Companies from far and wide are lining up at Sewell Village Cadillac to learn a thing or two about bringing customers back for more
Companies from far and wide are lining up at Sewell Village Cadillac to learn a thing or two about bringing customers back for more
OF ALL THE SIGNS A VISITOR MIGHT see hanging around Sewell Village Cadillac, Dallas's high-volume (and even higher profile) luxury-car dealership, two seem truly iconographic. They aren't easy to spot, given all the visual competition: banners urging technicians to strive for 100% FIXED -- 100% RIGHT; colored charts measuring their individual job-performance records; plaques citing Sewell Village as one of Cadillac's all-time leaders in customer satisfaction. But the signs are there. Both hang in the entrance to the service department. One reads, "We reserve the right to give preferential treatment to those who purchase their automobile from Sewell Village Cadillac." And, this being Texas, the other: "Please do not leave whiskey, guns, money, or other valuables in your car."
There is something profoundly generic about each of these statements. To begin with, giving preferential treatment to newcar customers is hardly a radical precept for running an auto dealership. Most dealers like to work on the cars they sell -- beyond the profits on a lube job, it promotes customer contact and repeat business.
At Sewell Village, however, the concept has been refined to what might appropriately be called Neiman-Marcus status. Upon purchasing a car from Sewell Village, each customer is assigned a personal service adviser whose sole job is to take the hassle out of maintaining and repairing his customers' automobiles. Among other duties, advisers write up all service orders, answer questions and complaints, and, when required, provide 24-hour emergency road service for clients stranded in the breakdown lane. The relationship between a Sewell Village Cadillac owner and service adviser extends over the life of the car and more closely resembles the bond between patient and therapist than it does your basic car owner/mechanic arrangement.
And oh, those little touches. Need an oil change? Not only will a dealer representative fetch your car for servicing, but with a 150-car loaner fleet at its disposal, Sewell can also guarantee that you won't have to go auto-less for more than 15 minutes, max. Transmission trouble on a Saturday night? You might, as some customers have, call up Carl Sewell himself (he's listed in the phone book), who has been known to dash over and swap your car for his, lest you fail to make that important dinner date on time.
Shopping the showroom? There, beneath three 10-foot brass chandeliers set off by a huge cut-glass vase of fresh gladioli, you'll find posh upholstery and fine Chinese porcelain. In the conference room with its silk-upholstered walls, you'll watch a slick, state-of-the-art slide show. Why shouldn't you feel as good about buying a car from Carl Sewell as you would about buying a fur from Stanley Marcus?
These amenities do not come cheap. The annual cost for operating a single courtesy vehicle, for example, totals $5,000, or $750,000 for the entire fleet. Nor does one run an operation like this with a staff of minimum-wage clock punchers. In Carl Sewell's village, the hours run long, the standards high.
Potential employees undergo a battery of psychological tests designed, says Sewell, to measure "intensity, aggressiveness, intelligence -- and stamina." For the few chosen to join his 250-employee family, the rewards can be significant. For example, technicians easily knock down $50,000 to $60,000 a year, a few as much as $90,000. Service advisers pull in six figures. And they do this on repair and body-shop bills that are competitive with other dealers.
Far from making the service department a loss leader, however, Sewell's system actually promotes profitability. Like most employees at Sewell Village, service technicians and advisers are compensated based on their productivity and managers on the bottom-line performance of their departments. Salespeople are on commission, and only the accounting staff is on salary. And the bottom-line performance is very good, says Sewell, who doesn't divulge specific numbers, though he does report sales of $100 million. Productivity is exceptionally high, and departmental costs are spread over unusually large volume. Sewell Village has Cadillac's largest service department in the country. And the service side helps feed sales: the dealership ranks fourth in retail sales of new Cadillacs as well, due probably in part to its number-two ranking in customer-satisfaction surveys among all Cadillac dealers.
"However you measure it, personal effort or money," avers Stanley Marcus, chairman emeritus of the famous Dallas-based department store and a man who knows Sewell Village intimately as both customer and consultant, "Carl has paid the price you have to pay to give high-quality service to the customer. And he profits by it. He sells cars, but like so many other great retailers, selling [the product] is not really his business. His business is customer satisfaction."
