As most of us know, constipation can be a terrible thing. When you are constipated it’s virtually impossible to be as productive as you might otherwise be.

Exercise, drinking lots of water and in some really bad cases taking a strong laxative can often relieve the problem and get you back on your “A Game.”

Having 60-day-old plus units in stock is a lot like being constipated. You can never perform your best when you’re all stopped up.

60-day-old units will make you sluggish and hold back your potential to be as productive as you might be. Your “A game” will never show up when you have used car constipation. Think of it as Poop in the chute.

Dealers will often give their used car inventory a laxative, flush the system and start over. It’s a costly approach that’s never the best way to go.

The problem is that even when they “blow it all out” it doesn’t do that much good in the big picture because they don’t change their diet or exercise, so the inventory continues to be constipated and therefore hold them back from achieving their maximum potential.

A good diet for the used car department would be to have good solid processes. A good exercise program for the used car department would be to understand the role that speed plays toward good health.

Good diet and exercise can help you avoid used car constipation.

Constipation makes you stinky. You don’t want to be stinky. Having aged units makes you stinky. You don’t want to be stinky.

It’s not a matter of fixing a one-time constipation issue.

It’s a matter of the right diet and exercise to live a happier and fuller life. If you give a hoot you’ll clean up your poop. That’s all I’m gonna say, Tommy Gibbs

If you ask someone who’s truly successful what they’re most proud of, the answer usually isn’t what you’d expect.

It isn’t…

• The money they’ve made.
• The homes they’ve owned.
• The vacations they’ve taken.
• The businesses they’ve built.
• The awards on the wall.
• The plaques, trophies, or public recognition.
• The rankings or headlines that celebrated their success.

Those things are nice. But they don’t last.

Ask them what really matters, and you’ll hear a different answer.

The greatest satisfaction comes from helping other people become successful.

The best leaders understand something many people never do…

The greatest investment you’ll ever make isn’t in a building, a stock portfolio, or the latest technology.

It’s in people.

Every day you have an opportunity to invest in someone else’s future. You can teach. Coach. Encourage. Challenge. Listen. Believe in them before they believe in themselves.

Leadership isn’t about your title. It’s about your influence.

When people feel they’re growing, they become more engaged. When they’re encouraged, they become more confident. When they’re challenged, they become better. And when people become better, everyone wins.

Here’s the hard part…

Sometimes you’ll invest in someone so well that they leave for a bigger opportunity. That’s not a failure. That’s a compliment.

Shake their hand. Wish them well. Be proud that you played a small part in their journey.

At the end of your career, people won’t remember every deal you made or every award you won.

They’ll remember how you made them better.

So here’s my question…

Who are you investing in today?

— Tommy Gibbs

Every time I speak at a dealership, someone eventually asks me about packs.

“Tommy, are you against them?”

No.

I’m not against packs.

If they’re helping your dealership make more money, keep using them.

The question isn’t whether you have a pack.

The question is whether your pack is helping you compete—or making it harder.

Here’s why.

In today’s used car business, your greatest competitive advantage isn’t negotiation. It isn’t advertising. It isn’t even inventory.

It’s your cost basis.

The lower your investment in every vehicle, the more options you have. Haven’t we always said, you make money when you buy a car?

You can price more aggressively.

You can turn inventory faster.

You can age fewer cars.

You can make more money over the course of a year.

Every dollar you add to a vehicle after you own it—whether it’s reconditioning, internal markups, or packs—raises the hurdle that vehicle has to overcome before it becomes profitable.

Years ago, packs made more sense.

Sales managers controlled gross profit. Deals were worked from cost up. Customers expected long negotiations, and skilled desk managers could often recover those added costs during the negotiation process.

That world has changed.

Today’s customer has already shopped your competitors online before they ever arrive.

Pricing is more transparent than ever.

Many dealerships—even if they don’t advertise themselves as one-price stores—are negotiating less, pricing more competitively, and saying “no” to unreasonable discounts.

When that’s your strategy, every unnecessary dollar added to a vehicle becomes harder to recover.

