By Desiree Homer
When you think of the Midwest, it’s typical to think of Chicago, St. Louis or Indianapolis. But in between those cities, there are cornfields, dirt roads, and rural communities. The summers are humid, the winters are arctic, and the family-owned car dealerships are thriving. The country folks need new cars, trucks and SUVs too.
Not Everyone Made It Through 2008
Given the state of the automotive industry since 2008, many of the smaller, family-owned dealerships have given up.
- Automakers’ demands for pricey facility renovations left the smaller dealers with two choices: spend the big bucks to appease the brand requirements or lose the brand altogether.
- Many rural dealerships closed due to lack of succession planning; their kids weren’t interested in running car lots.
- The lending market landscape changed drastically; the ability for buyers to secure loans went from way too easy to way too hard virtually overnight.
Some of those dealers learned quickly that in order to be successful, pooling assets and resources might be the best option. This is how the boom of the dealer groups in the Midwest was born.
Dealer Groups Emerged as Dominant Industry Leaders
As dealers made moves to sell out, others to acquire, there were noticeable advantages. A former lot owner could become a management employee of one of these dealer groups, in most cases, make the same or more money, and have none of the ownership risks as before. The dealership, now as a multi-location family of brands, had increased purchasing power. It was easier to secure inventory, parts, and even finance options. Pooling budgets also meant hefty advertising funds. These groups were emerging as leaders, offering all the brand selections, and all the rebates and discounts.
The dealer groups also learned, with the larger organization, they could offer better incentives and benefits to employees. Anyone working for a smaller, family-owned dealership, could sustain a new commute to make more with one of the larger groups. As the loyal technicians and sales staff made transitions, along with them went their customers.
Each new dealership assimilated into the group expanded the territory. This meant more reach and coverage of unique geography. They could share inventory between locations, essentially offering the entire family of brands at any dealership. The customers, impressed with these renovated facilities and increased floor plans to browse, started to flock to these groups for the first time. Overall perception shifted from trust in buying a car from the guy who sold your dad his vehicles, to shopping where the biggest and best options were.
Rising Success of Remote Dealerships
Just minutes from Interstate 55 and a few cornfields, lies Freedom Chevrolet Chrysler Dodge Jeep Ram. Located in Virden, IL, Freedom has been a family-owned dealership since 1979. It holds it’s own against some of the monster groups in neighboring Springfield, IL and St. Louis, MO. Ray Voyda, owner, has kept his eye on driving the customer experience and in 2003, welcomed his son, Brad Voyda to the business.
“My father [Ray Voyda] would truly prefer a loss to an unjust gain and will always do what is right and fair for all of our customers,” says Brad.
So while some of the smaller dealerships fell by the wayside ten years ago, many like Freedom were able to crack the code and grow their businesses in these rural communities. They learned how to stay relevant despite the changing and volatile markets.
“We stay busy due to our excellent customer service. While the market is changing, we know that the customer experience will always be the most important thing in keeping our business growing,” Brad Voyda explains.
The remaining dealerships outside the major metros are doing a host of things right to maintain their growth and success. They have embraced technology and buying trends. Because they’re smaller, they can often make deals and decisions quickly, rather than waiting for authorization through a hierarchy chain of command. They can get things fixed, issues addressed, and sales inked.
I’m reminded of one instance when I sold GM cars for one of these smaller dealerships. An older couple in their late 70s had come in to buy a car. With a local population of about 7,500, most everyone knew this adorable couple. While they had ample money to pay for the car outright, they wanted to take advantage of a particular financing program available at the time. Unfortunately, neither had ever had a credit card in their lives and routinely paid cash for major purchases over the years. On paper, they didn’t qualify. Instead of sending this handsome elderly couple on their way, the General Manager made a call to the local bank to secure their local financing, enter them into the program, and make them happy customers.
How Rural Market Dealers Adapted
The rural market dealers offer unique differentiators to meet the convenience of local buyers. They market on two fronts; to keep the customers they have and to reach new and emerging customers. The goal is to offer the same variety and service as the metro dealer groups, but with their own local comfort and convenience.
Freedom’s Brad Voyda says, “if you come to either of our dealerships, you really can tell that they are family-owned and are comfortable places to do business.”
Inventory is a significant factor in the success of a dealership. With the digital trends in buying, there is increased visibility of new inventory nationwide and easy communication to make dealer trades. Auctions are online too, meaning there’s not a used or new vehicle out there a local dealership can’t find for you. They’re also partnering with aftermarket companies to support the customers’ needs for add-ons and provisions. If you want that cobalt blue sedan on the lot, but want to add a sunroof, you’re in luck. The rural dealer can either find another model with the features you want or have a sunroof installed on the model you’re sitting in.
The best family-owned dealers have stepped up their game in the customer service arena too in a whole host of different ways. Here’s some that I’ve seen.
- Offering pick-up and delivery services for customers.
- Upgrading the loaner cars from older model trade-ins to newer models.
- Creating clear guidelines around loyalty and referral programs as a way to secure repeat business. For example, sales staff are authorized to offer substantial cash incentives for referral purchases.
- Extended hours for service, parts, and sales.
- Offer a wide range of service discounts to keep customers coming in for maintenance.
Brad at Freedom says, “we can price our vehicles aggressively and have a great team that has been with us for a long time.”
The real advantage these local dealers have is that they can listen to their customers needs and respond to them quickly, even offering niche services and products. A few have branched into towing services and boat sales. Some began offering their detailing services traditionally only used for in-house trade-ins and new car prep. Still others can justify the risk of ‘Buy Here/Pay Here’ services, to accommodate those buyers who presented traditional financing challenges. They can respond to these people’s needs because they are a part of their community.
Keeping Their Fingers on the Pulse of the Community
Rural dealers offer more than just a venue to buy vehicles. They offer a friendly face to anyone who wants to stop in for coffee and chat. They do cookouts in the summer. The mouth-watering aroma of charcoals and cheeseburgers will have people coming in for complimentary lunch – and nothing else. Wouldn’t you rather buy a truck from a group of people with whom you had previously shared a picnic lunch or a cup of morning coffee?
It’s all about community connection. While the metro-based dealer groups are busy securing new lots and refacing their storefronts, the rural family-owned dealers are giving back to their small towns. County festivals and parades here are full of dealership representatives, driving new models, pulling creative floats, and throwing the best candy. The local guys are participating in area fundraisers for schools, sports, and the local pet adoption center. They show up in groups to every Chamber of Commerce meeting. When employees are newly hired or have met pivotal milestones for employment, these dealers tell their stories in the local papers. The organic traffic from local social media marketing and online reviews helps drive the brand experience too.
While the industry itself and the methods in which we shop and buy vehicles has changed, the basic principles of good business are still measurable. Take care of the employees, take care of the customers, and your dealership will take care of itself. These rural, family-owned dealers get it. If you find yourself driving through south-central Illinois on a sunny, Saturday afternoon, you might be met with the smoky aroma of cheeseburgers coming from that local dealership. Stop and have a burger with the friendliest bunch of folks this side of the cornfield.
Desiree is a determined leader with 20+ years of sales and management experience in a variety of industries including advertising, television, car sales and staffing. She brings insight to generating revenue, new and organic business development, training best practices and real-world business experience. She is a freelance writer and content collaborator across a host of verticals. When she’s not writing, she’s a wife and mom, off to the next extra-curricular activity. She loves all things coffee and chocolate, and speaks fluent French.