The Pain of Efficiency

If you’re going to continue to make money, and hopefully make even more money, you will have to become more efficient.

Your processes will need to become more efficient.

Your management team will need to become more efficient.

Your entire dealership will need to become more efficient.

You must become more efficient when it comes to speed and cost of your reconditioning. I know it’s a sore subject for some of you, but the sooner you address it the sooner you will move forward.

There are many issues dealers are scrambling to deal with as we move into the most competitive environment in the history of the automobile business.

In order to do volume in used cars you need to have a “costing advantage.” By “costing advantage” I mean what’s added to the car once you own it, which includes packs and reconditioning.

To have a costing advantage you have to re-think your packs (which usually gets down to pay plans) and most importantly, what you charge the used car department from your shop.

Your sales managers don’t have control over gross as they did 20 years ago. The market conditions such as days supply are having an impact on how you price your vehicles.

More and more dealers are moving toward becoming one-price dealers and saying “no” when the customer shows up and wants a discount.

Becoming more efficient means improving the amount of time it takes to get a unit through recon and to the front line. Every day that a unit is not on your front line available for sale is costing you money. UpYourGross.Com

Sadly, most dealers do not actually know how long it takes. And even when they do, they turn a blind eye toward the problem.

They let the proverbial tail continue to wag the dog when it comes to fixing the service timeline problem.

If you’re going to do more volume you need to have an advantage when it comes to getting cars through your system and the cost tied to doing so. You must become more efficient.

The pain of efficiency, or the pain of regret. You’re going to have one or the other and the cool thing is you get to pick. That’s all I’m gonna say, Tommy Gibbs

6 Bullet Points

This is always a tricky time of the year.

It is not unusual for “Fall Optimism” to come back to haunt you when “Winter Reality” sets in.

After several record profit months, it’s easy to get high on our new founded mentality of standing tall and asking for “all the money.”

Sure, you can hold that unit longer…ahhh, maybe not.

Often there’s a disconnect between the desired goals and the skill level of those who have been put in charge of obtaining the numbers we need.

Are you ready? Is the team ready? Are you ready for the fall and winter?

It’s important to know what you deserve for any given car or truck on your lot. Knowing and understanding that is based on two parts:

Common sense.

Knowing and getting what you deserve means having a true understanding of the market and every unit on your lot. They are all different, yet we often treat them all the same. It’s knowing when to fish or cut bait.

Yes, even in this wacky market there’s a time to cash in and make certain units go away.

6 Bullet Points To Help You:

1. Redundant Training- It ain’t redundant until you’re perfect. You’re used car department isn’t perfect. Don’t confuse getting lucky and today’s unusual market with your management skills. You’d be far better off thinking you’ve recently gotten lucky than thinking you’ve figured it out. Maybe you have and maybe you haven’t. Now is the time to amp up the training for your entire team.

2. Rolling 30-Day Sales Travel Rate-Pay close attention to the number of units you currently have in stock vs. the number of units you have sold over the last 30 days. You may even want to view it over the last 15 days. Almost without exception, we are seeing inventories starting to outpace the sales travel rates. If you’re using our UpYourGross software tool, it’s right there on the scoreboard page for you to see.

3. Ask For More On The Right Units- Keep in mind the word lucky. You’ve recently gotten lucky on some units. Betting on lucky will not serve you well.

Yes, there are some that you need to start way high. Some very low. My UpYourGross software will help you know which units are which.

Once in a while, you gotta “ask for it all.” You can’t hit it out of the park if you don’t take a full swing. If it’s a low mileage, really nice car you deserve more money for it.

4. Not selling in Today’s Market-Your most profitable car is a 20-day car. If you are retailing a lot of cars at the 30, 45, 60 plus day mark, you don’t have a chance. Speed wins; the lack of speed kills.

Start charting those units that you sell at 45 days and beyond to see what they are doing to your average gross profit? In the movie “A Few Good Men,” Jack Nicholson might have been talking about you. You can’t handle the truth.

5. Lack of quantity and quality of photos –stop reading this. Go look at the used cars on your website. How hard is it to maneuver through your website? And, if you don’t have a photo booth, you cannot be competitive in today’s market. It’s an investment you can no longer afford to avoid.

6. Use Early Warning Radar-You have to be able to spot a problem child on day one, not day 61. Every one of your aged units (Your oldest unit is an aged unit) has a story to go with it. That story started back on day one and somebody wasn’t paying attention.

Fix your Radar system and your used car operation will become more efficient and more profitable.

You get what you deserve when you do the work to deserve what you get.

That’s all I’m gonna say, Tommy Gibbs

When Should You Do It?

Jeremy Foley is the former Athletic Director at the University of Florida. Foley had a 40 year career in leadership positions in collegiate athletics.

You can well imagine the number of people Jeremy Foley has had to fire over the years.

Of course he’s not always made the perfect decision when hiring and firing, but based on the school’s success, he’s been right far more times than he’s been wrong.

One of Foley’s sayings is, “If something needs to be done eventually, it needs to be done immediately.”

You will often find that to be a characteristic and trait of exceptional leaders. They see what needs to be done and they do it immediately.

You as a leader know there are things you eventually need to do, but for whatever reason, you keep putting it off.

You know there are people you need to eventually replace. If you know you need to eventually replace them, then you need to do it immediately.

You know you need to eventually change your pay plans. If you know you need to eventually change pay plans, then you need to do it immediately.

You know you need to eventually get rid of packs. If you know you need to eventually get rid of them, then you need to do it immediately.

There’s a long list of things you know you need to eventually do.

If you want to be a better leader, you would do them immediately.

That’s all I’m gonna say, Tommy Gibbs