The Pain of Discipline or The Pain of Regret

The great thing about the phrase is you’re going to have one or the other. The cool thing is your get to pick which one!

Being a former Marine, part of my core values as an individual comes from my Marine Corps training. And no doubt a large part of my success in life comes from being well disciplined.

Many of my disciplines have come from being an athlete where you cannot achieve any level of success without discipline. Without question people with a military and/or a sports background make better employees/team members because they are well disciplined. Yes, there are exceptions, but work with me.

Discipline shows up in many forms in the workplace including being on time, achieving assignments, how you dress, how you talk, what you say, how you say it and who you say it to.

Discipline shows up in your personal life every day. From your routine when you get up each day to the moment you lay your head on your pillow.

I cannot fathom someone achieving a key leadership position or having a personal life that’s balanced unless they are highly disciplined.

If you do not have a sports background, military background or if you didn’t grow up in an environment where there was a focus on discipline then you are at a total disadvantage as you attempt to climb the ladder of success. It is virtually impossible to achieve success in sports or the military without discipline, and business and life are the same.

It’s pretty much a sure bet that if you are un-disciplined in your work life that your personal life is no different and chaos has become your best friend.

Discipline is about controlling willpower/self-control over one’s desires to do the wrong or easy thing. It’s about doing the right thing when the wrong thing keeps screaming “why bother.”

Focus on improving your discipline regardless of where you have come from and where you might be today. Observe others around you who you deem to be well disciplined and start to emulate them. Pretty soon others will start to emulate you and now the tribe becomes very powerful.

Only the well-disciplined ever get to be the chief of the tribe.

“The pain of discipline or the pain of regret.” You get to pick. That’s all I’m gonna say. Tommy Gibbs

Whatcha Got?

I had great mentors when I first got in the car business. One of the first things I learned was that when a salesman was working a deal the whole world stopped.

Most of us are familiar with the tower or desk concept, the area where deals are worked, which can at times be like Grand Central station. It’s the nerve center. It’s the airplane control tower. It’s the emergency room and ICU all rolled into one. It’s serious business. You need to be serious.

What it’s not, is a place to socialize, but socializing does happen there. With that being the reality, the management staff has to have the discipline that all silly activity stops when a salesperson walks in the room. To this day, when I’m in a dealership and a salesperson walks in the tower I want to say, “Whatcha got?”

Sometimes they have a deal.

Sometimes they have a question.

Sometimes they need encouragement.

Sometimes they are looking for a little push.

Sometimes they are just lost.

But at all times I want them to know I care about them and I’m there to help them do business.

Maybe you should be just a little more serious. If you’re not already using the term “Whatcha got,” maybe you should.

By saying “Whatcha got,” you will get a lot. That’s all I’m gonna say, Tommy Gibbs

Are You a Good Kisser?

The first of anything is always the best. Coffee is a great example. I highly anticipate each morning the first taste of my cup of coffee.

It’s amazingly the best. Most things are like that.

The first time you kissed your wife, husband, girlfriend or boyfriend is far better than the smooches you’ve most recently got.

The first lick of your ice cream cone is better than the last and so on. It’s called the law of stuff tastes better at first. (Yes, I made that up.)

Used cars are that way too. Selling one in the first 10 days tastes a lot better than selling it on day 70. The biggest difference between selling a used car and getting a kiss is that selling a used car is based on math.

Kissing is based on kissing. Imagine that?

Here’s the problem:

Dealers often failed to recognize those units that need to be first, as in sold really fast.

Those will be your most problematic units such as ones you’ve buried yourself in, bad color, auction purchases, high dollar unit, etc. These are units that you do not have a favorable cost to market or days supply.

You have to accept the fact that you’re not going to make a as much gross on those as you might make on others. Never forget they serve a worthwhile purpose in your business model. There are benefits galore at turning and burning these units.

Because the pandemic has had a dramatic impact on the law of supply and demand, some of our older kisses have been really sweet.

Unfortunately some dealers have been hypnotized into thinking an old kiss is always going to be just is good as a fresh one. Maybe you’re a great kisser or maybe you just slobber a lot.

Do yourself a favor and take a look at a handful of your oldest units in stock. Ask yourself, “why are these units still here?”

The odds are good that whatever you come up with was there on day one and you ignored it.

This article isn’t mean to be a commercial for my software product, but if you had been using my life-cycle management and recon tool, the odds of you still staring at those units would be about slim and non.

If you want to improve gross profit and volume, you have to know which ones to hold and which ones to fold and never forget all kisses are not equal.

That’s all I’m gonna say, Tommy Gibbs.

Did You Play Sports

Peripheral Vision

I think that a large percentage of successful people played a sport or two along the way.

It’s not imperative for someone to have a sports background, but it sure does help.

Here are some reasons why you should give consideration to hiring people with a sports background:

They know how to win.

