Year: 2014

Why You and I Should Be Working Together

Posted on by Tommy Gibbs

One of the obvious things that happens when I work with your team is that I show them what the potential is. I get everyone excited about the used car business and the positive impact it has on new, parts and service sales.

My training is designed to train and coach your entire management team, not just your used car manager. The more people within your team that “get it,” the more your numbers will improve.

Here Are Just A Few Things I Will Teach Your Team:

1. How To Become A Student of The Game-I’ll show you how to take advantage of the information that’s available about your specific market, what it means and how knowing a few key elements will get you the competitive edge.

2. How To Press the Average Cost Per Used Car in Stock Down-As simple as this may sound it’s important to understand the reasoning and method behind the madness.

3. Attacking the Ten Most Expensive Units in Stock-I’ll show you how to do it and fully explain the impact of doing so.

4. Effective Internet Pricing-It’s probably the most misunderstood dynamic in our business today. I’ll show you how to increase your volume and gross profit with a few simple tricks of the trade.

5. Speeding Up Recon-Speed matters. It matters a lot. The service issues are very fixable. Until you fix your reconditioning issues you will never maximize your full potential. I’ll create the wake-up call that you so desperately need.

6. This ain’t no Mutual Fund-I’ll show you how to manage your used car inventory as if you were a day trader. It’s all about knowing which cars make you money and which ones don’t.

7. Track GAP-GAP stands for Give-Away-Profit. I’ll show you how to track GAP. When you start tracking GAP your grosses go up.

8. C.A.R. Meeting-Stands for Cars At Risk. I’ll show you how to track your most problematic units and make them go away.

9. Life Cycle Management-My “life cycle management” process is the most powerful innovation that’s come along in the last 25 years. It will change your world forever. It eliminates wholesale losses, improves volume and gross profit.

10. Lot Walk-It’s old school and I’ll show you how to make it work for you. Old school is a very good school.

11. Appraisal Tool-Using an appraisal tool (like vAuto) will help you create accountability and track your “Look to Book.” I’ll show you and your team why “Look to Book” makes such a big difference in your bottom line.

12. Mining Your Customer Base-You know you need to buy more units from your existing customer base. I’ll show you how to do it.

13. Under-Allowance Grid-The lost art of the car business is the utilization of the under-allowance. In today”s world of consumer information you need every competitive edge that you can get.

14. SETS & SUBSETS-You’ve heard about. You know it drives traffic. Now you get to learn how to do it. And, do it right.

15. 7 Must Have Leadership Skills-I’ll break down the 7 Leaderships Skills that are imperative for your team to understand and utilize everyday.

1. Strategy
2. Articulate Your Message
3. Be Responsive
4. Empathy
5. Introspective
6. Enthusiasm Matters
7. Discipline.

If you want to increase your business then you need to increase your personal intensity. Intensity begins with you and I working together.

What Could Be The Reason For Low Grosses?

Posted on by Tommy Gibbs

1. Could it be that the consumer is using the Internet for the majority of their purchases and therefore is pushing you into a pricing war you would rather not be in?

2. Could it be that you are not managing your pricing correctly? Are you coming out of the gate based on a bucket concept and pricing everything at X amount under market? Are you failing to shoot the moon on a few select units for x number of days before you drop your pants?

3. Could it be that because you wait so long in the life cycle to reduce your pricing that when you get to about 50 days you have to give all the gross away rather than giving a little away over a period of time?

4. Could it be the inventory you have is not the inventory that people are willing to pay the price for? If there are 300 Nissan Altimas in the market and you stock lots of Altimas, do you really think you’re gonna make any money when the market is over saturated?

5. Could it be the stuff you are buying is like an impossible dream? Are you buying 2014s with 25,000 to 35,000 miles on them? Really? The only way you’re gonna sell them is to give them away, eroding more average gross profit.

6. Could it be that you and/or your team really don’t understand “Life Cycle Management” and the powerful impact it has on gross and volume?

