You, The Fireman

Always putting out fires? Such a shame. So much time wasted. Non-productive time on those darn fires.

Think about a real fire. Most fires are started due to carelessness. The fires you fight are the same way. 

Someone is careless and thus, you get to fight the fire.

Fighting fires takes away from time that could be so much more productive. Productive building your team. Productive building your business. Productive building your bottom line. If you’re to be more productive you have to eliminate the fires.

The fires you fight are more often than not a result of someone either not knowing or not doing.

If someone doesn’t know, that’s your fault. If someone isn’t doing what they know how to do, that’s also your fault.

You’re creating your own fires. I’m thinking that’s called arson. It’s not about putting out the fires. It’s about fire prevention so that the fire alarm never goes off.

That’s not going to happen until you take responsibility for fire prevention training.

Fire prevention is about coaching and teaching your team on the “why and the how” and then setting expectations.

Anything less puts you in the fire. Enjoy the heat. That’s all I’m gonna say. Tommy Gibbs 

Wasting Time, Energy and Money

Dealers all over the country have a big push on buying cars from the public.

Many are spending thousands of dollars on advertising, marketing and software in an effort to find more and better cars at their front door. 

Some have even hired an “Equity Specialist” who has a full time presence in the service department and customer lounge in order to solicit customers with an offer of “Would you like us to appraise your car for you?”

Some dealers have even started an “exchange program” offering the customer a new or newer car for the same payment that they currently have. 

But wait, stop the presses! It’s a waste of time. Yes, it’s a waste of time if you haven’t put meaningful processes in place that are customer friendly and effective for you, your team and the customer.

Mistake #1: The tendency when someone says “Yes I’d like my car appraised” is to drop them off at the used car manager’s desk and leave. The person making contact with the customer needs to remain the contact. Though somewhat modified, there needs to be a “full routine” presentation by the contact person to each and every customer that says yes. 

Mistake #2: Most dealerships only want to buy what they know they can retail. If the program is going to be effective you have to be willing to buy anything from a stone piece of junk to a very expensive luxury car. CarMax has built the reputation that they will buy anything. Bring it to us-get a number. That should be your mantra.

Mistake #3: You try to steal it. What are you thinking? Get real. Get the unit. You will pay far more for it at the auction than you will at your own front door. Step up. Don’t be stupid. You need to own that unit.

Mistake #4: Giving verbal or handwritten appraisal quotes. Whatever you hand the customer needs to be computer generated in the most professional manner possible.(Appraisal Form) The quote should be good for a minimum of 7 days.(Voucher) The very brilliant Mike Porro of the Swope Auto Group even gives them a free CarFax report.

Mistake #5:
 Not paying the sales person or contact person based on the acquisition. If you want staff members to give the “full routine,” then you need to pay them just as if they sold a car. The full routine might actually inspire the seller to buy a car from you today or months down the road. Think about how much more efficient and cost effective it is when you can buy a car at the front door. The savings on the auction fees and transportation cost alone make it more than worthwhile for you to pay a reasonable commission.

Mistake #6: Someone hands them the appraisal and says, “Just let us know what you want to do.” The manager and the contact person need to do a complete review/presentation of the appraisal, answer questions and ask for the business.

Mistake #7: No one follows up with the customer. There should be a system in place to follow up within 24 hours, 1 week, etc. even if it means upping the ante $500 or so to acquire the car. There’s an old and very useful saying in the car business, “Follow them till they buy or die.” That saying applies to you buying their car as well.

Eliminate these 7 mistakes and you won’t be wasting your time, energy and money. That’s all I’m gonna say Tommy Gibbs

Skinned Knees

University of Alabama’s head football coach, Nick Saban, is part owner of Mercedes-Benz of Birmingham and Infiniti of Birmingham in Birmingham, AL.

I don’t know what he knows about the car business but he’s a pretty darn good football coach. At this point, he’s won four national titles at two different schools, which is unheard of.

Based on the team’s current status there’s a good chance he’s going to get a shot at a fifth one.

The company’s mantra for his dealerships is, “We will trip, fall and skin our knees trying to delight our customers.”

