Building Successful Car Buying Centers with Darrell Steed

In this insightful episode of ASOTU CON Sessions, Joe Overby interviews Darrell Steed, president of SmartWolf Consulting. Steed shares the fascinating origin of his company’s name, inspired by his reputation as a fixer in the auto industry, akin to Winston Wolf from "Pulp Fiction." The conversation delves into Steed's journey from a used car director to a consultant, highlighting the critical lessons he’s learned in dealership operations and his mission to help dealers optimize their used car acquisition strategies.

Steed offers practical advice for dealers on establishing successful car buying centers, emphasizing the importance of dedication and proper planning. He discusses the necessity of treating buying centers as integral parts of the dealership and outlines strategies for effective implementation, including branding, infrastructure, and personnel selection. The episode wraps up with Steed’s recommendations on hiring the right talent and building a sustainable model for buying centers, providing valuable insights for dealerships aiming to enhance their used car operations.

0:00 Intro
0:24 Steed shares the origin of the Smart Wolf name
1:49 Transitioning from dealership to consulting
2:08 Lessons from dealership to corporate consulting
3:44 Importance of commitment in establishing buying centers
4:35 Challenges and benefits of dealership buying centers
6:15 Branding strategies for dealership buying centers
7:19 Balancing profit and customer value in acquisitions
8:57 Initial steps in setting up a buying center
10:17 Resources for hiring the right talent

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Transcript

Unknown: 0:02

you're listening to the asotu con sessions by Effectv live from asotu con 2024

Joe Overby: 0:09

My name is Joe Overby, and I am here on the asotu con podcast stage in collaboration with Effectv. And sitting across from me is Daryl steed, who is the president of smart wolf consulting. Daryl, good to see you.

Darrell Steed: 0:22

Good to see you. Thanks for having me.

Joe Overby: 0:24

Absolutely thanks for being here and we you and I were talking a bit at lunch and talking about how the name smartwolf came to be. What was the what was the idea behind that?

Darrell Steed: 0:37

So I was the senior trainer for Kelley Blue Book Instant cash offer. And I had been a used car director for quite some time before I won't move. Made that move. And my boss called me one day and said, Hey, what are you doing in these dealerships? Because everyone's calling saying that, like, you just fix things. And I said, Well, I go in. I do. And they asked me if I can fix other things. And so he says, You're like the wolf. So of course, it was this big, huge joke of, like, Wolf, of Wall Street, like, I go in and I'm, like, doing drugs with dealers or something. And it was from what I say the greatest movie is Pulp Fiction. The character Winston Wolf is, I'm the fixer. You call me in if you give me a problem. I need 24 hours. I'm going to get you a solution. And it kind of stuck. So when I left and created my own consulting for acquisition and used car operations, was I'm going to do things the smartest way possible, because I want to work smart, and I'm going to use the nickname, because now everybody knows it. Yeah,

Joe Overby: 1:32

we were, you know, I think the two movies we're talking about here two greatest directors, you know, of all time, probably, but the one movie is maybe the one the pulp fiction is maybe the one you want to be associated with, the wolf there. But

Darrell Steed: 1:45

I'll go, I'll go with the guy that fixes things other than the other Wolf. Yeah,

Joe Overby: 1:49

well, well, I want to, want to see about, you know, you've, you've worked at both the dealership the corporate level and now in the consulting business. So what are some specific used car lessons that you've taken from the dealership world, the corporate world, that you're now applying in the consulting world.

Darrell Steed: 2:08

So the reason I wanted to become a consultant is when I was a used car director. Not that used cars is easy, but when you have a vision and drive, you can make something successful, because it's on your own. Back when I went work for Kelly Blue Book, it was an eye open experience of just how little they give dealers to be successful. They give them just enough to essentially, if they don't have the right people in place to fail. So when I want to become a consultant was if there's all these tools out there, but you don't have the right people, or you're not doing training or education. I could feel a void for people that like, hey, we have these tools, but we're not getting the same results or effectiveness that they said we're supposed to get. As I could go in there and actually be that piece that isn't provided from most corporations because they just don't have the bandwidth. They don't have that one on one time that, as I call it, the Jerry Maguire effect, is actually care and take care of your people. And so that was what I wanted to be in. That model was I'm going to be able to help with use cooperations, fixed ops, acquisition, any tool you get. I still go to all the classes, the webinars, daily reading books. So I can be an SME in that. But then I can actually create the care points and the actual implementation of its success in those things for the dealer. Yeah.

Joe Overby: 3:28

So one of, one of the things that you offer is, you know, starting helping dealers start that used car buying center. What advice would you have for dealers who are kind of starting from zero and looking to start a buying center. So

Darrell Steed: 3:44

first thing I would say is, if you, if you want to do a buying center, this has to be as important as your sales department. If you're going to be the type of dealer says, well, we want to try it. Lose my number. And this is why is, if you're just trying something, I mean, as the greatest philosopher of the world, Yoda, said, Right, okay, there is no try. There's do and do not, is you have to make it the same focus as selling cars, the same focus as servicing cars, because buying cars auction private party is the hardest job in the dealership environment, and so you have to make a commitment to building that business model. Is

Joe Overby: 4:25

that. I mean, do you find that dealers are putting more emphasis on buying centers now, especially because used car supply has shrunk the past couple years? I

Darrell Steed: 4:35

think there most dealers want to figure out how to have a buying center. But when you have conversations of the right people, the infrastructure, the investment, then most of them are immediately like, rethinking it, because then it's like, oh, it's the reality check of you can go to the auction and overpay for cars and auction fees. No one gets that second level of conversation of if you spent less money, but could do it in house and have. That control is they don't realize that it is an investment. It's not going to magically happen in 30 days. It's going to take time to build that and be part of a business model.

