The new frontier: auto dealers are rethinking the way they do business and finding new solutions to old challenges

Black Enterprise, June, 2004 by Cliff Hocker

In each location, Hubbard meets weekly with all middle managers and staff members. He also meets with the store's general manager, controller, and variable- and fixed-operations directors so that he can track revenues and expense indicators. Hubbard uses a computerized accounting system that is integrated across all stores to generate reports. Then he meets with key managers to analyze the reports. "We discuss an action plan and how we are going to improve those numbers," says Hubbard. "If you continue to evaluate and measure where you are and bump that against what the standard is and what you ought to be doing, then you improve those numbers. My overall philosophical approach is that what gets measured gets done."

For Hubbard, 2003 was neither a boom nor a bust. Because of this, he says he can't be complacent. "It was a year that required a forward-thinking vision, looking at ways to cut expenses, and accomplishing things much more efficiently; that's how [we] were able to maintain a profit. It was a year that if you continued to do things completely the way you always did in the past. you were going to find yourself on the short end of the stick," says Hubbard. Of the 50 to 130 vehicles that are sold at each dealership every month, 20 to 25 of the sales come through Hubbard's Internet departments. These departments get leads from several search engines, including www.cars.com. Inquiries made on the General Motors or DaimlerChrysler national Websites by customers within certain Charlotte-area ZIP codes are automatically forwarded to the Internet departments of Hubbard's Chevrolet stores or to the five-star Dodge dealership. Hubbard employs three Internet salespeople.

Hubbard sees business development centers as the new frontier, and he's already a few years into implementing this alternative to expensive advertising. A business development center is a department within a dealership that is dedicated to the sole purpose of finding potential customers who are willing to visit the dealership and consider buying its products.

Informing Hubbard's actions is a widely held industry belief that potential customers who have already experienced some type of interaction with a dealership are the best prospects for pitching future sales. Systematically and regularly updating prior contacts about products and incentives, business development centers target specific customers with a rifle's precision instead of advertising's generalized shotgun scatter. Prospecting among a dealership's current customer base can involve an automated system alerting the center of approaching birthdays. ends of leases, and due dates for service. Vaden-Williams says that new prospects might be found, for instance, by searching birth announcements in newspapers and inviting growing families to consider larger vehicles.

Although automotive manufacturers are encouraging all dealers to open business development centers, not every black dealer has done so, Vaden-Williams says. She notes that besides Hubbard, March/Hodge Holding Co. L.L.C. in Hartford, Connecticut (No. 2 on the BE AUTO DEALER 100 list with $555.5 million in sales), The Harrell Cos. in Atlanta (No. 5 on the BE AUTO DEALER 100 list with $286.5 million in sales) and Nathan Conyers operate sophisticated business development centers.