Being a leader is often a challenge because of the workplace environment we find ourselves in.
Being a leader is like being a parent. For example, if one parent stays at home, it can be more difficult to discipline the children due to being around them all the time.
Most of my readers are in the automobile business and are often around the same people for 12 plus hours a day. Most dealerships have systems and processes in place designed to create focus and discipline. Even under the best of circumstances processes are constantly breaking down which contributes to poor performance and a poor bottom line.
The reality is that it’s much easier to run a large dealership than a small one. As a leader in a large dealership, you can delegate much more and separate yourself from some of the personalities that can cause the breakdown of discipline.
Do not take that to mean that you don’t need to be involved, friendly or whatever. It just means you have to separate yourself from the emotional side of the equation. If you are in a smaller dealership the task of separating yourself from the staff is even more daunting.
I’m often amazed that leaders feel that they can socialize with staff members and still be able to properly manage and lead them. How can you:
1. Have lunch with the same people all the time?
2. Have dinner with spouses and members of your team on a regular basis?
3. Have after work drinks with staff members?
4. Party with staff members?
5. Attend sporting events with staff members?
6. Play golf on weekends with staff members?
Any of these in and of themselves is not a bad thing. But, to do any of this with the same person on a consistent basis does nothing but create problems for you and them. Aside from the fact it makes it difficult for you to manage them (let alone fire them) it creates a perception of favoritism that will destroy morale and team spirit.
Never forget, perception is reality. If you perceive that I’m a jerk, then I’m a jerk. The only way for that to change is for me to work toward changing your perception of me. The burden is on me, not you.
That’s all I’m gonna say, Tommy Gibbs
Sometime back around 2018 you will recall a paradigm shift in the vAuto world in their thinking on used vehicles.
The shift taking place was about changing your thinking of a unit’s age from pure days, which they refer to as “Calendar Time,” into a tool called “ProfitTime,” which is more focused on a unit’s overall investment potential.
Because the used car automobile business has returned to a more normal depreciation cycle of values dealers are once more focused than ever on getting back to a more discipline basics of running their used car departments.
There’s nothing more important that you can do than to management the life cycle of each used car based on its profit potential.
To understand this idea a little bit more and how it relates to UpYourGross’ Life Cycle Management, let’s consider Velocity principles and the problem ProfitTime is trying to solve.
Velocity principles would teach us that turning and burning units can boost ROI and allow grosses to accumulate. For many years, total gross vs. average gross has been something many of us have been focused on.
But what if there are some vehicles that we could have made more money on had we allowed ourselves to hold them a little longer and price them with a little extra gross built-in?
Strictly following the Velocity principles would leave these grosses on the table. As a general statement, holding a trade-in a little longer than something you acquired at an auction should make good sense to you.
Rather than applying the exact same turn and burn strategy to every unit, what if we intelligently managed how we priced units based on their investment potential? This would allow us to strike a balance between applying a turn and burn mentality to the vehicles that require it, and seeking more gross for our great investment units.
This is exactly what vAuto has tried to capture with ProfitTime. They give each unit in your inventory an investment score each day. These scores range from 1-12 and segment into precious metal buckets. This allows you to understand each vehicle’s investment potential and execute a strategy that attempts to strike a balance between turn and burn units and hold out on good deal units.
So This Means Days Don’t Matter, Right?
Well sort of, but not so fast. Let’s step back a bit and take a closer look at the factors that drive a vehicle’s investment potential. Once you have a unit in your inventory, its investment potential is based on the gross the vehicle can generate.
Essentially, how well you bought the vehicle (odometer-adjusted cost-to-market) and the market conditions for that particular unit (Like-Mine Day Supply and Market Sales Volume). ProfitTime wraps these data elements together to determine the vehicle’s investment potential.
I’d envision using ProfitTime to understand a unit’s profit potential so that you can price your cars more optimally on day one and so that you can keep them priced right as their profit potential changes. This should allow you to strike a better balance between turn and burn units and staying firm on good deals.
It’s important to note that this investment potential doesn’t care if the unit is one day old or 40 days old. Therefore, from the ProfitTime perspective, how long you’ve owned the car simply does not matter.
