The “P” Word

It’s hard for me to fathom someone being successful in the automobile business without being passionate about it.

I can’t think of any business where being passionate is as important as in the automobile business.I see a number of people in the business that aren’t passionate, yet they appear to be having some element of success.

Their success has nothing to do with being passionate; it’s a result of being in a good set of circumstances.

A good set of circumstances would be the right product, at the right time, in the right market. I have to wonder how much more successful they would be if somewhere along the way a rocket of passion had been lit under them?

Organizations like Zappos, Starbucks, and Apple will point to the passion of their employees as a driving force in the culture, which contributes greatly to their success.

People and organizations don’t necessarily fail because they are stupid or don’t know what to do. They fail because of the lack of passion. Passion is not something that can actually be taught.

I’d love to hold a workshop on passion, but I doubt it can be done. Besides, most people wouldn’t feel they need a workshop on passion. They think they already have it. The reality is that many don’t.

I can show you what passion looks like. I do my workshops with great passion. You won’t agree with everything I say, but you will agree that I do it with great passion.

Passion is created when you’re doing something you love to do. The problem is some people are doing what they do for a check.

Passion is multiplied in any organization by finding like-minded people. Passionate leadership will establish standards that are of the Ritz Carlton/Disney type.

These standards have to be fed to the masses every day by the passionate ones to the extent that people either eat it or move on. If passion scares non-believers away, how can that be a bad thing? You should expect people to become believers and if they can’t, then it’s time to make a change.

If you’re not passionate about this business, maybe you’re in the wrong business. That’s all I’m gonna say. Tommy Gibbs

The Point of Diminishing Return of Satisfaction

The first of everything in life is the best. Your first love, your first computer, your first car, your first job, your first house, your first management position.

How about ice cream and coffee? The more you eat the ice cream cone and the more coffee you drink the less enjoyment there is. The first taste of anything is always better than the second and so on.

Call it the “The Point of Diminishing Return of Satisfaction.” (I made that up; I make lots of things up, just work with me.)

Used cars are no different. Think of the first day that you own a used car as if it’s the first taste of coffee or ice cream. It tastes a lot better if you sell it on day one than it does on day 61.

The longer your coffee sits, the colder it gets. Not so good. The longer ice cream sits the more it melts and the less ice cream you get to enjoy. The longer a used car sits the less you make on it. The less you make on it, the less enjoyment you get to have.

But even if the coffee stayed warm, and the ice cream stayed cold, your second taste of either is never as good as the first.

You’re going to hear a lot about the “Life Cycle” of your used cars this year. My definition of “Life Cycle” would be how long you allow a car to hang around and more important, what elements impact and extend your “Life Cycle.” The management of “Life Cycle” is the most important element of maximizing the potential of your used car department.

Doesn’t it stand to reason that if you can shorten the Life Cycle of your used cars that you’re going to enjoy them a whole lot more and make more money? Dealers and used car managers are always looking for that magic bullet. We all know there is no magic bullet, but if there was one it would be called the bullet of “Life Cycle Management.”

When you shorten the life cycle you make more gross and sell more used cars.

Poor “Life Cycle” management impacts:

A. Slow Turn
B. Aging
C. Volume
D. Gross
E. Poor ROI
F. Attitudes
G. Ability to Trade at the Door
H. Future Acquisitions

There are many factors that create a slow turn and a long life cycle:

A. Acquisition to Write Up
B. Write Up To Shop
C. Shop & Parts Issues
D. Willingness to Re-Route (Sublet and/or jobber for parts)
E. Detail/Clean Up Issues-Same as “D”
F. Photos-Quality and Quantity
G. Posted on Internet
H. Pricing
I. Gross Attitudes
J. Pay Plans

If you focus on fixing “Life Cycle” factors then your coffee is always warm and your ice cream is always cold and the taste doesn’t get old. That’s all I’m gonna say. Tommy Gibbs

It’s Your Fault

I’m in lots and lots of dealerships over the course of a month’s time. I’m not always in them as a consultant, speaker, trainer or coach. I’m in so many dealerships because I’m shopping them.

I love shopping dealerships. I’m betting I shop more dealerships in a month than most people shop in a year.

I shop the biggest of the big and the smallest of the small. The number one issue I observe, regardless of size, is the lack of activity by the sales staff.

It’s not just that they don’t wait on me in a timely manner. It’s that they are standing around doing nothing. Standing around waiting for something to happen, rather than making something happen.

30 years ago we struggled with keeping the sales people busy and productive. A lot has changed the last 30 years. Not much has changed the last 30 years.

But guess what? All those people standing around doing nothing? It’s not their fault. It’s your fault. You’re the boss. It’s okay to be the boss. Just don’t be bossy. That’s all I’m gonna say, Tommy Gibbs

Expanded Strike Zone

I continue to be baffled when I see dealers with what I would consider to be aged inventory. What is aged? What’s the cut off number? Some would say 45 days. Some would say 60 days. Some dealers are willing to accept 75 or even 90 days as an aged number.

The biggest problem I observe in this business is that people don’t want to be held accountable. They don’t want to take “the hit,” wholesale losses, at whatever they have determined to be an aged unit.

And then all of a sudden they start to expand their “aged zone” much like a struggling baseball player starts to expand their “strike zone.”

As a hitter expands their strike zone, they start to strike out more. That’s a great parallel to aging using cars. The further you are willing to extend the life cycle of the unit, the less money you’re making.

