There are times when I struggle as to how much I want to “share” with you in my free newsletter. I often ask myself, “Should I save this for my paying clients?” This is one of those times, but what the heck, here you go.

If you’ve heard me speak or read any of my material, you know I believe it’s way past the time we had two-tiered pricing from the service & parts department to the used car department.

A different price structure for your cheaper used cars will pile up more gross and put more profit on your bottom line.

It’s a tough sell for those dealers locked into stinky old legacy thinking who have “always done it that way.” I, of all people, realize how difficult change can be.

I have a story for you. I had my car serviced recently and upon hearing the quote I asked, “Hey, can you give me a discount?”

The service writer said, “Sure, here’s a 15% coupon for the labor.” I said, “What about parts?” He said, “Nope, the parts department won’t work with us. They are very one way.” Another one of those things that’s hard to change.

Nothing shocking here, but my point is we are always giving our retail customers discounts and coupons. So why not the used car department?

Here’s the way it works:

1. The dealer or GM decides how many coupon sheets (see below) they will issue to the used car manager at the beginning of the month. If you want to get sophisticated about it, then base it on some formula of how many used (or even new) were sold the previous month.

You could do 40 used gets you one sheet. Or 40 new gets you one sheet. There’s all kinds of ways to set this up. You could do for every 10 units over forecast you get an extra sheet for the next month. Whatever formula works for your size store.

2. The sheets are set up for 8 coupons. You could do more or even less.

3. At the top of the sheet, the Dealer/GM will determine the maximum ACV the coupons can be used for. I’m thinking less than $10,000, but you get to choose.

4. Each coupon requires:

A. The stock # of the unit
B. The ACV before coupon/repairs are done.
C. The manager’s signature.

5. I have a template that allows you to change the coupon percentages to suit your taste.

6. How you expense the coupon discounts is up to you, but let me suggest that parts and service handle the discount just like you would with any customer.

7. Is there a slightly negative impact on your percentages in parts and service? Probably.

8. Is there a positive impact on your total gross profit? You betcha!

9. Is there a positive impact on attitude from the used car department? Another you betcha!

10. You will sell more used because you’re keeping some pieces you’ve been letting go down the street. You will sell more new because you will step up on some trades since you now have a way to turn them into retail pieces.

If you want to sell more used cars then do something different. That’s all I’m gonna say, Tommy Gibbs

You may have chosen to do volume or shoot for a high average gross profit. The odds are pretty good that you’re not all that happy with your choice.

If you chose high average gross, the odds are very good that you’re not generating enough total gross and your volume is kind of poopy.

If you chose volume, you’re not all that happy either. Your average gross is also poopy.

It’s a contradiction to say to your staff that you expect both high volume and high gross per unit.

They stay confused and frustrated when you keep pounding them over the head with this misdirection and sleight of hand marching orders.

I’m sure somewhere out there someone is making it happen on both ends, but it is certainly the exception and not the rule. So, you need to get over it.

It’s a given that more than 80% of the people shopping for a used car shop the Internet. If you think you are going to post high prices or no prices out on the Internet and traffic is going to show up then you’re not going to be very busy. The Internet is a “game changer” for all of you regardless of your new car franchise or set of circumstances.

When you take the leap into the volume world it requires you to rewrite your overall strategy from acquisition to staffing, pay plans, reconditioning, marketing, and pricing.

Failing to address any of these will result in frustration and poor production and you may find yourself worse off than you are right now.

The bottom line should be to increase your total gross profit. It’s not done by improving your average. It’s done by maintaining a respectable gross and substantially improving your volume. Small market or big market, it doesn’t matter.

The Internet has opened the world up to you and you have to decide if you want to be in either that world or your own little world. Your little world has limitations.The Internet world does not.

“You can’t spend average gross profit. You can spend total gross profit.” Your job as a leader is to figure out how to get the best of both worlds. That’s all I’m gonna say, Tommy Gibbs

Most dealers fall into one of two categories. Either they think they run the best show in town or they think they know who runs the best show in town.

If you do see yourself as being the best operation in town, you poke your chest out, toot your own horn and strut down the street once in a while.

If you don’t see yourself as running the best show then you probably know what your flaws are and you’re trying to fix them because of course, you want to be the best.

