How COVID changed dealership group AutoIQ — for the better

When COVID-19 reached pandemic scale in March 2020, Barrie, Ont.-based dealership group AutoIQ fast-tracked a variety of strategies, including some which defied conventional wisdom.

Those moves were implemented after Andrew Ojamae became president of the 16-store group in 2019. They featured a detailed omnichannel strategy, which not only carried the company through two tough years but also permanently changed many of its business practices.

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AutoIQ’s blend of collaboration among its team leaders and what Ojamae calls “semi-democratic” decision-making led to a few risky moves, in some cases defying accepted auto retail wisdom. But the results speak for themselves.

From 2019 through 2022, the group, based in Barrie, Ont., 110 kilometres north of Toronto, increased same-store revenue by 28.5 per cent, the company stated in a submission to the Canadian Automobile Dealers Association (CADA). AutoIQ further noted that these performance improvements enhanced its enterprise value and net worth.

As a result of these efforts, CADA named AutoIQ its 2023 Laureate in the business-innovation category.

NEW BOSS, NEW MANDATE

In 2019, the company underwent a restructuring that included appointing Ojamae, bringing all its dealerships under one organizational umbrella and creating the company’s brand name — AutoIQ. Before then, each dealership operated pretty much independently, Ojamae said.

With a mandate from company founder Mike Stollery, Ojamae said, he set out to “harmonize” the operation while nurturing its entrepreneurial spirit.

For the first time, the leaders of each dealership met online — as often as weekly — exchanging ideas and debating strategy. When COVID hit, AutoIQ’s omnichannel approach had been mapped out but not fully launched.

Some Canadian dealerships have reported being hit hard by the pandemic, but Ojamae said, “COVID has been very generous to our industry.” With vehicles in short supply, margins went up while expenses went down. Many customers migrated to online purchasing, and Ojamae said sales through this channel spiked.

By September 2021, the company had unveiled AutoIQ.com, a fully virtual purchase experience where customers could conduct the entire transaction from home and accept delivery of the vehicle in their driveway. They were also given the option of a hybrid online/in-store experience.

To promote its omnichannel offering, AutoIQ licensed the Journey song “Any Way You Want It.” To give buyers comfort in purchasing a vehicle they have never driven, the company broke industry tradition and offered a seven-day money-back guarantee, Ojamae said.

“We took a flier on that,” he said, noting fears that the program might become costly. “Now, I don’t see us ever dropping it.”

Although Ojamae did not have precise numbers, well below one per cent of vehicles sold are returned, he said, and many of those are exchanged for another vehicle.

SELLING THE SKEPTICS

Another initiative, however, ran into serious initial skepticism from the group’s dealers. Ojamae said that when he floated the idea of “shared inventories” — essentially mandatory dealership vehicle trades — he encountered a lot of naysayers. Despite some serious hesitation, “We just turned it on,” Ojamae said, and quickly increased sales.

The secret to dealer acceptance of the trades was a bifurcated profit model, he said. The profit on the car sale stays with the source dealership, and the receiving dealership gets to keep F&I and other revenue streams.

AutoIQ said that through the end of 2022, more than 28 per cent of its sales of pre-owned vehicles have been derived from intracompany vehicle transfers.

Ojamae “harnessed technology and data to differentiate their organizations from the competition,” said Kirk Kristofferson, a professor at the Ivey Business School at Western University in London, Ont., and a judge for the CADA Laureate competition.

AutoIQ, he wrote, had unified the group’s dealerships and more than 1,200 employees with a set of core organizational values, identified employee potential and developed five employee professional-development programs.

Other initiatives that CADA recognized include CarLoanIQ, which helps clients with poor credit ratings secure financing; 360-degree online videos of vehicles; one centralized auto service call centre; three tiers of used vehicles, ranging from fully reconditioned to “as traded”; and centralized vehicle delivery services.

CHANGE NOT AN EASY SELL

Ojamae credits constant collaboration among the dealership leaders for generating and executing so many initiatives.

“We don’t always have everybody on board,” he said. “We have definitely done some things our senior leaders haven’t been comfortable with.”

Ojamae — a graduate of the Automotive Business School of Canada at Georgian College in Barrie — said he looks to that school to recruit the best graduates. When promising grads are identified, AutoIQ aggressively courts them with promises of ongoing professional development and opportunities to grow their careers.

“Talent and career development is everything in our business,” Ojamae said, a philosophy that drew praise from the CADA competition judge.

“Andrew’s focus on employee growth and development is truly admirable,” Kristofferson wrote.

Ojamae said his goal is to “cut out mediocrity everywhere we can.” Doing so will foster organic growth over time, he said.

“We don’t want to be the biggest; we want to be the best.”