Archive for June 2014

Home Alone

When we think of being a leader we think in terms of a group following our leadership. We think of leading the troops. We think of teaching leadership and coaching skills along the way.

One of the things that great leaders have always found time to do is to be alone. It is often when you are alone that you develop your own personal leadership skills.

Your brain being on fire is a good thing, but you need to have a cool down period. It’s the cool down period where you put it all together. Being able to gather your thoughts from being on fire to the “sorting stage” is what helps you to see what the real possibilities are. You become a better leader when you take a moment to pause.

It’s a bit like bodybuilding. If your muscles are going to grow you have to allow an adequate period of rest.

My alone time is generally late at night or early in the morning. I learned this from my business partner, Ashton Lewis, Sr., when he introduced me to the Franklin Planner concept some 25 years ago.

Some of your most productive and leadership “inspiration time” is the time you spend alone. You do your best thinking by slowing down and concentrating. It’s impossible to concentrate with all the multi-tasking that takes place during the course of your daily routine.

Some of your best leading will occur when you are alone. It’s time to be alone. That’s all I’m gonna say. Tommy Gibbs

Winning With Speed

If you’ve heard me speak you know the subtitle of my workshop is, “It’s Not The Big That Will Eat The Small, It’s The Fast That Will Eat The Slow.” I stole that title from a book by Jason Jennings and Laurence Haughton. Bottom line is speed is critical to the success of your business.

Your used car business and your overall business model require you to be able to travel at the speed of Mach 5. You have to think fast and move fast in today’s market.

I often refer to the lack of speed as “drag points.” Drag points are those places along the way that drag you down, hold you back, destroy morale and make you very inefficient.

Some typical “drag points,” are:

1. Car sits too long before someone makes a decision on what to do with it.
2. Car spends too many days in the mechanical shop due to shop or parts issues.
3. Car sits a few more days before it gets into “clean up.”
4. Car takes too long to get out of clean up.
5. Car sits too long before photos are shot.
6. Car’s photos aren’t posted online in a timely manner.
7. Car’s price changes are made too late in the cycle.

Most dealers would tell me they get their used cars through the system and ready to go in 2 to 3 days. The reality for most is it takes about 7 to 10 days.

The fact of the matter is you make the most money on a car in the first 20 days. If it’s hung up in the system for 10 days you just blew 10 of your best selling days.

Yes, I’m simply telling you something you already know. But knowing something and fixing something are two different things.

The Dealer, the Executive Manager, the General Manager or the Owner Operator has the power to fix any and all of those issues.

Sadly, some can’t or won’t make the changes necessary to put the store on the fast track. So, they stay on the slow track to nowhere. Speed wins. That’s all I’m gonna say, Tommy Gibbs

Be Nice

In many people’s eyes you are special because you are in a leadership position. If you’re in a leadership position it could also be said you are on top. You may have earned the title or it’s possible it was a gift.

The reality is that since you’re on top it should be much easier to be nice to people than not. I see the “than not” frequently in my travels. How can that be? It should be just the opposite.

When you treat people nicely, you’re more likely to encourage them to do what you want. People want to please their leader. They are more likely to do so when the leader is nice and treats them with respect.

If you want productivity to go up, trying being nice. You don’t lose respect by being nice. You lose respect when you’re not nice.

Being nice works best when you can show humility. In Rick Pitino’s recent book “The One-Day Contract,” he points out that “With humility, you are better able to enjoy and understand success, and you are better able to examine and handle failure.”

People on the top in sports, movies, celebrities and high profile people are often not very nice. You know the ones I’m talking about. They are often jerks.

Don’t be a jerk. Just be nice because that’s what real leaders can and should do. That’s all I’m gonna say. Tommy Gibbs

I Win

I love winning. I love winning at anything. Sports, checkers, or the game of business. You name it and I love winning.

In last week’s newsletter I said I wanted to be sold on the logic of keeping inventory longer because used cars are hard to find.

That newsletter was written to see if someone could justify holding inventory past 45 to 60 days just because they can’t find replacement inventory.

I was very sincere when I said in the newsletter to “sell me” on the logic behind doing so.

