I was having a conversation the other day with my former Controller who is now selling cars at a dealership in South Florida. Within the last year, she relocated and wasn’t able to find a controller’s job, so she decided to go into auto sales. The conversation was concerning how to sell more cars and make more money.

Let me share with you some personal history. When I first started selling cars in the early ’70s I, and many of my co-workers, worked 12 hours a day, 6 days a week. (Dealerships were closed on Sundays back in those days.)

For those of us who were successful, that is what we did. For the most part that never changed in my entire dealership days, as a sales person, manager or dealer. I like working so it was never a big deal to me.

In 1980 I became a partner in my first dealership with my good friend, mentor and long time business partner Ashton Lewis from Chesapeake, VA. At that time Ashton owned Bill Lewis Chevrolet in Portsmouth, VA. Our partnership started with Parkway Pontiac-Volvo in Chesapeake, VA.

A couple of years prior to that I left the retail automobile business to work for ADR, an F&I training company out of Raleigh, NC becoming Vice-President of Sales. At that time we had over 850 dealers in 7 southeastern states. To put things in perspective, one of the current, larger F&I companies is JM&A, part of Southeast Toyota. They weren’t even a factor in the F&I business in those days. It was Pat Ryan and ADR and that was about it. It was during that time I got some great exposure to many ways of doing business.
                           
When Ashton and I opened Parkway Pontiac-Volvo in 1980 I was determined to change the business by focusing on the training and development of people. We opened an off-site training center for the express purpose of recruiting and training a different breed of sales person. We had two fulltime trainers/recruiters and a very nice training center with closed circuit TV for role playing, etc.

We primarily recruited college graduates on the pretense that they were entering into a management training program. Our training program not only consisted of spending two weeks in the classroom and ongoing training, but also included a rotation through the various departments in order for them to become familiar with all aspects of the operation.

I was very demanding about a dress code. Somewhere along the way I had read the book "Dress For Success," and I was totally sold (and I still am) on a dark suit and a long sleeved white shirt. I think someone spending $20,000 to $30,000 with you is deserving of that sort of respect. Will it sell more cars for you? Probably not. Will you perform better if you look the part? Absolutely.

So here’s the point, back in 1980 we were trying to solve the recruiting and hiring problem and to this day it’s not changed very much at all.

If a new sales person is going to earn a living they need to work bell to bell, period. If they work bell to bell, they can earn a decent living, but they lose their family and social life because they don’t have the time and energy. If they work only their shift they eventually quit or lose their job because they aren’t earning any money.

According to a survey from the National Association of Colleges and Employers, students who will graduate this spring are receiving job offers with starting salaries averaging $50,034 per year, up 3.5% from last year.

Keep in mind that is an average, some higher some lower, but it’s the average. Go look at your records. Of the sales people who worked a full year last year what was their average? Now realize the average you are looking at includes some who have been with you for many, many years. I’m thinking even with that, your average may be well below a first year worker with a college degree?

I shudder to think what your numbers might look like if you pulled out those sales people who have been with you for more than 12 months and did your calculation on just the ones with only one year of experience.

So, we are right where we started back in the early 80’s. Unless a new sales person works a ton of hours they cannot make any money. And, if they work the hours, make money, they don’t have a life. After all these years we still have not been able to solve the two biggest problems. Hours and money.

Another issue the industry is facing is that we are still trying to hire people with skills that do not fit today’s buyer. Today’s buyer and today’s seller are the same people. Think on that one for a minute.

With the Internet and the amount of online selling that continues to grow we have to think differently about the type of people we hire, the skill sets, the type of selling processes we utilize, the hours we require them to work and the way we compensate them.

So back to the conversation with my former Controller who is now selling cars. Here’s what I told her: "You will never be successful, and you will never make any real money working your shift. If you are not willing to pay the price you are wasting your time." It’s the same conversation I would have had with her some 30 years ago. Just plain sad. That’s all I’m gonna say, Tommy Gibbs

Before I get into today’s subject matter I want to clear up a couple of questions I’m frequently asked. Oddly enough those asking the questions are often people I know really well.

First, I’m often asked do I write the newsletters or does someone do it for me? Really? Of course I write it. If you know my personality, you know I write just like I talk.

