Archive for Zinger Newsletters

Feeling Lucky?

For the last couple of months, we’ve been testing my soon-to-be-released software, UpYourGross. I cannot tell you how exciting this product is. It’s simple; it improves turn, gross, and ROI; it reduces wholesales losses; it creates accountability, and it will be priced very inexpensively.

One of the things I’ve noticed with some of the testing dealers is that once in a while they will actually make a little bit of gross on a unit that’s over 60 days old. Maybe you’ve experienced that same thing.

Even though a little gross was made, the ROI went deep into the tank. But it’s important for naysayers like myself to remember that bills get paid by accumulating gross profit regardless of when it’s generated. It’s not a good business plan or a great bet to think it’s going to happen very often, but I get it.

Since I’m in the question-asking mood, what if that same unit had been priced the same way on day 30 rather than after 60?

Would you have sold it faster?

Would you have had a better ROI?

Better yet, could you have sold it and reinvested the money and doubled the gross on two units vs. one?

Used cars don’t age on day 61. They age on day one because someone isn’t paying attention. All of a sudden, day 61 rolls around and panic sets in.

One of the drills I like to do in my workshop is to ask managers to describe their oldest unit in stock.

After they tell me all about it, I ask them, “In your professional opinion, why do you think you haven’t sold that unit?” With very few exceptions, whatever they say was there on day one. The one undeniable fact about the automobile business is that price sells cars.

If you priced your most problematic cars more aggressively in the first 30 days, then you would increase your odds of making a lot more money.

Stop betting on lucky. Start betting on smart. That’s all I’m gonna say, Tommy Gibbs

You Had A Good Month?

As Starbucks CEO Howard Schultz reminds us, “Seek to renew yourself, even when you’re hitting home runs.” How appropriate is that in today’s market?

A lot of dealers had a record-breaking month in March. Some of them have already spent too much time gawking at their financial statements, poking their chest out and patting themselves on the back. And guess what? For some of them April is off to a slow start.

Let me caution you; you cannot be satisfied. You can never be satisfied. Those sounds you hear behind you are the competition coming to gobble you up. If you take just one little break, one little hiccup, it could be the very thing that puts you into a downward spiral.

People are successful for a variety of reasons, one of them being “fear.”

The fear of failure.
The fear of falling back.
The fear of giving up all they have worked so hard for.

It’s that fear that causes the successful ones to keep pushing and to keep looking for new and better ways of doing things.

Scott McNealy, CEO of Sun Microsystems, once said “You either eat someone for lunch, or you can be lunch.” No truer statement has ever been made.

Being a hard-charging competitor can be craziness at its best. Competing is fun. Trying to get better is the lifeblood of competing, leading and winning.

Study it. Embrace it. Love it. Use it as success fuel. Use it to take you to the top of your mental game.

Develop an unstoppable competitive mindset, and it will push you so far ahead of the competition that you won’t have to worry about looking over your shoulder.

What you have to realize is that most people are just lazy and because they are lazy they can become complacent very easily. Ultimately their lazy streak will show its head; that’s when you can “own” them.

There are times when you can have a good month in spite of yourself because the market lets you win.

No easy wins this month. Time to go to work. That’s all I’m gonna say, Tommy Gibbs

Why They Walk Around It

Salespeople are trying to make a living. You’re paying them on gross. What else would you expect?

My first management position was as a used car manager a very long time ago. I had a sales person working for me that was about as one-way of a person as you can ever imagine. He also wasn’t very good at telling the truth.

Let me tell you what he was really good at; he was really good at selling the freshest pieces that came into our inventory. Talk about doing a trade walk. Every morning he scouted the units that came in the night before. He knew what he could sell that would make him the most money.

During his tenure, I don’t recall him ever selling an older unit. He wasn’t there to help us. He was there to earn a living and feed his family.

It stands to reason why you have salespeople walking around your inventory. They can’t make any gross on those older units. They aren’t stupid, and though they may be team players, the team they are really playing for is the “home team.”