However you measure it, indeed. Carl Sewell, who is 44, has dozens of little internal measurements by which he calibrates his business. Gaze past all the "quality job" charts on the wall (a monthly graph for every technician, right down to the people who polish the cars) and see how efficient his workplace is. A computer system tracks 555 parking spaces, so technicians don't waste time hunting cars down. An intercom system lets them have parts pulled for one order while they're filling another, so they don't waste time at the parts desk. All the paper they need to process a job is in one place, easily at hand. Technicians, as a rule, don't waste time at Sewell Village. As they say there, technicians don't make money when they're not turning a wrench, and the dealership doesn't make money when the technicians aren't making money. At $42 an hour, psychiatry should work so well.
"When you run it right," says service director Philip Dunnet, "your service department really becomes another sales department. We have customers who might hate their goddamn car, but they don't want to lose their service guy, so they come back and shop with us. Basically, we attempt to take the automobile out of the deal altogether and put a person in its place."
Taking the car out of the deal altogether: now, that is a radical concept. Which brings us to sign number two. At most U.S. car dealerships, whiskey and firearms might be considered standard equipment for dealing with showroom salespeople. We all know the types. The "bait and switch" guys, who advertise one car and try to sell you a more expensive one. The good cop/bad cop closing routines. ("My sales manager over there, Attila the Hun, says he'll knock the sticker down $500. Take my word, it's the best we can do.") The menus of rebate/finance rate/warranty options that for sheer complexity are rivaled only by those of the great kitchens of France. Has buying a new car ever been more confusing?
For that matter, when has the U.S. auto industry been in such a public tizzy? With some observers predicting a sales decline of 10% this year, Detroit has gone skidding from joint ventures to stock buy-backs. Cadillac sales have stalled out in recent years, largely due, industry analysts say, to poor styling decisions: the cars are too small and tend to look like cheaper GM models. They point out that it's hard to tell the difference between, say, a Seville and a Pontiac Grand AM -- except for the whopping price differential. "If a consumer spends the bucks on an Eldorado, he wants to feel like people are looking at it and thinking how wonderful and special it is and he must be," says Philip Fricke, auto analyst at Goldman, Sachs & Co. "Instead, they've come to look very mundane."
No wonder, amidst all the confusion from boardroom to showroom, that Cadillac dealers are among the hardest-working people in showroom business. For Sewell Village general sales manager Jerry Griffin, service is a key that puts the customer into the car. Griffin, a onetime All-Conference linebacker at Southern Methodist University and a 16-year veteran of the showroom floor, likens car sales to football. He set the Cadillac division yardage record by getting 735 new cars signed for and out the door in 1979; by comparison, the average Caddy dealership sold fewer than 200 cars that year. In 1974, at the height of the oil crisis, Griffin sold 400 large guzzlers.
OK, this was Dallas, and yes, there is always a market for luxury cars in Big D. But still. In 1984, three years after gambling on a move to a bigger location, Sewell Village sold 3,050 Cadillacs, the third-highest volume in the nation. Even today, with its new-car volumn idling at around 2,500 units per year, Sewell offers no rebates, no incentives, and virtually no advertising that makes direct reference to the various models themselves. Car prices are "competitive," but most Cadillac customers don't split hairs over $50 in the first place. At Sewell Village, it seems, they not only take the car out of the deal, they take the mystery out of the particulars.
"I bet three-quarters of our customers walk out of here not understanding their warranty," says Griffin. "A lot of them have owned five or six Cadillacs, and most of them don't keep a car six years or 60,000 miles to begin with. They want the car, but above all else, they want to be treated right. And nobody in this business treats them better than we do."
Now, we have heard this kind of talk before. "C'mon Down to Carl Sewell Caddy, He'll Fix You Up 'Cuz He Wants to Be Yur Friend." Yet what sounds suspiciously like Texas-size hype is borne out by a curious phenomenon: on a weekly, sometimes daily basis, visitors from all over the business spectrum troop through Sewell Village Cadillac, poking into the parts department and examining the charts on the wall. Most of these visitors approach the dealership as if its main inventory were management tips, not Fleetwoods and Eldorados. And just who are these wide-eyed tourists? Some come from rival auto companies -- a Ford Motor Co. official has been through -- but many do not. Lennox Industries Inc., a Texas air-conditioning manufacturer, for instance, has checked Sewell out. So have representatives from Procter & Gamble and the Dallas Department of Transportation. Stew Leonard Jr., president of an $80-million retail grocery store in Norwalk, Conn., took a tour last October with his father and with Tom Peters, of Excellence fame. No stranger to first-class service he, Leonard was impressed. So impressed he wishes he could have his car serviced there.