7. Could it be that the team doesn’t get “Return on Investment” and what it does to the bottom line?

8. Could it be you are not tracking “GAP” which stands for “Give Away Profit?” GAP is the difference between the Internet asking price and the transaction price? Improving your GAP improves your grosses.

9. Could it be the sales team isn’t selling the value of your product and your store?

10. Could it be your used cars spend the best days of their shelf life tied up in service and recon?

11. Could it be your photos and pricing on Auto Trader and your website are just not with the times?

12. Could it be you’re missing some good grosses because you let a lot of nice trades get away from you? It’s either (A) your managers won’t step up or (B) they wholesale them because they feel the service department is ripping them off?

13. Could it be you have aged units and when you dump them they kill your overall gross?

14. Could it be you need to get your mind in a place to think about what it could really be?

That’s all I’m gonna say,Tommy Gibbs

Under-Allowance Or Not?

Posted on by Tommy Gibbs

It’s a fact that more and more dealers are moving away from negotiating toward one price selling, whether they want to or not.

The stress of posting prices on the Internet for both new and used is putting pressure on the sales team to stand firm on the price once the customer shows up.

No doubt the best business model is to sell your car for your asking price and you give the customer wholesale value for their trade-in.

For those who aren’t quite there yet, I’d like to suggest that you consider serving up an under-allowance on every trade. I didn’t say to do it just with those customers who look drunk or stupid. I said with every trade.

I’ve often referred to this technique as “taking the customer’s temperature.”

If you do so, one of three things will happen:

1. They say yes and you make some extra gross.
2. The customer will quickly adjust their thinking as to the value of their vehicle.
3. You just put yourself in a much better bargaining position.

There are a few customers you might have to peel off the ceiling. That’s ok. That’s why you’re paid the big bucks.

As long as you’re going to negotiate, you may as well put yourself in the best position to win the game. It’s a shame we have to play the game this way.

I predict that one day we will look back and ask, “Why didn’t we change sooner?” That’s all I’m gonna say,Tommy Gibbs

Driving or Riding?

Posted on by Tommy Gibbs

If you’ve ever ridden a bus, it’s likely you stood at a bus stop waiting and looking for the bus. Even if you’ve never ridden a bus for sure you have observed others waiting for a bus.

Have you noticed how those standing at the bus stop are always looking for the bus?

For most people it’s human nature to look for the bus. The bus is more than likely going to show up, and when it does there are some things to keep in mind:

1. The bus might be running late.
2. The bus might be full.
3. The seat choices once you get on the bus might not be very good.
4. You could end up sitting beside someone you don’t know or don’t like.
5. Most buses don’t have seat belts so if it has an accident you might get hurt.
6. The bus is going to make a lot of inconvenient stops along the way.
7. If traffic is heavy the bus will not take an alternate route.
8. Riding a bus can be a very rough ride.
9. You have very little control when you’re waiting and/or riding ‘da bus.

The bottom line is waiting for a bus has lots of flaws. When it comes to your business are you waiting for the bus or are you driving your own bus?

Driving your own bus means making something happen rather than waiting for something to happen.

Far too often I observe dealers and managers sitting back and waiting to see if someone else is going to come up with the next great thing so they can board the bus and ride along.

If you happen to be the Dealer or GM I cannot imagine how you can be in the automobile business today and not be in a 20 group. How are you going to get the latest greatest ideas by sitting inside a parked bus in your driveway?

Having your own bus is one thing; going somewhere in it is another.

It doesn’t matter if you’re the Dealer, GM, Used Car Manager, Salesperson or in some other type of business; what you have to ask yourself is are you driving the bus or are you letting someone else do the driving?

As long as someone else is doing the driving the scenery is going to be very limited and your success even more so. That’s all I’m gonna say, Tommy Gibbs

Perception

Posted on by Tommy Gibbs

Being a leader is often a challenge because of the workplace environment we find ourselves in.

Being a leader is like being a parent. For example, if one parent stays at home, it can be more difficult to discipline the children due to being around them all the time.

Most of my readers are in the automobile business and are often around the same people for 12 plus hours a day.

Most dealerships have systems and processes in place designed to create focus and discipline. Even under the best of circumstances processes are constantly breaking down which contributes to poor performance and a poor bottom line.

