Cover Story – Driving loyalty

Posted on May 1, 2014 :: Cover Story
Margaret LeBrun
Posted by , Insight on Business Staff Writer
Tim Bergstrom, president and COO of Bergstrom Automotive, leads the charge for digital communication and tracking results to maintain the company’s culture – and its mission to please “guests.” Photo by Shane van Boxtel, Image Studios.

Tim Bergstrom, president and COO of Bergstrom Automotive, leads the charge for digital communication and tracking results to maintain the company’s culture – and its mission to please “guests.” Photo by Shane van Boxtel, Image Studios.

“Hi, I hope you are having an outstanding day!” Tim begins. “I’ve visited four stores this morning and everyone was smiling. … Let’s be upbeat… Let’s be a place when our guests come in, they see we’re having a good day.” He reminds them of their goals and then concludes, “Thanks for all you do!”

It’s a wrap in under a minute. Within 5 minutes, Craig posts the message and blasts it to every Bergstrom team member in all 30 locations statewide. On average, about 900 team members will see a new video (or more than one) every day.

This is just one of many ways Bergstrom Automotive ensures that everyone is on the same page, putting the company’s highest priority — guest services – first. Customers are “guests” at Bergstrom; employees are “team members.” Bergstrom leaders say if you treat your team right, they’ll treat your guests right and they will come back. Give your team goals, hold them accountable and reward them for a job well done, and the whole company – and in turn, the community – benefits.

This makes all the difference in an industry with 3 percent margins, in which prices are more transparent than ever, Tim says. It’s especially true in a world in which the way people communicate is changing faster than you can say “Instagram.”

“Tim Bergstrom gets it,” says Jason Dorsey, best-selling business author, speaker and chief strategy officer with The Center for Generational Kinetics based in Austin, Texas, who has become a confidant of Tim’s. “He realizes that social media is critical not just for having a conversation with millennials but for engaging every generation of customer, employee and community member. What other car ambassador takes selfies with smiling people around the world? Tim is an example of what is possible in terms of authenticity and transparency for the entire auto industry.”

John Hogerty II, executive vice president and general counsel at Bergstrom, attests to Tim’s zeal for fresh ways to communicate. He’s among company leaders who often finds himself snapping photos with Tim and others.

“I’ve had the unique opportunity to watch Tim grow in his leadership style in different jobs within the company,” Hogerty says. “He has an amazing ability to communicate with our team members and guests, especially as we’ve grown and spread throughout the state. … The world has changed, and people who don’t embrace it will be left behind.”

Tim helps lead the charge to attract and retain the right people in an industry that requires work on nights and weekends and a company that expects its people – from the oil changers and service schedulers to the sales team and management – to put guests first.

He was among the leaders at Bergstrom who identified challenges in recent years – especially motivating the millennial workforce – and set about to fix them. The creative steps the company has taken to tackle those issues offer a lesson any business can learn from.

Pedal to the metal for spring sales

The long, cold winter made the first quarter of 2014 tough for auto sales, says Bergstrom Automotive CEO and Chairman John Bergstrom, 67, who continues to steer the wheel of the company he and his brother Richard started in 1982. But that’s in the rearview mirror now, just like the 2008 recession, undoubtedly the toughest time ever for the auto industry, Bergstrom included.

“Today the sun’s out and the sky is blue,” John Bergstrom says with a broad smile, focused intently on the road ahead. “We’ve been through a number of tough years of very challenging times, but it feels good today.”

Bergstrom Automotive has its foot on the gas to take on its busiest time of the year. From mid-May through the end of June, their target is to sell 3,000 vehicles.

“I’m very bullish about our business,” John Bergstrom says. “I think we’re going to hit our aspirational goals this year and reset goals for next year.”

Bergstrom has declared a goal of $1 billion in sales and company leaders expect they will meet that goal within a year, perhaps sooner. They were on that ambitious track before the recession hit, then set back when GM filed for bankruptcy and shut down its Saturn, Hummer and Pontiac lines.

