CEO Jeff Williams gave a quick tour of America’s Car-Mart Inc.’s headquarters on the fourth floor of the Benchmark Group Building in Rogers.
Williams said the company moved from Bentonville in May 2020 because it needed more space for its growing employee base. When the company took over the entire fourth floor, Williams was sure America’s Car-Mart had bitten off more than it could chew.
Just one year later, the floor is packed with employees, and Williams and the company are already looking for more space.
“When we first moved we thought there was no way we could fill this floor,” Williams said. “Now we are looking at space on the third floor.”
Car-Mart has similar expansion plans for its business. The company has made its mark in the buy here-pay here used car space since its founding by Bill Fleeman in 1981, but it has been undergoing a sea change in its operational focus.
The change began several years ago as the subprime lending market began to get squeezed by competition. Then-CEO Hank Henderson and Williams, at the time the company’s CFO, began to formulate a plan to turn America’s Car-Mart into a true used-car dealer.
The switch was from a collections company that sold cars to a car company that was good at collections. America’s Car-Mart changed its logo and its slogan and began to be active on social media.
A noticeable change was Williams’ promotion to CEO following Henderson’s retirement; the former CEO earned a degree of fame for his folksy “Drive Easy” tagline in television commercials. The new slogan, “Keeping You on the Road,” reflects the company’s intention to provide long-term service and customer service after the sale of a car.
The financial bottom line has shown the wisdom of the new way of doing things. America’s Car-Mart reported $530.2 million in revenue and $29.5 million in income in fiscal year 2014. Last year, those figures had risen to $918.6 million and $104.1 million.
For Williams, the key metric is customer numbers. Car-Mart reported 75,609 customers in 2018, the first time it reported that statistic, and that base grew to 80,669 in 2020 and 88,092 in 2021.
“We are growing quicker than we thought we would,” Williams said. “We have a big, hairy, audacious goal for April of next year to have 100,000 customers.”
America’s Car-Mart operates 151 dealerships in 12 states, and Williams believes the company can reach that 100,000 customer mark through organic growth at existing dealerships and selective new markets and acquisitions.
Right now, Williams said, the company is averaging 580 customers per dealership, though the number at individual lots obviously fluctuates.
“We have looked at the markets and looked at our competition and our staffing and history in these markets; that really should be 1,000 or more,” Williams said. “That may take 10 years but at some point in that 151, most of those dealerships should be 1,000 instead of 580. We have a lot of growth within the existing [footprint].”
The marketing and social media push is needed to change the perception of America’s Car-Mart. Williams said the thinking that America’s Car-Mart was a place for people with poor credit and few options to acquire a car is out of date. Yes, the company will still welcome those customers with credit difficulties, but it is also driving to become the go-to used car dealer in the markets America’s Car-Mart occupies.
“When you Google search used cars, we want to be one of the first ones that show up,” Williams said. “If we are going to be a sales company, we are going to have to advertise.
“We feel we have an obligation to serve more customers because we do things better than anybody else. We ought to be looking across the street and ask, ‘Why does that guy have 500 customers? They should all be with us.’ We have a pretty long runway to go from 580 to 1,000.”
America’s Car-Mart added more than 7,000 customers during the pandemic after adding about 5,000 the year before the health crisis. It was an odd time in the used-car business; automobile manufacturers suspended production during the pandemic, causing a shortage of available cars on the market.
“The demand for used cars went a little crazy in the summer of ’20,” Williams said. “The cars that we sell have always been in short supply.”
When business became strained for America’s Car-Mart in the mid-2010s, the company responded by pumping money into its training and recruitment at the general manager level.
A car lot’s general manager wears a lot of hats, overseeing car buying and selling as well as managing the employees and paperwork. Williams said Car-Mart wants to reduce its general managers’ workload by handling some issues out of its Rogers base, such as car procurement.
“Historically, the company has been very decentralized, especially as related to product supply,” Williams said. “Our general managers ate what they killed locally. We don’t want to lose the special sauce. We found that we were limiting our growth potential because the most talented folks in the field — our general managers — were spending too much time on the inventory, the procurement, the logistics and the make-ready costs.
“Part of our plan is to centralize some aspects so the managers have more time to grow the business and think about market share, think about what they can do to improve the business itself and not think about cars all day.”
The headquarters also has a staff of 30 whose responsibility is after-sale service, reminding customers of amenities that come with the purchase of a car. One such amenity is an oil change program that partners with national chains.
In the past, if America’s Car-Mart had to contact a customer, it was usually a billing issue. Now, the company sends birthday cards.
“To keep growing we couldn’t just ride the trend of a shrinking market,” Williams said. “To get a bigger market, we have to compete with CarMax and Carvana and Penske and the Fayetteville Auto Mall. You can’t compete with them without good people, good products, good digital presence, good marketing and advertising, and then we have added some service contracts.”
Williams said the transformation of America’s Car-Mart started about five years ago, and the pandemic both showed the importance of the change and increased its urgency.
“It told us we needed to make these investments that we had been tip-toeing into,” Williams said. “We had to work much quicker and come out the other side. Let’s take those additional profits and make sure we are reinvesting so after the pandemic, the business is more solid than it was going in.”
America’s Car-Mart Fiscal Results