Over 7,000 people get my newsletter each week. I get an extremely high open rate. Sometimes as much as 30%. Trust me, that’s a big number.

Now guess how many people attempted to sell me on the strategy of keeping cars longer? None. Not even one.

If you won’t try to sell me, how are you able to sell yourself and your staff? Sometimes I think someone is selling you on a bad business strategy instead of you doing what you know is the right thing.

Many of you are winning because you know turning your inventory in 45 to 60 days always wins. Yep, I win, you win, we all win when you turn your inventory. I love winning, that’s all I’m gonna say. Tommy Gibbs

I Like Being Sold

I’d like to think I’m a great salesman. Most great salesmen are easily sold. I wanna be sold. I’m begging to be sold. I’m begging you to sell me.

So come on, sell me on why it’s ok for you to keep used car inventory past 45 to 60 days. Recently, I’ve had a few dealers tell me inventory is so hard to find that they are keeping cars longer.

How does that help your inventory problem? Come on, sell me.

Does keeping a car longer ever make you “more money?” Come on, sell me.

Do you make a greater ROI when you sell a car at 90 days vs. 30 days? Come on, sell me.

When you keep a car longer, do you make more money on it than if you sold it sooner? Come on, sell me.

You can’t get the units through reconditioning fast enough so you want to keep them longer? Come on, sell me.

You can’t find inventory so you want to hold them longer? Come on, sell me.

The big volume players such as CarMax and Texas Direct have to buy most of their inventory. You can’t find cars, so that’s a valid excuse for keeping them longer? Come on, sell me.

Do you really think holding cars longer is the answer? Come on, sell me.

I’ve never had a dealer who was committed to a short turn say they regretted the strategy. I’ve had lots of dealers regret keeping cars past 60 days. Come on, sell me.

I like being sold. Come on, sell me. I’m waiting. I’m still waiting to be sold. That’s all I’m gonna say, Tommy Gibbs

Lying Cheating Stealing

It’s the most fundamental of all leadership traits. It’s like the basics of all basics. It comes before processes and great speeches. It’s the very core of any leader worth a grain of salt.

Leaders, real leaders will not tolerate lying, cheating or stealing. It’s really that simple.

Lying-For a bad leader it starts out by being tolerant of a little lie. Fudging a customer just a little bit. If they are fudging the customer they are fudging your organization. A bad leader lets it go. A strong leader hangs his/her reputation on fixing it. A bad leader lets it go and with it their reputation and career will eventually go. A strong leader spots, stops it, cuts it off at the head.

Cheating-A bad leader gives a wink and a nod to a little cheating. A little cheating might be doing those iffy repairs that don’t really need to be done. When they cheat the customer they cheat you too. A strong leader spots, stops it, cuts it off at the head.

Stealing-It could be money, items or even time. Bad leaders allow things to happen that shouldn’t. I had a dealer tell me one time he knew his used car manager was stealing and he was ok with it because he made him so much money. He must not have made him enough. He’s now out of business. A strong leader spots, stops it, cuts it off at the head.

It’s real simple. Your motto should be: “If you lie, cheat or steal you can’t work here.” That’s all I’m gonna say. Tommy Gibbs

The Six Stages

In the late 1970’s and early 1980’s James Prochaska and Carlo DiClemente at the University of Rhode Island developed a theory called the Stages of Change (SOC) Model when they were studying how smokers were able to give up their habit.

The SOC model applies to all types of changes including those in your dealership or any business for that matter.

Don’t poo poo this. You are in one of these stages regardless of how good or bad you think your operation might be. Moving into the next stage could be positive or negative. The key is for you to recognize which stage you are in and to take control of where you are in order to improve what you are doing.

Stage 1-Precontemplation is the stage at which there is no intention to change behavior in the foreseeable future. Many individuals in this stage are unaware or under-aware of their problems. In your business it’s the “everything is ok” mentality so why even think about doing anything different? Denial plays a big part in this stage as does the “we’ve always done it this way so let’s not rock the boat.”

Stage 2-Contemplation is the stage in which people are aware that a problem exists and are seriously thinking about overcoming it but have not yet made a commitment to take action. The majority of the dealers around the country are in this stage. They know they have problems but don’t have the courage to attack them. This is also known as the “fear stage.” The fear of losing people and that making changes will only make matters worse. Often dealers decide to move out of this stage after things have gotten so bad that there is little hope. (Hello new owners.)

