Talking Inventory with Wiesner of Huntsville

Greg Uland:  Clint MacLaren, general manager at Wiesner of Huntsville, down in Huntsville, Texas, thanks so much for sitting down and chatting.

Clint MacLaren:  I appreciate the invite.

GU:  Yeah, absolutely. All right. So, want to get into something that's been pressing for a couple of years around inventory, right? And getting it and acquiring it, especially how do you get it? So, you know, I guess, first of all, for your stores, what impact have you seen? You know, where'd you go from to where you are today? What the drop look like for you?

CM:  That's a great question. We started at the beginning of this where new inventory, we'd have on average, five hundred five hundred and fifty. This morning, when I looked at the inventory, new cars on the ground, we were at 14.

GU:  Wow.

CM:  So it's quite a dramatic drop.

GU:  Yeah, yeah. Absolutely. What about used, on that side of it?

CM:  Used cars hasn't dropped as much. We're probably 75 percent of where we were. Where we'd keep 100 retail, now we have about 75 retail.

GU:  OK. So not as big of a hit but, you have more control over it though, too. So.

CM:  A lot more control over it. We're able to find customers that we can buy from. So you take somebody that maybe had two or three cars with this market and the higher prices that we're able to pay for them, they're willing to let go of one or two of those if they don't have to have them.

GU:  OK. So how are you finding them, those customers. Like what's your process for figuring out who are those people that you can go reach out to.

CM:  Some of it's on our website. You know, we'll put, "We buy new--used cars," on the website. We have a billboard out front of the store, so right there on Interstate 45 as they pass by, we put, "We buy used cars." And the other is, some of it, it seems old-fashioned but looking in the website or the newspaper. Marketplace on Facebook, things like that. If people are putting their vehicles up for sale, we'll just give them a call and say, "Hey I notice you have a vehicle for sale. Can we buy it?"

GU:  Yeah, I mean if that's what you got to do to get it, there's no reason not to.

CM:  Yeah.

GU:  Do you guys do anything, I've heard of other dealers, you know, using their CRM or even the service drive to kind of say, "Hey would you be interested in us taking a look at your car while it's in and getting an appraisal?" Any of that type of stuff for you?

CM:  Most definitely. And fortunately for us we have a marketing program called Xtream that gives us that lead immediately. We don't necessarily have the vehicles to show them, where it was designed to be able to show them the savings on the new car, but now it does give us the opportunity to talk to them about just repurchasing that car and selling it to us.

GU:  Yeah, yeah. Well, you get a good look at it when it's in for service so you can kind of know what you're getting. Makes it a little bit different, you know.

CM:  Oh, definitely.

GU:  That's good. So what else on the used side? Any other tools that you guys are really embracing to try to figure it out? I mean, it's, is it just--is what you're finding that the best way to do it's just getting back to old-fashioned reaching out to people and having that conversation?

CM:  Yeah. Putting your foot down, keep walking one step at a time and go find them the old-fashioned way.

GU:  Yeah, yeah. Has phone been the best for you? Has email? How do you reach out usually?

CM:  Phone.

GU:  What's that initial...Just phone call?

CM:  Email, they get so many of them and at least with the phone if they're in your database, they see who's calling. It's not like a, you know, one of those robocalls. So you can still have a relationship with them and call.

GU:  All right. So on that, I did some some phone selling over the years and I'm curious. For your store, how effective is voicemail? Because you hear different strategies on voicemail, right? So you have, you know, people that will say, "Always leave a voicemail." And then you have people who say, "No, you call them seven times until they answer." So what, I don't know, what do you see?

CM:  I don't mind leaving a voicemail, but I will call them seven times to get an answer.

GU:  But not leave seven voicemails.

CM:  Not leave seven voicemails. And I grew up doing telemarketing with Kirby vacuum cleaners and we were taught, you continue to call every 30 minutes. And it gets a little irritating for them. With today, if they give you the opportunity to text, that's a new thing that we can use. And you'll call them and then send them a text right immediately. And most of the time they'll answer you.

GU:  Yeah. I like that two-layer approach, right? Because you can call them and then you can text and say, "Hey, I just tried to call. It's not a good time, that's fine." And to your point, you just get a much higher response right when you layer in the communications.

CM:  Correct. Because not everybody wants to answer the phone right now. We got a phone call yesterday, guy saw us on airport, with Chase Bank. And we didn't answer the phone. He sent us a text, we answered the text.