However, I would be careful to not generalize and make a blanket statement that days don’t matter at all. If you just sit on a vehicle that was deemed to be Platinum on day one, it won’t look too rosy on day 100. In fact, as the days pass, the unit’s investment score will worsen, as would be expected with any depreciating asset.
Where Do Days Come Into Play Then?
Days still come into play when you are looking at your ROI. This is because ROI is not only based on the gross you’ve made, but also on how long it took you to make that gross. This all starts to come together when you see the bigger picture.
Vehicles with low-profit potential from the get-go will see their ROIs start substantially lower than vehicles with a higher profit potential. This gives you less time to move these units from day one if you expect an investment return. You can think of this as buying a green banana versus a brown banana. The green banana has more time to be useful on day one, while the brown banana is already running out of time.
You can still make money on brown bananas, but you must sell them fast and understand all the pluses that go along with cranking up the volume with brown bananas.
Additionally, vehicles with factors that lead to quicker depreciating market values will see their profit potential decline at a faster rate than vehicles with steadier market conditions.
These units will have pressure to be moved quickly too.
In nearly all cases, each day that ticks off the calendar lowers the vehicle’s ROI, even if its gross doesn’t go down. However, the starting ROI and rate at which the ROI deteriorates each day will vary for different vehicles.
How does ProfitTime fit Into UpYourGross’s Life Cycle Management Philosophy?
At UpYourGross we’ve been preaching a lot about a life cycle management philosophy that is built on the concept of having a unique strategy for every unit. The reason we do this is we recognize that not all vehicles are created equal. When we talk about a concept like setting an auction purchase unit to a shorter life cycle, we are essentially saying this vehicle has less gross potential, therefore, it’s ROI will automatically start lower than that of, say, a customer acquisition unit. Therefore, we need to get rid of it faster.
You can strike similarities between the concept of ProfitTime and Life Cycle as follows. Calendar Time is simply the vehicle’s true time or age in inventory. Intelligently setting a unique Life Cycle to a vehicle means that its expiration date is no longer tied to Calendar Time; rather, it’s tied to its investment potential. An auction purchase might expire at day 45 while a customer acquisition expires at day 60. This philosophy operates on the same fundamentals as ProfitTime.
So if Profit Time and Life Cycle are Similar Why do I need Both?
The truth is each tool offers you a distinct benefit and those benefits increase in value when used together. While you don’t have to have ProfitTime to use the Life Cycle management tool we’ve built with UpYourGross, knowing a vehicles ProfitTime score makes “intelligently” setting the Life Cycle for each unit a bit more analytical rather than purely experience-based.
This isn’t to say that there’s no place for experience, but as many of us know making decisions backed by data is a good foundation for establishing consistent and repeatable processes.
And, you don’t need UpYourGross to use ProfitTime. But when you pair the two together, they put you in the driver’s seat of driving more gross to your bottom line.
Think of it this way, the ProfitTime score will help you select and updated a unit’s life cycle and UpYourGross will help you manage your inventory when you end up with many different units all following distinct life cycles. With UpYourGross, you’ll be able to easily see which units are about to expire and know what units you should be focusing on.
I guess you could build a massive spreadsheet and hire someone to punch data into it all day to help you keep track of it all.
However, we recognized that establishing and managing a unique strategy for every unit could be a daunting task to manage in spreadsheets-the exact reason we created UpYourGross in the first place.
What if I’m not Ready for ProfitTime?
If you’re not ready to make the jump to ProfitTime, I’d still encourage you to stop treating all vehicles the same. Not all vehicles deserve a generic 60 or 90 days just because you find that process and inventory age timeline simple to implement.
Try following a process that sets a unique strategy for every unit and see how easy it is to manage that process with UpYourGross.
You might just be surprised at how your bottom line starts to look when you combine ProfitTime and UpYourGross. That’s all I’m gonna say, Tommy Gibbs
Written by Tommy Gibbs & Jarrod Tanton, Founders of UpYourGross.Com
There are a lot of common problems when it comes to the used car operations for new car dealers.
