Beginning with a Nissan store, Mark Falkenberg’s group has strategically and profitably expanded its footprint
It’s a busy Tuesday at Willowdale Nissan. Customers are perusing the showroom, the service bays are full and Mark Falkenberg is sitting in his office, talking with me about how far the business has come and where he sees both it and the auto retail industry heading.
Starting out working with his father Hans in a single point dealership in the 1980s, Falkenberg currently oversees an operation that comprises seven new car franchised automotive retail stores, three dedicated used car facilities, a collision centre and a retail parts business. Falkenberg says that a big factor in the group’s growth has been the economic climate. “Candidly, as a family owned and operated business it was getting harder and harder to operate as a single point store in a competitive market.” He says whether its via strategies from the OEMs, co-op advertising budgets and the fact that today, consumers are inundated with more choice and competition for their automotive needs, single store operators are finding it harder.
SOLID FOUNDATION
“So we’ve expanded our footprint,” he says. “With the various volumes we’ve had, we’ve been able to migrate to a position where we know we have good representation in multiple markets.”
These include the busy Yonge and Steeles area of Toronto, downtown west via High Park Nissan on Dundas Street and dealerships in the Niagara area with three Honda stores and a Subaru franchise via a successful partnership with Alex Digenis.
Falkenberg says that the brands that the group represents have helped it build the solid foundation it has today. “We feel very comfortable with the OEMs we represent,” he says. “They’ve not only aggressively pursued short-term opportunities, they’ve also looked at the big picture.”
He says that an emphasis towards aggressively marketing product instead of extended-term financing is helping. And whether it’s through Nissan and Infiniti, both of which have seen solid growth this year, or Honda or Subaru, the result continues to pay dividends.
Alex Digenis says in the Niagara region, another key factor in the growth has been involvement in the community. He says that when he first arrived at Henley Honda in St. Catherines, Ont., a top priority was building a good reputation. He said in the past, a core problem was the lack of integration between various departments within the dealership and today, the emphasis is on everybody working together.
“One of our proudest accomplishments has been the elimination of that trench between sales and service,” he says. He notes things are now at a point where his new car manager can go on holiday for a few days and the service manager can close a few deals in his absence. “It’s important for us to think like we’re playing soccer or hockey, if we lose our service customers then we also drop the ball in sales.”
It’s also key to foster a culture and atmosphere where everybody is in it together, what he calls “a synergistic approach to business. You can have one person who might be great at sales but if they aren’t a team player, then you have to make big decisions, whether you want to stick with a superstar individual or focus on the overall synergy. We’ve taken the latter approach and it has served us very well.”
Management team, (left to right) Mark Falkenberg, Tony Tam, General Manager, Infiniti of Willowdale, Steve Seck, Fixed Operations Manager, Dan Spasojevic, General Manager, Willowdale Nissan, John Gionnas, VP, Operations
GROWTH AMID SHORTAGES
Back at Willowdale Nissan, Mark Falkenberg says that while the group has seen good opportunities to expand, it’s ever mindful of the future. Falkenberg says that in order for OEMs to maintain the sales volumes they’ve come to expect, the future of auto retail is going to have to rely heavily on leasing. “You’re going to have to be in a position where you’re able to rotate a customer through the product more quickly,” he says. Those faster turnaround times will also have an impact on other areas of auto retailing since more lease returns mean a stronger used car business, something that many dealers are currently struggling with, quite simply because there’s currently high demand and relatively low supply for good quality used cars. Both Falkenberg and Digenis say that finding good used vehicles is a concern. “It’s not just sourcing good used vehicles that’s a problem,” says Falkenberg, “it’s also the fact that new car deals are now so good, with low interest rates that even if you have a good CPO program in place, you still find it tough to compete.”
