Posted on February 4th, 2013 by Dealer in Magazine
Brothers Larry and Jerry Mullinax are the owners of five Ford dealerships in Florida and Alabama. In 2012, these stores sold 10,000 vehicles – 62% of them Ford trucks. Two of these dealerships are among the top 350 in sales volume nationwide.
Brothers and owners Larry and Jerry Mullinax recently discussed their strategy for success with Dealer magazine.
Larry and Jerry, your dealership has an interesting history. Would you share it with our readers?
Larry: Our Dad, Ed Mullinax, started this business in 1970. He bought a bankrupt, boarded-up Ford dealership on a four-acre lot in Amherst, Ohio. His strategy was to have a huge inventory, and do a huge amount of advertising. He did a great job with promotions, and eventually that four-acre lot turned into a 67-acre lot and one of the largest Ford dealers in the nation.
By 1996, my Dad, my brother, our partner, Pat O’Brien and myself had built our company up to five dealerships – four in Ohio and one in South Florida, and we were selling about 30,000 cars a year. When we sold these dealerships to AutoNation, in December, 1996, we were Ford’s largest retailer. We had three stores in the Ford Top 100 nationwide – our store in Margate, FL, was the third largest Ford retailer in the nation and our store in Amherst, OH, was the seventh largest Ford retailer.
Jerry: After we sold our company, we worked for AutoNation for three years. At the end of the day, we liked owning our own business better. It was more fun, and we thought we could make more money too. So, we left AutoNation and started over again from scratch in 2000.
We couldn’t buy or start a business in any of our original locations, because of our non- compete agreement with AutoNation. So, we bought our first store in Central Florida, in Apopka, near Orlando. Two years later, we bought a store in New Smyrna Beach, FL. Then in 2008, when things turned down, we bought stores in Palm Beach, and Kissimmee, FL. The great thing about a recession is it creates opportunity, and we capitalized on that opportunity. In January 2012, we bought the store in Mobile, AL.
We haven’t rebuilt quite as fast as we would have liked. It’s been a little harder than we had thought. Those original stores were in better locations than the ones we have today and the Ford brand had more through-put then, but we’ve worked hard and we are doing well in our new locations. Since our Dad started the business in 1970, the Mullinax family has sold over 450,000 cars and trucks, retail.
We’ve had a great teacher in our Dad – one of the best ever. He’s retired now. Jerry and I are grateful for everything he taught us. He was a great innovator – the first person in the nation, in 1975, to sell one price. He taught us how to sell that way and that’s the way we’ve done it ever since.
When did your Dad start you working at the dealership?
Larry: Our Dad got us started as kids – I was probably in the fourth grade. Lawn maintenance was our first job and then we moved on to working in parts; we sold cars, and cleaned service floors. Both Jerry and I graduated from Northwood University in Midland, MI. I continued to work at the dealership and ultimately, I became general manager of our store in Amherst, OH, and moved on from there.
Jerry: My first job was cleaning the service department floor when I was in the third grade. Larry and I worked together around the dealership. We mowed the big lawn here so many times I said to myself, when I get older, if I make enough money, I will never mow another lawn in my life. I stopped mowing lawns when I was 18. I don’t even mow the lawn at home.
Larry: Our Dad never forced us to choose the car business. It was always our decision and he did a good job of exposing us to work in each of the departments. He made a point of making sure that he wasn’t our manager. Jerry and I will teach our kids the business if they show interest. My son, Brad, is 21 and in college and he’s worked here selling cars. He hasn’t decided whether or not he wants to join us in the business yet.
Jerry: My daughter, Anastasia who is 15, and my son Clay, who is 12, work at the dealership. My son Grant, who is 14, will do website work for us from time to time, and Cole, who is 11, wants to work at the dealership, but he’s not ready.
How do you two work as a team?
Larry: Jerry and I have two very different management styles, but we complement each other very well. I’m more methodical – more on the business end. Jerry is a much better salesman than I am.
Jerry: I run the Apopka store and Larry runs the new Smyrna Beach store and we have three great business partners that run the other three stores. We like it that way because they have their money in the business as well. So they have the same goals for that store as we have. We feel that has been a big factor in our being able to go from two stores in 2008 to five stores today. Scott Nicolas is our partner at the Lake Park, FL, store; Chris Baron is our partner at the Kissimmee, FL, store, and Alvin Davis is our partner in the Mobile, AL, store.
How is all of this structured?
Larry: We sell our partners a percentage of the whole business. Most partners, when they buy in are only buying part of the franchise, and don’t buy into the real estate. But, our partners buy a percentage of the entire business.