Stage 3-Preparation is the stage that combines intention and behavioral criteria. Individuals in this stage are intending to take action in the next one to three months and have unsuccessfully taken action in the past year. Finally, yes finally, you have made a major decision that you have to get it fixed once and for all. You join a Twenty Group, go to a convention or workshop in order to seek the best advice and direction to take. After you’ve heard from multiple sources that Tommy Gibbs can fix your mess in the used car department you finally give him a call 850-251-2310. (Oh come on, smile, I just had to throw that in.)

Stage 4-Action is the stage in which individuals modify their behavior, experiences, or environment in order to overcome their problems. Action involves the most overt behavioral changes and requires considerable commitment of time and energy. You have decided to make discipline and processes part of your daily diet. You have decided that one way or the other you are going to make it happen. Your message to the staff is “the rest of you can get on the train or get run over by it.” This is the most exciting stage of all. You start to see the results of the changes you’ve made in your bottom line and you keep asking yourself what the heck took you so long?

Stage 5-Maintenance is the stage in which people work to prevent relapse and consolidate the gains attained during action. This stage extends from six months to an indeterminate period past the initial action. This is the “grind it out” stage. This is the “getting on everyone’s nerves” stage. This is when you find out a lot about who you are and your commitment to excellence. This is when your “will” is truly tested. This is when many of your key players start to let things unravel. They get lazy, lose their discipline, and want to take the easy way.

Stage 6-Relapse is returning to older behaviors and abandoning the new changes. This is the evaporation stage. Over time you just start to give up. Not worth the fight. Everyone has now fallen into their comfort zone and is just kind of happy with the way things are.

At some point during the “relapse stage,” Stage 1 will reappear and it all starts over again.

What stage are you in? That’s all I’m gonna ask.
Tommy Gibbs

Need More Inventory?

It’s that time of the year when dealers attempt to increase their used car inventory in order to take advantage of the summer selling season.

There are many sources for acquiring inventory and more often than not some of them are right under our nose and we either can’t see them or choose to ignore them.

I was at the CarMax store in Clearwater, FL recently and spoke with a very chatty sales person. He proceeded to tell me that 70% of the traffic they get at that CarMax store is from people who want to sell them a car.

Do you think their campaign of “We will buy your car even if you don’t buy ours” is working?

If you have not put a big push on to buy cars in your market maybe it’s about time you did. You may not get instant results, but over time you will. You must remain consistent in your advertising and marketing of the concept.

You will be wasting your time and money doing so if you do not set up internal procedures to handle these sellers when they show up. It’s a combination of the paper work, the offer, the documentation of the offer and the way the sales person greets and handles the customers when they show up that makes it successful.

What CarMax has figured out is that the person showing up to sell them a car is a “Customer.” They don’t treat them any differently than someone who comes in to buy a car. They all get the “full routine.”

One of the things we all know to be true is we get the nicest cars and trucks at the front door. Without exception almost every dealer and manager I work with will tell me “We never missed a trade at the door.” Really? Do you really believe that?

If you are not using the vAuto appraisal tool then you should. You should be tracking “Look to Book,” for your store and each manager who appraises used vehicles. You should always be looking to drive your “look to book” up. Don’t fool yourself by thinking a certain percentage is acceptable unless it’s 100%.

Yes, that’s silly, but that should be your thinking. Until you get it to 100% you haven’t gotten it right. Duh, you never get it right.

You should demand that every vehicle that’s appraised is put in the system. Since I know you are holding a “Save-A-Deal” meeting every morning you should make sure that you review every appraised trade from the day before during the course of that meeting. You’re going to find some cars in that stack that you will now go back and put some extra money on. Voila, you make another deal and get another nice used car or truck for your inventory.

One of the greatest opportunities to find more cars and trucks is from your existing customer base. This list can be a powerful marketing tool for finding great cars and trucks to sell. You absolutely know which cars of your own brand you do well with. You should be contacting these customers via direct mail or email with an offer to purchase their vehicle.

