Do Need a Chaser

Many dealers struggle with reconditioning, either that it takes too long to get a car done and through the system or they are paying too much to get it done. Often they complain about both.

I’ve said it before and I’ll say it again, most of these problems can be fixed if the dealer really wants to fix them.

The dealer has the power to fix anything they want to fix. A simple step to improve the situation is to hire a “Chaser.”

A “Chaser” will gain you a few days in recon and reduce your recon expense by a couple hundred dollars per car. Maybe even more on both ends.

A “Chaser” is someone who does just that. They chase the used cars through the system. This is not a high paid position; somewhere in the $3000 range per month. It’s a person who has solid mechanical knowledge, good people skills, attention to detail and the ability to communicate with the sales department and the service department.

Think of them as being in an assistant manager category. It is not the same as having a dedicated service advisor or used car technician.

The “Chaser” has a single-minded focus with no other agenda. They will never let a car sit for even one day while it waits to go from service to clean up. If clean-up is backed up they will start kicking and screaming to find a solution, whereas the service adviser is thinking “next” in terms of his/her own next repair order opportunity to make some money.

The “Chaser” is an employee of the sales department but spends most of their time in service. They need to have a certain amount of approval authority so they can speed things up for you.

I often hear dealers say they already have that, as they give the service department the latitude of spending X dollars per car without having to get approval.

Whatever that threshold is that you’ve given them it’s a
safe bet that you’re going to have a lot of cars bumping that number.

It’s a bit like telling your salespeople that you are only going to accept deals with a $1000 gross profit. You’re going to get a lot of $1000 deals. People take the route of least resistance. You won’t see too many $500 deals and you’re not going see too many $2000 deals.

The “Chaser” needs to have enough mechanical knowledge to know when to hold them and when to fold them. They won’t let the wool get pulled over your eyes.

They are there, in part, to protect and assist the used car department with the ultimate goal of speeding things up. They work for the used car department not the service department.

The “Chaser” is going to gain you some days in recon by doing…well, just that. They are chasing the cars through service. They chase the cars and they push the cars through each station. If things get backed up, they are looking for a solution on how to make it happen.

Many dealerships rely on the used car manager, service writer or, in some cases, the service manager to handle these duties.

And, for the most part they don’t have the time, expertise or focus to make it happen.

You may be sitting there reading this thinking, geez, I don’t want to have to hire any more people. I get that, I understand that. I have a question for you.

How much do you have to save per car in recon or gain in days through recon for the “Chaser” to more than pay for themselves? That’s all I’m gonna ask, Tommy Gibbs

A Shifting Market

Within the last week or so you have probably seen a rise in used car wholesale prices. Now think about that.

Just 30 days ago the bottom had fallen out and people were talking about dumping inventory and going out and replacing them at lower numbers.

I’m not saying that was wrong. I’m just saying it proves once again, you have to stay on top of what’s going on and be nimble and quick to move at the right time.

As a sidebar, when you have aged inventory you are anything but nimble and quick.

What’s really going on? This business is very simple and it’s easy to understand.

Depending on the state you’re in and if you’ve been able to sell cars or not, you’re running low on new car inventory because the factories have been shut down. Nothing you didn’t already know.

Thus, dealers are trying to supplement their sales by getting into the “Program Car Business.” Call it what you want, but by and large, that means rental cars.

This is going to be interesting to watch. It was just 30 days or so ago that the rental car companies were starting to sell off inventory because they had a ton of units sitting.

Florida is leading the country in the turnaround and as that continues and Disney and others open back up, the demand for rental cars is likely to go up. In other words, they are going to hold inventory, not sell inventory. Less cars. More buyers. Higher prices.

And now to compound the issue Hertz is filing for bankruptcy. There will be some impact for sure, but nobody can predict what or for how long.

And, as other states allow their dealers to get back into the retail business, they too are going to run short of new and used inventories. Pent up demand will come into play.

