On this week’s episode of Used Cars Weekly, the original CBT News show dedicated to bringing car dealers best practices and tips for the used car department, in-depth dealer interviews, hands-on dealership strategies, as well as vendor analysis, host Jasen Rice, founder of Lotpop, chats with Danny Zaslavsky of VINCUE and General Manager of County Hill Motors about private party acquisitions.
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Transcript
Jasen Rice:
Hey, Jason Rice from Lotpop. Thank you for watching this week’s Used Cars Weekly. I’m excited about this episode. I have Danny Zaslavsky on from Vincue and Country Hill Motors. It’s a unique approach where we have somebody that’s both involved in the dealership daily operations, along with being part owner of an inventory tool called Vincue. Danny, welcome to the show.
Danny Zaslavsky:
Thanks, Jasen. Thanks for having me.
Jasen Rice:
Hey, I’d like for you to give a little bit of background of, again, your roles. Both at Country Hill Motors, which is an independent dealer here in Kansas City, and also with Vincue. Danny, if you don’t mind.
Danny Zaslavsky:
At Country Hill Motors I’m General Manager, Dealer Principal. We sell around 300 cars a month total, we do retail and wholesale. And we’ve always taken that philosophy just because wholesale is in our blood, that’s how we started our business and we continue to do that. And the way we look at wholesale isn’t just through the auctions, but through dealer networks, meaning relationships that we’ve created over the years.
Danny Zaslavsky:
But something that’s really been important to us is the community. And one of the ways we serve the community isn’t just by selling cars, but it’s also by buying cars. So I’m excited to share that today.
Jasen Rice:
A lot of times when you think of private party acquisitions, it’s the salesman or somebody at the dealership hounding and pounding the phone, trying to acquire cars. In reality though, like you said, it’s a problem solving. People have this asset, whatever it be, however they came across it. A parent passing away, a kid moving out and that no longer needing a vehicle, what have you. And you’re trying to solve that problem. That’s what the approach you guys take at the dealership, right?
Danny Zaslavsky:
Yeah. When you call our store or when you walk in, first thing we ask is, “Are you here to buy a car or sell a car? Are you calling about buying a car or selling a car?” And so it’s a part of our culture. And the buying is then referred to a buying agent, we have what’s called a vehicle buying center. And we started it with one person. And we knew that there would be a lot of nuances that we would have to figure out along the way. But from the start, we know how to buy a car. If somebody walks in and wants to sell it to us, we know the steps to go through it. The thing that we needed to learn is how to scale that. How to scale that both internally with process and people, and then utilizing or creating technology so that we had a greater reach.
Jasen Rice:
So how many people now are in that department?
Danny Zaslavsky:
We have five people in the vehicle buying center. Four agents and one vehicle buying center manager.
Jasen Rice:
Let’s pivot over. Vincue’s created a private party acquisition tool, I believe, where it captures tools only as good as the end user. What are those steps to actually build out that buying center? And you went from one to four, how long did that take, and again, is it something that can be expedited better with the right tools and vice versa?
Danny Zaslavsky:
Sure. All these little learnings we had along the way, one of which was what are all the ways that we could buy from the public. One of them we learned was people coming to us. So if we advertise that we buy cars, people would come to us, and so we call those inbounds. And we started understanding how do those convert. We were, and are, a Kelley Blue Book instant cash offer buying center, and those convert differently. They convert lower because they’re a higher scale. The lead is coming over from a third party, so the customer has an extra layer essentially to go through, but that’s another way. So there’s inbound, third party. Then we learned outbound. Outbound is the idea that you see them on Craigslist, on Auto Trade or on Facebook, anywhere that it’s listed that you can go out to make that introduction. And hopefully make that connection and appointment, and hopefully acquisition. That’s what we call outbound. But then there are other avenues like your service drive, lease conversion, or private party to trade conversion. And so once we defined all these, what I call swim lanes or channels, being able to manage all that in one acquisition management system is where the scalability really becomes reality.
Danny Zaslavsky:
Because then, like a CRM, you get to see every opportunity, you get to measure conversions from meaningful connection to appointment. And then who the appraiser was and what money did they put on the car? And did they actually buy it? And how quickly did it turn afterwards? And along the way you get to learn, “Okay, what would I do different next time.”
Jasen Rice:
Yeah, yeah.
Danny Zaslavsky:
And you get to figure out, well, how many opportunities can one person actually handle? How many cars can they actually buy in a given month? No different than a salesperson. Sales people can only sell so many cars, there’s only so much time in the day.
Jasen Rice:
Sure.
Danny Zaslavsky:
That’s the benefits of having a solution.
Jasen Rice:
If a dealer, now I say dabbling, because a lot of times dealers would dabble and try it out and not necessarily sometimes go all in, but you almost have to … I mean, you dabbled at the beginning with one person, now you have four or five. If you’re going to dabble in one of those lanes, which one would you say is the most productive to keep the momentum or that snowball rolling?
Danny Zaslavsky:
Here’s the first thing we learned. We get opportunities to buy cars from the public that we normally wouldn’t get at the auction. Really neat cars coming to us, just because we share that we buy cars. So the first thing that somebody should do is make it a part of their message. Look at all the areas you already advertise, all the places you already have a voice, whether it be email marketing, social media. If you’re still doing television, radio, digital marketing, whatever. And include the acquisition call-to-action, and then give that consumer a place to go that gives them the ability to put in their information, get an offer and start processing that offer.
Danny Zaslavsky:
That is the quickest way to get to water, is what we call those inbounds, because ultimately those customers are knocking on your door. They’re ready to do business with you. And what’s cool about it is you’re writing them a check, so that whole experience … I have never, and we purchased thousands of cars, I have never had less than a five star review when I buy somebody’s car, because they’re always happy. Which is kind of cool in the world of selling cars.
