Group of Lexus Dealers Out to Change a Thing or Two

The Rohrich Auto Group raised its hand when Lexus sought a few good dealers to participate in a customer-oriented pilot program called Lexus Plus.

“We were so ready for it,” Greg Grimes, the Pittsburgh-based group’s vice president-operations, tells WardsAuto.

Lexus Plus aims to enhance showroom hospitality and make the buying process smoother and faster by offering no-haggle pricing and a single point of contact.

"We were so ready for it," Grimes says.

“The sales consultant, who meets you at the door or takes your phone call or Internet lead, works with you from the start to the consummation of the deal,” says Grimes.

The idea of a single dealership staffer handling a car shopper from A to Z is not new. It has been a topic of industry discussion for decades. Previous automaker attempts to implement it at dealerships have fallen short.

But automakers and dealers work more closely today, and both groups generally recognize the utmost importance of happy customers in the modern marketplace.     

Eleven dealers nationwide were picked to participate in the Lexus Plus pilot program, one of a growing number of automaker initiatives to make car buying easier and quicker.

Lexus Plus alters the traditional F&I operation that typically is a separate dealership department. Lexus Plus merges it into the overall sales process.

Rohrich Auto Group consists of two Lexus stores as well as sales points for Toyota, Honda, Cadillac, Chevrolet, Mazda, Bentley and Maserati.

Founder Charlie Rohrich began as a dealer in 1938. His son Jim succeeded him, followed by his son David, the current dealer-principal.

The group became one of the nation’s original Lexus dealers in 1989. “We had a big Toyota store at the time, and David at the age of 28, after the passing of his father, had to decide whether to invest in Lexus,” Grimes says. “He chose to.”

Before joining the Rohrich group last year, Grimes worked as a regional sales manager for Toyota Financial Services, the captive finance unit for Toyota and its Lexus luxury brand.

He currently serves as a mentor for the second-annual “F&I Innovator of the Year Award,” an event put on by EFG Companies and Northwood University.  The winning team will be selected next month.

He describes the mentorship as inspiring. “You can tell they take the program seriously,” he says of the students he is working with.

Q&A on How F&I Is Changing

Grimes talks to WardsAuto about F&I in general and specifically how the Rohrich group offers it to customers.     

WardsAuto: Where is F&I going these days?

Grimes: It is stronger today than ever. It’s a critical profit center for any dealership, whether it is a high-volume Toyota store or an independent in the middle of nowhere.

For so many reasons, not just profitability, it is a great position for our sales associates to aspire to be in. F&I is the connector to high-productivity car sales.

WardsAuto: Some studies indicate the F&I office can be a customer pain point. How do you balance the need for F&I to be a viable profit center yet also deliver customer satisfaction?

Grimes: I’ll call it like it is. It is not a balance. It is a must. When I think of balancing, I think of compromising. The old adage is that if everything is sacred, nothing is. But in F&I, everything is sacred.

First and foremost is the customer experience. That is everything when it comes to selling or fixing a car.

The differentiating factor is the experience. Shame on us as an industry that for so long the (customer) objection has been that it takes too long to get into F&I and then takes too long once you’re there.

Our industry is wrought with management by financial statement. We have to be able to manage by customer experience. The opportunity to provide a good experience in F&I is so big. We sort of dilute it because so much is riding on it. WardsAuto: What can you do?         

Grimes: Our auto group is at a crossroads. We raised our hands for Lexus Plus. It provides guardrails, a sales-and-pricing process and a theory on how to care for a client.

Earlier, we had started selling with upfront and clear pricing at our Cadillac and Honda stores and one of our Lexus stores, with some level of success.

Lexus helped us build the model of the single point of contact.

Maybe it is not the right model for Chevrolet or Kia stores, but (the industry) can learn something from how our clients behave in that environment and how we should behave. Dealerships can learn from the single point of contact even if they are doing the traditional sales-to-F&I turnover.

There are challenges. We have 20 sales consultants between our two Lexus stores and I have to make them (F&I) managers. I’d like to tell you I’ve completed doing that, but I’m not.

Single point of contact doesn’t have the natural, sort of psychological, breaks in the process. You have to be strategic about where you place the value of F&I products in your sales consultation.

If you have that culture on your showroom floor, then customers spend less time in the F&I office, are more comfortable with their purchases and are more likely to come back.

WardsAuto: Couldn’t that work at a Kia or Chevy store?

Grimes: Yes. I’m not saying we have to remove finance managers from every store in the country.

There are finance managers that dealerships depend on. We’ve got some great people in the industry who provide great service and profitability. They are trustworthy and work their butts off. It is a super-hard job. That job should stay in stores. We just have to evolve.

WardsAuto: Just to be clear, does Lexus Plus call for eliminating F&I managers per se?

Grimes: It’s kind of a chocolate-vs.-vanilla issue, a matter of taste. We’ve chosen to empower our management staff with additional training. One of our general sales managers this week is at a formal F&I training class. They can add supportive mechanisms to the sales process.

We’ve chosen to place contractors in a role that supports the sales staff by doing necessary paperwork, working with the bank, preparing legal documents; everything operational that happens behind the scenes, what the customer doesn’t see.

Meanwhile, our sales consultants are doing everything customer-facing, such as asking the right needs-based questions and doing the needs analysis to make sure F&I products make sense for the particular customer.

WardsAuto: Does that eliminate the F&I office?

Grimes: It doesn’t really eliminate it. At our Lexus stores, we don’t have the traditional finance manager. We have those finance contractors. It’s more sales-consultant-effort heavy and more qualitative on our management staff.

Selling value is a hard proposition. (Traditionally), you send a sales manager in to help a sales consultant. Usually what happens, he gives a little more money for your trade-in or takes a little off the purchase price of the car.

Well, that’s not the model for Lexus Plus. It’s that sales consultants have to be value-propositioning and be product gurus; people who give a darn about the customer.

It changes the game of managers who support that process, because they no longer have discounting as a crutch. They have to provide great value and experience to customers. Since we moved to Lexus Plus, our CSI scores obviously are high. It would work differently at our store in Pittsburgh vs. a store in Houston or Seattle. We’re finding our way with it, for sure.

WardsAuto: That was a good decision by David Rohrich to get one of the first Lexus franchises. Some studies rate Lexus dealerships as the highest in throughput profitability.

Grimes: I’ve worked with a lot of manufacturers. I’ve yet to find one that supports its dealer channel like Lexus and Toyota do.

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