Putting The Customer In The Driver's Seat

Rob Mancuso's approach to running his dealership is so successful that he has begun to package parts of it for sale. Even competitors are lining up to buy.

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Not so many years ago, when cheap oil flowed from Texas wells and good citizens worshipped their sleek V-8s, there were 48,000 automobile dealers in America. Now, when the Shatt al-Arab waterway is our tenuous gas tap, and prudent consumers value a high mpg rating more than a fast four-on-the-floor, there are a little more than half as many. From 1980 to 1982 alone, some 3,400 dealers went out of business.

The reasons for this exodus vary. Some franchises disappeared as part of a natural evolution toward fewer but larger dealerships. Others, unable to keep pace with changing tastes and the growing popularity of imports, were victims of a market that in recent years has been as treacherous as a locked differential. Still others fell prey to the recession.

And some, it must be said, were done in by the automobile dealer's traditionally cavalier attitude toward the customer -- an attitude rooted in righteous belief in Detroit's invincibility and their own.

"For years we were taught that we could do no wrong," explains Robert P. Mancuso, president of Mancuso Cadillac-Honda Inc., a $15-million-a-year dealership in Barrington, Ill., not far from Chicago. "I remember having a violent discussion with my father, a 30-year Chevrolet dealer. I was working in his service department, and I told him I was embarrassed because we'd just had to tow in a car that had been in for a tune-up the week before.

" 'What are you embarrassed about?' he asked me.

" 'Well, the guy spent $85 here, and now his car won't start. You know, we screwed up.'

" 'We don't screw up,' he informed me in no uncertain terms."

In the automotive landscape of the 1980s, the experts agree, such an attitude makes little sense. "Better service for the customer is undoubtedly the name of the new game," notes Carver Hendrix, Chicago zone manager for Cadillac Motor Car Division. "Dealers are going to have to get a lot better at managing their businesses," adds Robert Daly, executive director of communications and industry relations for the National Automobile Dealers Association.

These are lessons that Rob Mancuso, 33, has already learned -- the hard way. "When everyone was making so much money, there was no need to innovate, to manage your dealership better," he observes. "The best thing that ever happened to me was learning how to run a business without cash." His dealership, 1 of 12 in Barrington, was founded in 1974, a scant five months after the first Arab oil embargo. Since then, it has bumped along from one disaster to another.

All the hardships have left Mancuso with a rule of business so simple that he smiles as he says it: "Make the customer happy." But what sounds trite as a maxim is in practice a sophisticated sales strategy that has helped him maneuver his dealership through obstacle after obstacle. So compelling is the strategy, in fact, that Mancuso has begun to package parts of it for sale. And other dealers, some of his competitors among them, have lined up to buy it.

Mancuso is a fourth-generation automobile dealer. His great-grandfather, Charles, began selling Studebaker Series-18s more than 60 years ago, and until recently his father, Jim, owned a Chevrolet dealership in nearby Skokie. But Rob is hardly an offspring of the old school. A 1973 graduate of Princeton University, he dresses in three-piece suits and exudes the lean glow of a vegetarian and veteran marathon runner (he placed 1,557th among 3,624 in Chicago's 1980 marathon). And in a business known for its back-slapping camaraderie, he favors the soft sell of an Alan Alda, whom he somewhat resembles. His office, like his showroom, is chicly efficient: an Apple Macintosh on one corner of his desk, a photo of the Porsche 928-S he is buying thumbtacked to the wall behind, bottles of wine stored in the adjoining bathroom. As he tells his story, he gestures airily, impersonating the people he describes, and the conversation takes the form of a series of acted-out anecdotes. Sales, he admits, was always his forte.

Fresh out of Princeton, Mancuso became sales manager of his father's Skokie dealership, where his older brother, Rick, was minding the store. It was a case, he recalls, of three "aggressive, individual, and stubborn" men locked in good-natured combat. "After that argument with my father -- the only one we ever had -- I began to think that maybe I did have a different attitude about this business." In 1974, when a Cadillac dealership became available in Barrington, a horsey suburban "village" of 9,000 residents with a median income of more than $50,000, Rob set out to get it. Jim Mancuso financed the deal for his younger son, with the understanding that the new grad would buy out dad at the end of five years.

"On April 22, the day we signed the agreement," says Mancuso, "my father pulled up out front, threw me the keys, shouted 'Good luck,' and drove off."

It was a little bit like getting the keys to your family's old Edsel. Village Cadillac was a small, aging dealership ($4 million to $5 million in annual sales) with 22 older employees, no retail business to speak of, and a fleet business that the former owner had taken with him. And it was Doomsday: 1974, the year that new car sales would plummet from 11.4 million to 8.8 million units, largely because of the oil embargo. Cadillac, the most luxurious of the old-style land arks, virtually sank from sight. Unit sales dropped 65,716 in 1974, a 23% decline, contributing in a major way to General Motors Corp.'s 3% loss of market share.

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