"Our company is fanatical about focusing on the customer," he explains, "and so is Sewell. I mean, he has great people working there. They love what they're doing. You can't fake a positive attitude like the one they have. I even saw it in the guy who was sweeping the floor. Take little things like that, plus their ferocious appetite to make the customer happy, and you quickly see what drives Carl Sewell's business."
Fine, but besides smiles on the faces of employees, what do the faithful really come to see? They come to see the service bays, which Peters, one of Sewell's most passionate champions, says "are so clean you could happily eat off the floor." And a computer system that tracks everything from available work hours to the status and location of each work order to the number of seconds it takes a finished car to be delivered to the main entrance.
If they happen to wander back through the service area, they see something else: a plate bearing the inscription "Bob Templin Memorial Wing." It hangs over the 18 stalls built especially for major engine work. Who is Bob Templin, and why is Sewell Village singling him out for immortality?
"Templin is the Cadillac engineer who oversaw the design of General Motors's V-8-6-4 engine," explains customer-services manager Boyne McHargue. "When that engine first came out, in '81, it caused so many repair orders we had to widen the engine shop. So the guys back here decided to honor him."
Templin, says McHargue, seems a dubious hero -- and a potent symbol. For years, Carl Sewell Jr., president of Sewell Village and son of its late founder, Carl Sr., has fought hammer and tong with Detroit over just such "quality" issues as the discredited (now discontinued) V-8-6-4. At various times he has raised concerns about Cadillac's market sensitivity, its propensity for look-alike designs, even its drift toward smaller, lower-performance cars. More recently, the issue has been GM's reliance on factory incentives, a quick-fix market strategy that Sewell laments has "conditioned the customer to wait for the next big fire sale." Still, Sewell tends to downplay his differences with Detroit these days, pointing out that GM's decision to restructure its Cadillac Motor Car Division and give it the engineering and manufacturing autonomy it once lacked bodes well for his future.
"There probably hasn't been a bigger critic of General Motors -- and Cadillac -- than me," concedes Sewell. "The old guys used to hide their mistakes behind committees, but not anymore. Now folks like [GM executive vice-president] Lloyd Reuss and [Cadillac general manager] John Grettenberger can walk down the assembly line and say, 'Do it this way.' It sounds basic, but GM hasn't always worked that way."
Sewell didn't come by his outspokenness overnight. His father literally grew up with the automobile industry, starting in 1911, when at age 14 he began assembling Model T Fords from kits and selling them to farmers. Wiped out financially by the crash of '29, Carl Sr. persevered with a succession of dealerships in and around Odessa, Tex. In 1957, he bought Village Cadillac, in the fashionable Highland Park suburb of Dallas. It was the beginning of a beautiful -- and profitable -- relationship. Fiscally conservative ("My father's philosophy was if you make three dollars," says the son, "you give one to the government, spend one, and save one"), Carl Sr. made customer loyalty a fetish and encouraged his son to do the same.
Following college and the U.S. Army, Sewell moved into the president's office in 1972. He admired his father, who remained active with the company until his death that same year. But there would be other strong influences in his managerial life. One was Stanley Marcus, whom he invited to join the business as a consultant in 1978; the two still lunch together once a month or so, and Marcus has recorded a series of radio ads for Sewell Village built around the themes of quality and tradition. Another mentor was Erik Johsson, a founder of Texas Instruments Inc. And in the past couple of years, all Sewell managers and most employees have attended a series of consciousness-raising seminars developed by Philip Crosby at his Quality College.
In terms of the industry itself, however, probably the biggest contributors to Sewell Village's way of doing things were such dealers as Bob Spreen Sr., in Downey, Calif., who was a pioneer in the creation of loaner fleets; and Jack Williams, the late, legendary automotive-service consultant who, as an adviser to Sewell Village back in the '60s, pushed for such reforms as written job descriptions and comprehensive employee handbooks.