I’m thinking that’s the kind of mantra a great football coach would have, so there’s no surprise there. What I am surprised at is that more people in business don’t
have that same mindset.

Just think of the possibilities, if you could instill that thinking in your team. Advertising expenses would go way down. CSI scores and profits would go way up.

That’s all I’m gonna say. Tommy Gibbs

Run Turkey Run

If you’ve ever participated in my training program you know that a lot of what I focus on centers around speed.

Your inability to move fast is a killer for your used car business. Moving fast puts you in the winner’s circle. Not moving fast puts you in the loser’s circle.

The speed of your service department and detail operation has a direct impact on your ability to produce gross in the used car department. Being slow in these departments impacts how fast you get a unit into the Internet world.

The first 20 days you own a used car are critical to your success. You cannot afford to let a unit sit for 7 to 10 days. The sad part of this story is most dealers don’t know how long it takes to get a unit through the system, on the lot and online.

Your entire staff needs to be continuously educated about how fast the market can change on a used car and what it does to the bottom line.

Being fast can save a turkey’s life. Being fast will not only save your life, but improve your bottom line.

Hope you have a great Thanksgiving. That’s all I’m gonna say, Tommy Gibbs

Who Killed Osama bin Laden?

Rob O’Neill is the Navy Seal who claims credit for the killing of Osama bin Laden.

In a recent interview on Fox News he discussed some of the key points to being a member of Team Seal 6.

Turns out, whether you’re hunting down enemy insurgents or running a successful business, the same principles apply.

The message can be summarized in O’Neill’s four keys to success:

1. People skills matter-“Believe it or not, as a Navy SEAL, it’s important to get along with other people. People work harder when they believe in each other and they get along.”

Tommy Says-It’s no different in your business. If you have people in your organization that don’t have good people skills, they will drag you and the team to the bottom of the pile.

2. Prepare, but don’t over-plan-“People tend to sit in a room and do nothing and say, ‘We’re going to plan and plan and plan until we have the perfect plan.’ But they’re not doing anything. We learned that the only time the perfect plan exists is in the planning room.”

Tommy Says-In business you have to stay flexible. It’s important to have a plan but don’t get married to the plan. Everything we do has a moving target. Yes, give it time to work, but be ready to adjust and move on. Don’t look back. Keep digging.

3. Take emotion out of professional decision-making-“Your initial reaction to anything is the wrong reaction. That’s true whether you’re taking fire from a mountaintop in Afghanistan, or you’re the man or woman landing a jet on an aircraft carrier on the high seas at night, or you’re the person who makes lattes at 7 a.m. on a Monday at Starbucks and there’s a line around the corner.”

Tommy Says-Far too often we let emotions, relationships and loyalty affect our decision making process. If you do what’s best for the company, in the long run you’re doing what’s best for the people in question.

4. No matter what, never quit-A message from his SEAL training instructor applies to other life challenges: “You’re about to go to war for the first time, and the enemy is all your doubts, all your fears, and everyone back home who told you you couldn’t do this. Keep your head down. Keep moving forward. No matter what, never quit.”

Tommy Says-Don’t give up. Never, ever give up. There are people who want to see you fail. Keep pushing forward and you will drive them crazy with your grit, determination and intestinal fortitude. And, in the end you win.

That’s all I’m gonna say, Tommy Gibbs

Why You and I Should Be Working Together

One of the obvious things that happens when I work with your team is that I show them what the potential is. I get everyone excited about the used car business and the positive impact it has on new, parts and service sales.

My training is designed to train and coach your entire management team, not just your used car manager. The more people within your team that “get it,” the more your numbers will improve.

Here Are Just A Few Things I Will Teach Your Team:

1. How To Become A Student of The Game-I’ll show you how to take advantage of the information that’s available about your specific market, what it means and how knowing a few key elements will get you the competitive edge.

2. How To Press the Average Cost Per Used Car in Stock Down-As simple as this may sound it’s important to understand the reasoning and method behind the madness.

3. Attacking the Ten Most Expensive Units in Stock-I’ll show you how to do it and fully explain the impact of doing so.

4. Effective Internet Pricing-It’s probably the most misunderstood dynamic in our business today. I’ll show you how to increase your volume and gross profit with a few simple tricks of the trade.