Regardless, if you think you’re the best or not, it’s a safe bet that for as long as you’ve been in the car business you’ve compared yourself to other dealers.

Stop it. Your team members and the consumers in the marketplace aren’t comparing you to other dealers.

They are comparing you to Apple, Amazon, eBay, Zappos, Starbucks, The Ritz, Disney and a host of other great operations. Being better than your competitors isn’t good enough anymore.

If you’re not studying some of those that I mentioned, you should be.

If you’re just studying and comparing yourself to other car dealers, you might be the best in your immediate neighborhood, but you’ll never be the best of the best. That’s all I’m gonna say, Tommy Gibbs

If you talk to anyone that’s had a successful run, they will tell you the greatest thrill for them hasn’t been:

All the money they’ve made
All the great trips they’ve taken
All the wonderful houses they’ve owned
All the news stories about adding another business to their portfolio
All about their sales rankings in publications like Automotive News
All about all the wonderful plaques they’ve received for their civics’ activities, contributions to their community or the awards from the franchises they represent

It’s none of those.

They will tell you the greatest thrill for them is the contributions they’ve made toward developing great leaders in and outside of their organization.

Successful people are always looking for opportunities to invest in their businesses and their staff. The one thing they all know deep down inside is there is no greater investment than investing in their people.

Regardless of your position on the management totem pole, you too can invest in others by teaching, coaching, encouraging and picking others up. When you set the example, you become the example.

When people feel like they are learning and moving forward, they always want to give you their best. When people are giving their best we all grow.

Sometimes you help people grow so much that they leave for other bigger and greater opportunities. You should smile, high five them and give yourself a little pat on the back.

Are you investing in your team? That’s all I’m gonna ask. Tommy Gibbs

I’ve been a user of the Dollar Shave Club for the last 4 or 5 years. I got tired of getting ripped off every time I needed to replace my Gillette razor blades.

As a side note, after using their deluxe model of 6 blades for $9 a month, I switched to the doubled-bladed model for $1 a month plus $2 shipping. It actually works much better for me.

More of something isn’t always better unless of course, you can sell more cars and not hurt your average gross profit too badly.

Recently, Gillette has joined the party by selling their blades online. With shipping, their cheapest model is $7 more expensive, and their deluxe model is $12 more expensive than Dollar Shave Club.

Gillette has finally figured out:

A. That customers hate going to the store to buy razor blades.
B. That high prices are killing their volume (Hint, hint).
C. Baseball players aren’t shaving (Not really, but have you noticed how many baseball players are wearing beards these days?)

Are you going to be late to the party? Can a customer handle 95% of their transaction online? Are you utilizing electronic signatures?

As you may know, Carvana handles most of the car buying experience online. I think we’re years away before a large percentage of the buying public will be ready to do so.

I also think we’re a long way from Tesla and all electric cars being a big part of our industry. I don’t care what Volvo thinks.

But, I also believe that you need to be ready for it, before it’s ready for you. Even today, there are a lot of customers that would like to handle as much of the transaction online as possible, even if they aren’t quite ready for electronic signatures.

How much of a transaction can your customers handle online? Don’t be like Gillette. That’s all I’m gonna say, Tommy Gibbs

If you’re not increasing your volume, you should.
If you’re not attacking ROI, you should.
If you’re not improving your gross profit, you should.
If you’re not pressing your cost down, you should.
If you’re not tracking 30/30, you should.
If you’re not attacking your most expensive units, you should.
If you’re not doing a lot walk, you should.
If you’re not using my life cycle management process, you should.
If you’re not paying attention to look-to-book, you should.
If you’re not doing a trade walk, you should.
If you’re not doing a save-a-deal meeting, you should.
If you’re not on a 60-day turn, you should.
If you don’t have a plan to extract the water, you should.
If you don’t have a photo booth, you should.
If you’ve not hired me, you should.

That’s all I’m gonna say, Tommy Gibbs

One of the great disconnects among leaders is the mindset that they don’t need to be responsive to others-unless it’s something they deem urgent in their own minds.

This lack of responsiveness minimizes the expectations and intentions of the person who asked for a response. The leader’s response is important to them otherwise, they wouldn’t have asked for it in the first place.

