The CarMax Story

One of my favorites is the “CarMax story” as told to me by my nephew, who lives in Austin, TX and once worked at CarMax, but is now himself in the financial services industry.

As he recounted the story, he shared with me that he thought it funny that as a long-time student of practice management and client experience, some of that with the Coaching and Consulting team at USAF, the idea of the effect of process didn’t occur to him until after he had left CarMax.

So, several months ago he called to say that he had been looking back at that experience and wanted to share his observations. He laid it out in several key points.

1 - Have you ever noticed that you can’t get to the lot to look at cars without going through the lobby? (I have, my family has purchased three cars from CarMax in the last 5 years)

2 - Did you know that CarMax is the 2^nd largest retailer of used cars in the nation? (I did not, and I don’t know who #1 is)

3 - You work with one Sales Consultant through the entire process.

• There are no finance managers – You pick your financing with your Consultant
• You select your warranty with your Consultant
• You go to the business office, make a few signatures which takes 15-20 minutes, while your car is getting cleaned and washed. In 45 minutes, you’ve purchased a car and you’re gone!

He went on to say that over the few years he was at CarMax, many of his clients came back to buy another car and not a single one, “ZERO” he said, did so because of the prices of the cars, but ALL were emphatic about the “process and experience”.

The next observation he made centered around the local competition. Other dealers were on TV, radio, and billboards calling out CarMax specifically and promising to “beat any CarMax price by $500. Did it work? Apparently not. The five-year growth trajectory for this CarMax location was record breaking.

The long and short of this story is that it is not wishful thinking that clients will pay (and often times pay more for) for the experience and the process, recognizing tangible value. We very much have experienced this same phenomenon with advisors that we work with…Their clients are not fee or cost conscious, understanding the full tangible, predictable and consistent value their advisor delivers.

One of the things that makes this story compelling for me is that it lives outside of our industry but plays to the same root desire of all clients in all industries … Make it easy for me to understand your value.

How many of us have ever bought a car? … ALL of us!

How many of us would say it’s the best experience we’ve ever had? … ???

How many of us would like that to be the case? It’s not like you buy one car and then you’re done with that experience forever.

It’s Process over Pricing and Elevating the Client Experience!

If any of us were to ask a member of the general public to think about two professions that were driven by salespeople with quotas or a focus on “cost and money”, there is a good chance that those two industries would be cars and insurance, and to a lesser degree the generic description of financial planning.

However, deserved or not, that is often what jumps first into the mind of many people, and over the years I have actually asked the question as our team has sought to understand how and why process is so significant to the advisors we serve, and indeed to their clients. The CarMax story is a complete reversal of an imprinted and perhaps begrudgingly accepted industry standard, with growth numbers that supported the enlightened approach of elevating the client experience they provide.

There is a clear difference between salespeople with quotas and consultants with a process. CarMax, like so many of the advisors we work with, has made a shift away from a focus on Products, Pricing and Performance to a focus on Process, Planning Strategy and Process.

If you want to learn more about how we help advisors create professional contrast through process, let’s talk.