One of the things it’s important to keep in mind is if I’m not doing a workshop, coaching a client, speaking at a 20 group meeting or convention my mind is very much focused on two things:

1. How to help you sell more new & used cars & trucks.
2. How to develop better leadership skills for the industry I so love.

Most of my ideas and things I write about come from observations in
dealerships, coaching conversations I have with many of you and from things I see and read. Something will happen in my travels and my brain goes, "ahh, good idea for a Zinger."

The second question that frequently comes up is why do I give out so much free information? The truth of the matter is I’m just trying to remain relevant in this fast paced ever changing auto world. If not for keeping score and the love of money, I would do it all for free.

A lot of what I share with you is a reminder to help keep you focused on what’s important. I know from personal experience how the "evaporation factor" wants to take over your store. One of the things I do in my workshop is I give dealers a lot of information fully realizing they can’t or won’t do it all. What’s really important is to grab 3 or 4 solid ideas and work ’em hard for the next 90 days. Then find and work on 3 or 4 more and work on them without losing the momentum on the first ones.

Keep in mind, you reading these is nowhere near as good as me presenting them in person to your team. My enthusiasm and passion is like drinking a case of red bull. 

11 Things I Shouldn’t Share With You For Free

1. Study The Data– Be a student of the game. Use Auto Count’s Reports each month to confirm what’s selling and what’s not. Use vAuto’s stocking tool to determine the fastest moving units to stock. Combine those reports with Auto Trader’s reports and you will have a competitive edge. Make sure you keep these lists at the tower/desk so when one comes to the door to be appraised you step up and make a deal on a car that you are going to be able to retail in short order. The more units you step up on the more cars you sell at retail.

2. Press Your Cost Down-This is probably the simplest and most effective thing you can do to improve your business. Know what your average cost per unit is every day and do what you can to reduce it. If you are at $15,000 today, do what you can to get it to $14,500 and so on.  There is no magical number. It’s about keeping the less expensive units and making sure the more expensive ones turn fast. 

3. Know Your ROI-Every deal should be tracked for ROI. As you are working a deal you not only need to know how much gross you have, but what the ROI is. Go to FixROI.com and plug in three numbers. Your cost, your gross, and the number of days the unit has been in stock. Bingo, you have your ROI. Shoot for 110 to 120 ROI. By knowing your ROI you will know what’s working and what’s not. 

4. Attack the 10 Most Expensive Units in Stock-Make a list each day of your 10 most expensive units in stock. With one exception make sure they are priced really, really right. The one exception is if you know you always make money on a unit that’s on the list then use some common sense, don’t give it away. Consider putting bonus money on those 10 units regardless of the number of days they have been in stock. Sooner rather than later. Most dealers bonus their sales staff when the units have aged. Do it early, you will be much better off. Lastly, make sure the service manager gets that list each day and if one of those units happens to be in the service department the service manager has to understand they must get it out of the shop in a hurry because it’s one of your 10 most expensive units. You have lots and lots at risk with these units.  

5. Life Cycle Management-Read this statement then read it again. There is nothing, absolutely nothing you can do that will improve all aspects of your used car business more than understanding my process of "Life Cycle Management." Think Fast, Be Fast-You are working with a depreciating asset. Everything, including decisions on what to keep and not keep has to be done fast. Pull the trigger quickly on units that you are suspicious about. Don’t hang on to them hoping and wishing something good is going to happen. Early losses are far better than late losses. If you are paying attention and recognizing problem units early in the life cycle then you will have a lot less need to lose money on them at 45 or 60 days. There are certain "Trigger Points" you need to focus on during your daily "Trade Walk." Knowing how to use EWR (Early Warning Radar) pays big dividends.

6. Lot Walk-Nothing new here. If you do a lot walk once a week with all the members of your sales and management team then without a doubt you will sell more units. And, you’re going to see a lot of things you’re not going to like. Do you remember doing "Phone POPS?" You know, it’s the deal where they place mystery phone calls to your sales department then play the results back to you. They are never, never, never very good. Makes you just want to scream. So, initially you will have the same feeling when you do the lot walk. But, the bottom-line on the lot walk is it gets your entire team to know and understand your used car inventory. The more knowledge they have the more they sell. 