The reality is that it’s much easier to run a large dealership than a small one. As a leader in a large dealership, you can delegate much more and separate yourself from some of the personalities that can cause the breakdown of discipline.

Do not take that to mean that you don’t need to be involved, friendly or whatever. It just means you have to separate yourself from the emotional side of the equation.

If you are in a smaller dealership the task of separating yourself from the staff is even more daunting. I’m often amazed that leaders feel that they can socialize with staff members and still be able to properly manage and lead them.

How can you:

1. Have lunch with the same people all the time?
2. Have dinner with spouses and members of your team on a regular basis?
3. Have after work drinks with staff members?
4. Party with staff members?
5. Attend sporting events with staff members?
6. Play golf on weekends with staff members?

Any of these in and of themselves is not a bad thing. But, to do any of this with the same person on a consistent basis does nothing but create problems for you and them.

Aside from the fact it makes it difficult for you to manage them (let alone fire them) it creates a perception of favoritism that will destroy morale and team spirit.

Never forget, perception is reality. If you perceive that I’m a jerk, then I’m a jerk. The only way for that to change is for me to work toward changing your perception of me.

The burden is on me, not you. That’s all I’m gonna say, Tommy Gibbs

What Next?

Posted on by Tommy Gibbs

Yep, here we are again. October has just ended. October is the perfect month. “Perfect for what?” you say. Perfect for figuring out where you’ve been and where you want to go.

I can’t say that math was one of my best subjects, but I can divide by 10 real easy. At a glance I know what the averages are for any line item expenses, sales volume and gross profit.

What also makes October a perfect time is it sets the stage for the next year. Now is the time to start planning for 2015. Waiting until the last week in December to get your plan together is a really bad strategy.

This is the perfect time to dig in and firm up your fundamentals in all departments. This is the time to get back to basics. This is not the time to cut back on your training.

This is when you need to amp up your thinking, stretch your organization and stretch your imagination. If you don’t have a solid foundation of basic processes you will never maximize your success.

This is the time to take control of the “evaporation factor” that’s been occurring all year long. This is the time to stop the “process bleeding.”

Your long term plan should include joining a Twenty Group and attending the NADA convention. Look, we all get lazy, and get caught up in our daily routines. Attending these meetings gets you revitalized. It gets you outside of your daily box and opens your eyes up to what the possibilities might be. Seems like a no brainer.

This is the time to make those plans. Teamwork is critical if you’re going to maximize your bottom line. To keep your team on the same page you have to constantly communicate to them what the expectations are and what processes they are expected to follow.

There is no “shake ‘n bake” solution. You don’t fix it and walk away. You fix it and re-fix it.

What to do?

1. Ask yourself if you can improve your processes? If you focus on revamping your processes, what effect do you think it will have on your business? It is an absolute fact that regardless of how well disciplined you are over time your processes are going to evaporate. The best piece of advice I can give you is to lock yourself and your management team in a room and review every detail of your selling processes. Be brutally honest with yourself. Then take the necessary action to get you back on track.

2. Can you improve your team? Got the wrong players? Now is the time to make the changes. If you already have the right team in place then it’s time to let them know what your expectations are and show them the plan and the path to achieve those expectations.

3. Don’t think of your planning as “you now having a plan.” Think of it as a “mission.” Plans can fall apart. When you’re on a mission you stay after it until you succeed and then you stay after it some more.

I’m on a mission to get you to re-think what you’re doing…That’s all I’m gonna say, Tommy Gibbs

It’s A Contact Sport

Posted on by Tommy Gibbs

I’m often reminded that we should remember that business is about blocking and tackling.

It’s about doing all the little basics that we know we need to stay focused on. Even more important is to remember it’s a contact sport.

It’s how you contact with your team and your customers. A head football coach realizes he can’t be successful if they are only communicating/contacting with the offensive line personnel.

The most successful coaches connect with all the members of the team. They make it a point to have “touch conversations” as frequently as possible.

If you’re in the automobile business let me suggest that you start each day in the service department having a brief chat with every technician, porter, and recon person you can find.

