There are two things in the car business I’ve always found painful to deal with and that’s pay plans and advertising. Advertising is the great mystery. If you could write a book on the “Mystery of Advertising,” and actually solve it you would have a number one best seller.

And then there are pay plans. How to make them work for the company? How to make them work for the staff? Those are tough balancing acts. One of the great challenges of the day is to become more efficient. With grosses becoming more and more challenging and expenses going up and up, it becomes that much harder to achieve a strong bottom line.

As we move forward we need to rethink who we are paying and how much. There’s a disconnect when it comes to paying high achievers, the real producers, and those average and below average players enjoying the ride.

There are some we need to pay more and some we need to pay less. If the ones we pay less feel slighted and can’t handle it, then we need to let them move on. The sooner the better. They are stealing from you and your top producers because you’re paying mediocre people who are doing below average work far more than they deserve.

Ownership is often trying to solve the problem on the high end when the real problem may be in the middle and lower end. Oh, don’t get confused by that statement. There are plenty of over achieving under paid people throughout an organization regardless of the position in the chain of command. The problem is ownership identifies what they think is the quick fix, rather than the right fix.

Average people don’t deserve average pay. They deserve less than average. Top people don’t deserve top pay. They deserve over the top pay. They are the ones who are leading and making it happen.

I cannot tell you the number of times I’ve seen dealers want to cut a top performer’s pay when the reality is they are more than earning it. It’s the low performers who are killing you. It’s often a top GM or a GM of a group of stores who the owner wants to cut…that’s the very guy or gal that’s making sure the others are actually producing.

While I’m discussing performance let me share another tidbit with you. For the most part people need to be challenged about every 3 years or less. If you want to up performance and productivity move your people around from management position to management position and from store to store. It’s very seldom someone can perform well in the same job year after year.

We all need to be challenged. Dealers challenge themselves by buying additional stores and/or other businesses. It’s no different for the management team. So, if you want to increase performance and productivity challenge your team and pay your top people more and average performers less. I’ve said enough about pay and that’s all I’m gonna say, Tommy Gibbs

A couple of years ago I shared a video with you done by Rory Vaden. Rory is a young dynamic speaker whose theme is “Take The Stairs.” To summarize his concept for you it simply means taking the harder way. (VIDEO)

Most people would rather take the escalator than walk up the stairs. Human nature is to go the easy route. The route of least resistance. Many people fall into that category. They won’t take the hard way. It’s so much easier to stay with what they’ve got. “Don’t dare take the stairs.”

Here are four examples:

1. You’re reluctant to go to an “up system.” If you have half a brain you know it’s the only way to go, but you won’t do it because of the “fear factor.” The fear that all your “Superstars” will quit. You have to agree that if you think through all the elements of an up system it makes total sense. “Don’t dare take the stairs.”

2. Keeping used cars in your inventory past your timeline, whatever that line might be. “Fear factor” bites you again. It’s the fear of upsetting your used car manager by holding him/her to a discipline that, again, you know makes total sense. There are many elements to managing your used car inventory. It is not about losing a lot of money at the end of the timeline. It’s about daily disciplines and processes that you need to enforce. It’s easier to allow yourself to be sold on all those stupid reasons to keep those aged units in your inventory. “Don’t dare take the stairs.”

3. You continue to focus on average gross profit and you should, but you have to also be smart enough to understand the role that ROI plays in the equation. Some would rather live in the past of an imaginary concept of getting both high grosses and high volume. The easy way is to beat your management team up about how bad their grosses are. The hard way is for you and your team to understand the importance of tracking ROI and the role it plays in your bottom line. (FixRoi.com) “Don’t dare take the stairs.”

4. Bubba still works for you. Bubba did a great job 20, 15, 10 or even 5 years ago. But, Bubba just won’t accept the role of technology in our business. Oh, Bubba says he’s on board, but you keep getting the same old stupid results and he keeps on selling you on the fact that he “gets it.”

Bubba wants you to believe that using technology is a race to the bottom. Not true. Using technology is a tool to position you in the best place to maximize gross, turn and volume.
Bubba says it’s not his fault the numbers suck because the market is so screwed up. Bubba keeps telling you he’s all over the new age technology concept, but the reality is that nothing is changing for you except your numbers keep going further in the tank.

One of Bubba’s biggest attributes over the years has been his ability to “sell.” Especially selling you. You like being sold. We all like being sold. Being sold is far easier than using your own brain to think it through and to replace Bubba’s butt. “Don’t dare take the stairs.”

Taking the stairs requires pain and discipline. You get to choose whether to take the stairs or not. For me, I’m done writing this. I have a bunch of stairs to go climb. That’s all I’m gonna say.Tommy Gibbs

Has your selling process fallen apart? Has the Evaporation factor eaten you up? A little slide here and there? Does one manager do it one way and another manager do it another way?

Have you ever hired a training company to come into your dealership to install a training process? You know one of those 10 step systems that may or may not include an up system, four square or whatever?