Everything about our business is about supply and demand, which is all the more reason you need to pay attention, day by day, minute by minute. Having aged inventory means you will never control your destiny.

You can expect one of several things to happen:

1. The market continues with a little kick on the high side for 30 to 60 days.

2. The market finds its “watermark” and settles down quickly.

3. You’re going to overpay for some period of time. When you overpay, all the more reason to understand you still have to turn your inventory.

4. The virus has a surge and the market goes backward until things settle back down.

For the third time in this article; You cannot let your inventory age on you.

The market is always shifting. You cannot shift with it when you have aged inventory.

It has always been and will always be the Achilles heel of the automobile business.

You need to be ready to shift. That’s all I’m gonna say, Tommy Gibbs

You Can Do It Safely

I realize this may not be a fit for some of you. And yes, there are some who believe this is old school, old fashioned and outdated.

But, there are some who can make this work. And if it helps someone sell a few more units, I can handle a little criticism.
Memorial Day is just around the corner.

Consider Having An Onsite and Online Tent Sale:

1. Put the tent up as close to the road as possible. Pick the best strategic position on your lot.
2. Put tables and chairs at least 6′ apart in the tent & use plastic or plexiglass partitions to separate people.
3. Put ALL of your people in the tent.
4. Work all deals in the TENT!
5. Hang banners from the TENT saying “TENT SALE.”
6. Hang banners that say Social Distancing in Play.
7. Banners that say, Get Tent Sale Prices Online.
8. Offer free masks.
9. Make sure everyone is wearing a mask.
10. Lots and lots of spiffs for your salespeople and managers.
11. Send out memos and emails to all employees explaining in detail what’s going to be happening.
12. Rope off special parking for customers. Hire an off duty police officer or security guard to direct them.
13. Answer the phone XYZ Dealership Tent Sale in Progress.
14. Do a fundraiser at the same time for the local little league, homeless shelter, or whatever.
15. Post the event on your website.
16. Do an email blast to all your customers advising them of the sale. If your CRM system is sophisticated enough make sure you tell them you need their specific trade and will pay top dollar for it during the sale.
17. Giveaways generally don’t do much except cause people to show up to get their gift and leave, but having people register for a free car is a good way to get info on them when they show up. Pick out a $1000 or $2000 car and give it away.
18. Along that same line, give the salesman who registers the winning ticket some sort of prize. Gift card, $200, whatever floats your boat.
19. Make up a bunch of signs like real estate signs that say “Tent Sale in Progress” and “Social Distancing in Play.” Put along the grass in front of the dealership.

It’s not complicated and it’s not expensive. You just have to be creative. People need to know you’re back in business.

That’s all I’m gonna say, Tommy Gibbs

Should You Have Absolutes?

Absolutes are a powerful tool for creating a disciplined organization.

The downside of absolutes is it chokes off the potential to have an acceptable exception.

Exceptions break the rule of discipline. Exceptions soon become the norm.

When exceptions become the norm, chaos breaks out. The type of chaos I’m referencing isn’t actually like a bomb going off. This chaos is slow and gradual, often not recognized, and then – whamo – there it is, its ugly face screaming at you, “What the heck happened?”

Now here’s the real deal for those of you looking to become better leaders. You can have absolutes and exceptions in the same house.

They can actually hang out with each other once in a blue moon.

True leaders can use them both and chaos will never show its ugly face. Granting an exception and going back to absolutes is very doable.

The problem with leadership is that very few leaders have the skill to make effective use of them both.

Most people in leadership positions are stuck with one or the other.

At any given moment one is just as bad as the other. That’s all I’m gonna say. Tommy Gibbs

A Challenge For You

When I first got into the car business, 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/GM 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 and the ones that are less likely to have aging inventory problems.

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.” The used car manager 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 (Not to be confused with a trade-walk) once a week. At least once a week, when done right, the lot walk will generate some pretty amazing results.

