Contagious Conversations Podcast: Competing with Big Box Retailers

Kyle:

Welcome to Contagious Conversations where automotive industry leaders dig below the surface and discover what it takes to shift the culture and perception of automotive retail. Let’s get into the conversation.

Today, we’re excited to share this space with Danny Zaslavsky, Managing Partner of VINCUE and General Manager of Country Hill Motors.

All right, man, Danny, we have been chatting just off of this and about even just things like taking trips and vacations and things like Digital Dealer and all the wonderful things that we get to do in life. And so, I am excited to hang out and have a conversation with you today and share a little bit about what you’re doing, not just through VINCUE, but through the dealership and also the culture that you’re encouraging in automotive. We’ll just dive right in. But first, what I want to hear is where did you find auto or did it find you, or what was your origin story and coming up into the business?

Danny Zaslavsky:

Auto definitely found me. My parents came over in ’79 from Ukraine and my dad, one of his first jobs was as a shoe repair man, as a cobbler. In Kansas City, there’s this intersection of I-35 and Johnson Drive, which is right now where an Ikea is. Everybody in Kansas City knows where that spot is. But before, at the bottom of the hill was this little shoe repair business that my dad rented a small space out of and fixed shoes. And then eventually, he fixed enough to buy a part of that building and then eventually the whole building, but it’s still a very small space at the bottom of the hill on Johnson Drive.

Well, my dad walked up that hill and at the top of the hill was this old, what looked like an airplane hangar, and on the end of that airplane hangar was this small office with 10 cars sitting on the lot, and that’s where my dad bought one of his first cars. Josh was the guy that was there selling those cars. There was just him and this other dude named Bobby Lingle who was the “get it done” guy that was fixing them, detailing them, and putting them out when Autotrader came by and took pictures and put them in the magazine. My dad, after he bought the car said, “Hey, my shoe repair business, I just hired my first employee, can I come up here and sell cars with you because I like cars?” And Josh had only been in business for a few years at that point and that literally was how the business was born.

Well, I was a kid. I was born in ’83 and this was in ’86, ’87. In the late ’80s, early ’90s, I would spend my days at the shoe repair business after school because that was my daycare, right?

Kyle:

Yeah.

Danny Zaslavsky:

So, I’d follow my dad up the hill and sit at Country Hill Motors. That was literally, I was born into the business and eventually started, as a bored kid, you’re just given things to do so that you’re not idle. Otherwise, I’d be finding trouble, so I started washing cars, and I started standing underneath cars and checking them out. So, the business really found me.

Kyle:

Wow, that’s a crazy story, man. That’s really cool. Then you’ve traversed and into running that operation at this point?

Danny Zaslavsky:

Yup.

Kyle:

And then also, and I think one of the cool things that recently you’ve been doing, or at least, recently figuratively in the grand scheme of automotive and also your journey is this whole VINCUE world of things, challenging the way that we merchandise and source and acquire vehicles, and that’s the real reason why we’re hanging out on a podcast.

Kyle:

For those of you that don’t know, we do this thing called Pitch Tank on a new app called Clubhouse. Who knows if it’s going to survive? It might, it might not, but whatever it is and whatever it is right now, we do this thing called Pitch Tank, where vendors get to pitch dealers and decision-makers and all that type of stuff and share the new vision and opportunity that they have to support dealers. Danny came on and shared with a whole bunch of people, VINCUE. He won that day and so is on this, so we just want to be fair. And again, this isn’t a no pitch zone, right? VINCUE is an incredible product, so how did that journey going from the dealership and then bringing tech into it and moving into where you can marry tech and dealership and how did that happen?

Danny Zaslavsky:

Well, let me tell you this cool story first. When I was a kid, my dad needed to buy our first computer and my dad went to Sears on Metcalf, which is here in Kansas City, and he bought our very first computer from this guy named Matt. He said, “Hey dude, do you know how to use this thing?” And he goes, “Yeah, kinda.” He goes, “Can I pay you? Can you show up to the dealership? Can you install it?” And he goes, “Sure.” So Matt goes to the dealership, puts this computer in, and then Josh, my dad’s business partner said, “Hey, can you write programming?” And he goes, “Yeah, I’m learning.” And he said, “Well, I want to build a program called Sell Some Cars.” And Matt goes, “I could do that.” So, he wrote our first point of sale program and then said, “Hey, what is this? How do you guys get cars?” This was, again, early in the mid ’90s when Internet was starting, on Netscape in ’96 as things started going online.

