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Lexus of Memphis has embraced a philosophy that a dealership should reflect the luxury of the...

Business Journal by John Scruggs 

Lexus of Memphis has embraced a philosophy that a dealership should reflect the luxury of the cars it sells.

Three years since moving into its new $12 million, 28-acre facility onRidgeway, Lexus of Memphis is outselling other luxury brands in thecity and winning national awards for customer satisfaction.

The lone seller of new Lexus vehicles in the city, Lexus of Memphisis competing with and winning against other U.S. Lexus dealerships insales and service satisfaction, according to 2006 Lexus customersatisfaction surveys.

With $87 million in total sales for 2006, Lexus of Memphis continuesto see strong growth, posting 11% total sales growth from 2005 to 2006.

Moving from its Mendenhall location in 2004, the dealership wasrunning out of room and made the decision to build a new facility,designed by Wise Smith and built by Grinder, Taber & Grinder, Inc.

Giving its customers an experience that echoes the luxury andquality of the cars it sells, the new dealership's goal to win andretain customers appears to be working.

"We're all here for the customer," says Bryan Smith, general salesmanager for Lexus of Memphis. "What links us together is anautomobile."

Smith says his goal is to get customers and keep them for life.

"It starts with the car because our business is product driven," hesays. "But for some of our customers to come back and buy two, three,even four cars from us, it's the service."

Smith says much of the dealer's sales staff has been there since1990 when Lexus of Memphis opened its doors. Turnover among servicetechnicians is very low.

"Most auto dealerships have turnover that's as high as therestaurant industry," he says. "We have very low turnover here and Ithink that's a testament to the product and the store."

From a plush waiting area with computer terminals and a coffee/drinkbar to special Saturday orientation sessions, Lexus of Memphis seessuccess in terms of customer satisfaction.

Gary York, service director for Lexus of Memphis, says the brand is supportive of its dealers and provides excellent training.

"They put us in an environment where we're going to get the best training," he says.

Passing some of that training along to its customers, Lexus ofMemphis started offering training sessions on the third Saturday ofeach month.

"I have asked my customers 'What do you want? Extended hours? Newcar orientation?' " York says. "Most of them want to spend more timegetting familiar with their car and interacting with our staff."

The new owner's clinic, which York started two and a half years ago, has been a huge success for the dealership.

"I've had eight people and I've had 50 people show up," he says. "Wereally put on a show and it's a great opportunity for owners to buildrelationships with our technicians."

Smith says the response to the clinics has been outstanding.

"We get a lot out of it," he says. "And it's so simple."

Smith says service sales have doubled since the dealership moved to the Ridgeway location.

On average, he says Lexus of Memphis is selling about 100 cars eachmonth, but he'd like to get that total to 200, including new andpre-owned sales.

Aaron Sommers, district sales manager for Lexus' Tennessee and NorthCarolina regions, says the Memphis dealer continues to perform well andis a consistent winner of the brand's dealer awards and programs.

"We have a phenomenal partner working for us in Memphis," Sommerssays. "They continue to have good sales growth year after year."

Memphis is a unique market for the brand with its closest competitors in Little Rock and Nashville.

Smith says Cadillac is a competitor that has an abnormally largemarket share in Memphis, but is quick to add that Lexus of Memphisoutsold both Memphis area Cadillac dealerships combined in January andFebruary.

Customer satisfaction is the key, Smith and York say.

And making service appointments convenient is another strategy the dealer uses to keep Lexus owners smiling.

Lexus of Memphis' loaner fleet of Lexuses keeps people on the move without interruption during a service appointment.

York says for any service that takes longer than an hour, they'regoing to give you a loaner car from their fleet of 72 Lexus vehicles.

"People often want us to service their other car," York says. "And more often than not, if we can do the work, we say yes."

Saying yes and exceeding customer expectations is the driving forcebehind Lexus of Memphis' continued car and service sales growth.

"If we have to pay $1,000 to fix something that the factory won'tpay for, we do it. It's a matter of goodwill," Smith says. "You're notgoing to have to do it again and by doing something they don't expect,you're probably going to have them as a customer for life."

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