The hidden hospitality formula behind scaling to 40 dealerships

Welcome to another edition of expert insights from the Car Dealership Guy Podcast, an episode recap that breaks down the high-level takeaways

In this episode, Jeff Swickard, Dealer Principal of Swickard Auto Group sits down to discuss the secret hospitality formula behind scaling to 40 dealerships, serving one million unique customers every year, the best customer service car brands and his biggest challenges in replicating success in other dealerships.

You can stream the full episode now on YouTube, Spotify, or Apple.

1. Entry to the car business.

Jeff currently owns 39 rooftops representing 54 franchises and just added an additional storefront this month. Unlike most dealers, he didn’t grow up in the car business, joining the industry later in life after running a successful stint in the telecommunications sector. Jeff explains he stumbled into dealership management through a real estate transaction. He found that he loved the business, and the rest is history.

2. Service philosophy.

While Jeff entered the car business as an outsider, he explains that he was soon a sought-after retailer, with multiple manufacturers seeking him out to lead new storefronts. He notes that much of his success in the industry is due to his unique approach toward sales, which places a great emphasis on hospitality. This mentality has served especially well at the premium franchises, where consumers often have higher expectations of service quality and treatment.

3. Exceeding expectations.

This emphasis on hospitality has led Jeff to implement high standards across his business. Taking care of service customers presented some unique challenges to this philosophy. While many dealers force their customers to work around their schedule, Jeff decided to build a fixed-ops department capable of handling any amount of volume, no matter how busy the day might be. While he doesn’t recall the exact makeup of his loaner fleet, he does explain that most clients will drive the same vehicle that they submitted for service until work is done. While these efforts are expensive, Jeff notes that his service department is extraordinarily busy and remains extremely profitable.

4. Company culture.

This might sound impossible given the ongoing technician shortage. However, Jeff has faced little difficulty in filling out his service team. He explains that when people know your business will care for them, interest spreads through word of mouth, but when your company culture scares people away, you’ll never be able to grow. In other words, recruitment problems are cultural problems. To put this into practice, Jeff made sure that every technician on his team had a full schedule so that they could make as much money as possible. By scaling his team in lockstep with demand, he was able to build up the service department into a massive, successful operation with dedicated employees. He notes that to this day he rarely needs to hire new technicians since his service department is so well-balanced, even after opening up alternate facilities.

Edmunds - Premier is a solution from Edmunds that connects you with in-market shoppers when, where, and how they want to connect. Learn more at edmu.in/3C7x1pR

Draiver - ​​Draiver is your go-to solution for seamless, efficient vehicle transport—moving vehicles up to four times faster than traditional options. From valet services to service pick-up and delivery, Draiver’s 20,000 contract drivers are ready to assist with your dealership’s unique needs. Learn more at bit.ly/Draiver-Solutions.

OPENLANE - The world’s best online dealer marketplace for used cars, bringing you exclusive inventory, simple transactions, and better outcomes - all with lower fees. New dealers receive a $350 buy fee credit. Learn more at openlane.com.

5. Serving one million people.

Jeff believes that dealers must serve every customer with the same level of respect, regardless of how many people they serve or whether they operate premium or value brands. “We serve almost a million unique customers a year. And if I get into the game of not treating everyone with the same level of care and interest, then I shouldn’t be in this business. I should not own brands that I cannot support the customers at the level at which our company has promised.”

6. Where to start?

For those looking to begin their career in the car business, Jeff believes the service department is the most rewarding and welcoming place to start. He explains that it’s much easier to exceed customer expectations when it comes to vehicle service and that the environment is always fun and exciting. With technicians in short supply, the job market and pay are also higher than other positions, making it a good position even for those with less experience, education, or knowledge.

7. Used market challenges.

While Jeff currently sells slightly more used than new, which is atypical for the franchises he owns. He admits that it’s been difficult to grow preowned sales, a problem that he attributes to the competitive market. Rivals like CarMax make things especially challenging for dealers. “CarMax, in my opinion, is the best in the nation in terms of brand awareness,” he explains, noting that the vast majority (80% - 90%) of the vehicles the company sells are trade-ins. Dealers, on the other hand, have to rely heavily on wholesale and other acquisition routes to maintain their used car inventory.

8. Centralization.

To grow their share of the preowned market (which currently sits around 33%), Jeff believes franchised dealers need to evolve and use a more centralized approach to managing their operations. For example, Jeff uses a team of buyers with years of experience in acquisition led by a former CarMax manager. Through this, his dealership group has managed to drastically reduce its reliance on wholesale and now obtains most of its used car supply through street purchases, trade-ins, internal auctions, and a supply program for higher volume rooftops. This gives his company more control over pricing. Jeff also has a team that makes all decisions regarding which reconditioning vendors to work with centrally (excluding bodywork) rather than on a per-rooftop basis; this allows for flat pricing and disincentivizes the vendor from trying to upsell.

9. Automation vs human resources.

Dealers should adopt a balanced approach when it comes to technology and human resources. Having too much automation and not enough staff makes it difficult for customers to find assistance and sours their perception of the business. On the other hand, having too little automation and too many employees reduces efficiency and can be frustrating for consumers to navigate. However, by identifying where automation helps or hinders the buyer experience, dealers can maintain an equilibrium, driving the best results without making sacrifices.

10. Jeff’s five-year plan.

Jeff’s plan for the next five years is to take on an adequately performing dealership and upgrade its business model to provide what he calls an “ultra-premium experience.” Not only does he want the challenge, but he also believes this will lead to higher volume and prove to be a profitable decision for his company.

You can stream the full episode now on YouTube, Spotify, or Apple.

Interested in advertising with Car Dealership Guy? Drop us a line here.

Want to be considered as a guest on the podcast? Add your name here.