Kyle:

Yes.

Danny Zaslavsky:

He goes, “How do you get stuff online?” He goes, “Well, we don’t. We have to… It’s like one by one.” Matt’s last name is Watson. He started VIN stickers that turned into VinSolutions, and we were the ground zero for that. Matt’s been my friend this whole time, and he’s only a few years older than me physically, but emotionally and mentally, he’s like eons ahead of me, but he’s always been a friend and somebody I’ve looked up to and he is who later connected me because I’ve always wanted to be in a space where industry meets technology, and we can find out that cool bridge in efficiency.

Danny Zaslavsky:

I grew up in the car business. I actually went to KU, got a human biology minor in chemistry until I figured out I was very-

Kyle:

It’s perfect.

Danny Zaslavsky:

… I was afraid of blood, so I didn’t stay in it. I stayed down the car track and I’ve had a blast. About five years ago, there was this big shift, this big problem with commoditization and then having to use so many systems to solve the same problem. Matt connected me with a guy who had a startup at the time called DealerCue, which is now VINCUE. Chris got it to a really cool spot, but he needed an SME, a subject matter expert, that could come in and say, “Okay, what are the problems that we’re dealing with today?”

Danny Zaslavsky:

Together, we’ve been working on what now today is VINCUE, and its sole purpose is to be one system. One system to be at a ground floor level inventory management that then can bring in all these really cool insights that matter today, especially in this crazy market that we’re in and solve problems like acquisition from an inventory management standpoint. And so, we call it our core. From that core, we can constantly create efficiencies, for instance, like going to different channels to acquire inventory and be able to appraise and do all this cool stuff in the middle and then get them online really quick and keep those gears churning.

Kyle:

Yeah. I think that’s super important because… I mean, the same reason why in the mid ’90s, it was how do we get cars online, right? Well, one at a time. Well…

Danny Zaslavsky:

Yup.

Kyle:

I say this, the ability to sell cars comes from three places, and the central place is inventory. Do you have them and then the next piece is marketing, which includes merchandising. Does everybody know you have them? Then lastly, once they know you have them, can you transact, right?

Danny Zaslavsky:

Yeah. Right.

Kyle:

There’s the levels and you’re exercising on two of those core levels, which is really cool, and doing it in one space. I think that that’s a technology, that’s a miss that we’ve had in our industry because we’re like, how many processes, how many things can we do up here? We forgot about this core issue that we haven’t solved for, which I think is what you’re trying to say that you’re solving for.

Danny Zaslavsky:

We are, we are. Yeah. One of the areas that we’re recently been solving for as an example, because again, inventory management, the cores, we take any vehicle, right? Instead of looking at it purely from a price-to-market, cost-to-market standpoint, we look at how many VDPs does it take to sell this car? Like that old owl that was licking the lollipop, how many licks does it take to get to the center? When you look at a budget spend, and then you can start allocating dollars, whether it be to cars under 15,000 or SUVs or trucks or high-value targeted cars, and then apply the logic of what vehicles do we know are going to leave the market quickly? And instead of messing with price as the lever to be able to get rid of a vehicle, let’s mess with eyeballs in order to get rid of that vehicle, right?

Kyle:

Yes.

Danny Zaslavsky:

And you can do that with low market day supply cars and high market day supply cars. It creates this really cool synergy between what an algorithm can help you identify and what a human can help you understand so that way you can move that inventory faster without just spraying and praying, hoping and praying that you’re going to adjust the price, make a good VDP, and it’s going to go away. It doesn’t always work that way, right?

Kyle:

Yeah.

Danny Zaslavsky:

In our system, that’s one of our skills that has really helped dealers sell inventory. Obviously, it’s a seller’s market right now, but there’s still segments of inventory that need to be able to go. Going from the idea of, “Hey, let’s run as fast as we can to sell cars,” to “Let’s be as efficient as possible to get a higher gross return.”

