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Frank Fletcher’s Way: Adapt and Serve CustomersLock Icon

6 min read

No matter what business you’re in, the key to success is adapting to constant change, Frank Fletcher Jr. told Arkansas Business last week.

Fletcher is chairman and CEO of Frank Fletcher Cos., a diverse and privately held enterprise that includes the Wyndham Hotel, Riverfront Steakhouse and Benihana Japanese Steakhouse, all in North Little Rock; 13 auto dealerships in Arkansas and Missouri; Fletcher-Bensky Furs in Little Rock; Fletcher Real Estate; and Frank Fletcher Racing Operations.

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Frank Fletcher Cos., which reported $750 million in revenue in 2017, employs about 1,000 people, a number that has steadily grown over the past 20 years or so.

And, at about 75 percent of Frank Fletcher Cos. businesses, profit is up compared with last year, according to Vice President of Finance Thomas Roy III. Profit is flat at the other 25 percent.

In a recent interview, Fletcher discussed how each business he runs has pivoted to keep up with the times.

His experience working with and for Sam Walton, founder of retail giant Walmart, has informed much of his journey, Fletcher said. Walton taught him to be customer-focused, keep prices low and give customers the best value.

“The main thing is I have to fight to not do what we did yesterday, to do something different today,” Fletcher said.

The Wyndham, one of the businesses where profit has been flat, is an example of that push to adapt. Eight to 10 of its rooms are being converted into larger, two-room suites and wood floors are being installed. By the time that’s done, Fletcher said, the suites will be better than rooms at some of the newer hotels the Wyndham competes with.

Fletcher enjoys telling the yarn of how he came to own the hotel in the first place.

He and 10 other businessmen owned the land where the hotel sits today. When Roy Seikel, who owned 13 Hilton hotels, offered to build a Hilton property there and said Fletcher would get a tax write-off, the two men struck a deal. The hotel was rebranded as a Wyndham in 2002.

For years, Fletcher owned 5 percent of the hotel, but then the bank came calling, saying Seikel, who was from Oklahoma City, hadn’t been paying on his loan.

Fletcher found that he had signed an agreement that allowed the bank to sue him for the total amount owed, even though he owned just 5 percent of the business. So he bought the hotel, even though its lack of visibility from nearby Interstate 30 was a severe handicap for the business. At the time, neither Verizon Arena nor Dickey-Stephens Park, two major attractions nowadays, had been built.

Fortunately for Fletcher, those additions to the area and the fact that now nearly everyone uses a GPS device to navigate to lodging overcame the challenging location.

The hotel shuttles guests to events at Verizon Arena some six blocks away, and much of its business comes from those events and from businesspeople traveling to Little Rock for meetings.

Fletcher added two restaurants to the full-service hotel after he bought it, Riverfront Steakhouse and Benihana. Both restaurants are doing well, he said, intimating that the property as a whole became a “blessing” even though he first saw it as an “almost nightmare.”

In fact, Benihana’s profit is up an exceptional 15 percent, he said. (The two restaurants had combined food sales topping $4.6 million in 2014, the last full year for which sales data was subject to the state Freedom of Information Act.)

Fletcher said he has learned since owning the franchise restaurant that children influence where their parents go to dinner. So the hibachi-style eatery keeps kids entertained with shows by the chefs, fun hats and family photos.

The customer Fletcher caters to at Fletcher-Bensky Furs has also changed. Roy, the vice president of finance, said the store is selling fewer coats, but fur accessories are still popular, as is the business of altering fur clothing.

Online shopping has had the biggest impact on Fletcher’s businesses, especially the auto dealerships. Fletcher estimated that 95 percent of people under 50 shop for vehicles online instead of going to a lot. Today, some Fletcher vehicles are ordered online and then delivered to the buyer without the customer ever setting foot in the showroom.

Fletcher has had to hire social media experts to handle marketing for the dealerships, and he’s had to pay more attention to his auto group’s website. The website has to look good, be easy to read and be accurate, he said.

That’s because millennials demand those things, Fletcher said. They also want to know the best price upfront and whether you have the car they want in the color they want, and they don’t want to negotiate, he said.

It boils down to this: Younger adults want a quick answer, a truthful answer and for the buying process to be over in 30 or 40 minutes, Fletcher said.

Another change in the business has been the prevalence of low credit scores, particularly among millennials, a reality that has affected brand loyalty. A customer with a low credit store might buy a brand on the basis of a discount or rebate offered on that brand’s vehicle, Fletcher said.

The Great Recession and ballooning college debt have contributed to the low scores, he agreed.

“Our business has changed in that we’re not out just trying to buy [car] stores or sell stores; we’re trying to improve the stores we have by making constant changes in how we’re perceived by our customers,” Fletcher said. “We look at our good comments, and we look at our bad comments” and learn from those.

But some things haven’t changed.

He still lists the price, model year and features on every car on his lots, so customers don’t have to ask a salesperson. That prevents sales staffers from trying to take advantage of a naive buyer, but that’s not really the point, he said, because 75 percent of the people who buy Fletcher vehicles are returning customers or were referred to the dealerships by a friend.

“We don’t want to take advantage,” he said. “I don’t want to make a lot of money on one car because we found somebody who didn’t know what they were doing,” he said. “That’s not good for me long run. If I sell to you, I want to sell to you next year, to your sister, and that’s the way it is.”

The buck stops with him, Fletcher said, so any customer complaints wind up on his desk. “How do we compete? I believe it’s by being real, giving people great value, and telling them the truth and then when we mess up, fix it,” he said.

The only Fletcher business that hasn’t seen much change is its real estate arm, and that’s because other Fletcher businesses are tenants on most of the property it owns.

One exception is 17 acres on Otter Creek Parkway in Little Rock, near the Outlets of Little Rock and Bass Pro. The Fletcher Cos. had planned to build auto dealerships there but decided not to.

Roy, the vice president of finance, said the Fletcher group expects to sell that parcel — the only undeveloped parcel in the growing retail hub — soon.

One theme applies to all of his businesses, Fletcher said: “Business is a constant process of improvement. If you stay the same, you’re going downhill.”

As for the horse racing component of his companies, Fletcher doesn’t plan to ever profit from his string of thoroughbreds. That business is just for fun.

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