Turning around an underperforming store takes more than fresh advertising. It means fixing culture, tightening processes, and having financial discipline.
That’s the challenge Scott Simons, Owner of Simons Automotive Group, took on when he bought Simons Chevrolet GMC, then an underperforming store, in the small town of Whiteville, North Carolina, last year. Simons joins host Adam Marburger on today’s episode of Training Camp for a closer look at how he took the store from 24 units a month to 103, growing gross profit 115% year over year while holding expenses to a 4% increase, and pushing customer satisfaction to 280% of objective.
Fixing the culture
When Simons first took over, he mentioned how he retained the majority of the staff. Every employee got a chance to stay, and before making any changes, Simons sat down with each person individually to learn about their families, their goals and how long they’d been in the business. Once he understood the team, he laid out the plan. Initially, the store had been selling 24 units a month, a number he told staff they could grow and eventually surpass 100 vehicles for the first time in the store’s history.
"In this town, this Chevrolet store has never sold 100 vehicles; well, we just sold 103 vehicles."
He implemented a new sales standard gradually, beginning with employees selling one car every other day, which amounted to around 11 vehicles over a 22-day month. He then aimed to increase this to a rate of one car sold for each day worked. Despite the changes, some staff chose not to remain during the transition. But to strengthen the new leadership team, Simons brought in a general sales manager he had collaborated with for 25 years, along with a finance manager.
Fixing the infrastructure
With culture in place, Simons turned to process before attempting to increase traffic. Driving more traffic into a store that wasn’t ready to handle it would only waste money and frustrate the team, he said. “If you don’t have the team and you’re not prepared, you’re only going to get really upset because you don’t sell any cars and you waste money in advertising,” Simons said.
Before investing, he secretly evaluated his own store and the competitors via mystery shopping. He then discovered that neither used video responses to follow up with leads. This insight prompted him to start a video follow-up program, which differentiated his store and resulted in increased advertising efforts, while sales volume quickly doubled.
Fixing the financials
Simons owns the real estate under the dealership himself, which gave him an easy way to pad his own income. However, he notes that he chose not to take it. He didn’t raise the rent above what the mortgage required, and he didn’t take a paycheck from the store during the turnaround. That decision came down to what lenders and manufacturers look for when a dealer wants to grow. Simons said they weigh three things about the store:
- Its ability to sell new vehicles
- Its customer satisfaction scores
- Overall profitability
He said, “There’s a time and place when you deserve to raise your pay.” That financial discipline, he said, paid off. Simons reported that gross profit rose 115% year over year while expenses climbed just 4%, and customer satisfaction scores reached 280% of the store’s objective. He believes that since he hasn’t taken a dollar out of the business since buying it, he has instead kept the store’s finances strong enough to support his next acquisition.
Supporting the community
Successful dealers help the community that supports them, Simons said, arguing that dealerships often do more for their communities than most other local businesses. For instance, when a local sheriff’s deputy was killed while working a road detail, leaving behind a wife and two young children, Simons said he wanted to help. After learning that the widow was driving an old SUV with a broken air conditioner and other issues, he gave her a two-year lease on a new Chevrolet Trax, with all maintenance covered.
"Car dealers do more for their community than most other businesses. We employ people. We keep America running."
According to Simons, he didn’t do it for publicity, but to help the community his store serves. It wasn’t until a councilman and the sheriff reached out afterward, thanking him directly, that the story became known at all.
Similar gestures, such as sponsoring the local baseball team and supporting church and school fundraisers, are also ways dealerships can give back, he said. Dealers who get involved in their communities build the kind of support that carries a business through hard times.
What’s next
Simons said his long-term goal is to acquire roughly one store a year, though he’s cautious about moving too fast. He’s financed his growth by leveraging his own assets rather than taking on outside investors, and he’s said he’s turned down offers to raise a fund for future acquisitions in favor of growing with his family’s money first. Nonetheless, he expects to close on a second store by the end of the year, if not sooner.