Since then, Bergstrom has acquired many more locations. It’s the largest automotive dealer in Wisconsin, with stores throughout the Fox Valley, Green Bay, Oshkosh, Madison and Milwaukee, offering 63 brands, “every brand except the exotics,” Tim says.

Last fall, Automotive News named the company one of the top 20 dealerships to work for in the country, out of 15,000.

John Bergstrom is proud the company continues to pump 25 percent of its pretax profits back into the community and happy to see Tim is leading the charge to the future.

“We have a very good working relationship; we talk to each other 10 times a day,” he says of Tim, who was named president in January when Richard, 64, stepped out of that role to focus on family and community work. “His job is to run these operating businesses all day long.”

From Tim’s vantage point, his dad is “the car guy,” and “Uncle Dick is the money guy,” who, with a background in banking, ran the financial end of the business.

Dick says his brother and nephew share a passion.

“Like my brother John, Tim was born with gasoline in his veins. They just naturally love cars,” says Dick, who still keeps an office at Bergstrom.

Socially adept

Taking a visitor on a drive from downtown Neenah to the company’s Quest Training Center (at the site of the former Perfect Presentations on Lyon Drive, Neenah), Tim says social media – including YouTube, Facebook, Twitter, LinkedIn, Foursquare, Instagram, Tumblr, Flickr, Google Plus and the company’s internal and external websites –are among the ways Bergstrom reaches people. Today, he drives a white, 2014 Tahoe with company plates; he doesn’t own a car with his own registration but hops in whatever he might want to showcase on a given day. He looks down and realizes he’s wearing pleated pants – Jason Dorsey would not approve, he says.

“He says I try to act older than I am,” Tim says with a playful grimace. A 1999 graduate of Marquette University, he identifies with Gen X but is sensitive to what motivates millennials.

He talks about how he grew up in the business (his brother is an oral surgeon and his sister, a teacher) and how he sees his role as bridging the need for the company to maintain its culture of exceptional guest services with the way people buy cars today.

Tim often posts photos of sexy new models (of cars), selfies with team members in Bergstrom showrooms, and “checks in” electronically as he travels nationally and internationally (in April, Japan and Germany as well as multiple U.S. cities) to manufacturers as well as statewide to Bergstrom dealerships.

Almost 30,000 people “like” Bergstrom Automotive’s Facebook page, Tim personally has about 1,200 friends on Facebook – about half are team members; he keeps it friendly but business focused. The company’s followers on other social media are growing, as well.

Setting goals – and tracking them

At the Quest Training Center, in the office of Ted Gessler, real-time statistics flash on a large screen on the wall. Gessler, corporate Internet sales director, spearheaded search-engine optimization for Bergstrom last year, quadrupling the number of referrals within a few months. The wall monitor shows the number of calls coming in, how quickly each call is answered, how long callers are on hold and the duration of each call.

About two years ago it became apparent that calls were not being answered quickly and efficiently.

“On the sales side, if you said you wanted to buy a car, the call was answered in under 20 seconds,” Tim says. Other calls, however, averaged 2 minutes, 32 seconds. “We said, OK, why is this happening? This isn’t right.”

The company created a business development center, which channels all its calls to Guest Services. This removed the burden of scheduling from the company’s service departments. Now, calls are answered in three rings and most callers wait on hold less than eight seconds.

The Quest Training Center, which opened in 2013, includes an auditorium where the company trains new hires and holds meetings to keep team members informed of goals, metrics and new developments at Bergstrom. At a recent meeting, John Bergstrom wore Google Glass as he emphasized the importance of understanding new technology.

The training center came out of Bergstrom’s “Quest to be the Best” initiative, spearheaded by John Bergstrom.

