He also talked about his father, Bruton Smith, and why the company opted to pause the expansion of its One Sonic-One Experience in favor of growing EchoPark in an interview with Staff Reporter Melissa Burden last month at Sonic's headquarters here. Here are edited excerpts.
Q: What are some significant changes you've made in your first nine months as CEO, and what have you learned about the company during that time?
A: We got away from a lot of different projects that we were doing. So the first week of the year, we, unfortunately, had to eliminate 43 jobs. But a lot of that was ... to sort of right-size us, get us focused on the things that we do, which is our core business and EchoPark.
It's really pretty simple. We had a meeting in Houston where we had all of our leadership, and not just the top executives, but the top 400 or so of our leaders in the company, and we just had a real big kickoff meeting there and let them know what our expectations were. So we sort of sent out the new message. That was an internal message, but we sort of set expectations of what things are going to be like.
And then from [Jeff Dyke] and I and Maren [McGrane, Sonic vice president of culture and strategic initiatives,] on down, I think we've communicated what our expectations are very clearly. It's just simply setting expectations and then holding people accountable to those expectations.
How is Sonic sharing those expectations with employees?
We show all of our numbers [on digital displays] throughout the building. And then everybody out in the organization across the country, they know exactly where we are. And so everybody's really focused on our goals.
How involved is your father, Sonic Executive Chairman Bruton Smith, in the business? Do you talk with him regularly?
He'll probably call any minute. I had to delete some of my voicemail since he'll fill up my voicemail. But it's not unusual to have a whole page; like here's one (he displays his cellphone screen) where it says, Dad, Dad, Dad, Dad, Dad, Dad, Dad, Dad, Dad, Dad, Dad. He definitely stays in touch and wants to know what's going on.
He was at EchoPark, the first customer at the Charlotte store, he sold the first car. He was [there] Easter Sunday. He said, "You need more inventory." (David shows a picture he posted to Instagram of his father at EchoPark with the first customer.) So I [wrote], "EchoPark Charlotte officially opens Oct. 8. But true to form, Dad had to be there a few days early in case someone wants to buy a car. Here he is personally thanking and congratulating our very first customer."
The expansion of One Sonic-One Experience — an initiative in about 10 percent of Sonic's franchised stores that features no-haggle pricing, the goal of completing a purchase in 45 minutes or less and the customer working with one person using an iPad — was tabled more than a year ago to focus on EchoPark, which has adopted those methods. Is that expansion on the franchised side still on a shelf?
EchoPark today is not what it was four years ago. And so there's a lot of learning and lots and lots of money to get to that point.
So we learned some things the hard way with One Sonic-One Experience and also with the technology we originally rolled out in EchoPark. A big part of it was, OK, we've got X number of resources to focus on EchoPark.
We could have continued to roll out One Sonic-One Experience to all of our franchise stores. But what's going to get the biggest return? Let's focus on what's going to get the biggest return.
In terms of expanding EchoPark, what might it look like in five years?
We definitely plan to grow EchoPark. It remains to be seen how fast we'll grow. We're trying to do it in a smart way. And it's taken us awhile to get to profitability. We feel like we've gotten a model that really works well.
We want to be smart about how we expand the model. It's more about the quality, quality growth vs. just popping open the stores, picking our markets carefully. [With] eight locations ... we didn't deliver, but people came to EchoPark locations [to buy a vehicle from 121 markets].
What are you most proud of with EchoPark?
In addition to [providing a great guest experience], I know we're all proud that we've proven now that we can do that and also be profitable. A lot of people can't say that.
It's kind of a whole different trick to be able to build these things and start from nowhere, start from zero and not have a franchise to hang out there in a market where we've never been before and people don't know what EchoPark is, and all of a sudden you're selling 500 cars a month.