Can You Make Exceptions?

Absolutes are a powerful tool toward creating a disciplined organization.

The downside of absolutes is it chokes off the potential to have an acceptable exception.

Exceptions break the rule of discipline. Exceptions soon become the norm.

When exceptions become the norm chaos breaks out. The type of chaos I’m referencing isn’t actually like a bomb going off. This chaos is slow and gradual, often not recognized, and then – whamo – there it is, its ugly face screaming at you, “What the heck happened?”

Now here’s the real deal for those of you looking to become better leaders. You can have absolutes and exceptions in the same house. They can actually hang out with each other once in a blue moon.

True leaders can use them both and chaos will never show its ugly face. Granting an exception and going back to absolutes is very doable. The problem with leadership is that very few leaders have the skill to make effective use of them both.

Most people in leadership positions are stuck with one or the other.

At any given moment one is just as bad as the other. That’s all I’m gonna say, Tommy Gibbs

Are You Kidding Yourself?

There are some dealerships and some dealership groups that penalize the used car department for every unit over 60 days old.

A standard number they take is 10% of the value of each unit over 60 days. They subtract it from the month’s gross profit, impacting the gross profit the managers will be paid on.

A fairly common way of using that 10% is to write those units down by that amount, reducing the inventory amount and thereby creating a new and lower cost for that unit.

Part of the theory is that you’ll make some of it back when you sell the unit. When you finally sell the unit after a total of 90 days of ownership you might show a little profit, but you really didn’t make any money. All you’ve really done is played a joke on yourself, but it does make you feel better.

Never forget it is not about having to dump units at 60. It’s about finding a retail buyer before you ever get to 60. (Hello, Tommy Gibbs’ Life Cycle Management Process.)

Let’s pretend you have 10 units over 60 with an average cost of $25,000 each ($250,000.) That’s not a stretch because the more expensive units are the ones that tend to age, if for no other reason than there are fewer butts that can fit in those seats.

10 units at the 10% equals $25,000 worth of write down/loss for the month. Doesn’t really fix much of anything. Much like our politicians you’re just kicking the can down the road and allowing an undisciplined, lack of processes environment to continue to exist.

You might want to take some of that money you’re blowing and invest in coaching your team to a higher level of competence and continued performance. That’s how you grow a team. That’s how you grow an organization.

A penalized team loses games. A well-disciplined team wins games. That’s all I’m gonna say, Tommy Gibbs

The #1 Question I’m Asked

Where can I find a good used car manager? Yep, I get 15 to 20 emails a month asking me that question.

Often, when speaking to a 20 group or at a convention, someone will approach me and ask me if I know anyone they can hire for the used car manager’s position.

Very seldom do I have a name. Think about it. For the most part, if someone’s really good at what they do, they are smart enough to stay put. Whoever they are working for is smart enough to treat them well so they do stay put.

99.9% of the time when someone leaves an organization all the inventory problems come to the surface upon their exit.

My advice is always the same; you need to find someone within your organization, someone who knows your culture and who you can develop for an even greater position.

That’s what leaders do. They grow their team. They don’t run out and hire other people’s problems.

I often say if I were in your shoes, I’d find someone internally with a strong work ethic, who is open minded, technologically savvy, has some common sense, and I’d coach them to greatness.

For at least 6 months I (meaning the dealer or GM) would hold their hand. They would be my assistant. We’d be like Siamese twins and we would do everything together. He/she would follow me around like a puppy dog.

Here’s how it would work:

I do it and they are with me. (The best part about this is you’re going to find out where all the obstacles and landmines are located. Because you have the power, you will fix a lot of issues that have been holding your used car operation back.)

Eventually, I’d hand it off to them and they would do it and I’d be with them. I’d watch. I’d critique.

At some point, they would do it. They don’t need me except on issues outside of the scope of their authority.

And then, here’s the biggie, (this is how you grow) they do it, and someone is with them.

This is how you compound and grow your organization. Just like compounding interest.