Here’s something else to think about.

Packs don’t just affect the numbers.

They affect people.

Salespeople become frustrated when they sell a vehicle and discover there’s less gross than they expected.

Managers spend time trying to explain why the deal “doesn’t pay.”

Instead of everyone pulling in the same direction, the pack can unintentionally create friction between ownership, management, and the sales team.

Now, am I saying every dealership should eliminate packs?

Absolutely not.

I’m saying every dealer should ask these simple questions:

Do packs create a psychological disadvantage when your managers appraise or buy a car?

Do the CarMax and Carvana buyers worry about such adds-ons?

Could you win more buys, capture more trades if your managers weren’t worried about the added cost of packs?

Only you know the answer to those questions. That’s all I’m gonna say

— Tommy Gibbs

Here comes that time of year again.

The leaves start to change. Football is back. The holidays are around the corner.

And somewhere around December 31st, a dealer walks out onto the used car lot, looks around, and says:

“Oh shit. What have I done?”

The problem usually didn’t start in December.

It started months earlier.

Your Sales Have Peaks and Valleys. Your Inventory Should Too.

One of the biggest mistakes dealers make is managing their used car inventory as if every month of the year is the same.

It’s not.

April, May, and June may be terrific months for your dealership. You may be selling 100, 150, or 200 used cars a month. Business is good, cars are turning, and the natural tendency is to stock inventory based on that sales pace.

Then September, October, November, December, and January come along.

The sales pace changes.

But too often, the inventory level doesn’t.

That’s when trouble starts.

I’m not suggesting that you lower your expectations. I’m not suggesting that you accept selling fewer cars. And I’m certainly not suggesting that you stop trying to grow your business.

I’m suggesting something much simpler:

Pay attention to the calendar.

Look Back Before You Look Forward

Pull your used car sales for each month for the last several years.

Lay them out month by month.

Then look for the trends.

You may discover that, while your business is growing from year to year, there are still predictable peaks and valleys in your sales volume.

Maybe you sold:

• 120 units in May
• 130 in June
• 110 in July
• 110 in August
• 95 in September
• 85 in October
• 80 in November

The exact numbers don’t matter.

The trend does.

If your sales historically begin to slow during the fall, but you’re still stocking inventory based on your May and June sales pace, you are creating a problem that’s gonna show up in December or January.

Don’t wait until you’re standing on the lot on December 31st looking at 30 or 40 more cars than you should have and asking:

“Oh shit. What have I done?”

Want to avoid huge write-downs at the end of the year? Pay attention. That’s all I’m gonna say, Tommy Gibbs

Every leader has things they need to pay close attention to.

Things that, if ignored, can slowly damage the business, the team, and the culture you’ve worked hard to build.

So the question is:

What are you protecting?

1. Don’t Fall Victim to the Peter Principle

Don’t promote people simply because they’ve done a great job in their current position.

Promote them because they have the ability to succeed in the next position.

A great salesperson doesn’t automatically make a great sales manager. A great manager doesn’t automatically make a great leader.

Too many people are promoted until they reach a position they are no longer capable of handling.

Promote for where they’re going—not just for where they’ve been.

2. Protect the Process

The team with the best—and most consistently followed—processes will win more often than the team that simply has the most talented people.

Good processes remove guesswork.

Great teams don’t just have a process manual sitting on a shelf somewhere. They follow the process. Every day.

Consistency beats occasional brilliance.

3. Protect the Team

It really is about the team.

You need people who are willing to play together, support one another, and work toward the same goal.

A talented person who refuses to be a team player can cost you more than they contribute.

If someone isn’t on the team, you can’t afford to keep them on the team.

They will eventually destroy morale, productivity, or both.

4. Never Lose Sight of the Customer

When you take care of your customers, you build your business.

But there’s something else happening at the same time:

Your team is watching you.

They are learning how you handle complaints, problems, difficult situations, and unhappy customers.

They will usually follow your lead.

Set the standard.

