The Power of Positive Thinking and a Pragmatic Approach

“When they first started talking about this recession, I announced to my team, ‘There’s all this talk about a recession. I’m not participating. If you’re participating, you’re in the wrong room,’” said Jim Shorkey, dealer principal of Courtesy Suzuki and Jim Shorkey Kia in North Huntingdon, Pa.

That very attitude is why Shorkey’s operation is on track to sell 1,800 new Suzukis in 2009, which is 700 more than last year. He’s owned and operated the Suzuki store since 2003, and in 2007, he took over the Kia store. He’s planning to sell over 1,000 new Kias in ‘09, a goal he should easily surpass, since he sold 249 new Kias in January and February 2009.

In addition to that success, his special finance business, which accounts for 10 to 20 percent of his business depending on if you call special finance deals by score or by finance source, is up over last year. In February 2009, the department sold 30 units, which was a number it hadn’t reached in a couple of years.

Shorkey said he labels deals a little differently than many people in the industry. “We quantify a subprime deal on source. We have banks that we label subprime banks, so if a deal goes through that bank, that’s a subprime deal.” If a customer with a subprime score is financed by a finance company their dealership labels as prime, that deal is counted as a prime deal. By that standard, special finance accounts for about 10 percent of Shorkey’s business, but if he were to quantify deals by credit score instead of finance source, he said SF would account for about 20 percent of his business.

He contributes his dealerships’ all-around success to maintaining a positive attitude. Shorkey strongly believes in the power of positive thinking. “I’m a big believer in attitude … There’s a lot of negativity in the world today; that’s obvious. We’ve got to figure out a way to turn this negativity into something positive.”

In fact, he’d rather have an employee who lacks skills than have one with a bad attitude. “We absolutely, positively will not accept a bad attitude. Bad performance? OK, fine, we can train on that. Bad attitude? Go away. We don’t want you here … they’re infectious.”

He believes that results are created by thoughts, so a bad attitude can lead to bad results. He explained, “You have to think first, and that thought causes a feeling. That [feeling] causes an action, and that action causes a result … If you’re not happy with the result, the first thing you need to change is your thinking. Then, after we change the thinking, we can get a better feeling. Once we can get a better feeling, we can get a better action, and it’s the actions that are going to cause the results.”

While business is certainly good at Shorkey Kia and Courtesy Suzuki, Shorkey said they got “spanked” in September of 2008, which was his “wake-up call.” In response, he created a proactive six-month plan forsuccess, which involved training, refocusing on attitude and calling customers in their database in an effort to generate business. He said, “We reacted to the market. We didn’t go around with gloom and doom.”

And his plan was highly effective. Initially, his goal was to “get back to break-even, which I came close to in October,” and from November to February, his dealerships “made more money in four months” than they made throughout 2008. In Shorkey’s operation, goal-setting is just as important as positive thinking. He said, “Goals really do take on a power of their own and these goals will pull us towards them if we’re really serious about it, so we try to get our [employees] really serious about goals.”

Special Finance Manager Sean Rattigan’s main goal is to continue selling 30 units a month. The special finance department is run almost exclusively by him; however, to help him reach his goals, he has one employee in the department who makes phone calls and helps out with other duties as needed. He wouldn’t take all the credit though, adding that the salespeople help him out by doing various tasks like taking customers on test drives.

Throughout 2008, the department was selling between 20 and 25 units a month, according to Shorkey. Rattigan, who had been running the department since its inception 10 years ago, hit his personal best of 32 SF units sold a few years ago, so how did he manage to surpass 30 again when the subprime market has seen such a significant decrease in loan originations over the past year? Reputation and due diligence.

Shorkey said, “I think our reputation is really, really good. I think a lot of these guys out there fake the stips, mess with the down payment … causing their portfolios to underperform.” He’s confident of Rattigan’s abilities, and values his hard work. “[Rattigan] is incredible at paperwork … He does a great job with funding … This guy’s a rock star … He’s a hard worker, he’s very organized and he does a great job for us.”

And Rattigan recognizes – in a confident but modest manner – he’s a big part of the department’s success. He said, “I guess it all starts with me in working harder, working every angle, working a little bit later, working on my days off, working the lenders a little bit more and having more conversations about why they’re not buying.” Nowadays, he’s rehashing every declined deal and has cultivated better relationships with his finance companies, which have dropped to seven from 15 over the last year. Losing over half of his sources has allowed him to build stronger, albeit fewer, relationships.

While he’s always been a dedicated employee, what motivated Rattigan to be even more dedicated during tough times was Shorkey’s speech about not taking part in the recession. He said it “really stuck” with him and that he chose not to take part in it either. “We’re still going to sell a lot of cars.”

The positive attitude that’s so predominant among personnel is also present in the dealership’s marketing and advertising. The stores’ tagline is short and sweet: “It’s a Great Day!” Shorkey said, “All of our advertising is upbeat, talking about the great deals we have. Everything is positive.” One thing he does not include in the stores’ traditional, branded advertising is a subprime message. “We’re not going to brand ourselves as subprime guys. We’re going to brand ourselves as great guys; we’re very enthusiastic, high energy, great deals, and great warranties. We don’t think customers have to have bad credit to buy our cars.”

Even though subprime buyers aren’t targeted in the advertising, Rattigan added, “In [targeting prime customers with advertising], you get a natural flow of people who’ve had issues with their credit.”

Shorkey takes the stance that if his customers do have bad credit, his team will do everything to get them financed, but he doesn’t include that message in his TV and radio spots. He said, “We’re not going to say, ‘Bad credit, no problem’ because quite frankly, bad credit is a problem, and it’s delusional to think otherwise. That’s the reality of life. If you have bad credit in today’s world, you’re going to have a problem getting financing. Does that mean we cannot get [customers] financed? Well, heck no!” They just have to come to the table with more money down or a cosigner.

His pragmatic approach to the subprime business should not detract from the fact that he values it as a very important segment of his business. To drive more special finance traffic to his stores, 5,000 direct mail pieces are sent out each month that target customers by credit score.

Another piece of the SF puzzle – finding appropriate inventory – isn’t a difficult task for the dealerships. Shorkey said customer trade-ins provide enough vehicles that work with his special finance customers. It works out so well for him because his dealerships maintain a non-negotiation policy for trade-ins and sales. It’s not 100-percent absolute that they never negotiate, but it rarely happens. “We’re going to get the car for the right money, or we’re not going to get the car. So that enables us to resell these cars to subprime [customers].”

Both stores have blended sales floors and as soon as a salesperson identifies a SF customer, Rattigan steps in to take over the deal. That’s the way Shorkey wants it because if an SF deal is not in Rattigan’s hands, there’s margin for error. To be able to identify SF customers, salespeople ask a simple qualifying question early in the sales process. They ask customers how they’d rate their credit score on a scale of one to 10, with 10 being perfect. Shorkey said, “If they say anything less than 10, then we encourage the customer to run credit at that point.”

He wants his subprime customers to be well taken care of. Even though he doesn’t focus solely on subprime or aggressively market to that customer base, SF is a very important segment of his business—just like all his other profit centers. “I still don’t think [special finance] can be the sole focus of your business … I think you’re missing an opportunity when you decide you’re only going to do one thing … I’m not going to put all my eggs in one basket of anything. It just isn’t smart business.”

Shorkey concluded, “You have to be good, or at least mediocre, in every department … My goal is to be great in all the departments.”

Special Finance Insider Vol. 3, Issue 3