General Motors was an early adopter in the certified pre-owned business when it began picking up steam in the 1990s, and these days, GM typically leads the pack in terms of overall CPO sales.

But for one store, in particular, the core values of certification have been a part of the dealership’s mantra for more than three decades.

The standards for quality that dealership owner Carl Moyer put in place when he opened Karl Chevrolet back in 1978 have been pivotal to the store’s success as one of nation’s top-ranking GM Certified dealers, according to co-used-car manager Gary Cron.

And in light of Karl Chevrolet’s triumphs in the certified market, the Ankeny, Iowa, store has been named the Auto Remarketing 2011 CPO Dealer of the Year.

The dealership will be presented the award on Nov. 14 at the CPO Forum conference, which runs from Nov. 14–16 and is part of the Used Car Week.

Upon winning the award, Cron shared with Auto Remarketing more about the store’s success in CPO and the strategies it has employed to become one of GM’s top certified outlets.

Being Fully Committed to Certified Drives Top Sales

The store has been the automaker’s top certified dealer for five consecutive years and is poised to claim that crown for the sixth straight time in 2011.

Through July, the dealership has sold 895 certified units year-to-date, down from 920 from the same period of 2010 but still good enough for more than a 200-car lead as GM Certified’s top seller.

Moyer stressed how the dealership’s “commitment” to the CPO program has been pivotal to its success. The store had to become fully committed to certification for it to succeed, he explained.

“If a guy is committed, then you start figuring out all the ways you can be the very best at it than you can be. Then, you start bragging about everything that you can brag about that you gain when you get a certified vehicle. You get everybody in the place kind of drinking the Kool-Aid, and it just works. There’s not a day that goes by around here where we don’t talk about the value in GM Certified.”

The dealership sells around 600 cars per month, 200 of which are used. Of the used-car sales, 120 are CPO models. The best-sellers, he said, typically follow what the dealership moves on the new-car side.

So, what makes Karl Chevrolet such a strong CPO dealership?

“Mainly just Carl’s philosophy on his pre-owned lot. Ever since he started the business here back in the late ’70s, he’s always had the cream of the crop of used cars. The nicest-looking stuff, reconditioned to the highest standards," Cron said. “Basically, everything that certification stands for, he’s done since day one back in the ’70s.

"Getting into the certified program was really no big step for us because we were already there, quality-wise and standards," Cron added.

In fact, the dealership had its own CPO-like program even before jumping into GM Certified. “Karl Certified,” as it was called, had the same reconditioning standards and an in-house warranty, Cron explained.

Finding the Inventory to Keep Sales Certified Sales Booming

Like many dealers, though, the major challenge these days for Karl Chevrolet on the CPO side is actually finding worthy used vehicles to certify.

Industry-wise, dealers are seeing shortages in trade-in volume and lease returns that are the lifeblood of the CPO inventory pipeline.

“The amount of cars out there is just drastically changed here over the last four or five years. It’s making it a lot more of challenging, but luckily we’ve got enough of a new inventory that we were lucky enough to trade for, not plenty, but a good supply of nice trade-ins,” Cron said. “There’s never enough vehicles. We’ve got a full-time buyer trying to buy vehicles for us every day.”

Karl Chevrolet utilizes SmartAuction and physical auctions to find the necessary supply. But if at all possible, the dealership makes the trade-in its preferred way of generating used inventory.

“The main thing for us is just doing everything we possibly can to trade for that car here at our doorstep, rather than have to go try drive one home from the auction," Cron said. “If at all possible, if we can make any sense out of it here, we’re going to trade for the car here.”

Cron said the main goal is to make “sure we’re keeping our customers here.”

“If we have to put too much in a trade-in, so be it. If it’s the right car with the right history, we’re going to figure out a way to make it work," he said.

"We’ve always kind of had that philosophy somewhat, but it’s just kind of intensified even more to the point where if someone has a nice trade-in, we’re getting it," Cron stated.

Many dealers are turning to the service lane to generate CPO-worthy units. While Karl Chevrolet doesn’t typically employ this channel, the dealership has turned to another avenue that has also become popular lately: reaching out to existing customers in the store’s database.

The dealership may pick a certain used unit it needs, and then it target customers in the database who have purchased that particular model in the past, he explained.

To reach those customers, Karl Chevrolet will use "a little bit of everything," sending out emails, following up with phone calls and sending out mailers, according to the UCM.

Once the store has the CPO-worthy vehicle it needs, all reconditioning is done in-house, Cron shared.

The first stop the vehicle makes in reconditioning is to the service shop. Once it has passed GM Certified’s 172-point inspection, it is moved up to the pre-owned side of the dealership.

Selling the Value of Certified

The Web, Cron says, is a major point of emphasis in Karl Chevrolet’s marketing. The store has its inventory listed of various online channels. The dealership utilizes all of the traditional online avenues to move cars.

“With certified though, it automatically shoots out to a lot of maybe non-traditional websites,” Cron noted. “There are numerous websites that GM sends out information to."

The dealership also still utilizes print, radio and TV advertising to get the word out about CPO.

Cron also pointed out that the certified incentives from GM are another boon that’s helped sales, saying, "They’ve been important here recently. GM has tightened up their standards a little bit as far as who they’ll look at and who they won’t, but it’s another nice selling feature, being able to offer customers a good rate right out front on certain vehicles that have an incentivized rate.”

He continued: “It seems like it’s not as important these days as it was five to eight years ago, but it’s still a very nice benefit to the customer.”

When asked to explain central message that dealership tries to convey about CPO to the customer, Cron said: “We just try to set ourselves apart from the dealers that aren’t certified … and let them know everything that we can about the program, the whole process that vehicle goes through, and it’ll build value in why they’re paying maybe more than what they say can buy one elsewhere for because of the certified … just build the value. There is a lot of value to it.

“(We’re) just making sure the customer knows that, that they’re getting a lot of value buying a certified vehicle and it’s worth their time and effort to do it,” he added. “Our sales department is very well trained on every aspect of it and sells it on every vehicle. They don’t just take it for granted that the customers get it. They want the customer to know what they’re buying (and) build as much value as we can.”

Keeping Customers for Life

Moving along, Karl Chevrolet puts a lot of emphasis on fostering customer loyalty, and as GM Certified national manager Larry Pryg puts it, Moyer “basically wants to be your dealer for life.”

"There isn’t anything more important,” Cron said of maintaining loyal customers.

The store uses a variety of ways to keep customers coming into the dealership. For instance, the store’s Tires for Life program provides new-vehicle customers with lifetime tire replacement.

“Keeping in contact with your customer, that’s real important to us. We’ve got set schedules that we use to keep in contact with our customers,” Cron noted.

“We’re constantly sending out email blasts and doing everything we can to keep them here," he added. "That’s where this car business has grown over the years, from that repeat and referral customer.”

Cron will be a part of the special event called The Used Car Week this fall. The lineup includes the CPO Dealer Forum, the National Remarketing Conference and Re-3: Recovery, Repossession and Remarketing events, and goes from Nov. 14  through Nov. 18 at the Red Rock Casino, Resort and Spa in Las Vegas.

More information on these events and to hear Cron speak, be sure to check out www.usedcarweek.biz. To learn more about Moyer, click here.