7. Daily Inventory Pricing-The market changes every day and so should your pricing. Sometimes you can ask more, sometimes you can ask less. You cannot and will not achieve maximum results by changing prices every 10 to 20 days. Pricing takes intense management. It’s not something you do when you get around to it. You would be far better off if someone priced the car who is not in charge of appraising and buying them. 

8. Analyze Your Wholesale Pieces-Look at the numbers. How many units are you wholesaling each month? Go over each unit. How many of them could you have retailed if you opened your mind a bit either relative to pricing and/or the type of product you’re willing to keep? Are there early wholesale units or late wholesale units? You need to know the difference between the two. If you have lots of units being wholesaled late (at the end of the cycle) the odds are you are either stocking the wrong stuff or pricing them wrong. If you are wholesaling a lot of units early in the cycle it’s probably because someone on your staff doesn’t want to "mess" with certain types of cars. The probability is there may be a problem getting them through service in a timely manner or the used car department feels ripped off by your service department. The good news is in either case it’s a fixable problem. You just have to want to fix it. 

9. Photo Booth-and 40 pictures per car. If there is one thing I would do if I opened a dealership today it would be to do whatever it takes to have a photo booth. If you haven’t accepted the fact that the Internet is your new showroom then you are doomed. You cannot and will not be able to remain competitive until you get with it. It’s the biggest no brainer since the invention of the wheel.

10. SETS & SUBSETS-simply put, SETS is an easy way to set up a price leader with several other vehicles for the customer to pick from when they show up. SETS & SUBSETS are designed to drive traffic and increase volume. You can do as few as two cars in a SET, but never more than five. It’s not as complicated as it first appears. Don’t over think this. 

11. Save-a Deal-It’s the basic of all basics. From the first day I got in the business we did a save-a-deal meeting every morning. Back in those days we didn’t call it that. I learned that term back in the 80s from my good friend Mike Casey with JM&A. Call it whatever you want, but it’s an easy way to improve your business. Simply put, you go through all your pending deals, appraisals and ups from previous days. You will always find that two heads, three heads, etc. are better than one.

Since I’ve already said too much I guess it’s time to shut up. That’s all I’m gonna say. Tommy Gibbs

The idea behind a Jet Fighter Interceptor is to intercept the enemy before anything bad can go wrong. In the game of football an interception gives your team an advantage by intercepting a pass intended for a touchdown. In both of these examples an interception occurred as a result of movement. The fighter jet was moving when it caught up with the enemy.  The defensive back was moving when he caught up with the pass.

You need to get moving. I want you to use this mindset on Saturday to sell more cars. If you are a sales manager, F&I Manager, GSM, GM or Owner/Operator you need to become the “interceptor” and you are going to make a huge difference in the number of cars that get sold. You will intercept a whole bunch of problems before they become problems.

You are going to do it by moving. Moving your butt out of the chair and toward the front door to introduce yourself to every customer that comes through the door. And you’re going to keep moving around like a big stealth spy bomber. Your radar, your eyes and ears, are going to be wide open like never before.

Deals frequently get screwed up early on in the equation and you’re gonna help prevent that. There are a number of things that will happen by following today’s “Operation Interception.”

If a TO is needed you have already set the stage early by having met the customer. If your radar is working a full 360 degrees, you will sense something is not right with this sales person and this customer from that first handshake and you might intercept the deal right then and there. Never forget the customer belongs to the dealership, not the sales person. Don’t be afraid to “do it now.”

By moving around the showroom you will get some early TOs before the deal is all screwed up. Early intervention is a wonderful thing.

Simple huh? Fire up your jet engines for lift off, get out of your office and go to work. It’s show time baby!  Tommy Gibbs

My good friend Sam Milton with the Sonic Auto Group sent me the following quote by Woody Hayes, "Paralyze resistance with persistence."

Change, continuous improvement, and daily disciplines are often met with resistance. Resistance is not a generational thing, it’s just a thing. It’s a thing that’s always been present. It’s been around since the caveman.

There are always strange forces of nature at work. Resistance is the force of nature against persistence. We’ve all seen very talented people fall flat on their faces because of a lack of persistence. Talented people will often resist having to be accountable. They like doing their own thing. The lack of discipline is a close cousin of resistance.

Persistence can be a two edged sword. We’ve all known sales people who drove us nuts. They bugged you to death. They worked you till your nerves were on edge. But, the bottom line is they were persistent. Persistence wins over time and persistence will sell lots of cars.