Joe Overby: 5:08

Do you think it needs to be like a separate a separate physical center?

Darrell Steed: 5:14

No, I think it could be within store, but it needs to be treated as a completely separate model, because you're creating an experience a brand. It's and if you think of it like, so in the West Coast, there's a jewelry store called Devon's, and their whole ad is, we don't pay commissions, and so it eases that tension of, there's no commission, so there's not a good example in the media of a dealership. So if you watch movies and everything else car dealers, right, it's like, oh my gosh, it's a bad experience. It's this and that, because every movie has painted the dealership experiences that type of situation, the buying center you want to separate that, and it's, we're just here to get you the most money for your car. Make it easy, and then you can go buy whatever you want. So Carmax did that a little bit with the webI siddibo, and now dealerships have the opportunity to actually take marketplace back from Carmax, but it's do you want to? Because that's all it is. Is just the decision of wanting to, because Carmax doesn't do anything that a dealership can't do. They just made the choice to do it. Do

Joe Overby: 6:15

you think? Do you think it's still a case where the John Q Public doesn't know that you can sell your own personal car to a dealership without buying a new one.

Darrell Steed: 6:26

That's well, that's part of the branding strategy. I'm sure they know, because every dealership I see has a banner on their building that says, we buy cars. But that's when I kind of focus on that's a secondary focus. No one comes to your store just to sell a car, right? So do you have people calling people? Or do you have a branding strategy? Do you have social media? The one client that I'm working with right now, just building that for them, they were one of the first that actually said we want to do it all so they have social media accounts. We just had signage put in the store like an enterprise sublet. So you walk in and it looks like an Enterprise rental desk would be there is, it's a branded, bannered buying center. And so when you come in, you like, turn right and look for the big green sign, and this is where you get the most money. It's a completely and so if sales people know that, they're like, oh, that's how you get the most money for your vehicle, and they direct them there. So it's a marriage of the dealership and buying aspect. So

Joe Overby: 7:19

you know the goal is, is to help consumers, as you say, get the most money for their vehicle, but profits also made at acquisition. So how does, how can a dealer, you know, make built in profit, but also, you know, give consumers a good value. How? What are some steps they can take to do that?

Darrell Steed: 7:38

Well, the first step, which then ties into, and we'll talk about this later on. The panel is the your acquisition strategy should be the same as your trading appraisals and everything should have the same feel and rhythm, so that they aren't getting anything different. But how you have that strategy? Where do you want your profit? There's profit and fixed offs, there's profit and back end there's profit and front end. You're not going to make it in the same place every time, but the more opportunities you have to gain customers is how the profit is going to be made. And so I sit down with dealers and say, Where do you want to put it? How do you want to grow? Because every store is different. The store that says they want to buy 200 cars, and much like one of the speakers said, if I bought 200 cars a day and put it in your service department, I would implode the service department. You have that conversation of, what can you do, how successful can you be? And then how do you want it to grow? And you figure out where the profit is going to come, and then you just know, now you can start forecasting. So it is a growth model based on your bandwidth, people and then operational stuff. So

Joe Overby: 8:35

I imagine it's different for every dealer, group or individual dealer you work with. But what's kind of, what are some when you go, if you flew out here to from Maryland to Tennessee or somewhere, to work with a dealer and setting up a buying center, what are some, like first steps that you kind of work with them through what's the, what's the day to day process for starting out?

Darrell Steed: 8:57

So the first one is, is we have the conversation, how many cars do you want to buy a year from now? Not today, because if you get two or three or four great like but what does it look like once it's built, once we know what's going on, and then we Okay? Now let's work it backwards. The second is okay, let's get the right people. So I'm a firm believer in slow to hire, fast to fire, but you need to get the right people, because these aren't going to be sales guys. Most of the time, these need to be people that collection reps, BDC, people that you're going to make a lot of calls, and you have to have can do attitude, because it looks something like this. 100 calls, texts a day, hearing no and you going, mmm on to the next one, because you're telling someone of value, or you're setting up an appointment and they want more. Well, you're not gonna hear a lot of yeses unless, of course, in covid, and then you the first number you threw at him was like, Yeah, that sounds fantastic. So you have to get the people that understand it's you're building a pipeline. They can overcome adversity. And then once it gets going, like, the challenge of doing something people can't,

Joe Overby: 9:59

well. Last question before I let you go, here is a follow up to what you just said. What are some resources for dealers to go find, you know, those people to work at a buy center? Because it sounds like it's different than, you know, just the finding people to be a salesperson.

Darrell Steed: 10:17

So I use, indeed, we'll use Craigs as we put out ads, but it's and what you say so words matter is, what are you looking for? And then, just like we talked about being a priority for sales and service, does your pay plan dictate the level of or professional experience that you want? So if you're trying to get someone, I'm gonna pay minimum wage and bonus. Okay, put the ad out for what you want, not for what expense, like what pencils, because you're building a business, which means you're gonna need to get the right talent in place.

Joe Overby: 10:47

Good deal. Well, Darrell, thank you so much for joining us here, and let's give him a round of applause. Thank you.

Unknown: 10:55

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