As a leader, if you receive an email, phone call, letter or text message, it should be handled in the most expeditious manner possible. There’s a difference between just missing something and intentionally not reacting to it.

The problem goes even deeper when you tell someone you are going to do something and you don’t. Be a person of action. Be a person of doing. Be a person of doing it now.

As a leader, everyone is watching you. Monkey see monkey do. If you don’t do it, then don’t expect the rest of your team to do it

We get more respect and trust when we do what we say we are going to do, when we say we are going to do it. That’s all I’m gonna say, Tommy Gibbs

Games are often won and lost based on what happens at halftime. Teams practice all week utilizing stats, videos and scouting reports to come up with the perfect game plan. Even with all that effort, it’s the adjustments they make at halftime that will often determine their fate.

It’s halftime for you. The year is half over. What adjustments are you going to make?

Some of you have had a great first half. Some of you, not so much.

Some of you have been scoring touchdowns.

Some of you have been fumbling the ball.

Something has been holding you back. There may be some legitimate excuses, but maybe you just had the wrong game plan in place. Maybe you had a bad scouting report or maybe there have been some surprises along the way.

Just because you had the wrong plan or something happened that you weren’t expecting, doesn’t mean it’s too late to fix it. It’s halftime. You can fix it. You’ve still got 6 more months to go.

Those of you who have had a good first 6 months need to be cautious of becoming complacent. Even though things have been going well, you would be very smart to review how you can make things better as you tackle the second half.

Well-coached, disciplined teams have a “put away” mindset. They know how to run the table. You should be thinking about running the score up.

Everything we do is about choices. You can choose to let things be as they are or you can choose to dial it up a notch or two.

To do so means to review your plan and the strategies you have in place and make the changes that are necessary to get you where you know you need to go.

Your other choice is to make no adjustments at halftime. Go sit in your office and stare at the wall. Enjoy your seat because in a flash the game will be over.

Many a talented team didn’t win the game because they didn’t make the right adjustments at halftime. It’s halftime. Let the adjusting begin. That’s all I’m gonna say, Tommy Gibbs

I’m going to share 10 relatively simple things I’ve picked from the many I present in my workshops for you to consider doing.

1. Study The Data- Become a better student of the game. There’s so much information right at your fingertips. Use vAuto’s stocking tool to determine the fastest moving units to stock and take advantage of all the data Auto Trader can provide you.

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. If you are at $18,000 today, do what you can to get it to $17,500 and so on. 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 FixROI.com and plug in three numbers. Your cost, your gross, and the number of days the unit has been in stock. Bingo, you have your ROI. 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. Sooner rather than later. Make sure the service manager gets a copy of the list each day and create a sense of urgency to get any of those through the shop quickly.

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. Everything, including decisions on what to keep and not keep has to be done fast. 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 take units to the auction and lose money on them at 45 or 60 days. There are certain “Trigger Points” you need to focus on during your daily “Trade Walk.” Knowing how to use EWR (Early Warning Radar) pays big dividends.

6. Lot Walk-If you do a lot walk once a week with all the members of your sales and management team then without a doubt you will sell more units. The lot walk gets your entire team to know and understand your used car inventory. The more knowledge they have the more they sell.

7. Daily Inventory Pricing-The market changes every day and so should your pricing. Sometimes you can ask more, sometimes you can ask less. You cannot and will not achieve maximum results by changing prices every 10 to 20 days. Pricing takes intense management. It’s not something you do when you get around to it. You would be far better off if someone priced the car who is not in charge of appraising and buying them.

8. Analyze Your Wholesale Pieces-Look at the numbers. How many units are you wholesaling each month? Go over each unit. How many of them could you have retailed if you opened your mind a bit either relative to pricing and/or the type of product you’re willing to keep? I’m thinking you would sell a lot more of these wholesale pieces if you had more flexibility from your parts and service department on what they charge to your used car department. Is it time for two-tiered pricing?

9. Photo Booth-and 40 pictures per car. If you haven’t accepted the fact that the Internet is your new showroom then you are doomed. You cannot and will not be able to remain competitive until you get with it. It’s the biggest no brainer since the invention of the wheel.

10. Focus on Look-to-Book-When you improve your look to book you improve your odds of selling more cars. You sell a car and you get a car. It’s not rocket science.

That’s all I’m going to say. Tommy Gibbs