If you allow the average sales person to analyze their own results they will easily justify why they are doing so well or not. If a sales person has a high closing ratio then they would tend to think they are doing a great job. If a sales person has a low closing ratio they will blame it on getting bad ups.

You as a leader must be persistent in how you frame a sales person’s production and direction for improvement. If they have a high closing ratio then you should be encouraging them to talk to more customers. If they have a low closing ratio then you need to show them the way to better closing techniques. You have to have the discipline not to let them sell you why this or why that.

There is always room for improvement and you should never be satisfied…and you should never let them be satisfied. Becoming satisfied leads to complacency. To keep the "boogie man of complacency" away, you as a leader have to be persistent in all things that have been deemed to be important to the success of the organization. It is so easy to lose persistence. Being persistent is not something you do once in a while. It is something that has to be done every minute of every day.

Discipline is the twin brother of persistence. Discipline is what carries you through the down moments; those moments when you want to throw your hands in the air and say the heck with it.

I like to think of persistence as always staying after it regardless of your current state of mind. Being highly motivated can come and go. Even when you are not feeling all that motivated you can still remain persistent.

Being persistent means have intestinal fortitude and a willingness to grind it out regardless of the obstacles that keep coming your way. Think of obstacles as just bugs on a windshield. Persistence is the windshield wiper. Wipe ’em off and keep digging.

Being persistent means never giving up. Have you seen the video on Caine’s Arcade? Caine is a 9 year old kid whose dad owns a used parts store in east LA. Remaining persistent pays off big time for Caine. Go ahead check it out, that’s all I’m gonna say, Tommy Gibbs

If you’ve ever heard me speak you’ve heard me reference Bubba the wholesaler. Bubba is the typical wholesaler who has for years been in charge of training used managers in new car dealerships around the country. In the old days Bubba was the guy we called when we wanted to know the value of a used car. Bubba is the old school way of thinking. There is still a place in the business for the Bubbas of the world, but we don’t have a need for Bubba like we used to.

Also, 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 in your business.

So, back to Bubba. I’m not a big golf fan. I don’t even play golf. I’m not an avid follower, but I know things like Tiger’s got a serious temper. One of the TV commentators said this weekend that "not only has Tiger lost his game, he’s lost his mind." Tiger has nothing to do with this article. Just wanted to impress you with my golf knowledge.

I was watching the Masters Golf Tournament on TV late Sunday and lo and behold the guy heading to a playoff was none other than Bubba Watson. (Not Bubba the wholesaler.) I’ve heard the name but didn’t have a clue as to who this Bubba was." Bubba ended up winning the Masters tournament on the second hole of a sudden death playoff.

Like so many of you I’m computer savvy so I googled his name and it popped up on Wikipedia. This is what it said, "Bubba Watson (born November 5, 1978) is an Americanprofessional golfer who won the 2012 Masters Tournament."

Do what? Just 5 minutes ago he won the Masters and within that time frame it’s listed on Wikipedia! Oh my gosh! Talk about the speed factor! So, once again we have to come to grips with the fact that speed is so much of a factor in the world we live in today.

Your ability to react to the ever changing marketplace is going to ultimately determine the amount of success you will have.

To be very specific, your used car business requires you to be able to travel at the speed of Mach 5. You have to think fast and move fast in today’s market. Used car managers are amazing at selling themselves and the dealer on why they should hold inventory longer. Yes, inventory may be hard to come by (uh, work harder) but if you want to hold your inventory longer vs. turning it faster you will lose 9 times out of 10.

While I’m talking sports let’s talk a little baseball. Since my office is in the Tampa Bay area I tend to keep up with the Tampa Bay Rays. This weekend they swept the Yankees in a three game series. The buzz about town is that the Rays’ Joe Madden is a very unconventional baseball manager.

He moves hitters around from the number 6 spot to the number 2 spot. He bats a guy cleanup that’s never batted cleanup in his life. On another day he takes a hitter who went 0 for 4 the day before and moves him into the cleanup spot. He overshifts and positions his defensive players in very strange alignments. And, with one of the lowest payrolls in the major leagues he wins and often gets criticized.