I’ve asked this question before and I’m going to continue to ask it. Does it make any sense in today’s market to keep paying salespeople on gross profit? They certainly don’t have as much control over it as they once did. You’re already setting the bar with the price you’ve put on the Internet.

The only way moving to a volume-based pay plan works is to be a one-price dealer or have a “well-disciplined management team” that’s not going to let them give the unit away.

And now you know why the management team walks around the pay plan issue. That’s all I’m gonna say, Tommy Gibbs

It’s Almost Over!

March Madness is almost over and so is your month. Unless you’ve been living under a rock you know that March Madness is the NCAA basketball tournament.

More often than not these games are won on defense, and a full-court-press is often a major part of a defensive strategy.

A full-court press is a basketball term that refers to a defensive style in which the defense applies man-to-man or zone defense to pressure the offensive team the entire length of the court before and after the inbound pass.

A full-court press takes a great deal of effort but can be an effective tactic. Often when teams are behind late in a game, they will apply full-court pressure as a means of attempting to produce turnovers as well as tire opponents.

A team with less talent can beat a talented team by utilizing a full-court-press for the entire game. It doesn’t take talent, but it takes a lot of heart and desire to play an “in your face” defense for the entire length of the court for a full forty minutes.

If you’re in the car business today you need to be in a full court press. You may very well be behind in the game. Be it good or bad, in the car business every day is a full court press day. Every minute of every day, it needs to be an “in your face” approach.

I know you think you’re doing all you can, but you aren’t; there is always more. If you’ve played sports, you know that is true. Try this. Raise your hand. Now raise it higher. See, I told you so.

How can you do more? Start by writing it down. Make a list of all the basic things you know about this business. Things you now do, things you used to do and things you’ve heard that others do.

Once you make the list, make a commitment to go into a full-court-press for a minimum of the next 21 days. How hard can it be to hold yourself and others accountable for just 21 days? Come on, get with it.

Why 21 days? Research has proven it takes 21 days to create a new habit. If you will focus on this list for the next 21 days good things will happen. I’m trying to press you to take action. I’m pressing you to get after it. I’m pressing you to take stock of what you do and how you do it.

If you’ve just returned from the NADA Convention, what better time than right now to start a full court press? Anytime is a good time to start a full court press.

I think of every minute of every day as a time for a full-court-press. Start pressing and run up the score. That’s all I’m gonna say, Tommy Gibbs

What If?

The problem with used cars is there are no absolutes. I frequently get questions starting with “What if…”

As in, “What if you have a one-year-old truck with 15,000 miles on it and you over-appraised it and have $42,000 in it?”

My answer almost sounds evasive, as I’m always going to have a different spin depending on so many unknown factors.

My view of that unit today and my view of it three days from now may very well be totally different. Every unit is different and every day is different. You have to trust your good judgment. Make a decision and move on.

While I would always say don’t second guess yourself, you should second educate yourself.

You learn from doing. You learn from making mistakes. Make some mistakes, but don’t keep making the same mistakes. And even if you do. Sell it. Move on. It’s just a short-term stock.

If you’re a manager with a mindset of getting it perfect then you may want to seek a career change. You never get anything in this business perfect. You can always get better. You will never get perfect. Get over yourself.

In my day, basketball players that took lots of shots were called “gunners.” They shot and shot and shot some more. They always scored the most because they shot the most. Just because they missed didn’t mean they were going to stop shooting. If they had a bad night they went back in the gym the next day and shot even more.

Take your shots. Improve your touch. Stop looking for an absolute to the question of “What if.”

What if a bullfrog had wings? He wouldn’t bump his tail every time he jumped. That’s all I’m gonna say. Tommy Gibbs

The Accountability Battle?

Accountability: “The quality or state of being accountable; an obligation or willingness to accept responsibility or to account for one’s actions.”