5. Hold Your Vendors to the Same Standard

Don’t demand excellence from your employees while accepting mediocrity from the people and companies you do business with.

Your vendors affect your customers, your employees, and ultimately your reputation.

Saving a few dollars isn’t always a bargain if it costs you quality, time, or customer satisfaction.

Cheap can become expensive in a hurry.

6. Defend Your Culture

Your culture is too important to leave unprotected.

You cannot continually bring people into the organization who don’t share the mindset, values, and standards that made your culture successful in the first place.

One bad hire may not destroy your culture.

But enough of them will.

And one day you’ll wake up and wonder:

What happened around here?

7. Don’t Let Legacy Thinking Hold You Back

“That’s the way we’ve always done it.”

Those may be the six most dangerous words in business.

Just because something worked yesterday doesn’t mean it’s the best way to do it today.

Learn from the past.

But don’t live there.

Stop looking backward for all the answers. Look forward.

8. Learn From Mistakes—But Don’t Keep Repeating Them

Mistakes are part of growth.

We all make them.

The problem isn’t making a mistake.

The problem is making the same mistake over and over again and calling it experience.

Learn the lesson.

Make the adjustment.

Move on.

A mistake repeated is no longer just a mistake. It’s a choice.

9. Never Stop Training

You cannot train too much.

People sometimes complain about “redundant training.”

Really?

Training doesn’t become redundant until everybody gets it right every time.

And last time I checked…

The team isn’t perfect.

Practice, repetition, coaching, and reinforcement are what create consistency.

10. Protect Your Passion

Don’t let negative people steal your passion.

Don’t let setbacks drain it.

And don’t be afraid to show it.

Passion is contagious.

So is a lack of it.

Your team will take their cues from you.

If you want them to care, they’d better see that you care.

Guard your passion.

Protect it.

Feed it.

Because when the leader loses their fire, it usually doesn’t take long before everyone else does too.

So…

What are you protecting? That’s all I’m gonna ask. Tommy Gibbs

There’s just no disputing that the first of anything is usually the best.

Take coffee.

I look forward to that first taste every morning. For some reason, that first sip tastes better than the second, the third… and certainly better than that sad, cold cup you find sitting on your desk two hours later.

Most things work that way.

The first kiss from your wife, husband, girlfriend or boyfriend was probably a lot better than the one you got last Tuesday.

The first lick of an ice cream cone beats the last one.

I call it The Law of Stuff Tastes Better at First.

Yes, I made that up.

But it applies to used cars, too.

Selling a used car in the first 10 days tastes a whole lot better than selling it on Day 50.

And here’s the big difference between selling a used car and getting a kiss:

Selling a used car is based on math.

Kissing is based on kissing.

Imagine that.

We fail to identify the cars that need to be first.

Some cars need to be sold quickly.

Maybe you buried yourself in the trade.

Maybe it’s the wrong color.

Maybe you bought it at the auction because you thought you were smarter than the market.

Maybe it’s a high-dollar unit with limited demand.

Whatever the reason, these are the cars where your cost-to-market and days supply are working against you.

You have to recognize them early.

And you have to accept the fact that you probably aren’t going to make a ton of gross on them.

That’s okay.

They still serve a very worthwhile purpose in your business model.

Turn them. Get your money back. Put the money into something better. Move on.

There are benefits galore to turning and burning the RIGHT cars.

Because when it comes to used cars…

All kisses are not equal.

That’s all I’m gonna say, Tommy Gibbs

Everyone talks about providing “great customer service.”

Very few people surprise their customers.

And that’s the difference.

One of the simplest ways I’ve found to exceed expectations has nothing to do with grand gestures. It costs nothing. It doesn’t require a committee meeting. It doesn’t involve a new CRM or another training program.

It simply involves doing more than you promised.

Suppose someone calls with a question.

Instead of saying, “I’ll call you right back,” I might say, “I’ll get back to you by the end of the day tomorrow.”

Then I call them back within an hour. In some cases I knew the answer when they first called.

What just happened?

I didn’t merely answer a question. I exceeded their expectations.