If you dig deep enough, what he’s doing is all based on statistical logic. He does the research, makes decisions based on numbers and wins. He’s taken the concept of money ball to a different level. By doing so he’s challenged the baseball "world order." He drives purists and old school thinkers crazy.

You need to challenge your own "world order." Just because you’ve always done it a certain way doesn’t mean you should stay that course. 

Understanding the data you have available to you and how to apply it will go a long way toward improving your numbers. Remember, the slower you move, the more likely someone named Bubba or Joe will eat you up. That’s all I’m gonna say, Tommy Gibbs

Last Week’s Zinger was titled is "Is It Time For You To Listen?" (LINK) The theme and concept was that you need to listen to those around you who could very well have some ideas that will help your business. 

By coincidence I received a blog this morning from Seth Godin, one of my favorite writers titled "The Coalition of No." Seth is a really smart guy. Seth and I want to move you away from "The Coalition of No." 

Seth’s Article:

"The coalition of No"

It’s easy to join.

There are a million reasons to say no, but few reasons to stand up and say yes.

No requires just one objection, one defensible reason to avoid change. No has many allies–anyone who fears the future or stands to benefit from the status quo. And no is easy to say, because you actually don’t even need a reason.

No is an easy way to grab power, because with yes comes responsibility, but no is the easy way to block action, to exert the privilege of your position to slow things down.

No comes from fear and greed and, most of all, a shortage of openness and attention. You don’t have to pay attention or do the math or role play the outcomes in order to join the coalition that would rather things stay as they are (because they’ve chosen not to do the hard work of imagining how they might be).

And yet the coalition of No keeps losing. We live in a world of yes, where possibility and innovation and the willingness to care often triumph over the masses that would rather it all just quieted down and went back to normal.

Yes is the new normal. And just in time.
Seth Godin 

CLICK HERE to sign up for Seth’s Blog

The car business is not as complicated as we sometimes make it. When I first got in the business back in the early 70s we had a sales meeting every morning. Yes, as in Monday through Saturday. Part of the meeting had a bit of rah, rah, and part of it was training, covering issues, sorting out details of what our production was relative to forecast, and so on and so on.

For the most part, daily meetings have gone out of style and daily training is gone…well, I don’t know where. At best, the management team has been assigned counseling duties to review the BDC activity. At worst management says hello to each sales person.

From time to time the Dealer (PIC) gets all wired up and implements a new program/process that demands certain things are done. At best, it’s a 90 day excursion to futility.

It’s a given that those who consistently use positive best practices are the ones who achieve the most success. One of the things that happened during those daily meetings back in the "good old days" was the used car manager would get up in the front of the room and tell everyone to get their "sheet" out of their back pocket so changes could be made. The referenced sheet was the "used car list."

He would then say something like "draw a line through stock number 2345A. We sold that car last night." Further saying "add to your sheet, stock number 4645A. Tommy would you stand up in the back of the room and tell everyone about the nice little car you traded in last night."

As antiquated as that might seem to you it’s far better than most do today. If you want to sell more used cars you need to provide the team with more information about what you have in inventory. A great method of doing that is to do a lot walk once a week. Yup, just once a week, when done right, will generate some pretty amazing results. If nothing else, I can guarantee you at least one more used car sold by each sales person.

The lot walk is done right after the "Save-a-Deal" meeting. I just know you’re doing a "Save-a-Deal" meeting so it shouldn’t be hard for you to add the lot walk at the end of that meeting. Every sales person and every manager goes on the lot walk. New, Used, they all go on the "Lot Walk." Make sure the service manager is included in this walk.

You should stop and talk about each and every car on the lot. The conversations that come about will amaze you. A real byproduct of the lot walk is the sales people will start to tell you why certain cars haven’t sold. They also gain so much more knowledge about what’s on the lot. Do not leave the "Trade Line" out of the lot walk. They need to know what’s in the system and what’s about to become available.

This is a great time to inquire about what they think you need to stock. Of course you can’t fulfill all their needs, wants and desires, but it becomes a great opportunity to educate them about the law of supply and demand and why they need to sell the value of your current inventory.

When the team is educated they tend to educate the customer. When the customer is educated as to the value of your product you sell more cars and make more money. Education for both starts with the information shared on the "Lot Walk." Let’s Walk. That’s all I’m gonna say. 
Tommy Gibbs