Coming off of a record-breaking 2018, Paragon Automotive became the highest volume dealer to take home the Precision Team Award for Acura and the President’s Award Elite for Honda. We recently spoke with Brian Benstock, partner GM and vice president of Paragon Honda and Paragon Acura who walked us through their unparalleled success.
Jim Fitzpatrick: Hi everyone. I’m Jim Fitzpatrick. Thanks so much for joining us for another edition of CBT News. I’m excited to have our guest today, Mr. Brian Benstock. You’ve seen him here on CBT News a number of times. That’s because the guy knows how to run a dealership really well, so welcome into the show again, Brian.
Brian Benstock: Jim, thanks for having me.
Jim Fitzpatrick: Sure, so you guys are knocking the cover off the ball, and showing us in the auto industry how to sell vehicles and make money, and how to service vehicles and make money, and how to grow your business to the top of the heap in the Honda and Acura arena. Talk to us about the recent awards you’ve won and what when into winning them.
Brian Benstock: Well this year, for the first time in our history, we won the Precision Team Award for Acura, and in fact, I’m told we’re the highest volume dealer to ever win that award. We’ve come close a number of years, but we weren’t quite able to get some of the older vehicles that we needed to get serviced into the numbers. This year we were able to do that. We won the Precision Team Award on the Acura side, and on the Paragon Honda side, we won the President’s Award Elite, which is really exciting for us. There’s only ten dealers in the nation that get the President’s Award with the elite status. In fact, the team won every award available from Honda and Acura this year. We were really proud and we took the liberty of celebrating that with the team last week at the Classic Car Club of Manhattan.
Jim Fitzpatrick: Wow, that is … Well, congratulations again. That’s phenomenal.
Brian Benstock: Thank you.
Jim Fitzpatrick: That’s the top ten dealers out of 11,000 dealers I might add.
Brian Benstock: Yeah, that’s right. That’s something, you know, we always used to make excuses instead of progress, and we used to give all the reasons why a metropolitan dealer can’t do it, because of a diverse culture, we speak many different languages. You can’t get everybody on the same page. Our service department is separated from our sales department. That’s another reason we can’t do it. All of those New Yorkers are angry, they never give you good surveys, and we had all the excuses. We stopped making excuses and we actually started addressing some of the problems. I think the guys really did a great job. Areal on the Honda side with my buddy, Anthony, and Marat and Justin over on the Acura side, really proud to win this.
It’s a very different culture for us to be these guys talking about customer satisfaction because many years ago we were quite the opposite. We were really very good, I think, in volume and very good at margins, but we weren’t so good at customer satisfaction.
Jim Fitzpatrick: Yeah, and you’re right. It’s pretty cool that you did this in a metro, in a city like Manhattan, which is just unbelievable. Where do most of your customers live? Do they live on the island?
Brian Benstock: We’re in Queens, New York, which is just outside of Manhattan. Like most dealerships, I think the larger number of our customers come from within five to ten miles of the dealership, almost all of the customers come from within five to ten miles of the dealership.
One of the challenges for us is there are so many customers that if you didn’t treat a customer right, you knew there was always somebody else. I think the number one change with the 2008 recession, there were very few people walking in the door, and when that happened, you realize the value of each customer walking in the door.NIt really was a great transformation for us to start building and rebuilding the processes from the customer out, not from our needs in.
Jim Fitzpatrick: Sure. If you look back ten years, what was the difference in the volume? What were you selling, either per year or per month ten years ago, compared to today?
Brian Benstock: On the Honda side we’re up, I think, about 43%, on the Acura side 52 or 53%. The real fun numbers are the service numbers. I was never known for fixed ops, but on the Honda side, we’re up 90% in RO count.
We’re up 103% on the Acura side, and those have been significant game-changing numbers for us. The thing I think we’re most proud of right now is we’ve done those numbers without adding a single lift or a single square foot of real estate. We think that’s really cool.
Jim Fitzpatrick: How did you do that?
Brian Benstock: Well you know, I think by taking the dealership and using all the capacity that’s there, you pay rent 24 hours a day, so we started finding out how can we use the facilities in other hours that we’re not using it. If you ask yourself, when is Amazon open? Well, Amazon’s open 24 hours a day. When is Google open? Google’s open 24 hours a day. Facebook’s open 24 hours a day, so we took to opening up our service department 24 hours a day and got our systems in check to see just what kind of demand was there. Initially, of course, the demand was slow, so we were sort of doing some of the work, and taking that from the day that we couldn’t handle, but I can tell you right now, we’ve got a shop that’s full 24 hours a day, really cool.
