Magic Words

One of my favorite statements when people come to me seeking guidance on making specific decisions is, “I trust your good judgment.”

Granted they will sometimes make decisions I might not agree with, and that’s the best part. Why? Because it gives me a chance to coach them in a positive way.

I don’t have to tell them they were wrong. I simply ask them if they considered coming to a different conclusion by doing whatever? I might say next time it might be better to blah, blah, blah.

Only in a rare set of circumstances would I bust them over a decision they have made.

If you want to build a powerful team of leaders look for opportunities to say, “I trust your good judgment.” That’s all I’m gonna say, Tommy Gibbs

Right Under Your Nose

Not a week goes by that I don’t get several requests from dealers looking for a used car manager. The actual question is whether I know of an experienced used car manager that they can hire.

While there may be some short-term gain by going outside to hire, generally speaking it’s not going to be a long-term gain. We all know we are better off to develop our own team rather than going outside.

Either way, there’s going to be some pain involved.

If you promote an insider and you do some things right, you will reduce the pain and have a lot of long-term gain.

As the GM or Dealer Operator, the first thing you need to do is to commit yourself to the used car department. Regardless of what you think you know or don’t know about the department, you and the new used car manager need to become co-used car managers.

The two of you need to learn this job together.

This is important for a bunch of reasons, none more important than the two of you figuring out where the obstacles are that have been holding your department back. If you will absorb yourself in the used car department you will see amazing results.

Attributes of the right candidate:

1. A strong work ethic.
2. A coaching “receiving and giving” attitude.
3. A young thinker. They don’t have to be young. They have to think young.
4. An understanding of technology and the role it plays in our business.
5. Great confidence, tempered by a small ego.
6. Team player. They have to be able to get along with members of all departments. Most important they have to be respectful of others.
7. A burning desire to learn and succeed.
8. The will to win by being willing to prepare to win.
9. Passionate about car business.
10. And of course they have to be honest. Duh…but, honesty also includes that they are honest with themselves and they don’t look to blame others when things don’t go their way.

Think about it this way. If you have to keep going outside to find people to fill management spots maybe the real problem is that you haven’t spent enough time developing the staff that you have.

If you’re doing the right things, the person you should promote will be right under your nose.

That’s all I’m gonna say. Tommy Gibbs

That 10%

When I was in the Marine Corps, we often referred to “that 10%,” meaning there are those in the platoon who can’t run, can’t march, can’t shoot straight. They can’t and won’t do much of anything right.

In the Marine Corps they work hard to run those people off.

These are the people influencing what goes on in your business in a negative way. Regardless of all the good things you’re trying to do they will find something wrong and speak ill of it. They are the poop stirrers and agitators.

When I did cultural training in our dealerships I would speak about “that 10%.” I would tell the staff to be aware of “that 10%” and to help us run them away.

Of course you don’t want to have all “yes people” working in your organization. There’s a difference between “that 10%” and those genuinely interesting in serving up valid suggestions and ideas.

Keep an eye out for “that 10%.” Running them off improves everything you’re doing by at least 10%. That’s all I’m gonna say, Tommy Gibbs

Beating Wholesale Losses

If you have cars aging on you and you are dumping them in the wholesale market and losing money, then you are totally on the wrong path.

If you are paying attention to the right things and if you understand that you are in the retail automobile business there should be very few units you blow out and lose money on. It’s about retailing cars before they get to the end of the cycle.

1. It starts by selecting the right inventory. Unless you are an exception to the rule, most of those aged units are auction purchase cars. There’s nothing wrong with buying auction units, but you have to think “hole fillers” and “short life cycle.”

2. Tackle my “Life Cycle Management” concept-like your life depends on it, because it does. You are either getting tired of hearing me talk about it or you have started utilizing it. Software is coming to help you. You will never get your inventory under control as long as you allow all units to have the same number of days on the shelf. You have to identify and acknowledge what each car is on day 1 not day 61.

