Archive for December 2015

2016 Predictions

  1. Average gross per unit will come down. (Doesn’t mean it has to be that way at your store.)
  2. Use of personal devices by consumers to shop vehicles and prices will increase.
  3. Nice used cars will be scarce.
  4. You will struggle to make ANY gross on aged units. (Well, duh, you’re not using my Life Cycle Management process)
  5. Finding sales people who want to work the hours and be paid on gross will become even more difficult.
  6. Maximizing the use of software and technology in your dealership will challenge you.
  7. The franchises you represent will put more expenses on your side of the table.
  8. The manufacturers will increase the pressure on you to hit market share.
  9. You will accept aged units as a necessary evil of the automobile business.
  10. Your average cost per unit in stock will go up.
  11. You will become more dependent on your used car department to save your new car department.
  12. The amount of water in your used car inventory will increase.
  13. Your dealership will be sued because someone didn’t “just handle it.”
  14. Your CPA and legal fees will go up.
  15. You will waste 50% of your advertising dollars and you won’t be able to figure out which 50%.
  16. F&I income will feel stress from the regulators.
  17. Improving recon time for used going through your shop will be a high priority. (You will talk about but not fix it.)
  18. You’ll hire managers from the outside because you haven’t developed your own people.
  19. You will wholesale some used cars that you should have retailed.
  20. You’ll think about hiring me, but you’ll talk yourself out of it…again.

Well duh. Most of these are always true. Some things change. Many don’t.

Happy New Year to you too. That’s all I’m gonna say, Tommy Gibbs

 

Time To Get Busy

This should be a really good week. It will only be a really good week if you make it a good week. It’s not going to be a good week if you stay in your seat acting like a computer geek.

You can make it a good week by getting up and moving around. You should be like a bumblebee on a pollination mission. You’re here. You’re there. You’re everywhere.

You can’t just flap your little wings in place and think someone’s gonna sell a car. You have to move around.

You have to create the buzz. You have to go from being weak and meek in order to make it a good week.

I don’t like things to be all about you, but this is all about you. This week is all about you. It’s about you making things happen.

It’s about you contributing as much in a week as you sometimes do in a month. It’s not about you giving 100 or 110%. It’s about you giving 200%.

It’s not about asking others to do it. It’s about you doing it. You sometimes think you’re important. Well, you are important. You’re even more important than you think. At least this week you are.

You may have to sting a few people this week. That’s ok. Some of your team could probably use a sting or two. A little stinging pain for a whole lot of car selling gain.

This is not the week for the meek and certainly not a week for a geek. It’s the week of the bumblebees. Let the stinging begin. That’s all I’m gonna say, Tommy Gibbs

Your Plan?

1. How’s the plan coming?
2. Have you presented the plan?
3. Has the team talked about the plan?
4. Is the team sold on the plan?
5. Have you even started on the plan?
6. What happens when the plan falls apart?
7. What’s plan B? Plan C?
8. Is it a new plan with the same tired and worn out players from last year’s team?
9. Is it time to change the head coach?
10. What about the assistants?
11. Does the plan include the same selling process from 2002?
12. Are you sold on your own plan?
13. Are you planning for the sake of planning?
14. Is your plan a pie-in-the-sky forecast and not really a plan at all?
15. Did the plan come together for you because you put a bunch of numbers on an Excel spread sheet?
16. Since you think you have a plan, do you have a strategy in place to execute the plan?
Planning is fun.
It makes you feel good.
Just because you feel good doesn’t mean you’ve got it right.
That’s all I’m gonna say, Tommy Gibbs

Fear Your Competition?

I know what you just did when you read the title of my newsletter. You poked out your chest and said to yourself, “I’m not afraid of the competition.”
I hear ‘ya. I don’t totally believe you, but I hear you. Maybe you don’t fear them as such, but some of you become real concerned about the competition.
When the manufacturer wants to add a new point to your market you become a bit concerned. (Fear) When you hear CarMax is coming to your neighborhood you become a bit concerned. (Fear)
Fear is not really a bad thing, especially the fear of competition. Competition always makes you better. You sharpen your axe and do things better than you’ve ever done when you fear the competition.
We are raised in a competitive world. We grow up competing. Competition makes us better. Competition causes us to work harder and push ourselves to places we never thought possible. If it weren’t for competition how would we measure ourselves?
What you should fear the most is weak competitors.
Weak competitors make you lazy.
Weak competitors make you think you’re better than you are.
Weak competitors make you complacent.
Those are the competitors you need to fear. That’s all I’m gonna say, Tommy Gibbs

What Do You Really Know?

Archie Manning operates a quarterback passing camp, was a pretty good quarterback in the NFL in his day and has two sons currently playing the same position for the Denver Broncos and New York Giants.

Archie Manning once stated, “The best advice I try to give to a young quarterback is, you need to know what you are doing. You need to know what you’re doing because if you know where to go with the football, you can get rid of it, and throw it, and you won’t get hit.”