Until you take this approach, your ability to grow will always be limited. To do anything else, you’re just plugging holes with a temporary worn out cork.

That’s all I’m gonna say, Tommy Gibbs

We’ve Always Done It That Way

Don’t you just hate it when someone says, “We’ve always done it that way.” What I find so very interesting is that more often than not we don’t actually say it. We just do it.

It’s one of those weird things in business that happens and we just look the other way. Not going to make any waves that what we’re doing doesn’t put us in a competitive position. Nope, just going to go with the flow. The old “father knows best” theory.

There’s not one person reading this that will disagree that the business is undergoing dramatic changes on a daily basis. We’ll soon have chips in our heads and sensors on our fingertips.

The pricing of new and used cars on the worldwide web is as normal as sleep and 3 meals a day.

The other thing that’s normal is we still charge full retail from the parts and service department to the used car department. Talk about putting yourself in a non-competitive position. Whamo.

A lot of smart people read my newsletters. I know you’re smart because you read them. I’m sure someone out there’s going to figure out a better way.

Those that figure it out will sell more vehicles.

Those that sell more vehicles will pile up more total gross.

Those that pile up more total gross will make more money even though they aren’t charging full retail to the used car department.

We’ve always done it that way is such a stupid thing to say. That’s all I’m gonna say, Tommy Gibbs

Should You Try This?

I realize this may not be a fit for some of you. And yes, there are some who believe this is old school, old fashioned and outdated. But, there are some who can make this work. And if it helps someone sell a few more units, I can handle a little criticism.

Memorial Day is just a few weeks away. It’s not too soon to be thinking about putting on a Memorial Day sale.

Consider Having An Onsite Tent Sale:

1. Put the tent up as close to the road as possible. Pick the best strategic position on your lot.

2. Put tables and chairs in the tent.

3. Put ALL of your people in the tent.

4. Everybody goes in the TENT!

5. Work all deals in the TENT!

6. If at all possible, move your computers into the tent and do F&I in the TENT.

7. Hang banners from the TENT saying “TENT SALE.”

8. Promote it with Direct mail and/or with a “private invitation” only deal for Thursday before you kick off your regular ads.

9. Do anything you can to make it look like a circus.

10. Rent those jumping air things for kids.

11. Balloons and more balloons.

12. Pop Corn, Sodas, Hot Dogs.

13. Lots and lots of spiffs for your sales people and managers.

14. Do a great kick off breakfast on Thursday for your staff.

15. Don’t do it just for the sales staff; get as many of your
employees involved as you can. (Feed everybody lunch every day of the event as well.)

16. Send out memos and emails to all employees explaining in detail what’s going to be happening.

17. Rope off special parking for customers. Hire an off duty police officer or security guard to direct them.

18. Answer the phone XYZ Dealership Tent Sale in Progress.

19. Do a fundraiser at the same time for the local little league or whatever.

20. Post the event on your website.

21. Do an email blast to all your customers advising them of the sale. If your CRM system is sophisticated enough make sure you tell them you need their specific trade and will pay top dollar for it during the sale.

22. Giveaways generally don’t do much except cause people to show up to get their gift and leave, but having people register for a free car is a good way to get info on them when they show up. Pick out a $1000 or $2000 car and give it away.

23. Along that same line, give the salesman who registers the winning ticket some sort of prize. Gift card, $200, whatever floats your boat.

24. Make up a bunch of signs like real estate signs that say “Tent Sale in Progress” and put along the grass in front of the dealership.

25. If you’re close to the interstate do some signs with arrows and put them up close to the ramp. (Oh come on, the worst that can happen is they make you take them down.)

26. Rent a chicken suit or some kind of character and have them walk up and down in front of the Dealership with a placard that says “Tent Sale in Progress.”

It’s not complicated and it’s not expensive. You just have to be creative. Get some of your key people together and throw some ideas around.

That’s all I’m gonna say, Tommy Gibbs