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,

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

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

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

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

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

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

A wise man was once said the key to his success was “I’ve made lots of mistakes.”

And therein lies one of the keys to you becoming an even better leader. Allow yourself, and especially those around you, the latitude to make some mistakes.

The key is to learn from the mistakes. As a dealer for over 20 years, I know I made a lot of mistakes and I’m sure I made some of the same ones twice. But I’d like to think I learned something from each mistake.

Far too often when dealing with team members, leaders don’t use mistakes as a teaching moment, but as a criticism moment. It’s imperative that we learn from our mistakes and that we don’t continue to make the same ones over and over again.

As it relates to used car management why would you allow the same buyer to continue to go to the same auction sites, buy cars and 60 days later you take them back and lose money on them?

To be real, it may or may not be 100% the buyer’s fault. It may be that there’s no strategy to deal with vehicles that have a high market day’s supply and a high cost to market. In either case, there’s a consistent mistake being made that you as a leader are allowing to happen. Shame on you.

The key is to give your team enough rope to make some mistakes, but not so much that they choke themselves and your business in the process.

When people are allowed to make some mistakes, your organization becomes more innovative. Without innovation, your organization becomes stymied.

It’s very difficult to be a great mentor when you micro-manage every decision that’s made.

When you micro-manage you end up with micro-growth. Team members like working in an environment where they feel like they are allowed to grow. When they grow, you grow.

You’re making a big mistake if you don’t manage your mistakes. That’s all I’m gonna say, Tommy Gibbs

If you’re in a leadership position or hope to be so one day and you don’t have a sense of humor then I’d say you are out of luck.

I realize there are people in top leadership positions who don’t have a sense of humor, but I have to believe by and large they are totally miserable people and not nearly as successful as they, and their organizations, could be.

I believe part of a leader’s responsibility is to create a workplace that’s well disciplined, functional, effective and a fun place to work. Just because you display a sense of humor doesn’t mean you’re not serious about your work or have lost your discipline.

It means at any given moment you know how to inject humor to lighten up the joint.

Working in a place of business without a sense of humor is like working in a room with the lights off. Humor turns the lights on and adds an unmeasurable element to the organization.

Back when I was running my dealerships, I personally conducted cultural training to make sure every team player knew the mission and what was expected of them. I was quick to point out to our new hires, as well as existing staff, that if they didn’t have a sense of humor then it was the wrong place for them to be working.

I stated to them, “If you can’t laugh at yourself, then you’re going be miserable here. So, it might be best if you make some plans to meet some new people at your next workplace.”

So go ahead, laugh at yourself. It’s ok, it really is and those around you will be better off for it and so will you. That’s all I’m gonna say. Tommy Gibbs