Zinger-Study Nature

I recently sent out a one-question survey asking if “price sells used cars.” The response was amazing and the results have been tabulated. Over 90% of the surveys said yes. Those that said no or checked “other” said things like:

Price generates interest, but you still have to sell the car.

You still have to show value.     

Only if the unit is standing tall.

A main component, but not the only factor.

Perceived value matters.

Price doesn’t necessarily sell the car but causes it to get viewed.

The talent of the salesperson matters once they get to the store.

A better question would have been, “Does price drive traffic to your store?”

However you want to slice and dice it, price either sells vehicles or it drives traffic to the store.

Since this is an undeniable truth, why would you have any units over 60 days old? Isn’t it also a fact that the longer you keep a unit, the less gross you make on it?

My conclusion is there’s a price that someone would have paid for the unit much earlier in the life-cycle if you had just priced it right. By going away faster, you make more money.

This isn’t rocket science. It’s part of the fundamental laws of nature. Study nature. That’s all I’m gonna say, Tommy Gibbs

How Long?

How long does it take to know if they can do it? Do what?

Do whatever it is you’ve hired someone to do.

Does it take a week?
Does it take a month?
Does it take 90 days?
Does it take 6 months?
Does it take 6 years?

How long does it take you to figure out if you’ve got the right person or the wrong person in the job?

Part of that decision-making process might depend on:

1. How much have you invested in the selection process of putting the right person in the right job?

2. Did you put someone in the job because they were the “next up?”

3. How much have you invested in their training and development?

4. How much have you invested of your own time coaching and teaching the person?

5. Does your organization give people the tools they need in order to be successful?

6. Do you make the effort to get legitimate feedback from those around you that “know” about how this person is performing?

How long does it take for you to figure out if they can or they can’t? That’s all I’m gonna ask. Tommy Gibbs

Feeling Lucky?

For the last couple of months, we’ve been testing my soon-to-be-released software, UpYourGross. I cannot tell you how exciting this product is. It’s simple; it improves turn, gross, and ROI; it reduces wholesales losses; it creates accountability, and it will be priced very inexpensively.

One of the things I’ve noticed with some of the testing dealers is that once in a while they will actually make a little bit of gross on a unit that’s over 60 days old. Maybe you’ve experienced that same thing.

Even though a little gross was made, the ROI went deep into the tank. But it’s important for naysayers like myself to remember that bills get paid by accumulating gross profit regardless of when it’s generated. It’s not a good business plan or a great bet to think it’s going to happen very often, but I get it.

Since I’m in the question-asking mood, what if that same unit had been priced the same way on day 30 rather than after 60?

Would you have sold it faster?

Would you have had a better ROI?

Better yet, could you have sold it and reinvested the money and doubled the gross on two units vs. one?

Used cars don’t age on day 61. They age on day one because someone isn’t paying attention. All of a sudden, day 61 rolls around and panic sets in.

One of the drills I like to do in my workshop is to ask managers to describe their oldest unit in stock.

After they tell me all about it, I ask them, “In your professional opinion, why do you think you haven’t sold that unit?” With very few exceptions, whatever they say was there on day one. The one undeniable fact about the automobile business is that price sells cars.

If you priced your most problematic cars more aggressively in the first 30 days, then you would increase your odds of making a lot more money.

Stop betting on lucky. Start betting on smart. That’s all I’m gonna say, Tommy Gibbs

You Had A Good Month?

As Starbucks CEO Howard Schultz reminds us, “Seek to renew yourself, even when you’re hitting home runs.” How appropriate is that in today’s market?

A lot of dealers had a record-breaking month in March. Some of them have already spent too much time gawking at their financial statements, poking their chest out and patting themselves on the back. And guess what? For some of them April is off to a slow start.

Let me caution you; you cannot be satisfied. You can never be satisfied. Those sounds you hear behind you are the competition coming to gobble you up. If you take just one little break, one little hiccup, it could be the very thing that puts you into a downward spiral.

People are successful for a variety of reasons, one of them being “fear.”

The fear of failure.
The fear of falling back.
The fear of giving up all they have worked so hard for.

It’s that fear that causes the successful ones to keep pushing and to keep looking for new and better ways of doing things.

Scott McNealy, CEO of Sun Microsystems, once said “You either eat someone for lunch, or you can be lunch.” No truer statement has ever been made.

Being a hard-charging competitor can be craziness at its best. Competing is fun. Trying to get better is the lifeblood of competing, leading and winning.

Study it. Embrace it. Love it. Use it as success fuel. Use it to take you to the top of your mental game.

Develop an unstoppable competitive mindset, and it will push you so far ahead of the competition that you won’t have to worry about looking over your shoulder.

What you have to realize is that most people are just lazy and because they are lazy they can become complacent very easily. Ultimately their lazy streak will show its head; that’s when you can “own” them.

There are times when you can have a good month in spite of yourself because the market lets you win.

No easy wins this month. Time to go to work. That’s all I’m gonna say, Tommy Gibbs

Why They Walk Around It

Salespeople are trying to make a living. You’re paying them on gross. What else would you expect?

My first management position was as a used car manager a very long time ago. I had a sales person working for me that was about as one-way of a person as you can ever imagine. He also wasn’t very good at telling the truth.

Let me tell you what he was really good at; he was really good at selling the freshest pieces that came into our inventory. Talk about doing a trade walk. Every morning he scouted the units that came in the night before. He knew what he could sell that would make him the most money.

During his tenure, I don’t recall him ever selling an older unit. He wasn’t there to help us. He was there to earn a living and feed his family.

It stands to reason why you have salespeople walking around your inventory. They can’t make any gross on those older units. They aren’t stupid, and though they may be team players, the team they are really playing for is the “home team.”

I’ve asked this question before and I’m going to continue to ask it. Does it make any sense in today’s market to keep paying salespeople on gross profit? They certainly don’t have as much control over it as they once did. You’re already setting the bar with the price you’ve put on the Internet.

The only way moving to a volume-based pay plan works is to be a one-price dealer or have a “well-disciplined management team” that’s not going to let them give the unit away.

And now you know why the management team walks around the pay plan issue. That’s all I’m gonna say, Tommy Gibbs