Never forget, taking a loss on a used car at the end of the aged period is not the goal. The goal is to find a retail buyer before you hit that number.

I believe that most of you know what I’m saying is true, but just in case you aren’t a believer I have a little experiment I’d like you to consider. It’s called 30/30.

I have a spreadsheet I want to send you. It’s an easy way to track used vehicles you sell within the first 30 days VS those you sell after 30 days. The odds are extremely good that the average gross on those you sell in the first 30 are going to be a lot better than those you sell after 30.

All you have to do is hit reply and put in the subject line 30/30. I must receive your request by Friday May 22 in order to include you in the email with the spreadsheet attachment.

I don’t want to see you expand your “aged zone.” I do want to see you expand your “thinking zone.” That’s all I’m gonna say, Tommy Gibbs

The Best Leaders Are Always Asking

1. How much do I know?
2. Am I still learning?
3. Am I doing all I can do?
4. Am I restricting the team?
5. Am I giving the team the things they need to get the job done?
6. Am I seeking input from the team?
7. Am I being “loyal foolish?”
8. Has my thinking gotten stale?
9. Am I investing in myself and the team?
10. Do I believe in what I’m doing?

That’s all I’m gonna ask, Tommy Gibbs

Shooting The Moon

Achieving an above average front gross profit on used vehicles is a challenge that’s not going away anytime soon. There are a lot of factors that contribute to grosses going up or not.

One of the most overlooked factors is far too often many in the business have given up on asking for “it all.” I’m not suggesting you do it on every unit, every time, but on certain units you need to give it a shot once in a while.

Let me caution you, shooting the moon can be tricky. You have to be smart enough to know when to get the pricing back in line with the market. Is it 5 days, 10 days, or even 20 days? That’s where you have to pay attention and that’s where your experience and expertise comes into play.

If you shoot the moon once in a while you might just get lucky and hit it.

One thing is for sure, you’re never going to get to go to the moon if you don’t get on the rocket once in a while. But, you also have to know when to abort the mission. Go get ’em Captain Kirk, that’s all I’m gonna say, Tommy Gibbs

Higher Standards

One of the things you often hear leaders talking about is operating at a higher standard. Leaders are constantly pushing the theme to the troops in one message after another.

What some leaders fail to realize is that in order for the team to operate at a higher standard, the leader has to operate at a higher standard. As the leader’s standards improve or erode, so goes the team.

The standard setting by the leader is often the missing piece when it comes to growing and developing the team’s culture, progress and esprit de corps.

The standards you are setting are a culmination of the decisions you make each day. From the simplest decisions of just being nice, to the more difficult ones like resolving a conflict with customers and/or team members.

Holding yourself to a higher standard means ensuring that you are productive and making things happen today. A great motto to keep in mind is “speed of the boss, speed of the crew.”

On the other hand, if you’re the sort of leader that goes around telling others to make something happen, all you’re doing is creating hate and discontent. If you’re going to talk-the-talk, then you better walk-the-walk.

97% of people and organizations operated at average or below standards. To be part of the 3% of the elite who are operating at a higher standard, then you need to demand excellence of yourself. Only when you demand a higher standard of excellence of yourself will the organization begin to move toward the top 3%.

If you were writing a book on higher standards and each chapter was a day-by-day account of the standards you set, would you want to include today as a chapter in your book? That’s all I’m gonna ask, Tommy Gibbs

Do You Know Where Your Sickest Children Are?

If you have children and if one of your children was sick, I’ll bet you would keep a close eye on that child until they recovered from their sickness. Is that true or false?

I’m appalled at how many used car managers don’t actually know where their sickest children (oldest old used cars) are.

Often when I’m reviewing inventory with a used car manager I’ll ask them to tell me about certain cars in their inventory.

On some of the cars I’ll ask them, “Where is it?” They will say “It’s in the inventory.” No, I’ll say, “Where is it? Where is it parked?” Typical comments are, “I’m not sure”, “I think it’s out back”, “I think it’s in the service department”, “I think it’s in clean up”, “I think someone is driving it”, “I think it’s sold.”

You’re not being paid to think. You’re being paid to know. The great used car managers know where every car is every moment of its life with their store.

The great used car managers know where all their children are, especially their sickest ones, regardless if they have a 40 car inventory or a 400 car inventory.

They just know. You wanna know why they know?

They know because they care. They know because they are great parents. They know because the more they know about where their children are, the more they can protect them.

They can protect them from the evils of the world such as becoming aged, poor ROI, and slow turn. Let the parenting begin. That’s all I’m gonna say, Tommy Gibbs


We often read and hear about courage as it applies to heroic acts during war, when people are dealing with pain, or dangerous circumstances. The term is also loosely tossed around in the world of sports. Depending on one’s point of view, those may all very well be true.

I like to think of courage in business in a couple of ways.

1. Courage is doing the right thing when it’s easy to do the wrong thing. Courage means taking a stand even when sometimes taking a stand is not the most popular thing. Never forget it’s not about who is right, but what is right.

2. Courage is the willingness to stick your head above the fence once in a while knowing full well someone’s going to throw a rotten tomato in your face. It’s a willingness to try something different. It’s a willingness to get out of your comfort zone. It’s a willingness to accept harsh criticism.

Sometimes I tell you stuff that I know you’re not going to like. Sometimes I poke my head above the fence. Sometimes you throw a rotten tomato at me. If nothing else I’ll help your improve your aim. That’s all I’m gonna say. Tommy Gibbs