Falkenberg says it often boils down to whether a consumer wants a new car, or more car for their money. Nevertheless, Falkenberg says that for the group, used cars will represent a stronger percentage of overall vehicle sales moving forward. He says that despite restricted availability Willowdale has been able to grow its used car business since 2008 and based on both past history and current forecasts, the next few years should see a ramp up, delivering robust used vehicle numbers by 2016-2017, also helped by a renewed interest in the wholesale leasing business.
Alex Digenis says that finding good used cars through existing service customers is also proving a good strategy to deal with a shortage of good pre-owned metal. “We have a process to engage our customers who come in for service work; we give them specific proposals and if it fits them we can have them burning gas in a new car while we turn around and sell the one we got them out of.” He says it means there’s less of a need to go out and source good used cars since they are already in
the dealership’s database with service records and history readily at hand.
Dual drive through lanes save time
With more emphasis on fixed operations and driving retention, there’s more of a push than ever for dealers to find successful strategies to keep customers coming back. “Fixed operations is absolutely pivotal,” says Falkenberg. “Absorption rates are on the decline so finding that balanced scenario is extremely difficult.” He notes that while customers still tend to defect to the aftermarket once warranties expire, there is an advantage for dealers, in that the warranty periods in general have increased. “It gives us an extra chance to connect with the customer,” he says, “whether that might be on brakes or tires.” He does however, emphasize the need to be extremely competitive from a price standpoint.
He says Willowdale has been able to tackle some of these issues by educating customers and providing price point comparisons between the group’s stores and rival service providers, while also emphasizing extras such as valet and shuttle services and factory trained technicians. He says that while the growth opportunity in fixed operations is clearly there, he notes that the expectations from a dealer’s standpoint need to be reasonable. “It’s a slow growth trajectory. You have to be good to your clients and not try to sell them too much service work. You have to sit down with them, give them maintenance inspection reports and really understand what their needs are.”
Steve Seck, Fixed Operations Manager at Willowdale, says that from a staffing standpoint, there’s been a huge push on training and process and an emphasis on prompt and courteous service. “Everybody is busy, so you need to get your customers in, make sure they’re really taken care of and get them out as soon as you can.” He says that in itself is key to repeat business, especially out of warranty. “If you take care of your customers while their vehicle is still in the warranty period, they are more likely to trust you and to keep coming back even after the warranty expires. That has been a big focus for us, especially within the last few years.”
Whether it’s related to service, sales, collision or parts, Falkenberg says it really does come down to people. “I’m really proud of the team we’ve assembled,” he says. “Our growth simply wouldn’t have been possible without good leadership in our various departments. This has helped us to not only grow our business but to do so profitably.”
SHARING INTERESTS, GROWING TRUST
In today’s competitive auto retail industry, finding ways to stand apart can reap dividends. In the Niagara region, Alex Digenis and his team have been looking to social media as a way to do things differently. And one of them has been to create an online portal called e-carmony.ca. If you think it sounds a bit like a dating service, you’re not far off. In essence, e-carmony works to connect customers with staff who share their common interests and by doing so, develop relationships, foster trust and enable long term, repeat business. “It’s really about taking a look at the productivity between our staff and the people who walk through our doors,” says Digenis. By the time you read this, e-carmony will be up and running and it’s a project Digenis is particularly excited about. “We want to encourage those who are shopping online to not only shop for a vehicle but also for their salesperson, their service advisor and technician,” he says. Each team member has their own online profile to enable potential customers to find out more about them and be able to connect with those who they feel they’re most likely to form a synergy with. If you like motorcycles or labradors and I like the same thing, it’s something we can talk about and it can develop into a connection that’s very powerful,” says Digenis. He says that with the growth in Google and other website reviews, it’s more important than ever for dealerships to have real engagement with their audience and look beyond the nextsale or repair order. “When Mark and I bought the store, we really wanted to grow our reputation.” Digenis says that while initiatives like e-carmony.ca might be very much about the longer term, they’re also deeper and more genuine. As somebody once said, it’s not about how fast you go but how far.