They know how to lose.

They love big moments.

They want to learn more.

They know how to compete.

They always give their best.

They understand preparation.T

hey stay focused on the basics.

They get up when knocked down.

They coach and like to be coached.

They will get down in the trenches.

They know how to run the score up.

They understand mental conditioning.

They understand physical conditioning.

They know they must maintain discipline.

They like being on the team and understand teamwork.

They have drive, determination and the will to win.

They are eager to get off the bench and into the game.

They think fast.

They react fast.

They can react on the fly.

They have great peripheral vision, thus they always know what’s going on around them.

Hire more people with a sports background, That’s all I’m gonna say,

Is It Worth It?

As is the case with most Zingers I write they are usually a result of issues I come across in my travels, or emails and phone calls from dealers and managers with specific questions.

I was contacted recently by a general manager whose dealer was putting pressure on him because the average F&I gross was falling.

Here’s the specific question as it was presented to me:

“Great article this past week and as always very true. Here’s my question. We have been selling more and more inexpensive cars (many that have over 100,000 miles) and the volume definitely has increased and our turn is much better, but that being said our backend averages have dropped.

We are selling fewer products because the cheap cars are not eligible for product. My owner is putting tremendous pressure to keep backend averages up, but due to us pushing prices down and selling these older cars our averages are falling. Basically the numbers are telling me we are doing a poor job in used car F&I. Your thoughts?”

You have to believe the dealer likes the volume that these lower price cars are bringing to the table, but he also wants the higher F&I income. I get it, I really do.

However, it’s possible the dealer is missing the big picture or he is doing what dealers sometimes do; he’s working the management team. Been there and done that and there’s nothing wrong with it unless it totally screws up the heads of the members of the management team. It may also be he’s trying to create an environment of “If you think you can, you can.”

The first thing that has to be realized is achieving high gross profit and doing volume is a contradiction. It goes against Tommy’s laws of nature.

I’m not saying it can’t be done but I will say it’s very unusual, and there has to be a very special set of circumstances for it to happen with consistency. If it’s going to happen in today’s market it’s because the dealership has amazing talent or they exist in a very unique market.

There is no question F&I is going to take a hit when selling cheaper cars. What has to be determined is, are you better off selling them, with a smaller F&I average or not selling them at all and pulling your F&I average up. Hello?

Suppose the dealer puts so much heat on the F&I averages that the GM throws in the towel on the less expensive units and goes back to retailing more expensive cars and a better F&I average. Is the dealership really better off?

Here are 10 key questions that need to be answered:

1. What about all the parts and service gross that would have been generated on the less expensive cars going through service and reconditioning?

2. What about the fact that you could have put more money in some trades because you intend to retail them vs. wholesaling them? How many more car deals do you end up making because you have a better plan?

3. Does the increase in volume from the less expensive units impact the attitude of the sales staff and their ability to earn additional income? Isn’t it true the best time to sell a car is when you just sold a car?

4. What’s the benefit of having someone driving a car, any car, high dollar, low dollar, that they purchased from you?

5. Is there a chance you just sold a car to someone who might never have set foot in your store because you had a vehicle at a price point they could afford to pay?

6. Is it possible that this new customer has a friend or relative who might one day come back and buy something because of the way this new customer was treated during the buying experience?

7. Are the odds in your favor that they may come back for an oil change or other service?

8. Does doing business generate business?

9. What’s the “Return on Investment” on selling these less expensive cars? Relative to the amount of money tied up aren’t they a far better investment than what you would make with a $25,000 car? How many times in a year can you turn over a $7,000 to $10,000 investment vs. a $25,000 investment?

10. Doesn’t it make sense, that if you can sell more cars with less money tied up that it’s a good thing? There really isn’t much of a downside to increasing volume and decreasing investment.

To keep the accountability up on F&I it might be a good idea to keep two logs; one with the more expensive cars that you hold to your normal F&I standard and another for the less expensive cars. You have to decide how that gets broken down.

Let me remind you that what’s really important is how much total gross you are generating. I always say, “You cannot spend average gross profit. You can only spend total gross profit.” That’s all I’m gonna say, Tommy Gibbs

Go Take a Walk

The car business is not as complicated as we sometimes make it.

When I first got in the business back in the early 70s, we had a sales meeting every morning. Yes, as in Monday through Saturday. Part of the meeting had a bit of rah, rah, and part of it was training, covering issues, sorting out details of what our production was relative to forecast, and so on and so on.

For the most part, daily meetings have gone out of style and daily training is gone…well, I don’t know where. At best, the management team has been assigned counseling duties to review the BDC activity. At worst management says hello to each salesperson.

From time to time the Dealer gets all wired up and implements a new program/process that demands certain things are done. At best, it’s a 90-day excursion to futility.

