This is the third part of an interview with Bernie Moreno, the owner of Collection Auto Group. For more, please see:
What’s the best piece of advice you’ve ever received?
Make a decision. Too many times in business we are faced with hundreds of choices and options. Given the fast pace at which business moves today, you have to trust your judgment and make a decision. Second piece of advice that goes along with this: be right at least 51 percent of the time!
When you think about putting your customers first, describe your philosophy for what that means and how you impart that to your team members?
Customer’s first is a philosophy EVERY business CLAIMS to have as part of their culture. There is no organization that would say they don't value their clients. However, saying it and LIVING it are two entirely different issues. We live that philosophy by creating a culture in which our team members put the customer at the center of everything we do. We know our clients can "fire us" at any time and we never take for granted that we must execute every day. Of course, that culture hinges on having great people, which we are very fortunate to have an abundance of.
How do you empower your staff to go above and beyond for customers?
They are defaulted to say "yes." If a team member is going to disappointment a client, that’s my job. I am the only one allowed to say "no."
What is your philosophy for continuous growth — and continuous improvement?
The business world is changing at a speed that is unprecedented in history. We look at ways of reinventing ourselves, not just changing and evolving.
When you think about your business, what keeps you up at night, and what do you do to resolve it?
Nothing keeps me up at night. Business is my career and I never personalize it by letting it stress my personal life. That would not be fair to my family.
Collection Auto Group
28450 Lorain Road
North Olmsted, OH 44070
Last year, we introduced you to Collection Auto Group and owner Bernie Moreno.
The company is still making tremendous strides in the automotive industry, so we sat down with Moreno again to see how Collection Auto Group continues to drive success.
What's your greatest business challenge?
Managing our growth while maintaining our culture. We have grown from 25 people to almost 300 in just under seven years. We have a very unique culture that puts the customer at the core of everything we do. We don’t consider ourselves a “dealership,” but rather, we consider ourselves a customer service business. As such, recruiting, hiring, motivating and retaining the absolute top performers is critical. We also spend a lot of attention on making certain everyone understands our mission and our core values.
What makes you an innovative leader?
I don’t know if I am an “innovative leader,” but I do know we always look for creative solutions to challenges others have found difficult or impossible. We strive to keep our organization on the leading edge by being on the forefront of technology; whether by using social media, iPads for our sales people, or state of the art customer relationship management systems.
What's the greatest lesson you've learned in business?
Not everyone has the skills needed to be singularly devoted to following through on the mastery of the details required to delivery excellent customer service. Knowing this, we continually reinforce the need to put in place organizational processes to help manage these details.
What has been Collection Auto Group's impact on the economy?
We employ almost 300 people and generate over $250,000,000 in gross sales revenue. We are one of the largest collectors of sales tax in Cuyahoga County. We donate about $500,000 to local charities. We also provide human capital in the community to help improve this region.
How do you provide value and go "above and beyond"?
We take the purchase or servicing of a car from a transaction to an experience. Anyone call “sell” a luxury vehicle; we want to provide our customers one of the best, if not the best, service experiences they have ever had.
Collection Auto Group
28450 Lorain Road
North Olmsted, OH 44070
While their locations are in North Olmsted, Cleveland and Beachwood, Collection Auto Group and owner Bernie Moreno truly service the world.
The Collection Auto Group is a privately owned business composed of multiple automotive dealerships and an on-site performance center. Moreno started building his empire in 2005 with the purchase of the Mercedes-Benz dealership in North Olmsted. Later he added Porsche, North Olmsted Performance, Lotus, Saab, Fisker, Sprinter, Acura and Infiniti over the next five years.
Moreno and staff have made many achievements in the automotive industry since opening in 2005, including: Mercedes-Benz "Best of the Best" Award 2006, 2007, 2008, 2009 and 2010; #1 Mercedes-Benz Dealership in Ohio; #1 Mercedes-Benz Dealership in the Central USA; #1 McLaren SLR dealer in the world; #1 Porsche dealer in Ohio; #1 Porsche dealer in the Central USA; First German "Autohaus" designed Mercedes-Benz dealership in North America; #1 Saab dealership in Ohio; and #1 Lotus dealer in Ohio.
Smart Business spoke with Moreno to discuss how he's been able to build success and drive growth.
What was one of the biggest obstacles you were able to overcome?
During the peak of the economic crisis in 2008 and 2009, we made the strategic decision to add staff and spend more in advertising to gain market share and further improve our customer service. We knew everyone would be doing the opposite and that our approach would put us in a great position to build momentum.