“John has done a good or better job than anyone in the country as far as customer relations,” says Rollie Stephenson, chairman and CEO of Faith Technologies, longtime friend of John Bergstrom and fellow car buff.  “He’s constantly put up against big automotive dealers of Chicago, San Francisco and other major cities, and the company always comes out high in the rankings. It has a lot to do with empowering those around them. … When someone can be true to their values and their passion, it always comes out.”

Bergstrom Automotive has developed its own criteria for metrics, which it calls Op:Ex (Operations Excellence), based on three criteria: the manufacturers’ Customer Service Index (CSI), the company’s own standards for each of 11 components of the company (ranging from Parts and Service to Sales, Internet Sales and Leadership) and “execution check,” otherwise known as mystery shopping.

“Roughly 92 percent of the time, we were executing things the way we wanted to,” Tim says. “The way I look at it, that’s failing 100 percent of the time for about one out
of every 10 guests.”

Looking to the future

Some might question whether, in the age of Craigslist and CarSoup, the way people buy cars has upended the bricks-and-mortar dealerships. Indeed, says Tim, while the Internet has changed the way people shop for vehicles, it has helped build relationships. The traditional consumer spends about 90 days researching cars before making a purchase, he says. Much of their time is spent online, and this means they connect with sales representatives much earlier in the process. Bergstrom encourages communication with potential guests who visit their website using email, texting and sharing photos.

“The average sales associate 15 years ago was doing a good job if they sold eight to 10 cars a month,” Tim says. “Now, the average is much closer to 14. We have team members selling more cars than you could have ever sold 10 and 20 years ago because of technology.”

Employee incentives play a big role in the culture at Bergstrom. About three quarters of employees receive incentive pay; every employee is eligible to receive bonus pay for exceptional work.
About two years ago, the company recognized challenges attracting young people to work at Bergstrom. In particular, it experienced high turnover in its Express Lube services – a critical area because it touches more guests than anywhere else in the company. John Bergstrom and John Hogerty discovered Dorsey’s expertise in what makes millennials tick, and they invited him to Neenah.

Tim says Dorsey told him, “You’re not engaging them. They have to be inspired – and then they’ll work harder than you ever did.”

The first thing Bergstrom did was enlist one of their best service team members, Emmett Storey (their “Aaron Rodgers”) to lead the Express Lube team. He empowered them to take initiative and engaged them with technology. Some dropped out, but those who stayed were encouraged to do whatever it takes to please their guests. They brought toys into the waiting area for kids, gave away balloons in the summer and those who needed training received it through Fox Valley Technical College.

“Now, they’ve got this culture of winning,” Tim explains. “I do not go a single day without somebody telling me about their amazing experience” at the Express Lube. “At least once a week I’ll get a letter from someone who says they appreciated the experience. They are having so much fun, they’re inviting friends to work with them!”

About that time, the company began to step up its social media efforts, as well.

“We’re real people to them,” Tim says. “They interact with me. It’s amazing – that younger generation touches more guests than anyone else. They wash every single car and they change the oil. We’re no longer this big, corporate (faceless) employer. That whole engagement piece is really cool.”

One thing’s for sure: Communication will keep on changing.
The company’s success in social media proves the importance of staying one step ahead with technology, John Bergstrom says: “It’s unbelievable. And it’s going to continue. Change is good for all of us.”

But change for John Bergstrom? That’s not in the cards.

“I have no intention of retiring or transitioning,” he says.

Besides heading the company, his latest project is leading the charge to raise funds for building a Boys & Girls Club in Menasha (scroll down for related story, “A culture of giving”).

“Success, for me and for our company, is to try to make our community a better place,” John Bergstrom says. “That’s a whole lot more important than if I made a margin on a car.”

Bergstrom: How it all began

The story of how brothers John and Richard Bergstrom built their business is well known by many in the Fox Valley, but those of Tim’s generation and younger may not be aware that the two got their start in nightclubs, then hotels.