The lot 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 goes 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 each and every car on the 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 Time To Lead

I’ve spent most of my life observing and studying leadership skills. It started with my first little league coach, my college coaches, my experience as an athlete and as an NCAA college basketball referee.

Then into the business world, observing some of the best and some of the worst. Reading, studying, and attending workshops have all been a part of my journey on why leadership is stinky and the reverse, why it excels.

1. They aren’t flexible. You can tie this thought to any sport you want. The best teams are lead by people who make the right adjustments at the right time. Leaders are like boxers. They are bobbing and weaving. Far too often leaders get locked into whatever and their whatever drives the team nuts.

2. They don’t pay attention. What a simple concept. Real leaders have their eyes and ears open 24/7. They don’t lock themselves in their office and issue orders. They walk around. They talk. They listen.

3. They think they know it all. Nobody knows it all. You don’t, I don’t. Even CNN & Fox don’t. Leaders know what they don’t know.

4. They want you to rely on them to tell you everything
to do. That’s not what real leaders do. Leaders say, “I trust your good judgment, you decide.” When you stumble, they coach you up, not put you down.

5. They walk like a turtle. Show me a slow walker and I’ll show you, someone, nobody wants to follow. Get some pep in your step and get your butt in gear.

6. They are a stick in the mud. What a miserable life if you can’t laugh at yourself. If you don’t have a sense of humor you need to get a sense of humor.

7. They are arrogant and egotistical. There’s a big difference in being confident and being a jerk. Don’t be a jerk.

8. They aren’t likable. Ties into being a jerk. If you’re not likable the odds of being a great leader are about slim and none.

9. They hide the details. Leaders want to give you more than you need to know. They know that the more you know, the faster you learn. The faster you learn, the faster you buy-in. The faster you buy in, the faster the team grows.

10. They put the wrong people in the wrong seats on the bus. Leaders know that just because you have skill A doesn’t mean it’s a fit for seat B. Getting the right people in the right seats is critical for success.

11. They have lapses in integrity. You either have integrity or you don’t. It’s not a part-time thing to be used when you see fit. Leaders have integrity 24/7/365.

12. They say stupid things. Leaders use common sense before they open their mouths. The problem in today’s world is common sense isn’t so common.

13. They run around like a nut. Leaders know when to be calm and when to get excited. Too much of either makes people suspicious of you.

14. They have boss tattooed on their chest. Leaders aren’t the least bit concerned about tattoos or titles.

15. They say, “Look at me, look what I did.” Leaders say you guys did an awesome job. Way to go. I’m proud of you.

16. They blame others. Leaders say, “I let you down.” I need your help so I can do a better job. Let’s all work harder and smarter to do better.

17. They say do this, do that. Leaders say, “I need your help.”

18. They got promoted over their head. They know it. Everyone knows it. Not their fault. Somebody screwed up. Leaders don’t have to live with it. When all else fails, leaders hit the eject button, reset and move on.

19. They never read the bible. Leaders follow the golden rule. It simple. It’s easy. Preach it. Talk it. Walk it.

20. They don’t do what they say they are going to do. Leaders are true to their word.

21. They lack discipline. Leaders understand the pain of discipline or the pain of regret.

22. They confuse friendship and loyalty. Leaders are loyal, but they are smart enough to know when their loyalty to certain individuals is hurting the team. Leaders make hard decisions. You can be loyal without being stupid. Don’t be stupid.

23. They don’t own a mirror. Leaders find most of the solutions to their problems in the bathroom mirror.

24. They live in the past. Leaders say, just because we’ve always done it that way doesn’t mean we’re going to keep doing it that way.

25. They stop learning and growing. Leaders invest time and money on self and team development.

26. They resist change. Leaders knock down the walls of resistance. They know resistance is enemy #1.

27. They let people be mean to others. Leaders have a motto, “If you aren’t nice to your teammates and our customers you can’t work here.” Another simple concept for you.

