Archive for August 2017

Used Eclipse Sunglasses

They are just like used cars that you let hang around too long. It doesn’t matter what you paid for them. It doesn’t matter if you have one of them or 20 of them. It doesn’t matter how popular they were at one time.

You missed the market. Maybe the market was yesterday. Maybe it was a week ago, a month ago or 3 months ago. Face it, you missed it. You weren’t paying attention soon enough.

It’s now decision time. Retail them for as much as the market will now bear or keep them until 2024, 2034, 2044. If you keep them long enough, they will be antiques and you will make money on them.

How long is long enough? You may not have enough time on earth for “long enough.”

In the short term, they are losers. You know it. Everyone knows it, but you keep wanting to ignore it. Maybe the sun has burned not just your eyes, but also your brain.

Enjoy those used eclipse sunglasses. That’s all I’m gonna say, Tommy Gibbs

Disclaimer. I stole this thought from one of my favorite authors Seth Godin.

Sometimes I Struggle

I use my newsletter to share free information with you in part because it’s very satisfying to know I’m helping you improve your business. It’s nice to be relevant and if I can keep my name and face in front of you enough, one day you might hire me. I know that when you give, you get; so most of the time it’s win-win.

There are times when I struggle as to how much I want to “share” with you in my free newsletter. I often ask myself, “Should I save this for my paying clients?” This is one of those times, but what the heck, here you go.

If you’ve heard me speak or read any of my material, you know I believe it’s way past the time we had two-tiered pricing from the service & parts department to the used car department.

A different price structure for your cheaper used cars will pile up more gross and put more profit on your bottom line.

It’s a tough sell for those dealers locked into stinky old legacy thinking who have “always done it that way.” I, of all people, realize how difficult change can be.

I have a story for you. I had my car serviced recently and upon hearing the quote I asked, “Hey, can you give me a discount?”

The service writer said, “Sure, here’s a 15% coupon for the labor.” I said, “What about parts?” He said, “Nope, the parts department won’t work with us. They are very one way.” Another one of those things that’s hard to change.

Nothing shocking here, but my point is we are always giving our retail customers discounts and coupons. So why not the used car department?

Here’s the way it works:

1. The dealer or GM decides how many coupon sheets (see below) they will issue to the used car manager at the beginning of the month. If you want to get sophisticated about it, then base it on some formula of how many used (or even new) were sold the previous month.

You could do 40 used gets you one sheet. Or 40 new gets you one sheet. There’s all kinds of ways to set this up. You could do for every 10 units over forecast you get an extra sheet for the next month. Whatever formula works for your size store.

2. The sheets are set up for 8 coupons. You could do more or even less.

3. At the top of the sheet, the Dealer/GM will determine the maximum ACV the coupons can be used for. I’m thinking less than $10,000, but you get to choose.

4. Each coupon requires:

A. The stock # of the unit
B. The ACV before coupon/repairs are done.
C. The manager’s signature.

5. I have a template that allows you to change the coupon percentages to suit your taste.

6. How you expense the coupon discounts is up to you, but let me suggest that parts and service handle the discount just like you would with any customer.

7. Is there a slightly negative impact on your percentages in parts and service? Probably.

8. Is there a positive impact on your total gross profit? You betcha!

9. Is there a positive impact on attitude from the used car department? Another you betcha!

10. You will sell more used because you’re keeping some pieces you’ve been letting go down the street. You will sell more new because you will step up on some trades since you now have a way to turn them into retail pieces.

If you want to sell more used cars then do something different. That’s all I’m gonna say, Tommy Gibbs

Coupons 10-20-30-40%

Which Have You Chosen?

You may have chosen to do volume or shoot for a high average gross profit. The odds are pretty good that you’re not all that happy with your choice.

If you chose high average gross, the odds are very good that you’re not generating enough total gross and your volume is kind of poopy.

If you chose volume, you’re not all that happy either. Your average gross is also poopy.

It’s a contradiction to say to your staff that you expect both high volume and high gross per unit.

They stay confused and frustrated when you keep pounding them over the head with this misdirection and sleight of hand marching orders.

I’m sure somewhere out there someone is making it happen on both ends, but it is certainly the exception and not the rule. So, you need to get over it.

It’s a given that more than 80% of the people shopping for a used car shop the Internet. If you think you are going to post high prices or no prices out on the Internet and traffic is going to show up then you’re not going to be very busy. The Internet is a “game changer” for all of you regardless of your new car franchise or set of circumstances.

When you take the leap into the volume world it requires you to rewrite your overall strategy from acquisition to staffing, pay plans, reconditioning, marketing, and pricing.

Failing to address any of these will result in frustration and poor production and you may find yourself worse off than you are right now.

The bottom line should be to increase your total gross profit. It’s not done by improving your average. It’s done by maintaining a respectable gross and substantially improving your volume. Small market or big market, it doesn’t matter.

The Internet has opened the world up to you and you have to decide if you want to be in either that world or your own little world. Your little world has limitations.The Internet world does not.

“You can’t spend average gross profit. You can spend total gross profit.” Your job as a leader is to figure out how to get the best of both worlds. That’s all I’m gonna say, Tommy Gibbs

Are You Good Enough?

Most dealers fall into one of two categories. Either they think they run the best show in town or they think they know who runs the best show in town.

If you do see yourself as being the best operation in town, you poke your chest out, toot your own horn and strut down the street once in a while.

If you don’t see yourself as running the best show then you probably know what your flaws are and you’re trying to fix them because of course, you want to be the best.

Regardless, if you think you’re the best or not, it’s a safe bet that for as long as you’ve been in the car business you’ve compared yourself to other dealers.

Stop it. Your team members and the consumers in the marketplace aren’t comparing you to other dealers.

They are comparing you to Apple, Amazon, eBay, Zappos, Starbucks, The Ritz, Disney and a host of other great operations. Being better than your competitors isn’t good enough anymore.

If you’re not studying some of those that I mentioned, you should be.

If you’re just studying and comparing yourself to other car dealers, you might be the best in your immediate neighborhood, but you’ll never be the best of the best. That’s all I’m gonna say, Tommy Gibbs

Are You Investing?

If you talk to anyone that’s had a successful run, they will tell you the greatest thrill for them hasn’t been:

All the money they’ve made
All the great trips they’ve taken
All the wonderful houses they’ve owned
All the news stories about adding another business to their portfolio
All about their sales rankings in publications like Automotive News
All about all the wonderful plaques they’ve received for their civics’ activities, contributions to their community or the awards from the franchises they represent

It’s none of those.

They will tell you the greatest thrill for them is the contributions they’ve made toward developing great leaders in and outside of their organization.

Successful people are always looking for opportunities to invest in their businesses and their staff. The one thing they all know deep down inside is there is no greater investment than investing in their people.

Regardless of your position on the management totem pole, you too can invest in others by teaching, coaching, encouraging and picking others up. When you set the example, you become the example.

When people feel like they are learning and moving forward, they always want to give you their best. When people are giving their best we all grow.

Sometimes you help people grow so much that they leave for other bigger and greater opportunities. You should smile, high five them and give yourself a little pat on the back.

Are you investing in your team? That’s all I’m gonna ask. Tommy Gibbs