“It started in 1974 with a nightclub,” recalls Richard “Dick” Bergstrom, vice chairman of Bergstrom Automotive and until December 2013, president of the company. “It was in the old post office in Neenah, known as the ‘Old P.O.’ I graduated from college (UW-Oshkosh) in 1971, had been working in a bank in Milwaukee and transferred to Oshkosh. John (a Marquette University graduate) was selling cars. We saw this beautiful old character building and said, ‘Let’s open a nightclub.’”

It took off like wildfire, and the brothers, then 28 and 24, opened a second nightclub, in a former chicken hatchery, and called it the Fire Alarm in Appleton. Two years later, four business leaders in Neenah and Menasha, impressed with the impeccable service and hospitality of the Bergstrom’s nightclubs, recruited them to buy and run the Valley Inn Hotel in Neenah (now the location of the Riverwalk Inn), financing it 100 percent.

“We had two nightclubs going and I was working in a bank and John was selling cars,” Dick recalls.

Within two years they sold the nightclubs and bought the Pioneer Inn in Oshkosh. When business leaders in Appleton recognized the need for a downtown hotel, they turned to the Bergstroms, and in 1981 the brothers began building the Paper Valley Hotel. It opened in June 1982. John had been managing the auto dealership on Green Bay Road in Neenah, and that same year they bought the place, which today is called Bergstrom Chevrolet Buick Cadillac.

What did all these businesses have in common? “We always ran very clean, well-maintained businesses that were very hospitable, friendly, respectable, lively and upbeat,” Dick says. “It was all about service, hospitality and cleanliness – standing behind your people, your word, your product – right from the start.”

The Bergstroms sold their hotels in 1998 and focused on the auto business, acquiring locations throughout Wisconsin. Today, Bergstrom Automotive operates 30 locations in the Fox Valley, Green Bay, Madison and Milwaukee. Eight family members are employed in the business.

Accolades for Bergstrom Automotive

Bergstrom Automotive was named the No. 1 Automotive Dealer in the U.S. by Time Magazine in 2003, the industry’s most prestigious award. The following are awards Bergstrom has received in the past year:

» General Motors Dealer of the Year
» Chevrolet, Mark of Excellence
» GMC, Mark of Excellence
» Buick, Mark of Excellence
» Cadillac, Mark of Excellence
» Cadillac Master Dealer
» Lexus Elite
» Audi Magna Elite Society
» BMW Center of Excellence
» Chrysler Five Star Award
» Nissan Owner First Award of Excellence
» Mercedes Benz “Best of the Best”
» Mini, No 1 in Service, No. 2 in sales and guest treatment in the U.S.
» Acura Precision Dealer
» Volkswagen Top 10 in the U.S. for CSI
» Mazda Gold Cup
» Subaru Stellar Care
» Automotive News, Best Dealers to Work for (Top 100)

A culture of giving

It would be an understatement to say that community engagement is a hallmark of the Bergstroms.

“The leaders of Bergstrom have been significant contributors in our community,” says Kathi Seifert, co-chair of New North, Inc., who has worked on community projects with John Bergstrom, including the Fox Cities Performing Arts Center. “Downtown Neenah and downtown Appleton have really been transformed under their leadership. They’ve been tremendous contributors to the growth of our community.”

John’s current project is the launch of a new Boys and Girls Club in Menasha.

Tim Bergstrom served as co-chair of the Fox Cities United Way campaign in 2013 and is leading the 2014 campaign; last year Bergstrom teammates alone donated $160,000. Tim also serves on the ThedaCare Foundation Board.

Led by Thor Gilbertson, vice president of operations at Bergstrom, the company has raised a landmark $1 million in the last 10 years for the Make a Wish Foundation. Bergstrom Automotive is the single largest contributor to the Wisconsin campaign.

Every summer, Bergstrom Automotive promotes its Drive for a Cure campaign to help fight breast cancer, donating $1 for every mile participants test drive a car on a given route; last year it generated $55,747 for breast cancer research at the Medical College of Wisconsin.

 

Margaret LeBrun

About Margaret LeBrun

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