good and other times it’s better.” Turns out, this was a favorite saying of his that he repeated often, especially after the economic downturn of 2007. His astute business acumen, even during the rough patches, is what drove him to build the largest dealership group in Kentucky.

His tendency was to “strike while the iron was hot,” said Patti. “When the opportunity was ripe, he believed in taking action right away. I think he grabbed some business opportunities when some people were still thinking it over,” she said, pointing to his acquisitions of both Toyota and Honda dealerships before they became household names in the United States. “That proved to be a very wise decision.”

The apple didn’t fall far from the tree. “I think about things, I consider them carefully, but I don’t delay. I don’t have any trouble making decisions,” said Patti, who joined the family business shortly after college. “My father encouraged me, but he never made me get into this business. And I didn’t get any favoritism – I had to work like everybody else.”

Sam Swope’s vision was always to remain family owned and see the company grow. Patti’s vision is the same, but she is taking a modern approach by having the dealerships operate more autonomously. “I intend to make the existing dealerships we have more profitable. So I am implementing some culture changes, some policy changes that I think will enable our dealerships to do that,” she said.

“I believe that we have some very talented people running our dealerships. And I believe by giving them more authority and empowering them to run their dealerships the way they see fit will pay off. If they own what they’re doing, so to speak, then I think they’ll be more motivated to make it successful. I believe in empowering them.”

A more authoritarian style had its place over the years, however Patti felt like it didn’t allow upper management to hold their general managers accountable. “I think by loosening up the reins and empowering them to run their stores the way they think they can be successful, then I can hold them more accountable,” she said. The new policy has been in place for less than a month, but already is getting enthusiastic reviews. “Our people are embracing this. They like that I believe in them and that I believe they’re capable of it.”

Three areas of operation in which Swope dealerships have more flexibility are developing loyalty programs, purchasing inventory and hiring personnel. She explained that although the dealerships are all part of the same auto group, each one has its own manufacturer programs, culture and customers. Having them determine their own programs allows them to better connect with their customers. That same principle applies to purchasing inventory that appeals to their customers, and hiring the right salespeople who can better relate to an individual dealership’s clientele.

The move to more autonomous operations will also serve to attract younger, brighter employment candidates, according to Patti. “I think the younger generations want that kind of ability to have some creativity and input into ideas that would further the business. I sense that that will speak to some of those people that we’d like to have in our business.”

Switching gears in the company culture and policies means that corporate’s role has been redefined to that of coach – assisting the dealerships in attaining the highest level of profitability and professionalism. “I have some very talented, experienced managers who are overseeing groups of dealerships. I’ve taken two of my best and divided up our dealerships into two teams, so each one of these gentlemen has six or seven operations. And their job is to act as a coach, so those general managers have someone they can reach out to and get some advice or counsel from,” she explained.

Part of the company’s strategic plan, which was launched about a year ago, was to combine its human resources and education and development departments to form the Sam Swope Academy (see related story) which serves as an avenue to build the company from within.

With all the changes taking place within the auto group, there are some aspects that remain unchanged. For example, sales associates are able to cross sell other brands within the group, as long as there are no manufacturer restrictions. This is done in a couple of ways. A salesperson can simply turn a customer over to another associate at another dealership and receive a referral fee. But for those sales associates who see the value of keeping that customer relationship by working the deal from start to finish can do so. “We encourage it, and our sales managers are all trained to help facilitate that,” she said. “We feel like that benefits us; we are able to hire some of the best salespeople because they are able to sell every make and model we represent.”

Sam Swope’s wish to remain family owned is one Patti plans to uphold, which means preparing the next generation of Swopes for leadership. “I still think there’s a place for the family owned business in this industry.” Her cousin Dick Swope, who retired from the business in December, remains on the board of directors, and his brothers Carl and Bob operate the group’s dealerships in Elizabethtown, Ky. Dick’s son Richard is currently the general sales manager of Sam Swope Cadillac in Louisville.

Continuing and building on the legacy that Sam Swope left seems like a monumental task, but it is one for which Patti Swope has been well prepared.

By the Numbers

Year Founded: 1951

Number of Dealerships: 21

Brands Represented: 20

2014 Volume New: 11,275

2014 Volume Used: 14,326

Number of Employees: 1,100

You’re Only as Good as Your People

It may not be an original Swope motto, but it’s certainly one that the Sam Swope Auto Group has embraced. In adopting the philosophy, the company established the Sam Swope Academy a little over a year ago, a freestanding facility dedicated to recruiting top-notch candidates and providing ongoing training to all employees.

It has been a continuous challenge in the auto industry to recruit the best and the brightest. In fact, the late Sam Swope recognized the problem back in 1985 when he told Louisville Business First, “This business is ignored by sharp young people.” Patti Swope, president and CEO, believes that statement is still true 30 years later, which is why she has made recruiting a top priority for the academy.

“I think (the retail automotive industry) still has a reputation of being…difficult,” she said of the stereotype that’s been hard to shake despite industry-wide efforts to change that perception. The Sam Swope Academy’s answer to that dilemma is training its employees to become a role model for professionalism in the auto industry. “We have to present the automotive dealership experience as one of a relationship with the consumer with an emphasis on the value of having a professional advisor.

“We really are an outlet for someone who’s seeking professional advice. Certainly people can go out and get pricing and shop for automobiles online, but I still think there’s a relevance to having a professional advisor – someone who can help them with the sales and service process. That’s where the dealerships come into play. So we just have to make sure that we provide that kind of value to the consumers that interact with us.”

The auto group combined its human resources and education and development departments to form the Sam Swope Academy with an emphasis on recruiting. “We are making efforts to provide an opportunity,” said Patti. “We’re actually going out and recruiting and showing a young person a career path in our industry – what that would look like if you were to get on board; what your income potential is. What I always say is nice about our business is you don’t necessarily have to have a college degree to have a really good career and make a lot of money.”

While the recruiting efforts aren’t necessarily targeted to women, Patti feels that women can be very successful in retail automotive once they understand that a working knowledge of an engine isn’t necessary. “I have to confess – I’m not a car enthusiast,” she said. “I like cars; I think they’re interesting and it’s a fun business to be in, but I couldn’t tell you how an engine works. I know that sounds funny coming from someone who runs a bunch of dealerships but I really don’t have that kind of technical knowledge. I’ve never needed it. I think if you understand people and you understand retail and you understand service, then you can be very successful in this business.”

Training and retaining top talent once hired further aids the company in its mission to grow. Managers are trained to coach their staffs effectively to obtain desired results. “The philosophy is that instead of writing someone up and blowing them out the door, why don’t we spend some time coaching them on how they can improve. And most people, provided the opportunity and some good coaching, will improve. We believe in our people and if we hired well, then we should be able coach them into better and greater results.”

The academy also has a management development program aimed at growing the company from within. Employees, who don’t necessarily have to be in management, are invited to participate with the goal of better job performance or advancement into more challenging positions. “By being in this program, we will recognize you as someone we can look to when we have an opportunity to fill. We have at least 60 people who are currently in this program, and already seven have stepped up into a new level of responsibility. So it’s starting to work. It hasn’t been going very long – just a year – but we are looking to those individuals now to say ‘do they have what it takes to step into this role.’ And it’s working, so far.

“This really is a people business,” she said. “In order to remain relevant to the consumer we have to be professionals and provide them with good advice and a good experience. So we’re committed to training our people to provide that kind of experience.”

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