President, McGrath Lexus, Acura, Honda & Hyundai
Following in the footsteps of his grandfather and father, Mike McGrath has carried on the family auto business for 42 years. “My dad worked in the industry in the ‘40s in Caledonia, Minnesota,” shares Mr. McGrath. “He was then called back to military service as a marine pilot in World War II and the Korean War. When he got out, he went to work for General Motors. We had a large family with eight children, and he was transferred a lot, so we moved around all over the Midwest. I hardly ever went to the same grade school two years in a row. We ultimately settled down in Chicago because my mother said it was wearing her – and the rest of us kids – out. And that put a damper on his main career with General Motors, because if you don’t take a promotion you’re passed by. So he got into a financial program with General Motors to support a dealer who didn’t have any money, and bought a Buick store in Elgin when I was a junior in high school. That set the direction for our entire family.”
The Northern Illinois University alum, who was given the Distinguished Alumni Award and sponsored many students’ trips to the 2013 Orange Bowl game in Miami, Florida, branched out on his own after college. “I had six brothers and sisters coming up who all wanted jobs at Buick, so I opened up a Lincoln Mercury dealership in 1970. My dad co-signed and was partners with me initially, then I bought him out four years later. And my family is still involved in the auto business. Now one brother has Honda, Audi and Acura dealerships; the other has a Nissan dealership; my brother-in-law has a Ford one; My kids are also partners: Mike Jr. is at Lexus, Kevin runs Acura and Honda/Hyundai, and Ryan’s also involved. My wife, Kristina, heads up customer relations and has people in every store that report to her and monitor our customer responses to surveys, phone calls, to make sure we don’t slip.”
Starting at Lexus of Westmont in 1991, Mr. McGrath added an Acura there in (‘94), along with a roster of downtown Chicago dealerships: Lexus (‘99), Honda/Hyundai (‘06) and Acura last year.
One of the more unique aspects of Lexus at 1250 West Division Street is the hotel-like atmosphere. “Lexus started in 1989 with the premise to treat every customer like a guest in a home,” recalls Mr. McGrath. “What we’re trying to do, rather than have a typical car dealership, is develop dealerships more like a five-star hotel, with a nicer ambiance. In our case we have a café, putting green and Internet center where people can work while we work on their cars. We’ve tried to duplicate that at all our dealerships, which works well because we’ve raised the bar for customer experience and have a great reputation for being very customer-friendly.”
McGrath dealerships take customer relations/marketing seriously, and understand the importance of catering to women. “Women have become a bigger part of the auto industry — in sales, service, technology and as buyers,” observes Mr. McGrath. “While I think they’re smarter in terms of research, women may be intimated — most dealerships aren’t female-friendly because men with chauvinistic attitudes usually run them.”
So five years ago, Mr. McGrath retained Bridget Brennan, CEO, Female Factor, and author of Why She Buys, to evaluate the dealerships’ performance. “She held seminars for employees, and I still use the videos to train new-hires today.”
Mr. McGrath notes that Lexus actually has a higher percentage of female over male buyers. “I was instrumental in getting a woman on our advertising board to give a different perspective to the old-school male attitude toward marketing automobiles. I think old habits are hard to break, and there are still people who may not be great dealing with female customers, but they’re working on it. We know women have a different perspective on cars and negotiating, and if they feel more comfortable speaking to a salesperson, they are more likely to do business with us.”
McGrath dealerships really go the extra mile for female customers, even beyond marketing. “Women have special needs,” observes Mr. McGrath. “Men are more into power and performance; women are more into safety, styling – car that easier to drive. For instance, our number one female car at Lexus is our RX 350 SUV. You sit up high, have a commanding view of traffic, a hatch back you can hit with a button to open to unload groceries, luggage or equipment. It’s very female-friendly. There’s even a spot for your bag in between the seats. It’s the little things that are important to women that men don’t really care about.”
What’s more, Mr. McGrath is also a passionate advocate for women attending Chicago’s annual Auto Show. “I was on the Board of Directors from 1995-2004 and, ultimately, became Chairman of the Auto Show,” he says. “I’ve been on the Executive Committee, Advisory Board for Lexus/Acura, and I’m currently on the Board of Directors for the advertising group that works with Lexus on their marketing direction, which is where Women’s Day (Tuesday, February 12) comes into play. The day features discounted admission, guest speakers and activities so women can be more informed and not feel intimated about buying vehicles. Cars are emotional. They’re not just a mode of transportation, but almost an extension of you. And it’s important to cater to customers both in and out of the dealership.”
Outside of the auto industry, Mr. and Mrs. McGrath are very philanthropic. “Our philosophy is to give back to the community that supports us,” he says. “I started that way back in 1970 in Elgin. I was active in The United Way, Civic Center, YMCA and Women’s Shelter for Battered Women. In downtown Chicago, Kristina is our point person. We’ve been involved with the Joffrey Ballet, where she’s headed up the fall fundraiser Couture and Cocktails for three years in a row, as well as the USO Gala at Navy Pier. We’re also involved in PAWS and the American Cancer Society Annual Discovery Ball. We sell about 12-15,000 new and used cars a year, so we try to give a little something to everyone. It’s part of our business philosophy.