Kyle:

Yeah, absolutely. I think what a lot of people think is if we can just get more of everything out there, everything will fall in. But the reality is, if we take a Moneyball approach to our vehicle acquisition, our merchandising, our advertising spend, then we reduce expenses and increase profitability by dialing in. I think you’re dead on and when you can look at both of those next to each other, instead of them being separate, where typically you’ve got, well, let’s just talk about teams. You’ve got your marketing team is over here at the dealership, and your inventory team is over here at the dealership, and then the GM or the owner, whoever it is that’s in the middle, turning over here to the inventory team like, “Give me more inventory,” and over here, “Sell me more cars.” For some reason, these never talk, right?

Danny Zaslavsky:

Yeah.

Kyle:

This is a solution that says, “It’s impossible for you not to talk now.”

Danny Zaslavsky:

It’s impossible because it’s one file, it’s one car, it’s one system, it’s one appraisal, and that appraisal allows you to see all the data in one place. How many eyeballs are you attracting and what are the levers to pull in order to get that vehicle in front of the right people to make that acquisition?

Kyle:

Yeah, yeah. I love when you said levers because… So, I was listening to Jay Abraham, marketer, the big dude, and he’s talking about pulling tiny levers. And a lot of times what we do in the automotive industry is we’re like, “Big lever, put a commercial out there.” Instead of going, “Oh, there’s just these little tiny levers that we can pull in inventory.”

Danny Zaslavsky:

Yeah. Because we’ve been taught to be campaign driven our whole life. What campaign are we doing this month? Are we giving away tire and wheel? Are we giving away remote start? What’s the thing we’re doing this month? I think that has run its course, especially for people, and I’m going to say it, of our generation that are willing to pay to get what they want versus my dad who wants to find a deal. He wants a deal. He wants the free tote bag, and he wants the umbrella, and he wants the discount, he wants the feel, he wants the perception. And that’s two very different tracks.

Kyle:

Yeah, for sure. Man, I couldn’t agree more and you know that I love everything that you guys are doing, of course. Now, talk a little bit more especially about how you started to sense this market shift and also a shift in what your need was at Country Hill Motors, not just from merchandising and inventory analysis, but now moving toward vehicle acquisition as a strategy, like on a hyper-local level.

Danny Zaslavsky:

Totally. Yeah. I’m going to attack it from two different angles. From an acquisition standpoint, we knew what are the acquisition channels that we could buy cars from. We could buy them from the auction. We can buy them on trade. We were innovative with the dealer network where we literally went to dealers and bought their trades. I called it WAR, wholesale, auction, retail. So, if we were buying it for wholesale because it was too expensive, it went away, for auction because it was not meeting our criteria, or retail off of our lot.

Danny Zaslavsky:

And we still buy from local Harley stores. We buy from medical bike stores and power stores and RV stores that trade for cars all the time. And we’re not paying what we call stupid tax because we’re competing with other experts in the lane just to get beat up and then to pay auction fees, transportation fees, post-sale inspection fees, all that kind of stuff, right? And so that’s one of the channels, but we always knew that the highest ROI is when we work with the public.

Danny Zaslavsky:

We used to be on Johnson Drive and at that time, we were kind of isolated. But then, a development company came in and said, “Hey, we want to build an Ikea here.” So we’re like, “Well, shoot. But we want to stay in business. Where are you going to put us?” And they said, “How about this spot?” And they showed us a spot, and it was literally across the street from a CarMax. And we’re like, “Cool, rising tide. Let’s go.”

Danny Zaslavsky:

So, we built a brand new building on the corner of the highway, right across the street from the CarMax and right away, we figured out, “Well, wait a second. They’re buying a ton of cars from the public. And they’re doing…” I mean, we know that we do well with trades and then just like, COVID put a spark in everybody’s button to get a lot more aggressive when it came to processes and visual retelling and so forth. The unfortunate thing that happened in my life six years ago is my dad had a bad stroke. And he was the guy who was buying the majority of our inventory, so it was easy for me to sit back and go, “Cool, I’ll just worry about marketing and selling them.”