Jim Fitzpatrick: Wow, that is incredible. For the dealers that are listening to that, 24 hours a day makes them like shake in their boots a little bit for the most part. I mean that’s a huge undertaking. Obviously, the dealership is open and doing business when you’re not even there, which I think, again, is what makes some of then nervous. The fact that I’m going to be at home in my bed sleeping, and the dealership is just completely open, and doing business. It seems to, you’ve proven that it works.
Brian Benstock: Well Jim, take a look at that. You’ve got these icons like Roger Penske. He’s not in those stores, and they run because he’s got great management teams, and he has high expectations.
Some of the other mega dealers, so the fact that you think you have to be there, right now you and I are talking. There are transactions going on in the service department, and I’m not there to watch those transactions. I think God forbid you have to be there to watch each and every transaction. Then I probably wouldn’t have done as good a job of developing people. We’ve got some outstanding people that provide a very good level of customer satisfaction, whenever, wherever we’re servicing cars.
Jim Fitzpatrick: Yeah, for sure. Where does Paragon go from here? With those kind of numbers, where you’re almost doubling your RO count and your service, and you’re up 40, 50% in sales. I mean you’re really increasing the bar for next year, right?
Brian Benstock: Oh yeah, our December, or excuse me, our January for Paragon Honda was up 30% over last year, and last year was a pretty good year, so we’ve already come out of the box in January flying. Our Acura store finished first in the country. I think now it’s, and I don’t mean this the way it sounds, but I think dominance is what we’re after. I want our store to be the number one volume dealership of all brands in the world, frankly. I think that nothing less than that is going to stop us, stop me. I think that’s what we’re looking for. We have the density of population, right? The math works out. We have an incredible marketing machine that generates an incredibly high number of leads, so if we have the population, and we have the lead count, then there’s no reason that we can’t double that to the 10,000 plus units, the 20,000. We think we can do it over the next 24 months.
Jim Fitzpatrick: Sure. In an article that you had recently pushed out, you were quoted as saying, “The whole notion of having to visit a dealership is outdated.” Talk to us about that feeling, and where the industry’s headed over the course of the next five years with regard to digital retailing.
Brian Benstock: I think there’s growing evidence now with companies like Fair, and companies like Carvana, that people are absolutely willing to transact business from their cell phone when it comes to purchasing an automobile.
It’s really the dealer’s resistance to change, and not letting go of the existing business model that’s slowing that down. Now, I don’t think the number of customers that are willing to do it is anywhere near 50%, but it’s getting there and it will get there. I don’t care where we do business, whether it’s in the store or out of the store.
My wife and I were upstate this weekend, and we had a truck up there. I said, “You know, soon honey you’re going to be able to just push a button and if you want to go home in a different vehicle than we came up in, wouldn’t it be great to have that convenience? After we go someplace and we were shopping, and we bought a lot of stuff, wouldn’t it be great to just push a button and have a different car brought to us?” I think we’re already there. As more and more dealers are adapting to this, I think you’ll see more and more customer acceptance and vice versa.
As the Millennials become a major economic force, they will not go through the process that we put them through in a dealership. They just won’t. They’ll opt out in a second, so why not have the option of having the transaction conducted in the dealership or outside of the dealership?
If you go, Jim, to our website, each department on the website is represented. It’s new car sales, used car sales, service. You’re given immediately the option, in-store experience or out of store experience. It’s up to the customer. One thing I also want to recognize, the women in automotive recognize my partner, my boss, Edith Singer with a lifetime achievement award, which is super special.
Jim Fitzpatrick: Wow, yeah. That’s incredible.
Brian Benstock: Chrissy [inaudible 00:08:58], Lisa Copeland and Sherry Weis presented her with this beautiful trophy recognizing her time in the business. I’m not going to discuss her age, but she spent the vast majority of her life in the business. She is still working at the dealership five days a week.
They were [inaudible 00:09:17] to recognize her with an award. She enjoys it. She put in the time, and everything I do, frankly, is made possible by the companies that she has. I know who I am. I know what I do.
I know I can stand on my own two feet, but at the end of the day, the majority of it is her company, and so it was really special to have the women in automotive recognize her. When we were speaking, I said I thought it was a good award to give her. I said as far as I know she’s the number one female dealer in the United States of America. Her dealership, her single store, Paragon Honda, I do not believe that there is another dealership, a single point dealership in the United States of America, owned by a woman that sells more cars.