"I'm often asked, 'Why let all those people into your dealership?" says Sewell. "'Why open your doors to Ford?' Actually, the answer's pretty simple. Everything we do, we borrowed [in principle] from somebody else. Why should we keep secrets?"
In truth, Sewell could spend most of his working day playing tour guide. He does not, in part because he's a shy man and in part because he's too busy expanding his business. Already owner of a Cadillac dealership in New Orleans, Sewell has, in just the past eight months, bought a struggling Oldsmobile franchise and opened a new Hyundai dealership; he is also scouting a location for a Cadillac dealership in Austin and is considering picking up another Dallas franchise as well. Sewell points out that it's a good time to buy because "a lot of the World War II-era dealers are retiring now, so there's plenty of opportunity around."
Consolidation among dealerships is already upon us. One group closely monitoring the retail auto industry is J. D. Power & Associates, a Westlake Village, Calif., market-research firm. Among other services, Power publishes a monthly industry news-letter and, once a year, an independent customer-satisfaction survey covering all cars sold in the United States. According to Donald Keithley, vice-president for dealer services, bigness is just one of the dominant factors ruling a changing marketplace.
"Lack of available land means more consolidation," explains Keithley. "You see that now with the giant auto malls, those one-stop supermarkets springing up all over. That's one factor. Two, as the price tag gets higher to jump into the game at that level, you get more foreign investment, more competition.
"At the same time," he continues, "the overall quality of domestic cars is improving dramatically. They still trail the imports, but they're closing the gap, and that means the definition of service is in a state of change. Consumers are expecting more. Dealers are either going to have to be good, or they won't be in business."
Keithley, who has shared industry strategy sessions with Sewell, calls him the "prototype of the modern superdealer. What defines success in this industry is excellence, geographical diversity, and a record of outperforming the natural limitations of the marketplace. Sewell's a relative newcomer to expansion, but he sure seems to know what he's doing."
The key to Sewell Village's expansion may well have been taking over an old Chrysler-Plymouth site out by Love Field -- 11 acres in all. The move from Highland Park, in 1981, was both a business gamble and an emotional ordeal. For 25 years, Highland Park had been a golden place to sell Cadillacs -- the main lot bordered the fairways of the Dallas Country Club -- despite the fact that it was squeezed into one and a half acres, with room for only a one-car showroom and new-car inventory buried in an underground parking lot. Carl Sewell was torn, however, between dislocating his business and realizing the level of service he thought he could now achieve. He consulted Stanley Marcus, and the two of them drove out to the site one afternoon. "We pulled up front," says Sewell, "he turns to me, and says, 'Can you move today?' I think the showroom got him. He always used to tell me, 'Carl, nobody displays his merchandise as poorly as you."
Sewell Village made the move -- and doubled its volume over the next two years. Obviously, the business had not lost its old customer base. More to the point, the move allowed Sewell to enhance its service capabilities far beyond what had once been possible. That commitment has in turn helped attract such blue-chip technicians as Ed Calbridge, who currently manages the cellular phone department and hosts a nationally syndicated radio car-talk show.
For Carl Sewell fans both within and outside the auto industry, one question posed by diversification is this: Can the same strategy work as well for a low-ticket car like the Hyundai as it has for Cadillac?
Sewell thinks it can -- even if the numbers shift. "Seventy-five percent of the [Hyundai] business will probably come from new and used car sales [compared with 45% at his Cadillac dealership]," he avers, "but that's not unusual. With a less expensive car, you make less because the customer does more of his own repair work. Hyundai is also a brand-new car, so there aren't many out there to work on.
"Still," he says, "I don't see the business being radically different. Customers want to be treated right, whether they're buying a $6,000 automobile or a $30,000 one." He probably won't offer the array of goodies he does with a Cadillac, but the philosophy will be the same.
Sewell Hyundai opened its showroom doors last October, one of eight Hyundai franchises in the Greater Dallas area. By the end of its first month, it had become the sales volume leader in Big D.
As they say around Sewell Village, the signs are there.