Jasen Rice:
Couldn’t feel any better. It’s like winning the lottery.
Danny Zaslavsky:
Yeah.
Jasen Rice:
And one of the things I was surprised with and one of the benefits of dealers going through this COVID phases was, it forced their hands on this. I believe dealers have seen the success of what CarMax did, Carvana’s doing, and they go … And again, they dabbled with it or kicked the can down the curb, the street, just knowing that they need to get into it but never fully went into it.
Jasen Rice:
And now dealerships are forced. Matter of fact, I know of a dealer in a smaller town. He moved all his advertising dollars, transferred all of his advertising dollars over to acquisition verbiage, nothing about selling a car. And now all of a sudden he was able to buy 30 cars off the street because consumers didn’t know. I even talked to one of the reps from TrueCar, and he was talking about how his neighbor was trying to get rid of a car. And he’s like, “Well, why don’t you just take it to the dealer?” And he was blown away, he didn’t know, “I can sell a car to a dealer?”
Danny Zaslavsky:
Yeah.
Jasen Rice:
“I thought I had to buy a car.” And so to your point, educating consumers that it’s a possibility even, is the first road, huh?
Danny Zaslavsky:
Yeah, for sure. The consumer will only refuse to do business with the dealer for one reason. It’s because the consumer thinks, “That dealer’s not going to give me enough.” And the cool part is it’s not the true anymore.
Danny Zaslavsky:
Where my dealership is, I have a CarMax literally across the street from me, and then five miles down the road they just built a Carvana. And then around me, I have Hendrick stores and Group 1 stores. So there’s about 20 car dealerships just around me. And I have never been worried about another car dealership coming in into my market. I’ve always been able to maintain and grow the number of vehicles that we sell.
Danny Zaslavsky:
And I think about acquisition the exact same way. We work to give meaningful offers to consumers and solve their problems. Whether it be make their payoffs, whether it do all their paperwork, whether it be either pick up their car. Whatever it takes in order to do quality business, that’s really the foundation of it. And then be able to scale that with quality people.
Jasen Rice:
So then with all that competition, how many cars are you able to acquire a month typically?
Danny Zaslavsky:
Right now we’re buying on a slow month about 80, and on a great month about 120. And so what we’ve learned is there is a KPI, so it’s about 20 to 30 cars a month is what one person can buy in a month. Sales people usually sell between 10 and 20 cars a month. We have the Cody Carters of the world that can sell 80 or 100, but we’re not all Cody’s. And I’m lucky we have one really fantastic lady who could buy 40 in a month and has been doing that consistently, but most will be buying between 20 and 30.
Danny Zaslavsky:
And so when you take that and you match that to the opportunity in the market, how many cars are you getting from your inbound advertising campaigns and so forth, and how many opportunities are you going after outbound. How many are you looking at in your service drive, how many are you getting third party, all that kind of stuff. And you start to share those opportunities amongst the team, then you can quickly identify conversion rates and how many people you actually need. So with four people buying 20 to 30 cars a month, you can understand how I get to my math.
Jasen Rice:
Yeah. And all percentage wise, high percentage still retailable versus wholesale. And again, not that wholesale isn’t another strategy and route, but I mean are you 80% [crosstalk 00:10:38] retailable or?
Danny Zaslavsky:
Yeah. That’s one of my goals for ’22 actually, is to do more wholesale. We retail 95%, if not more of the vehicles we buy directly from the public, but we do miss out on wholesale opportunities. And I mean, wholesale profit opportunity. 160,000 mile Toyota Sienna’s and Honda Odyssey’s and things that I know would do well at the auction or do well … Maybe it’s a late model Tahoe with 6,000 miles that I may not want, but I could wholesale to a dealer partner.
Jasen Rice:
Again, going back to, now you spend half your day at the dealership, half the day at Vincue. And I’m assuming you’re taking all those headaches and processes and trying to implement them into a tool that makes it more efficient. And there’s plenty of some products out there to help dealers through private party acquisition.
Jasen Rice:
I guess, kind of wrap it up, what’s some of that unique stuff that you’re making sure that, “Hey, on a daily basis at the dealership, here’s one of our biggest grinds that we’ve been able to solve through technology.”
Danny Zaslavsky:
Well, it goes back to that idea of one solution. So Vincue is at its foundation inventory management, it does syndication, and then all the market pricing intelligence. So I appraise through Vincue. Regardless if I buy a car or sell a car in the system, it’s all coming back to being able to just click one button, get it up to my website. I can immediately start merchandising. I can close that gap on days to market. I can bring in reconditioning on any one of these vehicles and communicate that to the consumer to increase the value of the car to the consumer as it should be, so I’m not just competing on price.
Danny Zaslavsky:
There’s all these efficiencies when you’re working in one system. Not to mention my team is all working towards the same goals because they’re not using different logins. And that’s really what I feel is super important. So those are the nuances that we continuously look to improve at the dealership. When we find a way to do something cleaner, faster, more efficiently, we translate that into technology. And I’m lucky that we’re not the only ones doing that now. We have many, many others that are contributing to a better way.
Danny Zaslavsky:
And my last thing I’ll say is, in today’s market, if you have an opportunity to do business with the public and buy their car, please do it. Because for the first time in my whole life, and I think in yours too, Jasen, we now have common competitors. And so if we, as a dealer body, don’t come together and take this seriously, those cars will get absorbed by online retailers. And this is our way to lead our industry into the future.
Jasen Rice:
No, that’s a perfect idea, again, that strategy. Because yeah, the bigger are going to get bigger, unless dealers can round up together and fight that. It’s a great ending there, Danny. Thanks for your time again. Used Car Weekly, every Thursday on CBT News.