It’s a given that those who consistently use positive best practices are the ones who achieve the most success. One of the things that happened during those daily meetings back in the “good old days” was the used car manager would get up in the front of the room and tell everyone to get their “sheet” out of their back pocket so changes could be made. The referenced sheet was the “used car list.”

He would then say something like “draw a line through stock number 2345A. We sold that car last night.” Further saying “add to your sheet, stock number 4645A. Tommy would you stand up in the back of the room and tell everyone about the nice little car you traded in last night.”

As antiquated as that might seem to you it’s far better than most do today. If you want to sell more used cars you need to provide the team with more information about what you have in inventory. A great method of doing that is to do a lot walk once a week. Yup, just once a week, when done right, will generate some amazing results. If nothing else, I can guarantee you at least one more used car sold by each salesperson.

The lot walk (Different than a trade-walk.) is done right after the “Save-a-Deal” meeting. I just know you’re doing a “Save-a-Deal” meeting so it shouldn’t be hard for you to add the lot walk at the end of that meeting. Every salesperson and every manager go on the lot walk. New, Used, they all go on the “Lot Walk.” Make sure the service manager is included in this walk.

You should stop and talk about every used car sitting on your retail lot. The conversations that come about will amaze you. A real byproduct of the lot walk is the salespeople will start to tell you why certain cars haven’t sold. They also gain so much more knowledge about what’s on the lot. Do not leave the “Trade Line” out of the lot walk. They need to know what’s in the system and what’s about to become available.

This is a great time to inquire about what they think you need to stock. Of course, you can’t fulfill all their needs, wants and desires, but it becomes a great opportunity to educate them about the law of supply and demand and why they need to sell the value of your current inventory.

When the team is educated, they tend to educate the customer. When the customer is educated as to the value of your product you sell more cars and make more money. Education for both starts with the information shared on the “Lot Walk.”

Let’s Walk. That’s all I’m gonna say. Tommy Gibbs

A Valid Complaint?

I realize human nature is that people like to complain and want to blame someone for their inefficiencies. What do you think the number one complaint is I hear from Sales management when I’m in dealerships?

Yep, you’re right, the service department. Sometimes it’s subtle, sometimes it’s blunt, often tempered with an excuse or apology to dare complain about it.

If you review history, you know that one of the reasons dealers charged full retail from the service department to the used car department is very much the same reason why they implemented packs back in 1942. I have no idea if it was in 1942, but I thought it sounded good.

Sales managers have historically worked from cost up and it has made dealerships a lot of money over the years. Therefore, if we can add higher cost to the cost of the used car the sales manager will still generate whatever their happy place is in gross profit.

This argument isn’t as valid as it once was because we have internet pricing and more and more dealers have a “one-price,” non-negotiating mindset when it comes to used car pricing. It’s amazing what the law of supply and demand can do to our thinking.

You can think what you want, but as time has progressed, the used car department has become an easy mark for the service department.

It’s not only the amount they are charged, but also the time it takes to get the car in and out of the recon operation. Used car managers will tell you they get charged for things that they don’t need fixed, and things that need to be fixed often are not.

Almost everyone in the business today understands how crucial speed is to being successful. The lack of speed and efficiency in your service department as it relates to used vehicles is killing your ability to do volume and make the money you have the potential to make. (Shameless plug; my recon tool can help you.)

Creating speed and becoming more efficient should be your number one priority as you move into the second half of the year.

I like relating our business to sports. Today’s athletes are bigger and faster than they have ever been.

With profit margins starting to decrease, your business needs to emulate sports. You must get bigger (sell more cars) and become faster and more efficient than ever before.

In CarMax’s Annual Report from a few years ago under the section “Discovering Efficiencies” it states:

“Eliminating waste from our reconditioning processes has contributed to a year-over-year improvement in our gross profit per used vehicle sold in 12 of the last 13 quarters, while still preserving the competitiveness of our pricing. At the end of last year, we noted that our targeted efforts allowed us to achieve a cumulative reduction in average reconditioning costs of approximately $250 per vehicle, while still maintaining our high-quality standards. While actual reconditioning costs will vary based on sales mix, these sustainable savings are now embedded in our cost structure.”

Here’s the bottom line: If you can become more efficient, more streamlined, and take better control of the cost of repairs to your used cars then doesn’t it stand to reason that you will be able to sell more cars than you are currently selling?

And maybe, just maybe it all starts with a more efficient and effective appraisal at the front door. Didn’t see that coming did ‘ya? That’s all I’m gonna say, Tommy Gibbs

What Learning Stage Are You In?

I’m going to be discussing and commenting on what’s commonly known as the “Four Stages Of Learning” plus two others that I know you have never heard of because I made them up. I don’t know where the first four originated, I just know I stole them.

All six stages of learning apply regardless of the application. They can be applied in sports, business, social activities, and life in general.