Jim Fitzpatrick: How long before we see one of the seven publicly traded companies put a female CEO in charge?
Brian Benstock: That’s right around the corner. It’s right, right, right around the corner. I mean if GM can do it, what’s the excuse for the public? I’d love to see … I’d hate to see it and I’d love to see, I’d love to see them grab somebody from the technology world. Our friend over at Facebook, she’s had enough trouble over there. Why doesn’t she get into the car business and make the transition? I think that would be fascinating.
Jim Fitzpatrick: It would.
Brian Benstock: To see her take over Auto Nation. Again, it would be frightening at the same time, because she’s got a whole different skill set and knowledge set, and I think that skill set, brought into the automobile business would be an absolute game changer.
Jim Fitzpatrick: Right, especially as the auto industry embarks on this new frontier in digital retailing, and a whole new way. I think it needs a new, fresh set of eyes from the digital world or from the tech world to come in and say, “Look, if Google or Jeff Bezos bought the largest auto group in the country, here’s what that would look like,” and I think it would be very encouraging and very interesting to watch. What’s in store for Paragon Honda for the next five years? How do you …
Brian Benstock: I can’t wait to show you.
Jim Fitzpatrick: How do you keep going?
Brian Benstock: I hate to talk about stuff that’s coming down, but we’re going to see some major changes in data platforms that we’re using. We’re kind of excited to talk about that. We are piloting some online finance processes that we’re very, very encouraged with the initial results. Things that I would have thought were not quite possible. We’re already at double the level I thought we could be at, and so we’re really excited about that, with expense control.
We just finished up some interesting work with artificial intelligence, and you’ll see more of that coming down the pike, as those plans look like they’re going to move quickly. I am putting some challenges out there to some of the vendors out there, not to think like other vendors. We were at a meeting a couple weeks ago, and I asked everyone, “Did you see Amazon at NADA?” Jim, you were there, did you see Amazon at NADA?
Jim Fitzpatrick: No, I didn’t.
Brian Benstock: No, you did not. Why? Because they’re not interested in anything that’s being sold there. They’re not interested in CRMs. They’re not interested in advertising platforms. They’re not interested in your hiring processes or those other things. They’re not interested in the balloon that’s outside the dealership, with air being blown in it. That’s not how they’re going to do business, and so I think there’s a real message there for us. We need to look outside of our business if we’re going to reinvent ourselves. We need to look at what customer service is like from the people that we’re doing business. The clues are everywhere.
You talk about this guy. I’ve got an iPhone here. You’ve got an iPhone, Apple has a great website. I can buy all the products that they have on the website, or I can buy them in the Apple store. The experience in the Apple store is fantastic, and the experience online is fantastic, so we’re going to try and mirror some of those learnings as best we can.
Jim Fitzpatrick: Yeah, for sure. If, for the people that are listening, for the dealers that are listening, the managers that are listing, the kind of volume that you’re doing is just incredible, and obviously award-winning, the top volume awards and customer satisfaction awards from Honda and Acura. If you had to leave them with a couple of different ideas that could help them drive their business to greatness like yours, what would those be for 2019?
Brian Benstock: Well they’d really be back to old advice from Joe Verde. The acres of diamonds are right underneath your feet.
Jim Fitzpatrick: It’s that simple.
Brian Benstock: You’ve got a database, and if you were going to sell your dealership you ask yourself what you were going to sell it for, and if the dealer came up with a number, 10 million dollars, what are you actually selling? You’re selling your database.
Why don’t we take a look at that database and see just what gold is there for us if we just get somebody to pick up the phone and call the customers and give them an offering that’s better than what they’re driving right now? For us dealers, it’s not about necessarily investing in incredibly expensive technology. It’s doing a better job with what we already know we have to do. Again, the answers are in the DMS. I think for us going forward, we’re going to start to look at how we can mix intelligence with the data, and use the intelligence and the data to make very good decisions with our customers, to help serve them better, and serve them faster, and to try and wow them everywhere. It’s time to stop just doing transactions. It’s time to start really giving great customer experiences. Look at some of the companies that are really doing well. They’re creating a cult. They’re creating a tribe of customers that want to be there, and I think that’s something that we’re starting to do as well.
Jim Fitzpatrick: You’re doing one heck of a job, so keep up the great work. Mr. Brian Benstock, who is the partner and GM, and Vice President of Paragon Honda. Thank you so much.
Brian Benstock: Okay Jim, thank you.