Run Dealerships Like Casinos

Auto dealerships should be more like Las Vegas casinos, says Andrew Blazsanyik, executive director of training for Resource Automotive.

He's not suggesting car dealers should don paisley vests and deal blackjack in the showroom or install slot machines in the service lounge.

He thinks car dealers should follow “the house business model” of casinos in Las Vegas, site of this year's National Automobile Dealers Assn.'s convention.

Besides being an automotive retail trainer, Blazsanyik is a certified clinical psychologist who works weekends for the Illinois Department of Corrections.

He has human insight that he expresses with wry humor and an accent from his native Australia. He came to the U.S. in 1991 to pursue the American dream, starting with working at a dealership's finance and insurance office.

In Las Vegas recently for an F&I Management and Technology conference at the Mandalay Bay, Blazsanyik had some free time. So he headed to the casino.

That's where he got to thinking how good dealerships are run like Las Vegas casinos, and bad dealerships employ people who act like they have gambling problems.

“When I was walking around, giving $20 bills to casino dealers who smiled at me, it occurred to me that there are two business models that apply to two very different types of dealership operations,” says Blazsanyik.

He explains: “The first is the gambler approach to the business. When a dealership customer comes in, he or she is treated like a slot machine by a salesperson who thinks, ‘This may be the big win.’ That salesperson jumps from one customer to the other; looking for the big win, not always telling the truth and often creating unhappy customers.”

In contrast is the casino house model, he says. “It is a disciplined approach. You realize you need good people working for you; people who are well trained to work at a place with a business model based on systems and controls.”

Good casinos, like exemplary auto dealerships, treat people honestly (but always are on the lookout for dishonest patrons), emphasize customer satisfaction and make a lot of money.

“It blows my mind to walk around these billion-dollar facilities,” says Blazsanyik of his Las Vegas experience.

That raises another comparison with modern auto dealerships. They, like Las Vegas resort hotels, have become much more upscale in modern times.

In the 1950s, dealerships tended to be stark, utilitarian affairs. The ones built today often are architectural statements with all sorts of customer amenities.

Likewise, the 1950s-era Las Vegas casinos are all but memories. One of the last of that era is the Stardust. It opened in 1958, catering to budget-minded travelers. It closed in late 2006. It will be replaced by a $5 billion redevelopment project.

Just as Las Vegas has invested billions upgrading Las Vegas casinos and building new ones, so too have U.S. dealers collectively spent billions upgrading existing facilities and pitching up new ones.

Like the dealership world, Las Vegas is a city that adapts to change.

In 1978, when legalized gambling arrived at Atlantic City, NJ, many people predicted Las Vegas would suffer. Instead it began a new phase of large-scale expansion that created the awesome mega-resorts along the Strip today.

Likewise, auto dealers — throughout the 100-year history of the franchise system of selling cars — have changed with the times, and are stronger as a result.

Remember when some people predicted the Internet would hurt dealers and possibly even put them out of business? Yet today's dealers are leveraging the Internet to sell more vehicles and services.

NADA convention attendance always is high when the annual event is in Las Vegas. It is easy to see why. Auto dealers and Las Vegas have a lot in common.

Steve Finlay is editor of Ward's Dealer Business. He can be reached at [email protected]