Holy crap! Isn’t that the way we need to think about a used car manager? I’m going to re-do his statement based on the car business:

“The best advice I can give a used car manager (or dealer) is, you need to know what you are doing. You need to know what you’re doing because if you know where to go with the car, you can get rid of it, and unload it at retail or wholesale, and you won’t take a hit.”

Shazam! Hallelujah! Holy Toledo! Kaboom!

And therein lies the problem. Far too many managers don’t know what to do or they don’t do it soon enough. They hold the ball too long. Holding the ball too long and not knowing where to go creates gigantic losses and headaches.

The great quarterbacks recognize the defense immediately and change the play at the line of scrimmage in order to give them the best chance for success.

The problem in the car business is far too often the used car manager doesn’t recognize the problem until it’s too late and by the time they do they have taken a major hit.

You need to know what you’re doing. That’s all I’m gonna say, Tommy Gibbs

What Great Leaders Know

Great leaders know that in order to win it takes constant preparation.
They know there is no single strategy they can execute that will make the team a consistent winner.
They know and understand the need for ongoing preparation. They are constantly exploring new strategies, concepts and ideas.
Winning in sports and business requires preparation. Great coaches will tell you the game isn’t won on game day. It’s won during the week on practice days. It’s the preparation that makes the biggest difference.
It’s a given that most people want to be part of a winning team. Winners are drawn to those organizations that are willing to pay the price with preparation. I believe there are three types of people:
1. Those who want to get better and embrace preparation.
2. Those who don’t care if they get better and will do everything they can to avoid preparation.
3. Those who are just confused and looking for someone to show them the way.
Preparation breeds confidence.
Confidence creates a can-do spirit.
A can-do spirit creates momentum.
Momentum keeps the ball rolling.
Winning is constant preparation. That’s all I’m gonna say, Tommy Gibbs

Might As Well Try This

You’ve tried everything else to move that aged inventory. Might as well try this:

“Mark Down Tent.”

A “Mark Down Tent” is not a permanent fixture. It’s to be used from time to time when you are trying to unload problem cars. You know those units that you all of a sudden discovered you are killed in and have had hanging around way too long.

Put up a tent that can hold 3 or 4 units, as close to the road as possible. If permissible, hang banners around it that say “Mark Down Tent” and use the little signs that you can stick into the ground with arrows to the “Mark Down Tent.”

Promote the “Mark Down Tent” in all your ads including your website. You might want the receptionist to answer the phone, “ABC Motors, have you heard about our Mark Down Tent?”

Using a marker, start off by putting a very, very high retail price and the date on the front windshield. You will be marking the price down each day by $500, with the date beside the new price until sold.

Draw a line through the old prices and dates. The sales person’s commission on day one will be $2000. Each day that you mark the car down by $500 the sales person’s commission will be reduced by $100.

Now don’t panic. I said to start off with a really high retail price. If you get to a point where you are uncomfortable with the pricing going too far south you can always pull it from the tent.

The idea is to create a sense of urgency with both the customer and the sales person to take action.

The reason you now need to put cars in the tent is you didn’t have a sense of urgency soon enough in the first place. That’s all I’m gonna say, Tommy Gibbs

You’ve Got A Mess On Your Hands

Actually I hope you don’t, but thinking that you do isn’t a bad way to approach each day.

Starting each day by thinking you don’t quite have it right yet is the same thing as thinking you have a mess.

When you think you have a mess, you become more alert.

You become more in tune to what’s going on around you.

Your peripheral vision improves.

Your peripheral hearing improves.

You become better because your antennas go up just a little higher. The higher your antennas go up the more you pay attention. The more you pay attention, the less of a mess you have on your hands.

Pay attention. Less mess. Get it? That’s all I’m gonna ask.
Tommy Gibbs

When Do You Make The Money?

There’s an old adage that you make the money on a used car when you buy it or trade it. Buying it or trading, it’s all the same thing.

For the moment, I’d like to take issue with that statement. Of course, it’s true you have to be in a unit right, but the most important things that impact your profit are the decisions you make about the unit once you own it.

Sometimes we make a bad decision on what to keep and what to wholesale.

Sometimes we spend too much on it. Sometimes we spend too little.

The biggest problem dealers have is that they don’t have a defined strategy of how they intend to market the car.

They price it too low.
They price it too high.
They don’t change the price fast enough.
There’s no sense of urgency to get it on the lot and on the web.

If you want to make more money on your used cars then make sure you have a defined strategy on what you’re going to do with it. Retailing or wholesaling isn’t a strategy. That’s a disposition decision.

A strategy means you understand what you’re dealing with and you have a plan to get it retailed.

Think of the potential. You buy them right. You strategize them right. That’s when you make the most money.

That’s all I’m gonna say, Tommy Gibbs