I go after my customer base each week by staying in touch with you via this newsletter. It’s my way of asking for the business. One way you can stay in touch with your customer base is by letting them know you want to buy their car or truck. It’s not rocket science, it’s just smart. That’s all I’m gonna say.Tommy Gibbs

The Road Leaders Travel

Through the course of life you will make millions of decisions. You’ll make hundreds of them today. You will decide what food to eat, which streets to take on your way to work, what music to listen to and which roads to take in the journey of life.

The first thing on your road to a better life and greater success is to accept responsibility for your life. Know that it is you, and no one else, who will determine your success.

You get to decide who will mentor you. Choose your mentors wisely. You will make some mistakes when picking mentors. That’s only a bad thing when you aren’t smart enough to figure it out fast enough. It’s as important to learn what not to do, as it is to learn what to do.

There are people who are close to you who want to see you fail. Sadly it’s sometimes family pulling against you. For some people when they see you fail it makes them feel better about their lack of success.

Part of your decision making process is to surround yourself with winners and rid your life and your organization of those who pull you back and hold you down.

Know that it is you and your decision making process, that will get you where you want to go, and no one else. That’s all I’m going to say, Tommy Gibbs

This Is Easy

This may be the simplest and easiest way to get out of the NEWSCAR business and into the used car business. Most new car dealers are not in the used car business. Most are in the NEWSCAR business.

That’s when the average cost per unit in your inventory keeps creeping up and up and before you know it you are too close in price points to your new car inventory.

When average cost of your inventory moves up and up and the factory comes out with rebates, incentives, low interest rates, or employee purchase plans, you get crushed because you are sitting there with all that high dollar inventory.

The more you press your average cost down, the more used you will sell and the better off you will be. You end up getting in the used car business and out of the NEWSCAR business.

You end up selling more units with fewer dollars tied up. Oddly enough most of your problem cars go away. Your ability to get on a 45 to 60 day aged inventory goes way up.

There is no set of circumstances you can lay out that negates this concept. So, if you were to say any of the following, you would be wrong:

We do a great job with highline cars. (Irrelevant.)
We do a great job with high dollar pick-up trucks (Irrelevant.)
We do a great job with high dollar SUVs (Irrelevant.)
We don’t have software that can separate our inventory by Cars, Trucks, SUVs and Wholesale Pieces (Irrelevant.)

You should require your used car manager (If you’re the used car manager, just do it) to print the report each morning, circle today’s average cost, and put his/her initials inside the circle and lay it on your desk.

So, what’s the magic number to get to? There is no magic number. Every dealer’s number will be different. If you are at $14,500 today your mindset should be how do you get to $14,000, then $13,500, then $13,000 and so on. The
more you press your average cost down the better off you will be.

I find it interesting that when I’m speaking to a group, they think they are hearing me say go out and buy cheaper cars. No, that’s not what I’m saying. I fully realize how hard it is to buy cheap cars. But, what I am saying is it’s not so much about what you buy, but what you don’t buy.

If you are buying a high dollar car you have to buy it with great caution. You need to either have it sold, or have data to back up that it’s going to move fast.

One of the most important things you can do is to quit letting “Bubba and the gang” have your cheaper cars. There is absolutely no reason to not retail any vehicle that has a piece of life left in it. You can present all the excuses you want, and they are just like the rear anatomy that we all have.

There is no question that if you just pay closer attention to what you are buying and what you are keeping to retail that your average cost will go down. Only good things end up happening.

As you monitor your average cost it is going to bump up from time to time. There are two reasons for this. First, it’s because you traded in some high dollar stuff, which you will naturally have to do and second it’s because you got goofy and went to the auction and bought some high dollar cars.

In both cases it’s a matter of paying attention to it daily and getting back on track.

I’m often asked two questions:

1. What should my target goal be? There is no target, just try to get it lower than the day before.

2. Can I press my average cost too low? The answer is no. Don’t be concerned with that. If you do a good job with $25,000 SUVs, you will still sell $25,000 SUVs, but by pressing your average cost down it just makes you that much better.

Getting better is a matter of making things easy and simple. This is easy and simple. That’s all I’m gonna say, Tommy Gibbs