Danny Zaslavsky:

So, when that was no longer an option, I quickly realized that I absolutely hated going to the auction. I don’t like standing in lane. I never smell good afterwards, I feel awful, I feel like I paid way too much. And I spent the whole day prior making an auction list and thinking I’m going to buy all these cars to buy a fraction of those. And then other cars that, when I was upset, I’m just emotionally bidding stuff because I need inventory. And so, it was just a bad formula for me, and I know now that I wasn’t alone.

Danny Zaslavsky:

So, we started looking at how do we just buy more cars off the street? And at the beginning, it was just pen and paper. I knew that I needed somebody that wasn’t a salesperson, I recognized that right away, because this was more of somebody who needed to be a good customer service person, a good communicator. And so, I landed on a guy who used to be a teacher and I shook his hand, and I said, “We’re going to figure out a way. My goal is to buy a hundred cars a month from the public. And he goes, “It’s a big goal, but let’s figure it out.”

Danny Zaslavsky:

And we bought seven the first month, then we bought like 10 and 15 the next month, and then I started figuring out, “Wait a second, there’s vendors out there that will sell me acquisition opportunities. Cool. Let’s see what the ROI is.” Then, we tracked those. And then we said, “Cool. What can we get organically doing an email marketing campaign?” We did that for a while, then we hooked up with KBB ICO and we said, “Okay, cool. Let’s figure out how many I can get here and how many we can convert to trade.”

Danny Zaslavsky:

All of a sudden, all these consistencies started being born. When you track those, then you can also… I mean, any scalable business will think this way, but it was revolutionary for us and exciting for us because every idea was like a new idea, right?

Kyle:

Yeah.

Danny Zaslavsky:

We felt like we had just stumbled upon magic, and now we’re going to protect it and build it. And so eventually, we started to find consistencies like how many acquisition opportunities can a person handle in a month? How many can they buy? If we hire another person, how many will they buy? And so then, you can start to scale by having a new VBC, vehicle buying center coordinator reps in your store. Now, we have five people in that department buying 100 to 125 cars a month, and we’re buying what we want. And so now, we’re getting really fancy with it and saying, “Cool. Inbound is one process, outbound is another process. And incentivizing them not to just to buy cars, but to buy the right inventory that we want, that we know will turn fast and that also gives us a ton of curb appeal.

Danny Zaslavsky:

Okay. What’s today? Today’s Tuesday… Today’s Monday.

Kyle:

Yeah, 21st.

Danny Zaslavsky:

So Saturday, and these were VBC cars. We sold a bright yellow. You can still see it on my website. They’re sold though. These are VBC buys, a Plymouth Prowler, a 2011 Maserati convertible, a Ford Raptor, and a Nissan Maxima. So, those are all totally different weird cards that I would have never bid in lane. I would have looked at those and go save it for the Mercedes store, right? I would have never taken a chance on those cars because what I also would’ve been thinking is like, “Why are these at the auction? There must be a problem with them.” Right?

Kyle:

Yeah.

Danny Zaslavsky:

But no, I got them off the street and I bought them right, and they attract a ton of attention to the lot because they’re cool cars. They sold super fast. They grows really well not because we sold them for over what they should have been sold for, but because we bought them right and avoided stupid tax and unnecessary reconditioning because auction cars, I’m sorry, they’re just not the same great a vehicle that you’d be buying off the street.

Danny Zaslavsky:

And we made customers, and took trades, and created service, and, and, and. Right? So it’s like, there’s so many cool things that were born out of that opportunity to just do business and be “innovative,” which to me is like, Einstein’s old quote, “Enough common sense is genius.” Just have enough common sense.

Kyle:

That’s amazing. Yeah. And here at Nelson Auto Group, we’ve seen the same thing. We’re buying anywhere between, and we’ve got five stores and a couple of brick and mortars, but we’re buying anywhere between 300 and 400 cars off the street-

Danny Zaslavsky:

Oh, my God.