From there work your way through to the service advisors, parts department, administration office and lastly the sales department.

If you want to improve your ability to win, just remember it’s a contact sport.

The more you contact with your team and your customers the more you get to run up the score. That’s all I’m gonna say, Tommy Gibbs

It’s a Trick, A Bad Trick With No Treat

Posted on by Tommy Gibbs

If you read the likes of Automotive News or pay attention to media reports you may have heard there’s a glut of used inventory coming from off-lease vehicles and prices are going to start to drop.

Some of you have already experienced the so called “price drop.” If you’ve had conversations with Bubba or been to the auction of late you absolutely know about the “price drop.”

For whatever reason, you may have beefed up your inventory over the last 60 days or so and now you’re going, “Oh crap, I’ve got a serious problem.”

Let me ask you something. And before I do, please don’t get mad at me. I’m not trying to be a smart butt. But, what planet have you been living on? Don’t prices start to fade a bit this time of year? Would you call this the real “selling season?”

Doesn’t it make sense to tighten your inventory up just a tick as we move into the late fall/winter season? This media thing is a trick, a mean trick to make you think you don’t know what you’re doing.

Maybe you don’t or you had a slight memory loss when it comes to remembering how the market works. If you went out and purchased a bunch of inventory over the last 60 days, what were you thinking?

You need to stop thinking about what’s going on in the wholesale market. It’s not any different than it’s ever been.

What you need to be thinking about is how to retail your inventory, not wholesale it.

While I’m at it, I have another trick or treat for you.

If you have a vehicle and it’s priced number one in the market and it hasn’t sold, guess what? It’s not cheap enough. Trick or treat, that’s all I’m gonna say, Tommy Gibbs

Good Fortune?

Posted on by Tommy Gibbs

Recently, actor Michael Keaton was featured on CBS Sunday Morning. At the end when discussing his success he said, “The key has been my good fortune.”

There’s something to be said for good fortune or good luck. There is little doubt that either can play a role in one’s journey toward success.

Good fortune is often the result of good decisions, one of which is surrounding yourself with good people.

When asked what’s been their key to their success, people in leadership positions will often say that the key has been their ability to hire good people.

Of course there’s some truth to that once you have “arrived,” but to “get there” you have to have the good fortune of deciding who you are going to associate with. Who will be in your circle of influence?

Sometimes it’s the good fortune of where you decide to go to work and who you decide to work for. Sometimes it’s the good fortune of leaving a group of people who aren’t smart enough to let you have a seat at the table and who aren’t feeding you the skills you need for success.

Your good fortune is really all about you. Who you choose to be around? Who you choose to influence you?

I’ve had great good fortune to be influenced by some really great people. It could have been just the opposite.

I could have created my own bad fortune by allowing myself to be around bad people. Good fortune starts with you. That’s all I’m gonna say, Tommy Gibbs

What Have You Gotten Used To?

Posted on by Tommy Gibbs

I recently purchased an iPhone 6. Nice little gadget. I also tried the 6 plus. A bit too big for my style of running through airports.

At first even the 6 felt a bit too big. After a few days it felt pretty normal. About a week later I picked up an iPhone 4.

Geez, that thing feels so small. It didn’t feel small until I got used to the 6.

The question is what have you gotten used to?

1. Have you gotten used to low grosses?
2. Have you gotten used to low used car volume?
3. Have you gotten used to 60 day plus used cars in stock?
4. Have you gotten used to 7 to 10 days to get a car through service?
5. Have you gotten used to having lots of $25,000 used cars in stock?
6. Have you gotten used to buying cars from the rental car companies?
7. Have you gotten used to listening to “I can’t find used cars”?
8. Have you gotten used to crappy ROIs?
9. Have you gotten used to lousy used car photos on your website?
10. Have you gotten used to giving up discounts on used cars that you’ve priced “really, really right” on the Internet.

Yep, I’m just asking, what have you gotten used to? You’ve probably gotten used to a lot of things you shouldn’t. That’s all I’m gonna say, Tommy Gibbs

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