All 6 stages of learning apply regardless of the application. They can be applied in sports, business, social activities, and life in general.

1. Unconscious incompetence-The individual does not understand or know how to do something and does not necessarily recognize the deficit. The individual must recognize their own incompetence, and the value of the new skill, before moving on to the next stage.

The length of time an individual spends in this stage depends on the strength of the stimulus to learn. The more time they are willing to spend learning the skill or activity the faster they move to the next stage. Example: You decide to take up golf so you go out to the driving range, whack at a few balls. 1 out of 10 you make great contact, but you have no clue what you’re doing. You know you love the feeling and you know you want some more of it so you keep returning to the driving range and/or play a few rounds of awful golf.

2. Conscious incompetence-Though the individual does not understand or know how to do something, he or she does recognize the deficit, as well as the value of a new skill in addressing the deficit. The making of mistakes can be integral to the learning process at this stage. Example: After going to the driving range for a while and playing a few rounds you begin taking lessons with a golf pro and quickly realize how little you know. You observe others either at the golf course or on video, etc. and the realization of how much there is to this game starts to sink in.

3. Conscious competence-The individual understands or knows how to do something. However, demonstrating the skill or knowledge requires concentration. It may be broken down into steps, and there is heavy conscious involvement in executing the new skill. Example: More golf lessons, more golf rounds played and you are starting to understand the integral parts of the swing. You haven’t mastered the swing yet, but you are starting to strike the ball more consistently especially when you think it through. It’s not automatic, but your skills are improving as your knowledge starts to grow. This can be the most frustrating stage of the first four. You still have to think about it. When you do your results are much better and when you don’t you want to throw your clubs in the lake.

4. Unconscious competence-The individual has had so much practice with a skill that it has become “second nature.” and can be performed easily. The individual may be able to teach it to others, depending upon how and when it was learned. Example: You’ve now repeated your golf swing enough times, played enough rounds, attempted enough different types of shots that you can break par or better and have reached a very competitive level. You no longer have to think about the elements of your swing, you just do it. The physical and mental muscle memory is locked in.

5. Competent Incompetence-is the most dangerous of the six. It’s when you have years of experience, know your stuff, and have become convinced you have nothing else to learn. Your success has convinced you that you are “the man,” (or woman) and you are done learning. Seeking more knowledge is the last thing on your mind. What got you to where you are today is what you think is going to keep you where you are and beyond.

6. Learning to be competent-this stage never stops. It’s a lifelong journey that keeps life interesting and challenging. You know that learning is a journey, not a destination. (That would be you and I.)

The most successful people at any skill, business or activity are the ones who continue to do two things:

1. They keep going back to the basics

2. They continue searching for answers even when they think they already have many of them.

What stage are you in? I’m in the “Learning To Be Competent” stage and I hope it never ends. That’s all I’m gonna say, Tommy Gibbs

The Year Is Half Over

Can you believe it? Does time fly? The year is half over.

How was your June?

How have your first six months been?

I know it’s been a crazy year, but some of you have had some really great months.

You might even be beating your chest a little bit.

Some of you have been running full speed ahead. Some of you have been dragging through the sand.

If you haven’t performed well, there may be some legitimate excuses, but maybe you just had the wrong plan in place.

Just because you had the wrong plan does not mean it’s too late to 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.

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 do nothing. Go sit in your office and stare at the wall. Enjoy your seat and pretty soon it will be over, Tommy Gibbs

Getting Noticed

I’m often asked by managers and others what it takes to be successful in business and how to move to the next level.

They will often imply that they do a good job, but feel frustrated by the lack of forward progress.

Doing a good job doesn’t ensure you of anything except you get to keep doing a good job…until someone else comes along who can do it better and then you may be looking for another job that you can do a good job at.

It takes more than doing a good job to get you noticed and to the next level.

20 Tips For Getting Noticed:

1. Come early.

2. Stay late.

3. Come to work to work.

4. Stay busy.

5. Seek information and education.

6. Understand you are owed nothing.

7. Do more than you are asked.

8. Be tenacious.

9. Steal someone’s ball and run with it.

10. Force the passion. You may not be in the perfect job or perfect place. It’s up to you to make it the perfect job at the perfect place.

11. If you do these things, someone will notice.

12. If you get noticed, you have a ladder to the top.

13. If you don’t get noticed or this isn’t the place for you, then you are developing some skills that will eventually get you noticed.

14. Do it at the next place and the next place until you get noticed.

15. Be so good that you can’t be denied.

16. Pull others up. and up you go with them.

17. Set an example for others.

18. Get up, walk around, be nice.

19. Be enthusiastic, even on your worst day.

20. Dress up to the next level. Don’t dress like the rest.

Thanks for noticing. That’s all I’m gonna say, Tommy Gibbs