GU:  Yeah. Whatever channel you need. That's right, good. All right, so Clint, let's talk about new for a little bit. So less control on the new side, right? How…I don't know, how do you get a hold of that? How do you try to get the allocation? Anything that you guys have done that's helped you to get vehicles, all 14 of them right now. But, you know, but 14 is better than zero.

CM:  14 is better than zero.

GU:  And you got trucks that, you know, you might not know when they're coming but at least you know they're coming.

CM:  Correct.

GU:  So, I don't know, anything that's been successful for you guys on the new side?

CM:  We're doing a couple of different things with that. There's two philosophies out there:  if you don't have the inventory, mark it up. We rejected that. The factories have turned from giving allocation on a one-to-one basis:  if you sell one, you get one. So the cheaper you sell it, the better off you are. We did a turn. So what we're trying to do is turn that vehicle as quickly as possible. We're holding at MSRP. We're not going over MSRP. It's fair to the customer, fair to us and it does turn the cars faster. We're on right now, I think last time I looked it was a 12-day turn, maybe down to 11-day turn now on average on the cars. And that rates up there with General Motors and they're able to give us the extra allocation.

GU:  That's good. That's good. So focusing on turn has really been your strategy that seems to be working at least at some level, right? I mean there's only so many cars out there to be had, but.

CM:  Correct. And we're also selling inventory that's on the way in. We've got a system where on our website as soon as the vehicles are produced they got a VIN number. The imaging system pops up, pre-populates. It's the exact car, the exact options, colour, so the customer can see it on the website. We can sell it from there and then we just have to track and monitor when it's going to arrive to the customer.

GU:  Yeah. So are you taking a deposit on every car?

CM:  Take a deposit on those. $500 to $1,000, something like that. If they back out when the car gets there, I'm gonna give them the money back because it's selling anyway.

GU:  Right.

CM:  But it does help the integrity of that sale.

GU:  Yeah, yeah. So when are you, when are you pencilling the deal? When the car comes in and you're ready to sell, actually sell the car? You pencilling it ahead of time? What are you doing?

CM:  Ahead of time. We'll go ahead and pencil it and have all the numbers. And the trade-in, we're going ahead and locking the trade-in for a 60-day turn. It's dangerous right now, but I need to do it. And have the paperwork done upfront. We don't really contract upfront, but we'll get a buyer's order and take the deposit. That way it's no surprises when the car comes in. I've heard too many horror stories, a car comes in and the customer goes to pick it up and the dealer goes, "Oh, hey, by the way. It raised on the price." Or, "We dropped your trade." Or something like that. And I just, we deal in relational, versus a transactional. And I like keeping to that.

GU:  So are you seeing a pretty consistent lead time for vehicles coming in where, you know, you'll see that it's going to be allocated to you. You may even sell it ahead of time. Are you confident at all that it's going to be there in 60 days or is it just, it'll come when it comes?

CM:  No. Comes when it comes. I had a truck, personal truck, was built in June of 21. I received the truck last week.

GU:  No kidding.

CM:  There's shipment problems, there's accessory problems, there's everything. And it's just a matter of being able to talk to that customer and say, "Look, I understand that what we're doing. I understand you want the car. Be patient with us."

GU:  Yeah, yeah.

CM:  And if you've got a relationship with the customer, it's okay.

GU:  You're right, you're right. So any, have you seen an increase at all in flipping people from new to used? And do you even have a desire to do that because, you know, if you have more used inventory. Somebody wants a new car they get something that's darn close, looks great. Is there more openness to that in today's world?

CM:  There is. And right now, customers just want to purchase something. You're seeing a lot of customers--and it's on two scales. Either they want what they want and they'll wait six to eight months to get it. Or, "I want something because the value of my trade's so high and I just need something to roll it into." Those are the customers that, if you don't take advantage and roll them from new to used, you'll lose them. So we do that quite frequently.

GU:  Yep. So what about, so shifting from inventory a little bit and we're talking about the customers, how has demand been? Have you seen, you know, you probably can't sell as many cars because you don't have as many cars. But if you, let's say you had, you know, four or 500, 600 cars on the ground. You know, is the demand there where it was previously? Higher? Can you even tell because of inventory issues?

CM:  Couldn't really tell. I want to say that the demand would still be there, but I think a lot of it is the customer doesn't see it, so it drives it more to want it. You want what you can't have on the most times. And they come in and just looking, going, "Hey, hey." You can tell that they really have an itch. It's, "I want something. I want it now. Can you get it for me?" And we have to work through that.

GU:  Yeah. Yeah. Now are most of your customers, what's your customer base like when, you know, are most of them coming into the store, are most of them calling on the phone? Are they all local? You know, are you--is your market expanding any?