We don’t have a full blown management company. Jerry and I are on the phone everyday talking about the overall organization and we’ve got two or three people that are doing things for more than one store. For instance, we have Steve Francis who helps us take care of a lot of operational issues for the group, such as banking, insurance, equipment, and computers. But, other than that, each store pretty much stands alone.
How many vehicles did you sell in 2012 and what’s your forecast for 2013?
Jerry: We sold about 10,000 vehicles in 2012, between the five stores. That’s actually not a lot, by our standards, but we’re trying to move that number this year and going forward.
Being a Ford store, trucks are a high percentage of our business. Right now 62% of our business is new truck sales. In a way, trucks are our signature product.
We park F-150s on gigantic rocks in front of all our dealerships. We started doing that at Apopka, near Disneyworld, where you see those types of displays. We hired an architect and built our rock from concrete. It holds three trucks and it’s really a monument in our town.
As for new car sales, we are really excited about our new car lineup. For starters, this is the best line up of cars we’ve seen from Ford Motor Company ever. Initial sales have been awesome with the Focus, Fusion, Escape and C-Max. We’ve got cars that can dominate. These are going to be big chunks of the market that Ford hasn’t played in before.
How is the used car business for you?
Jerry: Before 2008, we typically sold two new vehicles to one used vehicle. But the recession in 2008 necessitated that we become better used car dealers. Today, people are keeping their cars longer and a lot of the cars that we used to wholesale, we now retail. You don’t get that many 30,000, 40,000 and 50,000 mile trade-ins that we used to get. We retail cars that have 150,000 miles on them now. We sell a lot of cars under $10,000. We sell more used cars than new cars now. And, our used car sales are up 10% this year. I think part of that we can attribute to vAuto. We like what vAuto does for us. They allow us to see what other similar used vehicles are selling for in the market so we can price our vehicles competitively.
We are doing a better job of selling the older cars. We spend money to make them into good vehicles. One of our partners, Chris Baron, goes as far as putting new transmissions in them.
We sell a lot more higher mileage cars, and the other factor is that cars are much better made today. So you can sell a car with 100,000 miles and have confidence that you are selling a good vehicle.
Larry: Another factor is the Ford Certified Program. They’ve made that a whole lot better and we are one of the top Ford Certified dealerships in the country. The improvements Ford has made with that program have had a big effect on our business as well.
What percentage of your business is Internet-based?
Jerry: That is so hard to say. It’s hard to measure what customers are Internet-based or not. A recent customer survey showed that 89% of our customers are on our website before they ever show up at the dealership. I have a philosophy that every customer is an Internet customer. Some start on the Internet, then pick up the phone and call, and then walk in the front door.
You have to have a great process in place for the people who actually submit a lead. There are a lot fewer people that submit documentable leads online than just show up or call you on the phone. Yet, they may have researched you on the Internet first.
What about your third party lead providers?
Jerry: We use Autotrader.com and Cars.com; those are the two big players out there and we are very happy with what they do for us.
How much of your business is repeat business?
Jerry: We have a significant amount of repeat business. We ensure repeat business a little differently than most dealerships. Encouraging repeat business is part of our pay plan that we have standardized in all dealerships. Sales people are paid a $100 bonus for each customer that comes back to buy. We track this monthly in all the stores.
We want our sales people to create a relationship with each customer. We figure when the customer comes back because they have a relationship with that sales person, we save money because we didn’t have to go out and advertise to bring that customer in.
Please tell us more about your tactics for success.
Larry: First, having a big selection is key. We only sell Fords and we do a great job of moving inventory between stores. We can offer customers a choice of 2,000 cars between our five stores. Second, my Dad invented one price, and we now call that Up Front Pricing and we trademarked it. We put our best price right on the windshield. That takes the hassle out of buying cars and gives our customers a very positive experience. Our CSI is great and gets better every year. Third, we have no dealer fees, which are very common in Florida and Alabama. A lot of our competitors charge more than $700 in dealer fees.
Jerry: Our goal is to make it really easy for the customer to buy a vehicle here. We advertise our Up Front Pricing, no dealer fees and a huge selection and that’s what we provide to the customer, an easy, hassle-free buying experience. And great people work for us and serve our customers. Those are the things that make our company successful: a simple way of doing business and great people.
Let’s talk about your advertising strategy. What is the mix: traditional vs. digital?
Jerry: We do a lot with digital to market our brand. But, just as AutoTrader advertises on TV to drive people to their website, so too, we use TV to create our brand with the goal of having the consumer wind up on our website.
Digital is not as expensive as traditional. So, I’d say we spend 60% on traditional and 40% on digital. We don’t do anything in newspaper or radio anymore. We believe people in their cars are on their cell phones, or listening to radios like Sirius satellite radio – not the local radio station. And, we just like TV better.
We also have a newsletter we put out every month to 80,000 customers, outlining our brand and our goals.