Kyle:

… and it’s absolutely amazing. Again, like you said, they’re right in service that day. We know the car. We’re the only one bidding it, and they turn quickly, they were able to care for those customers. Plus, it’s a whole new family member that we get to have-

Danny Zaslavsky:

[crosstalk 00:19:57].

Kyle:

… right?

Danny Zaslavsky:

High five.

Kyle:

Boom, we’re in it together in different areas of the country, so super kudos and you’ve equipped your teams with not just like the vision and the mentality, but the technology to do that. And I’ll do the sales pitch and you can too. If you’re listening or watching, you can equip your teams with that, for sure.

Danny Zaslavsky:

I guess I’m bearing the lead. I mean, that’s exactly what we built in the VINCUE, right? So, VINCUE does all that now. And that’s what’s been so cool, taking that mechanical process and turning it into a real solution and a system to be able to intake all those opportunities, see the appraisals, manage the appraisals, CRM, communicate with the consumers, and then bring in all the outbound cars, all the cars that consumers are listing on Craigslist and Facebook and Autotrader, Cars.com, CarGurus, and eBay and all these places. And then, take my reps and set their sights on the vehicles they should be acquiring for my lot because the system assist them with attracting that inventory.

Kyle:

So now, instead of just going after everything, you have speed and specificity in the way that you are acquiring vehicles, which is man, how great is that. Amazing. Absolutely amazing. I love the mentality, and I hope someone picks up something from that, whether it be a new process or a technology and recognizing that there’s other ways to do this, but it takes a dedicated team, that’s not just your sales team, that is intentionally trained and focused on this new way of business.

Kyle:

Danny, you maybe have heard me talk. I talk a lot about the whole marketing team in this whole new arena of people that we can attract to the car business, but this is it. This is another place. It’s like a new entry point into growth, career path thing, leadership thing, leadership mentality that five years ago we didn’t have. We just had a used car manager, right? And I was like, “No, this is an avenue into this incredible industry that we can hire a new subset of people that have the opportunity to support and scale within our business.

Danny Zaslavsky:

I heard you talk about that at Digital Dealer on the main stage, on the keynote stage. You were saying how cool it would be for you to wake up in a world that allow your kids to be proud to work in the automotive space. And I heard that because I have twin seven-year-old boys. And I agree, I want the space to be a proud space to work in, not a chromogenic space to work in. I want the space to be an honest space to work in, not a space that carries shame. And so, the things that we’re doing as automotive leaders gets us there.

Kyle:

Yeah, absolutely. So that’s going to be the transition to the last thing, if you are okay with it. And I want to talk to you in particular about what it looks like to create a culture of specifically inclusion. And however much of your story you want to share, but I would love for you to share about what that looks like and the leadership that you’ve been able to grow into through your dealership, through your city, through your state, through your region, but more specifically in automotive and how we in automotive can care more intently about being an inclusive industry that creates career paths no matter where people come from in their history or their path or their personality or who they are.

Danny Zaslavsky:

Yeah. So this has been a really cool spot in my life, and I was literally born into the opportunity to kind of learn this, so I’m Russian, I’m Jewish, and I’m gay. So, it’s like the trifecta. And so there’s been a cool opportunity for me to either use those to grow and help others grow and be a change leader or to kind of set back and kind of watch and let other people. I have a friend who lives in Utah, who has a very different story. He actually lost his son to suicide, and the Mormon church is certainly not had the best track record with homosexuality. And he said, “I could have left the Mormon church, but I decided to stay in the Mormon church and be a cause for good and help open people’s eyes.”

Danny Zaslavsky:

So, I was lucky enough to be invited to work on the Mid-America LGBT Chamber of Commerce. I was a part of it for seven years, and I got to be the president of it for four years. And its mission was diversity, inclusion, and equity and that specifically, the difference between inclusion and equity is really important. And if you don’t know what the differences are, I’m not going to explain, I’m just going to tell you to Google it because it really changed my world in understanding how to give people equity within your business organization because we’re not all coming into the business with the same amount of opportunities or if you look at it like a field, some of us are closer to the goal than others, right?

Kyle:

Yeah.