I’m thinking you probably raised your hand and answered yes to my little question. I’m willing to bet at the completion of the training that your business improved and you saw an increase in volume, gross or both. I can also bet that over time your selling process began to evaporate.

The selling process to me is much like my “Life Cycle Management Section” in my used car workshop. The key to life cycle management is to recognize a problem car on day one not day sixty-one.

The problem with a selling process is we are often in denial that it’s actually falling apart. We want so much to believe that we have it right and that everyone is doing it right that we ignore the obvious.

Often the management team will say they have a selling process but they don’t follow the steps or they don’t have one and they just kind of wing it.

The most fundamental aspect of the car business, that hasn’t changed since the invention of the closing statement “would you take…,” is to have a selling process that all the members of the management team understand and believe in.

Dealers frequently complain about gross, volume or both. If you want to improve all the above then take a hard look at your selling process.

I’m a firm believer that a deal has three parts. A beginning, a middle and an end. All three are critical if you are to maximize results.

I like to think of the 1st stage, the beginning, as the greeting, fact finding, qualifying, or “make-a-friend” stage. Call it what you want. Managers who really know what they are doing have a keen eye for what’s going on in this stage. This is the stage where deals unwind or blow up, and then we wonder what the heck happened. Personally, I’ll execute a T.O. at this stage just as fast as I would in the closing stage, maybe even faster. If this gets screwed up you ain’t got a chance.

The 2nd stage or the middle of the deal involves a lot of the actual selling. It’s the story about the car, the dealership and why they should buy here.

And of course the last stage is the close itself. We all know that if stages 1 and 2 are done well then stage 3 is a cake-walk.

With all the amazing technology available to us today it would be easy to see how one might view a selling process as the old frontier which is tired, worn out and outdated. Nothing could be further from the truth.

It’s the old frontier that actually presents the most interesting opportunities to charge ahead of the competition. Attacking and tailoring your selling process with real innovation presents a unique challenge for the new age of selling into which we are evolving.

Don’t sell it short, or should I say don’t cut your selling process short. If you’re serious about improving gross and volume then maybe now is the time to re-evaluate what you do and how you do it. That’s all I’m gonna say, Tommy Gibbs

Have you ever noticed that with some businesses that it feels like nobody’s in charge? Sort of like the business has been turned over to the inmates to figure it out and do the best that they can? Sure, we’ve all had that experience.

Often, when I’m in a dealership I’m not sure who’s really in charge. In some cases it’s the blind leading the blind. Even more to the point I wonder if anyone is really “running the show.”

The sales department of the typical dealership needs to be set up in one of two ways:

1. General Sales Manager-this person runs the sales department. All the managers in the sales department answer directly to the GSM. The GSM needs to have great leadership skills and it’s always preferred that they have been an F&I and Used Car Manager. They must have the ability to communicate with the other department heads and understand their area of responsibilities. They should never let their egos get in the way of keeping the Dealer/GM informed as to what’s going on in the sales department. Their motto should be the Dealer/GM is never surprised. GSMs usually run into trouble when they start to think they are the dealer and begin making decisions on things that are above their pay grade.

2. General Manager/Dealer Operator-not only performs GM duties, but GSM duties as well. This situation is more prevalent in smaller stores or during those economic times when cutbacks are necessary and the GM takes on multiple responsibilities.

Notice the line that says “Needs to be set up in one of two ways.” My experience is that often it’s just not being done, or if it is it’s a halfhearted effort at best. You cannot put a group of managers together and hope they “get it” and work together as a team. You can’t “kind of sort of” say that so and so is in charge.

The best run businesses are those in which everyone clearly knows, understands and supports the chain of command.

People support the chain of command because they have respect for the person at the top not just based on their prior performance, but because of their daily actions. Respect has to be earned everyday and is not a result of “carry over” action from some previous accomplishments, such as he/she was a great salesman…now let’s anoint them with “Sales Manager in Charge” status.

Far too often the GSM or GM does not have the skills that are actually needed to run the sales department. Then there are times when they just don’t have the desire. It’s not their cup of tea. They may have other useful skills for the organization but managing a sales force just isn’t one of them.

It could be they don’t have the training and background or their personality just isn’t a sales personality. They may have been given the position because they were a great closer, or were the next person in line to be promoted.

It’s not all that unusual for a GM to be a former Parts and Service Director, Comptroller, or even a relative of the owner. They may or may not have the skills and/or training to do the job the way it needs to be done.

That doesn’t mean they are not a great GM by normal standards, but they may not be the type of GM who can also perform the duties of a GSM. Sometimes the person I’m talking about here is actually the owner who has taken on additional responsibilities for whatever reason. Just because someone is the owner doesn’t qualify them to run the sales operation, but they have to be smart enough to recognize the skills they have and don’t have.

So, here’s the deal. You have to put someone in charge who can do the job. I mean really do the job. It’s one of the most critical positions in the dealership.

If you have the wrong person or you are relying on the managers to work it out among themselves you will be led down a road of constant frustration, confusion, lack of direction and poor production. In the end everyone suffers, especially your bottom line.

That’s all I’m gonna say, Tommy Gibbs