Accountability starts with you, vibrates to those around you and ends up back in your lap. If you believe a leader sets the culture of an organization then you must believe you cannot create an organization of accountability if you’re lacking in your daily disciplines.

If you’re not willing to hold yourself accountable then for sure you can’t hold others accountable.

Why should those around you do what has been deemed important, if you as their leader aren’t willing to do the same? There are a million ways to describe this, but since I’m a common sense guy, how about “monkey see, monkey do?”

A good leader makes sure those around them know what’s important. And a good leader makes things important by checking to make sure those around them are doing what’s important.

Building an organization of accountability isn’t a one-time thing. It’s an everyday thing led by you.

Accountability plays no favorites. If you let one person off the hook, eventually the entire organization falls off the hook.

Besides your personal accountability, there are three parts to holding people accountable.

1. Your personal street savvy. For many, this is based on time and experience and there are a few that are born with it.

2. Getting your head out of the sand. Get out of your office. Pay attention by using your peripheral vision and hearing.

3. Data. Look at the data and look at it some more. Data can be overwhelming. Figure out what’s important and what’s not by applying common sense to everything you’re looking at.

Sometimes data is misleading. Sometimes it smacks you upside your head.

Are you building an organization of accountability? That’s all I’m gonna ask, Tommy Gibbs

Anything Over 60?

If you’re a consistent reader of my newsletters you may have noticed more than half of them involve the disciplines necessary to run your used car operation. There’s no denying that the stronger you are in used cars the better you are in New, Service, and Parts. It’s a given. It’s a fact. It is. It just is. You can deny it all you want. You will be wrong

There’s an old saying, “Do the things you don’t want to do, so you can do the things you want to do.” That’s a great life lesson to understand, live and grow by. Never has there been a more powerful truism than for the automobile business.

There’s no department that requires more specific strategic disciplines to be successful than your used car department.

The most common discipline that dealers struggle with is turning their inventory in 60 days. Let me state it a different way; no unit can become 60 days old. Some of the more disciplined operations are starting to put that number at 45 days old.

Most dealers would say they want to make more money. In order to make more money, you have to do some things you don’t want to do. One of those things is the pain of discipline. Doing a lot of little things each day to ensure you can do what you want to do.

If you’re not already on a 60-day turn it’s going to be painful and costly to get there. Either you or your staff will have all kinds of excuses as to why you can’t do it. It’s going to cost you some money to get it done. (Do the things you don’t want to do.)

When you finally get it done, your dealership runs smoothly, you make more money, life is simpler and you smile a lot. Now you’re doing the things you want to do, as in making more money.

“The pain of discipline or the pain of regret.” If you would use my lifecycle management process you’d have a lot less pain. That’s all I’m gonna say, Tommy Gibbs

I Have Questions For You

Below are 40 fundamental traits of a good leader. These are traits that everyone should seek to emulate regardless of their position on the totem pole.

There are 3 ways you can use them:

1. Evaluate yourself. How’d you do?

2. Evaluate the person above you. Your supervisor, department head, team leader, dealer, GM, the person in charge, etc. (You don’t have to tell them, just tell me.)

3. Have someone you work closely with or someone you supervise evaluate you.

If you do all three you’ll become a better leader.