People remember that.

Today, too many businesses do the opposite.

“We’ll call you right back.”

“We’ll have it ready this afternoon.”

“I’ll email that over in five minutes.”

Then nothing happens.

Customers don’t expect perfection.

They expect people to keep their word.

When you consistently deliver sooner, faster, or better than expected, you begin building something that’s hard for competitors to duplicate.

Trust.

Give people one more reason to say, “Wow.”

People rarely remember average service.

They always remember being pleasantly surprised.

Exceeding expectations isn’t about spending more money.

It’s about paying more attention.

And in today’s world, where so many businesses simply fail to do what they promised, consistently exceeding expectations may be the greatest competitive advantage you have. That’s all I’m gonna say, Tommy Gibbs

Dealers love to talk about the value of a customer, which starts with the first vehicle we sell them and continues through repeat purchases, service business, and referrals.

But we rarely consider the total value of the trade that first transaction creates and the journey that trade takes through our dealership.

Years ago, dealers used something called a “wash-out sheet.” Some of you know exactly what I’m talking about, and the rest of you probably think it had something to do with the detail department.

Here’s how it worked. You sold a new car and took in a trade. You sold that trade and took in another trade. You sold that one and took in another. Eventually, the last vehicle was sold without a trade, and the entire chain of transactions was finally “washed out.”

Only then did the dealer calculate the total gross generated from the original sale and every transaction that followed.

Today, dealers have more technology and data than ever before, yet most still can’t answer a simple question: How much total profit did this vehicle create for the dealership?

Your first reaction may be, “We already track that.” No, you don’t. You track pieces of it. You know the front-end gross, F&I gross, Parts and Service gross from reconditioning, packs, and doc fees. But when the vehicle is sold and creates another trade, you stop connecting the dots.

I call it the Trade Tree. One vehicle creates a trade. That trade creates another sale and possibly another trade. The process continues until the final transaction ends the chain.

A deal that appears average might ultimately create thousands of dollars in additional gross profit, but because you aren’t tracking the entire Trade Tree, you simply don’t know. And part of that is tracking all the parts and service gross that’s a result of that very first transaction.

With today’s technology, dealers should be able to track the total gross generated by every vehicle from the first sale to the last transaction it creates. Stop looking at every transaction as an isolated event and start measuring the total profit created by the Trade Tree.

The old wash-out sheet may be a little like suits and ties. Keep them around long enough, and eventually they come back in style.

What’s the value of a customer?

How much gross does one trade create?

That’s all I’m gonna ask.

Tommy Gibbs

Let’s get something straight.

A used car is not a spreadsheet.

It’s not a formula.

It’s not a clean data set.

And it sure as hell isn’t the same as the one parked next to it.

Every used car is one of a kind.

Same year. Same make. Same model. Same mileage.

And still… completely different cars.

Why?

Because cars live different lives.

One was owned by a neat freak who serviced it like clockwork.

Another was driven hard, skipped oil changes, and cleaned only when it rained.

And yet…

we’ve got dealers appraising them as if they are all the same.

The Software Trap

I’m in the software business.

I believe in it. I use it. I sell it.

Good software is powerful. It gives you data, speed, and consistency.

But here’s the problem…

Too many dealers have turned software into a crutch instead of a tool.

They plug in the VIN.

They look at the number.

And they stop thinking.

You Can’t Download Experience

No software can:

•        Feel how a transmission shifts

•        See the difference between “clean” and “exceptional”

•        Smell smoke, pets, or neglect

•        Recognize pride of ownership

That only comes from you. You’re more important than you might think.

Your experience.

Your judgment.

Your time in the trenches.

You’re the one standing in front of the car.

You’re the one who decides:

“Is this rough, average… or is this special?”

Common Sense Still Wins

Bottom Line

Software is a tool.

You are the advantage.

If you rely on the tool and ignore your instincts—you’ll underperform.

If you combine both?

Now you’re dangerous.

Every used car tells a story and only you can read the story. That’s all I’m gonna say. Tommy Gibbs