5. Speeding Up Recon-Speed matters. It matters a lot. The service issues are very fixable. Until you fix your reconditioning issues you will never maximize your full potential. I’ll create the wake-up call that you so desperately need.

6. This ain’t no Mutual Fund-I’ll show you how to manage your used car inventory as if you were a day trader. It’s all about knowing which cars make you money and which ones don’t.

7. Track GAP-GAP stands for Give-Away-Profit. I’ll show you how to track GAP. When you start tracking GAP your grosses go up.

8. C.A.R. Meeting-Stands for Cars At Risk. I’ll show you how to track your most problematic units and make them go away.

9. Life Cycle Management-My “life cycle management” process is the most powerful innovation that’s come along in the last 25 years. It will change your world forever. It eliminates wholesale losses, improves volume and gross profit.

10. Lot Walk-It’s old school and I’ll show you how to make it work for you. Old school is a very good school.

11. Appraisal Tool-Using an appraisal tool (like vAuto) will help you create accountability and track your “Look to Book.” I’ll show you and your team why “Look to Book” makes such a big difference in your bottom line.

12. Mining Your Customer Base-You know you need to buy more units from your existing customer base. I’ll show you how to do it.

13. Under-Allowance Grid-The lost art of the car business is the utilization of the under-allowance. In today”s world of consumer information you need every competitive edge that you can get.

14. SETS & SUBSETS-You’ve heard about. You know it drives traffic. Now you get to learn how to do it. And, do it right.

15. 7 Must Have Leadership Skills-I’ll break down the 7 Leaderships Skills that are imperative for your team to understand and utilize everyday.

1. Strategy
2. Articulate Your Message
3. Be Responsive
4. Empathy
5. Introspective
6. Enthusiasm Matters
7. Discipline.

If you want to increase your business then you need to increase your personal intensity. Intensity begins with you and I working together.

What Could Be The Reason For Low Grosses?

1. Could it be that the consumer is using the Internet for the majority of their purchases and therefore is pushing you into a pricing war you would rather not be in?

2. Could it be that you are not managing your pricing correctly? Are you coming out of the gate based on a bucket concept and pricing everything at X amount under market? Are you failing to shoot the moon on a few select units for x number of days before you drop your pants?

3. Could it be that because you wait so long in the life cycle to reduce your pricing that when you get to about 50 days you have to give all the gross away rather than giving a little away over a period of time?

4. Could it be the inventory you have is not the inventory that people are willing to pay the price for? If there are 300 Nissan Altimas in the market and you stock lots of Altimas, do you really think you’re gonna make any money when the market is over saturated?

5. Could it be the stuff you are buying is like an impossible dream? Are you buying 2014s with 25,000 to 35,000 miles on them? Really? The only way you’re gonna sell them is to give them away, eroding more average gross profit.

6. Could it be that you and/or your team really don’t understand “Life Cycle Management” and the powerful impact it has on gross and volume?

7. Could it be that the team doesn’t get “Return on Investment” and what it does to the bottom line?

8. Could it be you are not tracking “GAP” which stands for “Give Away Profit?” GAP is the difference between the Internet asking price and the transaction price? Improving your GAP improves your grosses.

9. Could it be the sales team isn’t selling the value of your product and your store?

10. Could it be your used cars spend the best days of their shelf life tied up in service and recon?

11. Could it be your photos and pricing on Auto Trader and your website are just not with the times?

12. Could it be you’re missing some good grosses because you let a lot of nice trades get away from you? It’s either (A) your managers won’t step up or (B) they wholesale them because they feel the service department is ripping them off?

13. Could it be you have aged units and when you dump them they kill your overall gross?

14. Could it be you need to get your mind in a place to think about what it could really be?

That’s all I’m gonna say,Tommy Gibbs

Under-Allowance Or Not?

It’s a fact that more and more dealers are moving away from negotiating toward one price selling, whether they want to or not.

The stress of posting prices on the Internet for both new and used is putting pressure on the sales team to stand firm on the price once the customer shows up.

No doubt the best business model is to sell your car for your asking price and you give the customer wholesale value for their trade-in.

