With so many customers shopping online and knowing what they want and having a price when they finally get to the store it’s easy to try and justify the lack of a professional demo ride.

Dealers are always complaining about average gross profit going down. One of the biggest killers of gross profit is not doing those things that we know to be important. Allowing the demo ride to evaporate to little or no meaning is something management cannot allow.

The demo ride creates value. The touch, the feel, the smell and the opportunity for the sales person to have the customer’s undivided attention is priceless. The closing ratio and the gross profit goes up when you return to the most fundamental basic of the car business.

The demo ride is an art. Don’t let it be a lost art. That’s all I’m gonna say, Tommy Gibbs

Many of you who read my material are convinced I’m against packs and charging full retail in service, etc. The reality is I’m not actually against either. Whenever I’m working with a client who utilizes those strategies, I tell them if it’s working to keep doing it.

I’m also quick to point out that they need to be ready for the change, because change is coming. It’s going to become tougher and tougher to run your business the old fashioned way.

In a recent article published in “MSN Money,” Alison Spitzer, of the Spitzer Auto Group states “Today, customers find the car first, then the dealership.”

Part of finding the car means finding the car they want at a price they want to pay. Allison could just as well have said, “They find a price and then they find a dealership.”

If you don’t believe that’s so, drop all your photos and pricing from your website, Auto Trader, etc. and just put stuff on your website telling the consumer how great your service is and see what happens to your traffic.

The following quote from the article tells the real story when it comes to today’s consumer and where pay plans are heading.

“Today, buyers call or walk into a showroom already armed with a car’s invoice price, competing dealer bids and discounts from the manufacturers, and can get updates on their cellphones while standing in the store. They can access online reviews of the salesperson and dealership.

That has led many dealers to eliminate commissioned pay, price new vehicles closer to their own costs and station more staff in front of computers, where they are rewarded for generating sales quickly and in higher volumes, rather than trying to talk a customer into buying a more expensive model.”  (Read FULL ARTICLE)

I’m going to state this one more time. I’m not against packs as long as they are working for you. I do question whether they are really working or not.  As my good friend Marvin Barnes has always said, “You can justify anything you want to justify.”

The more the industry moves towards non-negotiating and not paying on gross, the less of a need you will have for packs.

The showroom is no longer the showroom. The Internet is the showroom. Today’s consumers go there to look at photos and to get a price. That’s all I’m gonna say, Tommy Gibbs

I hate it when I ride by a dealership and see a tent up with cars parked under the tent and the dealership is promoting a “tent sale.” Many of you have read my document on how to put on a real “Tent Sale,” which is not the same as what I’m sharing with you today.

Today’s subject is a “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.

As close to the road as possible, put up a tent that can hold 3 or 4 units. 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 telephone operator 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 with 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 gonnna say, Tommy Gibbs