New Era, New Techniques
How GSM Danny Canteo of Subaru Pacific is structuring his business and digital capabilities to attract a new breed of customer.
As a brand, Subaru is heralded for being built on love — all the way down to a mandate that all of its dealerships support worthy causes in their communities. And conscious consumers are responding. At the end of 2018, Subaru celebrated seven straight years of month-over-month growth. GM Danny Canteo of Subaru Pacific sat down with us to shed light on the positive developments at his dealership — and how he’s planning for a new generation of customers. The interview has been edited for length and clarity.
Fair: I understand business is good for Subaru. What’s been your strategy for moving inventory?
Danny Canteo: Yes, we’ve been very fortunate. James Hartzberg runs both Subaru Santa Monica and this one [in Hawthorne], and each store is a little different. Here we try to hit 80 new car deals per month consistently.
Fair: That’s awesome. Would you say your pre-owned business is evolving, and are we seeing something different than what was seen in the past?
DC: You know, it’s pretty competitive out there. But as far as the premium market is concerned, I think it’s bigger than it’s ever been and we still have a lot of customers looking for pre-owned cars, so we keep them priced to market online.
Fair: Why do you see things moving toward the Internet as a sales portal? As far as your online shoppers go, are they more sensitive about payments?
DC: I think customers are looking more at monthly payments, keeping costs down. A lot of times you pay less depreciation if you’re in a pre-owned vehicle, and with some of these manufacturers having certifications on them, you get a lot for your money.
Fair: Can you tell me how you have your sales team organized right now?
DC: We have a Retail Department and an Internet Department. Retail handles foot traffic and customers that come through the front door. They also handle the phones, while our internet guys handle the e-commerce side of things. They work on web deals through various different lead providers: Edmunds, AutoTrader, Subaru, AAA, etc. And then we set the appointment, or actually do most of the deal virtually before they even get there.
Fair: I’m guessing it feels like a lot of moving parts to manage. What are the key influences to your management philosophy?
DC: I feel that there’s so much data out there and information on the internet that we must give the customers what they want. You know, it’s not necessarily a race to the bottom, but you’ve got to be priced to market on new cars and on used cars. Just because there’s so much information out there, you’ve got to be in the ball game. If not, you won’t get somebody coming down to look at a Subaru Outback that’s priced over market, when they can find five or six of them for $2,000 less that are local to them and in the L.A. area. So my philosophy is to just give the customer what they want, make it easy for them, streamline it.
Fair: How do you typically manage or measure your client satisfaction?
DC: We have a customer relations manager that works with measuring [satisfaction] after the sale with the managers who are involved with them. And then the manufacturers, they call it the OLP score — basically the customer service index for the sale. Their metrics are: Did the dealership offer a beverage? How was the final paperwork processing? Was the car free of scratches and clean? How was the actual facility where you bought the car from? Did they offer parking? That’s sort of how we’re measured from the manufacturer. And then we measure ourselves on Yelp ratings and on social media, where we have the tools and resources to make sure we get the exposure that we deserve based off of how we treat customers.
Fair: What’s an example of the type of Fair customer you’re seeing come into the store? Who are the people consistently using the app to get their cars?
DC: You know, we see a lot of transplants. There’s a lot of businesses around here that attract a lot of people from the East Coast or from the Midwest. I see a lot of customers using the Fair app who are not from around here. The others who tend to gravitate that way are customers who can’t really get approved for a conventional auto loan. You know, somebody who has maybe substandard credit, but who can afford the payment and gets approved through Fair. I feel those customers who have the flexibility, a lot of them don’t want to be tied into a three-year lease. They’d rather have the flexibility of being able to keep their car for as long as they want and have their own free will. They like keeping their options open.
Fair: Has that been pretty seamless for you guys?
DC: Fair is pretty easy to be honest. From a dealer standpoint, most of the work’s done by you guys. We just facilitate the delivery and make sure that the car is clean and ready to go when the client wants to come pick it up. I think I’ve been dealing with Fair since September 2017 and I might have had just one customer bring the car back, and there’s been a couple times where maybe we try to buy the car back from you guys. But for the most part, to my knowledge, the customers keep their cars.
Fair: So how is the relationship-building process changing to engage with these transplants and modern car buyers?
DC: You definitely can’t judge a book by its cover. There’s so many resources now to purchase a car. Most of the lenders are a lot more open to different types of credit. Obviously in Santa Monica, we have a lot of “A” papers, as we call them. But we also have a lot of customers with substandard credit that our lenders are open to. So, I definitely think that the business is definitely evolving. I think the lenders are hungrier to claim more of the business, a bigger percentage of the market. But Fair gives us a broader audience to where we can send deals.
Fair: How do you see the sales process adapting in order to reach Millennials who are used to shopping for things online?
DC: Before, you just waited for them to come in. Now, everything has to be easier [for the customer]. There’s a process at the dealership for how we price our cars online, both the new and used. It creates a lot of the organic leads that we drive to our dealership based off of where we’re priced at. So our online presence is huge in that regard. You know, you’re not going to go to the coffee shop that’s got two stars. You’re going to go to the one that’s got five stars. Like if you go to our website, we’ve got everybody listed. Our sales people are called brand specialists, and from the website you can pick the one you want.
Fair: When Millennials come in, how much time are they spending at the store? How do you see them using Fair?
DC: On a non-Fair customer, we try to average two or two and-a-half hours at max. But with Fair, it is easy. I mean they’re in and out because of the fact that everything is signed, everything’s done online. It’s so streamlined from the text message notifications to the dealer portal that notifies me of the inputs going in and out. I think it’s getting faster. The new options for inputs allow us to kind of get to the contract part of it, and get the customer going and I think that’s helping you guys out for sure.
Fair: I guess we’d say you’re very “customer obsessed.” I know you have the annual Share The Love event and donate a lot on the local level. What else do you do for the community that makes a difference? Is that important to you?
DC: Yeah, just a basic example for our dealership in particular, we contribute to Heal the Bay and Meals on Wheels. Those are big charities that we donate to and, of course, we do customer appreciation events where they can come down. We love to showcase what Subaru does for the community. Our owner from the top is very involved in the South Bay, and then also in Santa Monica.