For those who aren’t quite there yet, I’d like to suggest that you consider serving up an under-allowance on every trade. I didn’t say to do it just with those customers who look drunk or stupid. I said with every trade.

I’ve often referred to this technique as “taking the customer’s temperature.”

If you do so, one of three things will happen:

1. They say yes and you make some extra gross.
2. The customer will quickly adjust their thinking as to the value of their vehicle.
3. You just put yourself in a much better bargaining position.

There are a few customers you might have to peel off the ceiling. That’s ok. That’s why you’re paid the big bucks.

As long as you’re going to negotiate, you may as well put yourself in the best position to win the game. It’s a shame we have to play the game this way.

I predict that one day we will look back and ask, “Why didn’t we change sooner?” That’s all I’m gonna say,Tommy Gibbs

Driving or Riding?

If you’ve ever ridden a bus, it’s likely you stood at a bus stop waiting and looking for the bus. Even if you’ve never ridden a bus for sure you have observed others waiting for a bus.

Have you noticed how those standing at the bus stop are always looking for the bus?

For most people it’s human nature to look for the bus. The bus is more than likely going to show up, and when it does there are some things to keep in mind:

1. The bus might be running late.
2. The bus might be full.
3. The seat choices once you get on the bus might not be very good.
4. You could end up sitting beside someone you don’t know or don’t like.
5. Most buses don’t have seat belts so if it has an accident you might get hurt.
6. The bus is going to make a lot of inconvenient stops along the way.
7. If traffic is heavy the bus will not take an alternate route.
8. Riding a bus can be a very rough ride.
9. You have very little control when you’re waiting and/or riding ‘da bus.

The bottom line is waiting for a bus has lots of flaws. When it comes to your business are you waiting for the bus or are you driving your own bus?

Driving your own bus means making something happen rather than waiting for something to happen.

Far too often I observe dealers and managers sitting back and waiting to see if someone else is going to come up with the next great thing so they can board the bus and ride along.

If you happen to be the Dealer or GM I cannot imagine how you can be in the automobile business today and not be in a 20 group. How are you going to get the latest greatest ideas by sitting inside a parked bus in your driveway?

Having your own bus is one thing; going somewhere in it is another.

It doesn’t matter if you’re the Dealer, GM, Used Car Manager, Salesperson or in some other type of business; what you have to ask yourself is are you driving the bus or are you letting someone else do the driving?

As long as someone else is doing the driving the scenery is going to be very limited and your success even more so. That’s all I’m gonna say, Tommy Gibbs

Perception

Being a leader is often a challenge because of the workplace environment we find ourselves in.

Being a leader is like being a parent. For example, if one parent stays at home, it can be more difficult to discipline the children due to being around them all the time.

Most of my readers are in the automobile business and are often around the same people for 12 plus hours a day.

Most dealerships have systems and processes in place designed to create focus and discipline. Even under the best of circumstances processes are constantly breaking down which contributes to poor performance and a poor bottom line.

The reality is that it’s much easier to run a large dealership than a small one. As a leader in a large dealership, you can delegate much more and separate yourself from some of the personalities that can cause the breakdown of discipline.

Do not take that to mean that you don’t need to be involved, friendly or whatever. It just means you have to separate yourself from the emotional side of the equation.

If you are in a smaller dealership the task of separating yourself from the staff is even more daunting. I’m often amazed that leaders feel that they can socialize with staff members and still be able to properly manage and lead them.

How can you:

1. Have lunch with the same people all the time?
2. Have dinner with spouses and members of your team on a regular basis?
3. Have after work drinks with staff members?
4. Party with staff members?
5. Attend sporting events with staff members?
6. Play golf on weekends with staff members?

Any of these in and of themselves is not a bad thing. But, to do any of this with the same person on a consistent basis does nothing but create problems for you and them.

Aside from the fact it makes it difficult for you to manage them (let alone fire them) it creates a perception of favoritism that will destroy morale and team spirit.

Never forget, perception is reality. If you perceive that I’m a jerk, then I’m a jerk. The only way for that to change is for me to work toward changing your perception of me.

The burden is on me, not you. That’s all I’m gonna say, Tommy Gibbs