Danny Zaslavsky:

And this is kind of a difference in managing style. My dad liked to come in and, God bless him because what got us here won’t get us there, so what got us here was my dad being coming in and saying, “This is my idea. Do it. Go to the next department. This is my idea. Do it. And then this tornado just kept going and going and going. But without my dad’s energy, the machine kind of stopped. Well, it’s hard to scale that style of business growth. So instead, you know this, when you start shifting and showing up and valuing, not just what you can do but what you know and how you can share that knowledge, all of a sudden scale just happens because people get empowered and they start believing in their worth. And all of a sudden net equity begins to build, and that’s truly the definition of karma because that comes back to the leadership of the organization because everybody wants to be a part of something bigger than themselves, and that organization begins to grow and begins to shine.

Danny Zaslavsky:

And so, the biggest gift of my life has been to be able to be a part of cultures that embody that philosophy. So, that’s what I try to do. I try to be, I try to come in, share my knowledge. I personally have always been attracted to people who I can learn from. It’s never scared me. I’ve never been afraid of big egos, and there’s plenty of them in our industry. I’m an internal optimist, so I see the good and I learn from it, and I go, “Cool, I can use that.” Actually here, check it out. I have a book just getting there. This is a really cool book. This is a bunch of really cool people that have accomplished things. There are little mini-stories in here, but I think the secret lies in the journey, not in the destination. And I know that’s cliche, but it’s so true. And so work hard but celebrate that success, learn from it, and then do it again. Rinse and repeat.

Kyle:

Yeah, I almost decided… Probably someone else has probably coined this term already, but in the automotive industry, we always say always be ABC, always be closing, right?

Danny Zaslavsky:

Yeah.

Kyle:

And I want to coin this like hashtag or something that’s like ABL and always be learning, always be a constant learner, willing to set aside your previous expectations or viewpoint or story formation for the potential for someone else to share with you something that they carry, that they learned, that they’ve experienced, that’s maybe different than you. And that because you’ve now been able to listen and learn, you get to share that out. And then all of a sudden, the reciprocity of the learning and the sharing, especially within organizations, it’s strengthening for everyone because everyone does, they, you don’t have to tell someone that they’re empowered. They feel empowered.

Danny Zaslavsky:

They feel empowered. Is it wild because I know you’ve experienced this because I don’t know you that well, but I’m getting to know you better. And I imagine in your lifetime, and this probably happens regularly, people come up to you and they just see you as a leader. They just see you as somebody they can ask advice from, they can just see that you’re somebody that’s a safe place to talk to. And it’s because of that intention that you set forth in your life. And there’s so much magic that happens just after showing up that way.

Kyle:

Yeah. Well, man, I appreciate that. And I hope that many people sense that. And I hope that more people understand that you don’t have to be in a place of leadership to be a leader, right?

Danny Zaslavsky:

Right.

Kyle:

And I think that that’s where if I can encourage the industry and encourage along with you, the industry, is that there are so many more leaders that are in places of leadership in our industry. And if we can give that to more people, if we can share that to more people, then the lift from the bottom will be so much quicker, and it’ll empower more people to do really cool things like what you’re doing with VINCUE and in these really neat spaces.

Kyle:

So, man, I’m going to wrap it with that. I really appreciate you just sharing your heart, sharing your technology, your automotive, your leadership journey, and I’m cheering for you, man, like crazy. And your team and everything that you have your sights set on. So yeah, for sure.

Kyle:

Do me a favor. I’m going to do the typical podcast thing. How can people connect with you? What’s the best way to do that? You or your team if they’d like to do that.

Danny Zaslavsky:

Yeah. So, the whole team’s on vincue.com, V-I-N-C-U-E.com. You can just literally email me direct danny@dealercue.com, D-E-A-L-E-R-C-U-E.com. But vincue.com, I’m on the team page. Just email me and I respond right away. It’s really cool. This isn’t the average podcast, Kyle. I think you know that, but you’ve done a really great job with questions. I really appreciate it.

Kyle:

Cool. Well, I appreciate you coming on and can’t wait for continued conversations.

Danny Zaslavsky:

Thanks so much for joining our conversation. If you enjoyed this episode, make sure to share it out. We can shift the culture and perception of automotive retail together. Until next time.