28. They micro-manage. Leaders are good checkers, but they give people a job and let them do their job. They coach when necessary and stay out of the way the rest of the time. Leaders don’t “number” people to death.

29. They don’t look like a leader. I understand you want to dress casually. I do too, but I don’t. Ok, I’ll give you one day a week and that’s painful for me to say. The rest of the time you need to set the example and look the part.

30. This one’s for you. You pick. I’m sure you’ve got one that I left out.

I’ve said enough so that’s all I’m gonna say, Tommy Gibbs

Should You Write Your Inventory Down?

(Written week of April 20, 2020, in the middle of coronavirus pandemic.)

I get several calls and/or emails a day asking, “What should I do about my aging inventory now that sales have slowed so badly.”

My first piece of advice is this may not be the time to be thinking about writing your inventory down.

It is certainly a time to think about retailing everything you can at some number.

That said, there may come a point at which you need to write down a selected few units or possibly your entire inventory.

If you’ve been allowing units to exceed 60 days then you may be in big poop and have to bite the big bullet.

The first thing to understand is don’t bother writing your inventory down unless of course, you’re going to commit to some serious changes.

Often when dealers write their used car inventory down, they take a big hit, a deep breath, and say, “OK, done, let’s move forward.”

Many dealers lack the discipline to steer away from what got them there in the first place. Therefore, in six months or so, the owners are staring at the same hot mess they tried to fix and thinking here we go again.

It hurts me to say this, and I know it’s going to cause a few of you to unsubscribe from my newsletters but taking units to the auction and dumping them is just plain dumb.

If you thought enough of that 60-day old unit to bring it into your inventory as a retail piece, you should have been able to find a retail buyer for it at some number. There’s a number that every unit can be retailed at.

Therein lies the problem. You won’t retail it for what it’s actually worth, yet you’re willing to wholesale it for what it’s actually worth.

Of course, your attitude is different right now as a lot of you are being forced to retail units at less than desirable numbers. You would have been better served to have had that sort of mindset before we got to this hot mess of today.

Hey Einstein, which way do you think you have the greatest opportunity to recover from a unit that was probably a bad decision from jump-street? Insanity.

The instances where you have to dump a previously assigned retail piece in the wholesale market should be very few. If you’re in the retail automobile business, then retail your units.

Yes, the grosses on all that aged stuff are going to hurt you for a while. Dumping in the wholesale market will hurt you more. If you have a lick of discipline and stay with it, you will be fine and never, ever have another unit over 60.

My Life-Cycle management process gives you the disciplines and strategies that will keep you from saying, “More write-downs, here we go again.”

If you’re interested I have an easy to use spreadsheet that I’d be happy to send you. It helps you make the adjustments and encourages you to set a new life-cycle on each unit you write-down. Hit the reply button and it will be on its way.

One more thing to keep in mind; 30 days is now the new 60. Be mindful of your 30-day rolling sales numbers vs your current inventory numbers.

This may or may not be the time for write-downs.

If you are going to write down your inventory let me coach you through it. It costs you nothing for me to help you.

That’s all I’m gonna say, Tommy Gibbs

Let’s Do A webinar For Just Your Store or Stores

Of course, you’re trying to streamline things and become as efficient as you can be. I’m no different. So, since traveling is out of the question right now I want to offer your store a private webinar.

If you have more than one store you can include them. One of the great benefits of my training over the years is that I’ve been able to come to you. Why has my training been so effective?

When we get all the members of your management team in one room, I lay it all out on the table for them. Therefore, there’s no confusion about the direction you’re trying to go.

The sticking power is amazing when the team gets on the same page. That program takes about 4 hours, lots of travel on my part and a good size investment on yours.

Since I can’t come to you right now, I’ll do an hour and a half webinar for your store or stores.

I’m going to give you 6 key bullet points to focus on that are simple and easy to implement. They will make you instantly better.

The investment is $1500.