1. Leaders have pep in their step
2. Leaders are disciplined
3. Leaders arrive early, stay late
4. Leaders have a sense of humor
5. Leaders are consistent
6. Leaders follow the golden rule
7. Leaders don’t put themselves above others
8. Leaders don’t show favoritism by hanging out with subordinates
9. Leaders can be counted on
10. Leaders answer their own phone
11. Leaders return phone and email messages promptly
12. Leaders dress the part
13. Leaders show respect for others regardless of position or social status
14. Leaders say thank you…a lot
15. Leaders cut to the chase and get to the point
16. Leaders listen because they know others have great ideas too
17. Leaders use the word “We” vs. the word “I”
18. Leaders pull others up not put them down
19. Leaders don’t work in fear of their job; they coach people “up” to take their job
20. Leaders do what they say they are going to do when they say they are going to do it
21. Leaders pick up after themselves…and others
22. Leaders know what they know and they know what they don’t know
23. Leaders take the blame when something fails and they give others credit when it works
24. Leaders communicate then communicate some more
25. Leaders help establish vision and direction
26. Leaders remove obstacles to production, not create them
27. Leaders attack a problem now, rather than letting grow it into a cancer
28. Leaders seek ways to simplify not complicate
29. Leaders seek knowledge; they learn, then they coach others
30. Leaders make the tough decisions now, not later
31. Leaders don’t tolerate a fearful workplace
32. Leaders are enthusiastic
33. Leaders set the accountability standard
34. Leaders have controllable passion
35. Leader detest the statement “We’ve always done it that way”
36. Leaders accept mistakes as a part of progress
37. Leaders see a problem as an opportunity to “fix it”
38. Leaders guard the processes but recognize when they are not working
39. Leaders are optimistic realists
40. Leaders lead from the front and they push from the rear

How did you score? That’s all I’m gonna ask, Tommy Gibbs

The Elephant In The Room

There’s always an elephant in the room. They come in different colors, sizes, and shapes. Some are purple, red and green. Some are fat and some are skinny. Some are wide and some are narrow. Some are sort of cute, but most are ugly. They are always there.

You know they are there. Your staff knows they are there. But, you, yes you, the leader, you keep ignoring them. The more you ignore the elephant, the more your staff rolls their eyes in disgust and disbelief. The staff knows you have the power and weapons to slay the elephant, but you keep ignoring the elephant in the room.

You seem to think that if you ignore the elephant it will just go away. How silly of you. The elephant is grazing on your resistance, getting fatter by the day. The elephant ain’t going anywhere on its own.

If you really wanted to fix things, you’d get a stick and run the elephant off. But, Nah, you like pretending the elephant doesn’t exist. You like living in fantasyland. Don’t be surprised if one day the elephant sits on your lap and crushes you.

Your staff will be so sad when that happens. They wanted to tell you the elephant was there, but they wanted to keep their jobs even more.

Are you ignoring the elephant in the room? That’s all I’m gonna ask, Tommy Gibbs

Are You Eliminating Excuses?

One of the constant themes/issues that I come across in my travels is PIC (Person in Charge); the dealer, general manager, owner-operator who doesn’t listen to those in the trenches when it comes to what’s working, what’s not and what can be done to fix something.

Often it’s not just that they don’t listen, it’s that they don’t bother to ask. Even when they do ask they won’t act on the information they have been given because they (the PIC) has been there and done that.

Sometimes they have over-analyzed the information to a point where they are convinced that whatever the thought or suggestion that was served up will not work.

I think far too often in the car business, or any business for that matter, we become convinced that something can’t be done and when we do that we are no doubt right.

And, we are just as right when we become convinced that something can be done.

Business and life is such a head game. The better heads win. Often as we go up the APG (Authority Power Grid) we start to believe that due to our success we have all the answers.

And as brilliant as we may be, we need to value and act on those ideas that come to us from those who are immediately dealing with the problem.

You need to listen to those under you and you need to let them try some of the things they believe will help your business. Take the handcuffs off and turn them loose once in a while. What you think doesn’t matter as much as you think.

One of my favorite techniques as a dealer was to ask the members of the management team what they need in order to fix whatever problem they felt was getting in their way of performing to their maximum potential. (That’s big, read it again.)

My message to them was “Tell me the problem, tell me what you think the fix is and let’s get on with it.” I loved eliminating excuses. Now the ball is in their court. Game on!

When all the information comes from the top down in the power grid, those on the lower half of the grid become very unhappy.

Unhappiness leads to frustration. Frustration leads to throwing one’s hands up and giving up.

When people give up they go through the motions and the organization never reaches its full potential. I want you to reach your full potential. Ask questions. Eliminate excuses. That’s all I’m gonna say. Tommy Gibbs