CM:  It's expanding exponentially.

GU:  OK.

CM:  We're getting customers from Seattle, Washington, Florida, a couple from California, but their companies are out of California, and most of it's a lot of businesses.

GU:  Oh, really.

CM:  You know, looking for vehicles for their clients. You know, we've got one that's bought--his office is in Seattle, he lives in Dallas, titling's a nightmare, but he's bought four vehicles from us in the past two months because he can't get them anywhere else. And we're not selling over MSRP. So that helps as well.

GU:  Yeah. So how do you handle that? How do you handle that remote deal? What's it look like to you? Because it can be clunky if you don't have a bunch of pieces in place.

CM:  It can be clunky. We've got a titling agency that helps us with the titling if we need to get license plates. We try to keep with one F&I person dealing with out-of-state issues. Overnighting the paperwork. We're looking at some options to be able to do remote signing. And delivery of the vehicle, if I can get the customer to fly down, I'd love that. If not, we've got a couple of drivers that'll drive the vehicles to the customers.

GU:  Gotcha. OK. Yeah. That, you know, that digital contracting is a big, big part of it. I mean, it speeds things up. It makes it easier because then you got to get it back and it just--it's such a pain when you're dealing with paper.

CM:  If I have to overnight it, do you have any control of FedEx, UPS? I mean, they could drop a truck, they could lose the package. You have no idea what's going to happen. And the old person in me says, you want the customer in the store. I want them signing the paper right there in front of me. Worst case is we drive the papers to them. Those days are gone. You can't do that anymore. So we're looking at the different options on that.

GU:  Yeah, and if you want to be involved in that conversation and there for them to answer questions, the easiest way to do it is to send them a link and then just talk them through it, right? You're right there, you're on the phone with them already or you're on Zoom or whatever. And send them a link and you're still just closing that deal right then and there rather than, "All right, well, I'll send you the paperwork and you take a look at it, let me know if there's questions." It just--you're disengaged at that point.

CM:  Yeah. You can't do it. And with some of the products that we're looking at, you have the ability to do your docuPAD signing, giving a menu a presentation. Worst thing that you can do with a customer is not offer them products. And just because they're out of state doesn't mean they shouldn't be able to buy those products.

GU:  Oh, 100 percent. And you look at consumers, we've done a lot of looking and just talking to consumers and surveys and things like that, and, you know, what we found is they're not opposed to being sold products, they just need to know what the heck they are. They want to be educated. They just, they don't want to say yes to something they don't know what it is, but you got to be able to teach them what it is in order for them to say yes.

CM:  Correct.

GU:  They're not opposed to talking to you, they just want to talk.

CM:  No. Yeah. Sell me something, right? Don't just give me something, sell it to me. And they'll pay the price for it and they appreciate it.

GU:  Yep. No, for sure. All right. Well, Clint, what else? What else haven't we touched on? Appreciate you taking time. I want to be respectful of your time, though, for sure. So what else haven't we touched on that maybe you want to talk about or anything else top of mind for you?

CM:  Top of mind? I can't really think of anything. The allocation process with the new cars, obviously it takes a lot of our time being able to work with the constraints to get the vehicles here.

GU:  Yeah. So go a little deeper on that. What do you mean? Like, what's taking time?

CM:  Well, say you have a customer that wants to buy a Chevrolet Suburban four-wheel drive with a diesel.

GU:  OK.

CM:  Certain areas of that vehicle, the diesel, or maybe it's a floor mat or a trailering package, they put them on constraint. They'll only, the factories will only allow this many of those vehicles to go out. So it's continually asking day after day after day and being vigilant with it to be able to get those vehicles in.

GU:  Gotcha.

CM:  That's a hard part.

GU:  So who's doing that in your store? Is it the salesperson doing that? Is it you doing that? Who's making that call?

CM:  I'm doing that.

GU:  You're doing that.

CM:  I took it back over about two years ago when I saw that it needed to have the utmost attention to it. I had another man doing it, nothing against the other guy doing it, I just trust myself when it becomes this critical.

GU:  Right. Right. No, it is critical. It's important. I mean, you know, you're talking about, whatever that is, seven percent of your inventory, right, when you only got 15 cars on the floor.

CM:  Oh yeah. Every one of them matters.

GU:  Heck yeah it does. Heck yeah. All right. Well Clint McLaren, Wiesner of Huntsville, I'm struggling with Wiesner of Huntsville today. I don't know why it is. But Clint, thank you so much for taking time. I really appreciate it.

CM:  I enjoyed the conversation. Thank you very much.