Ford dealership in Peoria, Illinois sets all-time sales record
Anyone in the car business today owes it to themselves to speak with Bill Pearson, the owner and general manager of Finish Line Ford in Peoria, Illinois. Saturday, November 15, I was copied on a text message sent from Pearson to his partner Jeff Green. The message proclaimed that they had finished the day with 29 used retail sales, an all time daily record for this dealership. We must all wonder how a Ford store in Peoria, Illinois experiences such a record in the midst of the worst automotive market in decades and perhaps history.
This morning I called Pearson to congratulate him on his success and I was stunned to learn that the previous Saturday they had sold 21 used, Monday 15, Tuesday 9, Wednesday 11, Thursday 15 and this Friday, leading up to the big 29 car day, they did 12. Bill’s excitement was palpable as he declared with confidence that he predicted a 350 used car retail month within the next 90 days. As of November 16th, Finish Line Ford had 135 used cars delivered for the month. I spent the next hour and a half listening and learning from Pearson the keys to his success.
First Pearson said, “I don’t want this to sound arrogant, but we are about to completely shut out all of our competitors.” He went on to tell me that he is able to sell cars for less money than they are owned for by his competitors. He added, “The winter months are now my summer months.”
Pearson’s success goes back to decisions that he made this past spring when gas prices soared to $4.50 per gallon. At that time, he found himself with a lot full of trucks and SUVs that were owned for way over the current money. Pearson decided to blow those units out for little profit and, in most cases, losses. As you might imagine, this drew more than a bit of notice and concern from his partner Jeff Green. Several times over the summer, Pearson called me for reassurance. The theory was that there would still be a market for gas guzzlers at $4.50 per gallon, providing the price was right. This proved to be true as Pearson found he was able to replace and then sell at a profit the same vehicles that he had just sold for thousands less, week after week. His experience during the tormented summer days of high gasoline prices taught him a valuable lesson that provides us with an insight into his success today.
Consistent with his experience last summer, Bill has discovered that there are still plenty of buyers in the market place for vehicles that represent an extraordinary bargain. Pearson says, “The bad news for dealers is that it is a buyers market and the good news for dealers is that it’s a buyers market.” In other words, anyone who is able to be a buyer in these times, consumer or dealer, will likely be a winner. Today, Pearson attends 2-3 auctions per week, buying truckloads worth of vehicles that include not just Fords but Mercedes, Infiniti and BMWs. Thirty percent of Finish Line Ford’s used sales are ultra-luxury vehicles, drawing buyers from as far away as Phoenix, Arizona. Pearson says, “I can sell anything on the Internet if it’s priced right.” He quipped that he is even experimenting with a motorcycle to further test his theory.
What Pearson knows about being able to sell just about anything at the right price is somewhat common sense. What makes what he does difficult for most dealers to implement is that Pearson also understands that cars can only be priced low to sell if they are owned right. Owning vehicles right has two aspects. First, they need to be purchased right, and, in today’s buyers market that really isn’t a problem. The second aspect of owning them right is keeping them fresh and turning. Pearson acknowledges that any vehicle in his inventory in excess of 45 days is no longer owned right. This commits Pearson to being relentless about getting rid of any car around 45 days. The average age of a used vehicle in Finish Line Ford’s inventory is 22-23 days. Pearson doesn’t mind adjusting the price on a vehicle every day if that’s what it takes for it to sell. More specifically, Pearson uses his vAuto system to make sure that every car is competitively ranked in the top three positions versus identically equipped vehicles in a 150 mile radius. Pearson also attributes much of his Internet success to Auto Trader’s Premium Package. He states that he gets approximately 300,000 page views per month which results in about 30,000 detailed page views. Between Auto Trader and his other third-party listing services, Pearson is tracking about 1,000 calls per month.
When I questioned Pearson about his compensation program for sales people and managers, he explained it in great detail, but requested that I do not disclose it. He had concerns about having his local competitors learn the details, but I think that he might selectively share these with others if asked. Needless to say, he has this one figured out as well. He has no problem hiring and retaining sales people as his showroom is electric with activity on most every day of the week. When I questioned Pearson about how he overcomes the need to negotiate already discounted pricers, he said that it isn’t really a problem. First, his sales people have come to understand that their vehicles are priced to sell, not to negotiate. They routinely use vAuto’s showroom tool to show customers how their vehicle is priced relative to every other identically equipped vehicle in the market. Pearson says that once customers see the vAuto competitive set ranking list, the discussion becomes very easy.
One other key aspect of Finish Line Ford’s success is Pearson’s dedication to hard work. After all, it was a Sunday during which he was willing to discuss his success from his office at the dealership. Every Sunday, Pearson commits 2-3 hours getting his inventory properly priced and setting purchase plans for the coming week. He says that he doesn’t purchase any vehicle without first having an exit strategy. Using vAuto’s appraisal tool, Pearson identifies how a vehicle that he intends to purchase would have to be priced to be ranked number 1, 2 or 3 in the market. Knowing that selling price allows Pearson to gauge what he is willing to pay at auction.
Pearson is anticipating another record weekend over the Thanksgiving holiday. He speculates that with people off from work, they will be willing to travel to Peoria, Illinois, for what will surely be the most extraordinary bargains of the holiday season.