3. Making smart and quick decisions on trade-ins you bury yourself in-Happens all the time. You step up for whatever reason, but since you don’t use “Life Cycle Management” you treat these units just like every other unit. Look Einstein, if you buried yourself in it on day one it’s only going to get worse. The best thing you can do is price that unit below market and make it disappear.

4. Don’t get too excited-about a successful short term run. It will kick your butt every time. Stop it. All of a sudden you have a strong 30 day period when you sell 10 XYZs. For whatever reason they were hot. So, what do you do? You run out and buy 20 more of those bad boys. And guess what happens? They sit and they sit. And now you have some more huge wholesale losses staring you in the face.

If you go back and analyze those first 10 you popped out like hotcakes you will probably find something unique and special about those units. Might have been miles, might have been color or it might have been the price of gas during that stretch that influenced those sales. I’m not saying you shouldn’t get excited and try some more of those hot babies, but you need to be smart enough to keep your enthusiasm under control. You have much more control when you take them in small doses rather than choking yourself to death.

5. Understand that you are in the retail business-You need to make sure you are pricing your cars to market early enough and attractive enough to find a retail buyer early in the life cycle. In most cases, if you analyze your aged units you will discover that for whatever reason you overpriced them too long. Key words here are “too long.”

When you are retailing your retail pieces you don’t have to worry about aged units and wholesale losses. That’s all I’m gonna say, Tommy Gibbs

It’s Okay To Be Wrong

Yep, it’s okay to be wrong. If you’re never wrong then you’re never learning. If you’re never learning then you’re going to be wrong a lot more than you’re right.

The key is to admit you’re wrong, learn and move on. As a dealer, I was ok with people making mistakes, being wrong.

What I wasn’t ok with, and you shouldn’t be either, is you or your staff repeating the same mistakes.

If the same mistakes keep getting made, it’s an even bigger mistake to keep rewarding those people by keeping them around.

When there’s too much “wrong” happening it may be time to replace someone. Sometimes the person that needs to be fired is you. If for no other reason than putting up with too much wrong.

That’s all I’m gonna say, Tommy Gibbs

Talk To The Hand

The longer I’m in this business the more I scratch my head when I come across dealers that allow their managers to keep units past 60 days. I’m not talking about one or two here and there. I’m talking about a consistent pattern of multiple aged units.

There’s no way that they don’t know that it doesn’t work.

So, why do they do it? The only thing I can figure is they just don’t have a commitment to having a disciplined organization and/or they don’t understand the math.

I’m not going to bore you with the whole ROI calculation story, but want I do want to point out to you is by and large you don’t make much money on anything you have that’s over 30 days old.

So, how do you think you’re making money on all that stuff you keep past 60 days? Have you ever thought about tracking it?

Maybe they just don’t know how to say no, when a manager asked if they can keep it a little longer.

Here’s the best tip I’m ever going to give you. The next time a manager asks if they can keep it a while longer, hold up your hand, palm facing away and say “Just talk to the hand.” That’s all I’m gonna say, Tommy Gibbs

It’s Not Easy

We’re talking about your job. Yes, your job. We know it’s not easy, that’s why you’re asked to do it. If it were easy, we’d put someone in it with a lot less talent. Less drive. Less enthusiasm. Less moxie. Less grit. Less get up and go.

Your job was never designed to be easy. If it were easy no one would care. And if it were easy, you’d be paid a lot less.

Sure, you’re not paid enough. But, it’s not always about what you’re being paid. It’s about what you’re paying to the big picture.

Sometimes it takes some serious grinding it out to get the pay to match. You will eventually get to the point where you’re being paid for more than you are actually doing.

Never forget that you’re contributing. You’re contributing in a big way. A way that others can’t contribute. We need you to keep doing what’s not easy.

Just stay the course. Of course, the course is not always easy, but needed. That’s all I’m gonna say, Tommy Gibbs

Advice You Didn’t Ask For

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. 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. 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 and plug in three numbers. 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.

5. Life Cycle Management- 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. 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. Knowing how to use EWR (Early Warning Radar) pays big dividends.

That’s enough for now. That’s all I’m gonna say, Tommy Gibbs