Why did you decide to add staff and spend more?
We define our business as a service delivery business and knew that every other dealership would be cutting critical customer-facing employees. We saw this as an opportunity to staff up and increase our service level with the aim of increasing market share.
What makes you an innovative leader?
We foster a spirit of fun throughout the dealership that customers recognize and appreciate when they come here. We also look to the newest technologies and adapt our processes accordingly to suit our customers' needs.
Why is a spirit of fun so important? What makes a good company culture?
I love cars. I can't imagine why someone would not find buying a new car fun. It never made sense to me. What is better than getting a new car? As a result, we try to instill that culture in our sales team. A good culture is one that everyone understands and follows ... and achieves the desired result!
What new technologies have you utilized and how have they made you more efficient?
We use iPads and touch screen TVs throughout the dealership and have invested heavily in IT to improve our customer experience.
You're a big proponent of supporting local businesses. Why is that so important?
It's the circle of life. I live in this community. My kids live in this community and will always know Cleveland as their hometown. To really be effective as a business, you have to give back to your town more than you took. That is our goal.
We have increased employment tenfold in six years. We spent almost $15,000,000 in construction, all of it with vendors or suppliers from Northeast Ohio. We spend over $3 million in local media.
What's the biggest lesson you've learned?
Set high expectations for yourself first and motivate your team to do the same for themselves.
Collection Auto Group
28450 Lorain Road
North Olmsted, OH 44070
In the last two years, AOL has become a target for criticism of its acquisition strategy. AOL purchased the controversial niche news service TechCrunch and then bought the even more controversial Huffington Post, making its founder Arianna Huffington, the editorial chief of AOL’s burgeoning online content operation.
One wit said, “AOL’s is changing its familiar ‘You’ve got mail’ to ‘You’ve got problems.’”
Despite the slings and arrows of financial television show hosts, AOL may have a trick up its sleeve. The company could, according to Auctionbytes, use its content to increase its share of the burgeoning market for online advertising.
The company acquired a local news and information company called Patch in June 2009, a company founded by Tim Armstrong. Armstrong was the president of AOL at the time of the acquisition, which means that Patch was important to the long-term content strategy of the floundering AOL. At the time of the acquisition, I assumed that Armstrong was negotiating the deal. In “Back to the Future,” AllThingsD.com reported that Armstrong allegedly told AOL staff that he would not make a profit on his stake in Patch. At about the same time, AOL bought Going, which was a social networking company.
News is circulating via blog stories like “AOL’s Patch, AmEx Targets Groupon with Patch Deals." The idea is that AOL wants to be a player in the local online advertising market. What makes the AOL rumors interesting is that unlike some of the companies competing in this sector, AOL has local content, a social networking technology, millions of users and a number of high traffic websites that can generate buzz about AOL’s products and services. A Web watching blog, WebProNews.com said, “AOL Launches Patch Deals…Yes, Another Deals Service.” The blog crept out on a limb and said that the service would be a Groupon clone. The roll out is slated to take place in the fall of 2011.
First, what is Patch? The service is a bit like the local newspaper. Unlike the print publications that are created to serve a narrow geographic region, Patch describes itself as “hyperlocal news.” With most major newspapers chasing big stories and recycling content from various services and syndicates, information about the local soccer club tryouts and the junior college play schedule are difficult, even impossible to find. Google indexes billions of pages, but the search system does not make it easy for me to find out when the Montgomery County Seneca Valley High School book sale will be held this year.
Patch captures news and information from small cities. The goal in 2010 was to cover 500 U.S. cities. The company uses paid staff and has a “foundation” to help “improve the quality of life in underserved communities across the globe and through access to trusted local news and information.” One of the advisors to AOL Patch is Jeff Jarvis, a college professor and expert on Google. He complements a full lineup of professionals.
The one issue that I have is that I have not encountered anyone who uses Patch. In a recent story of local online advertising, the sample included in our research did not mention Patch a single time. AOL has a formidable marketing machine, but in the noise about local advertising, local search and local maps, AOL’s voice is not being heard.
There is a website, quite a fancy one in my opinion. Navigate to Patch.com. You will see a list of states in which the local information service operates. I am writing this column for a company based in Cleveland, Ohio. According to the map of Patch coverage, Ohio is one of the states the service covers. Kentucky is not so lucky. Neither is Texas, Indiana, Oregon and two dozen others.