We love Ford; it’s part of our brand, and our goal is to be the best Ford retailer in the USA. And, we have a seven-point Mullinax brand.
- We have the friendliest sales and service people.
- We strive to be different from other dealerships.
- Our facilities and our vehicles are clean and well displayed.
- Everybody Gets Pickles: We are consistent in what we deliver.
- We offer the greatest selection of vehicles – with more than 2000 vehicles in inventory.
- We participate in our community.
Larry: In regard to community involvement, we’ve done some good things with the Ford Drive One 4 UR School program, where we partner with our local high schools to conduct test-drive fund raising events. For every valid test-drive completed, Ford Motor Company donates $20 to the participating high school, up to $6,000, to support school events and organizations.
Yesterday, we had community events at all five stores. At the Apopka store, we raised $3,200 for the local food bank and filled a pickup truck full of food to deliver to their food pantry. We really want to be active in our community and we think that kind of thing comes back to us.
What is your biggest challenge for 2013?
Larry: We want to get better at everything we do, so there is no single biggest challenge.
We’ve already got great people and we continually train our people to help them get better every day. We have close to 300 employees in the five dealerships. We’re only as good as our people and we rely on our managers to do their part. All our training is done internally.
Fortunately, we also have great people who have been with us for many years, even as far back as our original set of stores. We had people who worked for us in Ohio in the dealerships we sold to AutoNation, who moved to Florida to work for us here when we opened up our own dealerships again. For example, we’ve got Darryl Anderson, our GSM, in New Smyrna Beach who’s been with our company for 30 years, and Scotty Nicolas, our partner, has been with us for 25 years.
Is there any sense of competition among the five dealerships?
Jerry: One of the great things about having five dealerships is we can make comparisons between stores.
Naturally, our partners want to beat the other stores in sales and service, but we’ve kept this sense of competition on a positive note. The good thing about the numbers is we do the accounting the same way in each store, so we are comparing apples to apples. It’s a little bit more accurate than you would be able to get in a 20 group, where the stores may be keeping numbers with different accounting methods.
We have five GSMs, five service managers, five parts managers, and we compare and we share best practices among the stores. These people all work together. Phone calls are made on a regular basis, as far as what’s working here and what’s not working there.
For the fixed operations departments, we definitely dial in on brakes, batteries and tires, and really track that percentage of repair orders at each dealership. How high can we get that number? Having five stores with the same basic setup and the same information from Ford Motor Company is really helpful.
Friendly competition is always good. No question, people do want to beat the other stores.
What about your F&I processes at the five stores?
Larry: We’ve got different processes at different stores. We’re trying to speed them all up. We are trying to make it a friendly, fast process at all stores. We do have menu selling, which most dealers do today. We present all the options to the customer, and our goal is to get them to choose as many options as possible. And we know the faster we can make that process for the customer, the happier and more satisfied the customer is going to be.
Have your stores received any awards for customer satisfaction?
Jerry: All of our stores have won Ford President’s Awards, which are for CSI. In 2012, two of our five stores won the Ford President’s Award. Our Lake Park store has won it four years in a row, including 2012. Our goal for 2013 is to have all five of our stores win the award.
Any plans for expansion of your facilities?
Larry: We are building a brand new $8 million facility in New Smyrna Beach. We’ll be in it by October of 2013. We’re working with Ford to update our image.
Jerry: Larry is also working with the city which has a lot of regulations for new buildings. Ford has a prototype of a building they want us to build and it is somewhat at odds with our town’s very strict regulations. The new Ford image has a lot of metal and hard lines. Our town is looking for New Smyrna Beach charm – old fashioned and beachy. The new Ford look is not beachy. So, we’ll have to work out something that satisfies both the OEM and the town. That’s not easy.
What do you see as the future of the industry?
Jerry: Customers ultimately get what they want and customers are demanding a more transparent, simpler process. Customers’ time is critical. Customers want more speed in the process.
I say to our salespeople: I can go to Wal-Mart and ring up 125 items so much faster than buying one car. Our goal is to speed up the process. Customers don’t want to be here for hours. When the customer is shopping around, they figure that’s their time and they can take as much time as they want, but once they decide upon a vehicle, they want that process to go fast.
So the future I believe is customers doing more shopping online ahead of time and when they get to the dealership, it’s just a matter of solidifying the ideas they had online and making sure the car is what they want and then finalizing the process. So the future is a lot more of the process online and then a faster experience at the dealership.
What advice would you give to a young person buying his or her first dealership?
Jerry: I’d advise them to start off by learning about and becoming very involved in the used car business, because that is where the cash is. It’s still a trade-in business. 70% of the people who come in to buy a car have a car to trade in, and you have to be a good trader. And the second piece of advice is to get involved in your community.