Now think about it; If you bring me to your dealership, you will spend that and then some on flights, hotel and meals plus what I charge for my brilliance.

By doing it virtually you can have all the members of your management team join in. The benefit of getting your entire team on the same page is worth its weight in gold.

Do the math. What’s it costing per store, per manager? It’s a no-brainer.

How is this different from a typical webinar I might promote?

When I do a regular webinar we have from 50 to 100 people on the line. It’s impossible to ask questions and address individual store’s issues.

We can set up a conference call the day before to make sure I’m on target with what your needs are.

The slots will fill up quickly. If you have the slightest bit of interest, please reach out.

That’s all I’m gonna say, Tommy Gibbs

A Perfect Time For Change?

(Written in April 2020 in the middle of the coronavirus pandemic.)

There’s never a perfect time to make changes.

That said, we should certainly do our research, do some strategic planning and pick a time and place that gives us the best chance to succeed.

Many dealers are likely going to be making tough decisions about staff and business strategies in the near term.

One of those most likely to go to the top of the list are pay plans.

Part of that evaluation is to determine if you’re incentivizing the right behaviors that are going motivate the mindset of current and potential team members moving forward.

Dealers have known for years that paying on gross has its issues but evaluating options and making changes often gets put off because of the concern of upsetting the staff and the “timing” is always wrong.

There may never be a better time than right now to make that change.

In the end, a smart Dealer/GM would be wise to seek input from the sales staff and sales management.

Buy-in of the “new plan” has a much better chance of succeeding when the team believes it’s their plan.

Maybe this is also a good time to review:

1. The selling process.

2. Used car aging policy.

3. Recon time to the front line.

4. Website (I dare you. Go look at it. Click around a little.)

5. Ability to sell a vehicle remotely. Do you have a real process in place? (Electronic Signature and delivery procedure.)

6. Staffing. The right people? The wrong people? People doing the wrong things for their skill level? “The right people on the bus, sitting in the right seats, doing the right stuff.”

7. Advertising & Marketing. Are you spending the money in the right places? Better yet, are you holding those places accountable for the numbers they are generating or not?

8. F&I process from the turn-over to F&I to contracts in transit. Is F&I a part of your online selling process?

9. Factory receivables. Are your factory receivables in shape and being followed up on? Are you getting every dime they owe you?

10. Never has there been a better time to evaluate your leadership and communication skills than right now.

Right now, more than ever before in your store’s history, your team needs to see and hear you. It can be a one-on-one session or an all-hands-on-deck meeting. It just needs to be.

There’s no perfect way for you to deliver the message. Just make sure you keep delivering.

People often feel they are left in the dark about what’s going on.

You are the light. Shine your light. You are their light and hope that we will get through this hot mess.

Go shine your light. That’s all I’m gonna say, Tommy Gibbs

ARE YOU NERVOUS?

When I was a kid growing up in Richmond VA my father had a “dirt lot” used car lot.

My father and some of his fellow used car dealer friends loved to gamble. Back in those days they would rent a hotel room in downtown Richmond and play cards all night long.

Some nights he came home with money. Some nights he came home broke.

My father’s nickname with his peers was “Nervous.” Yep, they called him nervous. He was always worried that the cops were going to raid the joint and take ’em all to jail.

We all inherit traits from our parents. I inherited the “nervous” trait from my father.

Used cars make me nervous. Some used cars make me more nervous than others. This is a time to be more nervous about some than others.

You should be identifying the ones that make you the most nervous and come up with a plan to make them go away.

A few of the ones that make me the most nervous are:

1. High dollar
2. High miles
3. Bad colors
4. Bad equipment
5. Cars we have too much money in from jump street
6. Anything 45 days old and older
7. Auction purchases
8. High cost to market
9. High day’s supply

Gambling made my dad nervous.

Used cars make me nervous.

Gambling on the wrong used cars makes me even more nervous.

What makes you nervous? That’s all I’m gonna ask, Tommy Gibbs