Victory Automotive Plants Seeds in the Classroom
Group funds retail program, scouts for talent
Rodger Olson is an absolute geek on retailing. And he makes no apologies for that as he lectures undergraduate students in his class on retail sales at the University of Michigan here. Whether it’s comparing the franchise models of Dunkin’ Donuts and McDonald’s or measuring the success of 7-Eleven convenience stores’ rollout in Taiwan, Olson can speak with the authority of someone deeply immersed in his chosen subject. His fascination rubs off on his students — the mark of a good professor. Only Olson, 38, is not actually a professor. He’s the COO of Victory Automotive Group, a suburban Detroit dealership group that owns 26 stores around the country and is ranked No. 40 on the Automotive News list of the top 125 dealership groups in the country, with 17,999 new retail vehicles sold in 2013. “Retail has been something of a dirty word. We’re trying to change that,” says Olson, who spent 14 years working as an engineer for auto suppliers before he got his MBA and changed careers. “There are some fantastic opportunities on the retail side. Everybody thinks of the greasy, slimy used-car salesman who’s in your face.” As guest lecturer, Olson’s mission goes beyond just changing perceptions. Victory Automotive can use his class to mine talent coming out of the university’s Ross School of Business, one of the nation’s most prestigious business schools. In fact, Olson got his MBA from U-M.
Sales come first
The difficulty in hiring and keeping good retail sales talent is one of the industry’s worst-kept secrets. That’s one reason why Olson’s boss, Victory CEO Jeffrey Cappo, donated $3 million to the university to fund the new sales certificate program, which launched last year. Cappo, a big booster of U-M athletics, says he wanted to do something to let business students know that there are opportunities outside working on Wall Street or becoming an accountant. U-M “asked me what they could use money for, and I said, ‘Could we do something in sales?’ They looked at me like I had three heads,” says Cappo with a laugh. But he likes to point out a fundamental truth about business: “When you think about it, nothing happens until somebody sells something.” Cappo, 59, never attended college. He went into business selling vacuum cleaners door to door right out of high school. From there, he graduated to selling used cars at Varsity Ford in Ann Arbor. Cappo is Exhibit A for anyone who needs convincing that selling cars can be lucrative. “I was making about 250 grand a year working at Varsity Ford, and my first month owning my own dealership, I made about 200 grand,” he says of his early days when he bought East Tennessee Nissan in Morristown, Tenn., 18 years ago.
He expanded the group to 26 dealerships and four pre-owned stores in seven states, concentrated in the South, Midwest and California. In 2010, Cappo moved Victory from its headquarters in Morristown, Tenn,. to Canton, Mich., a Detroit suburb. A major reason was to put headquarters close to the university and its talent pool. Cappo doesn’t expect students will graduate from U-M and start selling cars. “There’s not many kids in that class who have ever had their tank on empty with no money to put in gas,” he said. “Most people who are really good in the car business, at one time they were broke.” But he believes the sales certificate program can help them get an essential understanding of what selling is all about. Follett Carter, adjunct professor in the marketing department at the U-M business school who runs the sales certificate program funded by Cappo, shares Cappo’s view: “I don’t think college graduates would go into selling cars. But I think there are opportunities in dealerships where they could find meaningful jobs, and knowledge of sales would be helpful.” Carter says the sales certificate program consists of four courses: marketing, fundamentals of sales management, retail sales marketing and consumer behavior. This winter term, 65 students are enrolled.
Cutting sales turnover?
Carter and Olson hope the sales certificate program, with all those students, might incubate some new ideas for dealership sales-compensation plans that could reduce the notoriously high turnover rate. “If it was my dealership, I would hire university graduates. I’d train them. I’d put them on a quota, maybe a revenue quota. There needs to be a process that is different from how many cars you sold,” says Carter. “These kids can’t be on 100 percent incentive pay. They have to get a portion of their income in salary. That’s a big change. “You can’t revolve over 40, 50, 60 percent of sales reps every year. That’s unsustainable.” Victory already has recruited several U-M graduates, including management prospects. Students have done internships at the group’s dealerships. “One guy just wants to be a sales guy and is already selling 25 cars a month,” says Olson. Devin McParlane, a student in Olson’s class from Livonia, Mich., says she will be going to work in Ford’s marketing training program after she graduates in June. “I’m going to be a zone manager working with retail managers,” says McParlane, who believes Olson’s lessons will help her understand dealers. Olson says he tells students their experience in sales can lead to management: “I really push the fact that the auto industry has so many opportunities, and the pay and benefits can be phenomenal. The fact that some of our general managers are making more than $500,000, that opens their eyes.” Source: Automotive News