But of all the problems and challenges that dealers face, the number one problem is that dealers trade or buy a unit and have a lack of “intent.”
Most would say, “Of course I have intent. I intend to sell this unit and make some money.” That makes total sense, but the problem is, it’s far too general.
That’s like saying you’re going to drive from NY to LA without a plan on how you intend to get there.
How many of you have ever heard the saying, “Every used car has to stand on its own?” If you’ve been around long enough you understand the term and can probably agree with the statement.
That being true, how can you give them all the same shelf life?
How can you not have a specific intent for each unit?
Most managers don’t think, “What’s my intent,” when a unit comes into their inventory. They paint them all with the same broad brush, which doesn’t make a lot of sense.Intent starts with the appraisal and is finalized during the trade walk, where the “final intent” is determined.
If dealership managers would look at each unit and clearly state their intent, they would have fewer inventory problems, turn would improve, and average gross, volume and ROI would go up.
I’m not going to go into the details here in this newsletter, but my life cycle management process gives you the disciplines to determine and carry out your “intent.”
My intent with this article is not to try to sell you something. My intent is to get you to think harder about what your own intent happens to be when you bring units into your inventory. That’s all I’m gonna say,
I’ve always loved the word “relentless.” There’s no higher compliment than someone saying that you are relentless.
In simple terms it means someone who is determined to do something and refuses to give up.
They get knocked down.
They get up.
They never give up.
In the journey of life, we often encounter obstacles, setbacks, and challenges that can seem insurmountable. It’s during these moments that the quality of relentlessness can make all the difference between success and failure.
Being relentless means refusing to give up, no matter how tough the going gets. It’s a trait that has been the driving force behind countless achievements and inspiring stories throughout history.
Here are 7 Bullet Points of Relentlessness:
1. Overcoming Adversity: Relentless individuals are those who see adversity as an opportunity rather than a roadblock. They understand that setbacks are a natural part of the path to success. Instead of being discouraged by failures, they use them as stepping-stones to propel themselves forward.
2. Unwavering Determination: Being relentless requires an unwavering determination to achieve one’s goals. It means setting your sights on a target and refusing to be swayed by distractions, doubts, or naysayers. Whether you’re striving for personal growth, career success, or any other aspiration, this determination keeps you on course even when the seas are rough.
3. Learning and Adaptation: Being relentless doesn’t mean stubbornly sticking to a single path no matter what. It means being adaptable and open to learning from your experiences. If one approach isn’t working, a relentless person will pivot, reassess, and try a different strategy, always with the ultimate goal in mind.
4. Pushing Beyond Comfort Zones: Achieving remarkable things often requires pushing beyond your comfort zone. A relentless mindset encourages you to embrace discomfort and uncertainty because you understand that these are the places where true growth and innovation happen.
5. Resilience: Resilience is the cornerstone of relentlessness. It’s the ability to bounce back from failure, rejection, and disappointment with renewed vigor. Relentless individuals view challenges as opportunities to test their resilience and come back stronger.
6. Inspiration to Others: Being relentless doesn’t just benefit you; it also inspires others. When people see your unwavering commitment and determination, they’re more likely to believe in their own abilities to overcome challenges and achieve their dreams.
7. The Road to Success: History is replete with examples of relentless individuals who achieved greatness against all odds. People like Thomas Edison, who failed over a thousand times before inventing the light bulb, or J.K. Rowling, who faced numerous rejections before publishing the Harry Potter series, teach us that relentlessness can turn dreams into reality.
So, if you’re striving for something extraordinary, cultivate the power of relentlessness within yourself. Remember that success often lies just beyond the point where most people would have given up. Embrace challenges, learn from failures, and keep pushing forward. You have the potential to achieve greatness; all it takes is an unwavering commitment to being relentless in your pursuit of your dreams.
In conclusion, being relentless is a quality that can transform your life. It’s the secret sauce that helps you conquer adversity, stay determined in the face of setbacks, and ultimately reach your goals.
The secret sauce. That’s all I’m gonna say, Tommy Gibbs