When Michael Tuno, president, World Class Dealer Services, founded his agency in 2003, he had already put a great deal of thought into what he wanted it to represent. He wanted to be the best in the industry, not only in what he did, but how he did it. No detail was overlooked in the planning - from the name, to the color scheme of gold and royal blue – as he set out to brand his agency for success.
Tuno takes that philosophy seriously. He himself went back to school and earned an MBA with a focus on the automotive industry, and he makes sure he earns any new certifications offered by organizations like AFIP. He also teaches at the NADA Dealer Candidate Academy, taking that philosophy of constant education and applying it not just to himself and his staff, but to the industry at large.
“What I have found in 16 years as instructor is that it is a micro-chasm of industry. I have seen all of the regimes and schemes and culture shifts from the outside world reflected in that space. Even the learning process has changed over time. Dealers used to show up with textbooks, binders and paper. Now, they all have laptops and everything is digitized.”
He noted that being open to change, and embracing it, is what sets the great agents and dealers apart from the mediocre. In fact, he believes the days of agents being successful as product salespeople are finished. Today, he noted, agents need to bring solutions that increase dealer profitability and compliance, and those that don’t offer it themselves need to align themselves with third-party resources to do so on their behalf.
“We as agents have to keep stepping up to the challenge, and stay educated if we want to be of service to our clients,” Tuno said. “That was our original mission, to be finest agency along those two predominant foundations of profitability and compliance for the dealer market. And that mission statement really hasn’t changed, just intensified; the business hasn’t changed that much either, just intensified. So we stay true to the original mission, we just keep refining and adapting.”
One thing Tuno would like to see more of is an increase in professionalism in the agent side of the business. There are, he noted, some fantastic agents and agencies out there doing business. But there are an equal number of agents who, he noted, were successful selling an unrelated product in retail somewhere, and decided to try their hand in our industry. “Isn’t really anywhere you can go to ‘agent school’ to learn the business,” he noted, “where you come out on other side and say ‘I know ‘this, this and this’.”
He believes there have been great strides in some segments of the market, such as the associations, to educate dealers, but even then, he believes, it falls a bit short. “They bring in guys like me to teach,” he said. “There is no human capital in those organizations productive enough or proactive enough to really help dealers or agents.” This, he said, leads to situations where agents are blindsided when a provider goes out of business, for example, and they are left scrambling, then looking back and wondering how they did not see it coming. “The industry, globally, if it had some sort of licensing component required, like those in financial services for example, the business would get a better level of agent, one that has been tested at some level of accreditation. That would change the dynamics of everything that goes on, and it wouldn’t just be about the caliber of that person going in.”
“The professionalism, knowledge and education level have to be there, and they’re not,” Tuno went on to note. In fact, he believes that is at least part of why government organizations like the Consumer Financial Protection Bureau (CFPB) are defaulting to the lowest common denominator – flat fees. Banks, he said, aren’t going to police their dealers to that level long term, so the CFPB is trying to find a way to standardize. And with no program in place in the industry, they have to default to tools like a flat fee.
And, Tuno said, a lot of it comes down to common-sense approaches. “It is process, process, process,” he said. “Don’t make it so hard. I like to use the example of a person who makes $8 an hour selling McDonald’s with menus. As soon as the customer says ‘package two’, they mark it that way, and the $8 an hour person asks a question that adds 50% more to bottom line: ‘Would you like to super size that?’ Why don’t we do that? Why do we over think this? We make it too hard trying to take short cuts, when we should be strategic, think about it once, then get it done. It boils down to strategy – do you have the right process, with the right people to execute it, and do you hold them accountable? There is nothing complicated about knowing the customer, discovering their needs, and then selling to those needs in a manner they can relate to.”
That philosophy will continue to be more important going into the future, as well. Tuno noted that increasingly, the younger generations are looking for a different kind of buying experience, and he believes the dealers who don’t adapt will lose the business to the guy down the road who does. He believes the day will come when a customer is sitting in a dealership to buy a car, will get a text or Instagram from a competing dealer offering a car for a few hundred less, and that customer will be out the door while the sales or F&I person is off talking to the manager. “If the process is like going in to get teeth removed,” Tuno said, “the gen x and millennial customers are going to walk. And you’ll be left wondering why you can’t capture that side of the market. The process has to be aligned with the buyer needs, and the younger generation already knows the car, the finance terms, the rates, and the options. They won’t tolerate the old system, so the future is going to be about tearing the walls down and streamlining the process.”