The cities Patch “covers” in Ohio are Avon Lake, Avon, Beachwood, Brecksville, Cleveland Heights, Cuyahoga Falls, Fairlawn-Bath, Hillcrest, Kent, Lakewood, Mentor, North Canton, Solon, Stow, Strongsville, Twinsburg and Westlake.
If we dive into a community with which I have some familiarity, Cuyahoga Falls is among the more affluent cities within commuting distance of Cleveland and the now shuttered marine park. A click on the Cuyahoga Falls Patch link displays news about a ceramics program for those 60 and up, a “Mid Day Serenity” event at the Paradise Club and ballroom dance lessons at 6:30 p.m.
The content seems to be a blend of bylined stories; for example, the “Q&A with Woodridge Graduate Jessie Greene-Hill” was written by Alanna Klapp, who is a freelance writer.
For a merchant in Cuyahoga Falls, the opportunity to put a message in front of Patch information consumers in Cuyahoga Falls makes perfect sense. There is one big challenge — traffic. Small communities will have smaller populations. Cuyahoga Falls is a reasonably affluent community, so one would expect that most households would have a computer and a good percentage Internet access. Smartphone penetration would also be higher than the phone penetration in Harrod’s Creek, Kentucky, by way of comparison.
However, when I checked Patch traffic on the Compete.com service, Groupon was in the 29 million unique range, LivingSocial was 14 million, and Patch.com was 5.5 million. Compete reports that traffic for Cuyahoga Falls Patch is climbing, hitting 8,000 unique visitors in April 2011 up from about 700 uniques in December 2010. The growth of the service is excellent, especially at a time when many websites have been adversely affected by Google’s anti-spam activities called Panda.
Details about Patch Local are sketchy. Some broad outlines of the service may be discerned in the information leaks surfacing in the Internet media.
Patch wants a piece of the advertising revenue in certain cities. Like Cuyahoga Falls, Patch wants to capture some of the advertising dollars flowing to hard copy newspapers service cities like New Canaan, Connecticut. In the city, BNet reported that there is New Canaan Patch, the New Canaan Advertiser, and a weekly Hearst paper, New Canaan News. Patch, not surprisingly has the AOL.com online brand and a staff of Twitter savvy professionals plus and a motivated president, Tim Armstrong, a former Google executive.
Patch’s angle may be a lower cost, lower risk alternative to Groupon. After fees, merchants using Groupon have to cover the customers from what is 25 to 30 percent of the regular price of the product or service. Groupon has been attracting some negative feedback when a poorly conceived coupon promotion creates a money losing situation for an advertiser. Patch and its partner American Express may pursue small businesses with combination offers. A joint promotion to American Express card holders and the AOL online user community could be an angle that puts traditional media and newcomers like TryItLocal.com under pressure. A price war could make online local advertiser a bargain for merchants who have an appetite for new media marketing.
AOL has played a role in online communities since its inception. I recall attending a conference at which AOL and CompuServe executives discussed the vibrancy of forums and discussion groups. The Facebook DNA, in my opinion, can trace its heritage to the early and largely unmoderated forums on these early online services. Unlike companies that talk social like Groupon and LivingSocial, AOL has deep social technology roots and quite a bit of experience in leveraging its customer base.
The Patch Deals FAQ provides additional early stage details about the forthcoming AOL service. Keep in mind that with a release date months in the future, the exact shape of the service at launch can change significantly. AOL Patch’s key differentiator is that advertisers will not have to make an upfront payment, obviously an alternative to the Groupon method of getting the merchant to pay upfront fees. AOL makes clear that it will promote the service “a couple of different ways: “via e-mail, through Patch’s daily and weekly newsletters, and thorough social media such as Facebook and Twitter.”
When Patch becomes available, should a local business consider advertising on the service? Will Patch pose a challenge to local newspapers and information services from bloggers and commercial publishing operations? Will Patch be able to carve out a profitable niche in a very crowded sector?
These questions are difficult to answer. AOL needs a revenue win, and it may have the right combination of ingredients: A dash of Huff-Po, a chunk of Patch, and a smidgen of AOL. Might be a Top Chef recipe.
Stephen E. Arnold is a consultant. More information about his practice is available at www.arnoldit.com and in his blog at www.arnoldit.com/wordpress. His most recent book is The New Landscape of Enterprise Search. For information, visit http://arnoldit.com/wordpress/landscape/.