PATTERSON AUTO GROUP

PATTERSON AUTO GROUP
Increasing
profitability by
building lasting
relationships
PARTNER PROFILE
Patterson Auto Group
315 Central Freeway East
Wichita Falls, TX 76301
Objectives:
Drive retention
Increase PRU
Reduce reliance on fi nance reserve
Success:
PRU increased by 40% in 4 years
resulting solely from F&I product sales
Today’s vehicle service contract
sales alone account for 71% of the
dealer group’s total PRU, signifi cantly
reducing reliance on fi nance reserve

Economic
Landscape
In 1979, The Shah of Iran was overthrown and the Ayatollah
Khomeini came to power, slashing Iran’s oil production
and plunging the U.S. back into a recession mirroring the
1973 recession. Double-digit infl ation returned, interest rates
soared up to 20%, and the threat of a gasoline shortage and
the return to rationing sent Americans fl ocking to gas stations.
While the rest of the nation was in a recession, the auto
industry was experiencing a depression. The second oil crisis
in 10 years changed the competitive landscape from “bigger
is always better” to “frugality is the name of the game.”
During this time of great upheaval, Patterson Auto Group was
born. With the opening of his
fi rst store, Harry Patterson knew
that to be successful, he would
have to be nimble enough
to adapt to whatever the
market threw his way. As the
auto retail industry struggled
to stay afl oat, the model of
using finance and insurance
products to generate greater
profit was just beginning to
make headway.
Harry Patterson became a
fi rst-adopter and engaged EFG Companies for an F&I solution
when he opened his fi rst dealership. Patterson knew that
with consumers being more circumspect about new vehicle
decisions, he had to incentivize them with benefits beyond
simply having a new vehicle. With EFG’s innovative product
development, Patterson was able to do just that and EFG
became his fi rst and only F&I product provider, creating a
lasting relationship that has spanned almost 40 years.
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Patterson’s
Brand Promise
Fast forward to the Great
Recession. The auto industry
was experiencing another
crisis that even government
bailout programs struggled
to shake off. By the midpoint
of 2010, there were small
indications of improvement,
however spending and
employment sectors
appeared to be negative or
fl at. Consumer confi dence
was still shaky and the
unemployment rate was still
at 9.6%. Americans were holding off on making big purchase
decisions and the auto group needed to re-evaluate how
to address current economic conditions and bring in more
business.
As such, dealers were quickly working to develop a greater
level of business analytics, diligence in compliance, and
proactive management to include individualized training
programs for personnel and key staff retention strategies.
EFG developed a strategic program to leverage Patterson Auto
Group’s brand promise.
EFG developed a strategic program to leverage Patterson
Auto Group’s brand promise. With extensive recruiting,
training and compliance support, the auto group was able
to build upon its solid foundation of putting the customer first
to cultivate a culture of superior service performance.
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EFG’s
Engagement
EFG initiated its plan by
tackling the auto group’s
greatest challenge and
asset – its people. EFG’s
recruiting and training experts
utilized the company’s
proprietary Top Performer
®
model to determine which
behavior set would work best
within the dealership. With
this Top Performer Profi le,
they were able to place key
performers in roles where they could succeed and increase
dealership profitability.
After re-evaluating and placing top
talent within the dealership, EFG worked
with Patterson’s management team to
determine areas of improvement and
develop performance benchmarks.
They reviewed everything from the
“meet and greet” to loan qualifi cation.
EFG specifi cally helped them in
presenting options by putting the F&I
director in an advisory position versus
a sales role, with the goal of increasing customer satisfaction
by allowing the customer to make a purchase decision within
a valued set of options.
Along with focusing on the fundamentals
and positioning dealership personnel
as advisors, EFG also focused training
and process development on ensuring
compliance and ethics. This became
critical as government oversight
increased with regards to dealership
markup practices. In addition, EFG readdressed
Patterson Auto Group’s pay
plans to meet dealership goals and
provide the maximum opportunity for revenue generation by
providing a more positive and motivational compensation
and promotion strategy.
4

The
Approach
Lastly, Patterson and EFG evolved the dealership group’s
F&I product mix to directly address the recessionary
environment. They implemented market-differentiating
products that addressed the need to protect their consumers’
credit and investment in their new vehicle.
Along with EFG’s MAP ® vehicle service contract, Signature
Finish ® Tire and Wheel, Signature Finish ® Dent Protection, and
GAP debt protection, EFG most recently began implementing
a proprietary customer retention program.
Patterson VIP was designed to foster customer
loyalty and increase service-drive revenue by
creating the habit for consumers to return to
the dealership for all their vehicle service needs,
while also providing timely service reminders via a
sophisticated email marketing algorithm.
According to NADA, vehicle buyers establish their vehicle
maintenance habits during the first 18 to 24 months, or six
to eight maintenance visits; and, 70% of dealer service
customers will strongly consider making their next purchase
at the dealership. Patterson’s goal with VIP is to motivate
customers to establish their maintenance habits with the
dealership group and increase customer retention.
Vehicle buyers establish their
maintenance habits within the first six
to eight maintenance visits.
70% of dealer service customers will
strongly consider making their next
purchase at the dealership.
5

End-to-End
Solutions
Patterson VIP comes complimentary on every vehicle
sold. Whether buying new or used, Patterson customers
receive complimentary oil changes
and tire rotations. Additionally,
Patterson VIP customers receive
roadside assistance benefits that
auto-renew every time they bring their
vehicle in for their complimentary
oil changes and tire rotations. VIP
roadside assistance includes alternate
transportation and tire protection,
where Patterson will replace or repair
a tire damaged by a road hazard.
With the combination of product innovation and the
implementation of revamped procedures, training and
recruiting methodologies, Patterson Auto Group came out on
the other side of the Great Recession with the honed muscles
and habits of a professional athlete. The Auto Group not
only increased sales, but also lived up to its brand promise
“The Patterson Difference” in one of the toughest economic
recessions since the Great Depression.
Throughout both the oil recession of 1979 and the Great
Recession spanning 2008 through 2010, and all the ups and
downs in between, EFG Companies has provided Patterson
Auto Group with the innovation and client engagement
necessary to not only weather the storms, but also remain a
top volume dealer in its area for the last three decades.
6

Results
During the heart of the Great Recession, Patterson Auto
Group closed out 2009 with a PRU of $958.
The auto group closed out the third quarter of 2014 with a PRU
of $1,330. This represents an increase of 40% from 2009.
BANK
40%
Increase in
PRU
2014 PRU:
$1330
Finance Reserve
Accounted for 62%
of 2009 Profit
2009 PRU:
$958
It’s also important to note that with
Patterson Auto Group’s product reserve
currently at $611, it has remained fairly
constant over the years. So, that 40%
increase in PRU resulted solely from F&I
product sales.
In fact, today’s vehicle service contract sales alone account
for 71% of the dealer group’s total PRU and make up almost
the entire PRU from 2009.
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Lasting
Success
Harry Patterson founded Patterson Auto Group with the
simple philosophy “If it’s only good for me, it’s not right.”
EFG’s services and unmatched client engagement allowed
Patterson to remain true to this philosophy by fostering a
culture where his sales and F&I team were empowered and
trained to listen to their clien ts, and provide a total ownership
experience that creates lasting relationships. This dedication
of customer satisfaction directly correlates with Patterson
Auto Group’s success in increasing its PRU.
John Stephens
Vice President,
Dealer Services
EFG Companies
To learn more about EFG Companies, visit
efgcompanies.com
Or Contact:
John Stephens, Vice President,
Dealer Services
jstephens@efgusa.com
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