I was standing in the airport the other day (nothing unusual about that) and I overheard one guy say to another, “Go sell something.” And he responded by saying, “I’ll do my best.”

I have some shocking news for that guy, just as I have for you. Your best is not good enough. Never has been, never will be. 

We often hear people in business and sports speak of giving 110%. Well, it’s the same deal with 110%. 110% isn’t good enough because, trust me, someone else is giving 111%. There is always someone willing to do more than you.

The fact of the matter is you can always do more. Sure, there are all sorts of excuses as to why you don’t do more, and they are just that…excuses. If you’re a sales manager and have 10 sales people working on your team I can guarantee you that if you think back over the course of the previous month, you could have helped and pushed those sales people to get one more unit each. Maybe even two units for some of them.

If you’re the dealer or general manager I’m thinking you too could be doing more. We can all do more. I kick myself at the end of every day because I know I can do more.

Maybe you got distracted, maybe you got busy, maybe you got satisfied, maybe you got sideways about something goofy and your mind went out in left field.

The Superstar players don’t get distracted. They don’t let busy beat them. They are never satisfied, and they don’t let others get them off track when they hit a wall.

You and I both know you can do more. That’s all I’m gonna say. Tommy Gibbs.

There’s always talk about where the value of used cars is going. Are they going down, stabilizing or going up? Just this past week there were reports in Automotive News that indicated values may be on the upswing.

Let’s say for the moment there are a few models, a few markets, or a few situations where that may be true. You can skin this cat anyway you want to, but trust me on this. If they are going up, it’s temporary and if you decide that your new business model is to hold cars longer because the values see a sudden spike you’re making the worst bet of your life.

There is no sure bet. But there are some really bad bets. A bad bet is to hold on to your inventory because cars are scarce. Really, it’s a bad bet. The whole notion that you need to hold your inventory longer is as flawed as an old pair of jeans with those cool rips and tears in them.

The number one thing you should keep in mind is “buying and selling in today’s market.” You will never go wrong if you follow this discipline. “Today’s market” can be defined as a maximum of 20 to 30 days.

If today you pay too much money (or what you believe to be too much money) because the market is up, as long as you sell it while the market is up, then you will be making a solid bet.

To do anything less is a bet on “the come.” Gamblers bet on the come all the time. And they win once in a while. It’s funny how we want to remember those few wins. They are like a drug we just gotta have more of. Have you ever noticed all those gigantic, gorgeous casinos in Las Vegas? They were built with gamblers betting on the come.

They were not built by people who understand how the game is really played. Whatever the gamblers thought, it was wrong. Holding your inventory will turn out to be wrong.

Dealers who buy into a bad bet of keeping inventory often have poor processes in place, have lazy people who don’t want to scramble to find cars, and don’t understand the concept of “buying and selling into today’s market.”

A better bet than holding your inventory longer is to “shoot the moon” for gross profit for the first 20 days or so. Asking for more when the law of supply and demand is on your side is a very good bet.

As I often say, “Don’t be stupid.” Don’t think for a minute you can hold out for a $4000 gross for 45 days and then lower your price and you will be ok. You won’t.

Here’s another good bet for you. It’s now August, September is right around the corner. The fall will soon be here. Halloween, Thanksgiving and Christmas are on the way. Lower prices will follow. It’s a sure bet. That’s all I’m gonna say, Tommy Gibbs

Don’t hate me for thinking CarMax has the best model. As I often say, if I purchased another dealership today I would steal a lot of what they do. They are doing a lot of things we all know to be true and correct. Did you see this recent ARTICLE in Automotive News about CarMax?

The numbers are staggering. They outsold the number 2 seller, Auto Nation, in used cars by 227,107 units. It is not at all unusual for them to be in a market and not only are they number 1, but they outsell the 2nd place dealer by 250 units or more. It’s also not unusual for them to have the top 3 stores in any given market. (Their 2013 report came out in Feb. and they actually sold 447,728 retail units for the 2013 Fiscal year.)

According to their annual report, they have 117 stores and 4 new car operations, so they focus primarily on used sales. We all get that. Auto Nation, the number 2 seller of used cars, has 170 stores and 210 franchises, so obviously they have different models and are dealing with different issues. It’s much easier to focus on used when you don’t have to worry about generating profits from new, service, parts and body shop operations. But still the numbers are staggering.

CarMax made $460,000,000 last year. Not bad. So what do they do that you don’t do and what can you take away from their operations to make you better? Here are 10 key points that you need to be aware of:

1. They have a controlled environment. You can’t get into the inventory without going through the showroom. “Hey, who’s helping that guy in the red shirt?” You will never hear that statement in a CarMax showroom. How often does it happen at your dealership? Why is it that when you build a new facility or do a re-model you don’t set your ingress and egress up the same way? “It’s not complicated.”

2. They use a greeter-up system. Every customer gets the full routine regardless of what they are there for. If they come in to buy or sell a car they get the full routine. What happens in your store if someone comes in and wants to sell you a car? Odds are the sales person will dump the customer on a manager just as fast as they can so they can go find a real customer. You may not want to do a greeter-up system, but it’s hard to deny that your sales people will do a better job with every customer if they know they aren’t getting another one until all the other sales people have had their turn. “It’s not complicated.”

3. They will buy anything. You will only buy something you can retail. They don’t care what it is. It can be stone junk or a $100,000 sports car. They are building the reputation, “We will buy your car even if you don’t buy ours.” They want to get as many people inside their store at some point so that when they are ready to buy a car they end up at CarMax. At some of their stores, 70% of their traffic comes from people who want to sell them a car. And believe it or not some of your sales people and/or managers are sending your customers over to CarMax to get a figure on their cars. “It’s not complicated.”

4. They hire only green pea sales people. As great as you and I are, we can’t get a job at CarMax. And because they only hire green peas they never have people questioning how things are done. They do it the CarMax way because it’s the only way they know. When it comes time to promote, they have people who know the CarMax culture, the CarMax way. They don’t have to reinvent the wheel every time they promote someone or open a new store. “It’s not complicated.”

5. Their pay plans are based on volume. The sales person is interested in telling the CarMax story. The better they tell the story the more cars they sell. The more cars they sell, the more money they make. Some of the pay plans that new car dealers have almost take a rocket scientist to figure it out. We make it complicated. “It’s not complicated.”

6.They hire part time sales people. A great way to staff up and staff down depending on the time of the week, time of the month, time of the year. Besides the cost savings, they have happier people because they are not standing around during the dead time of the day. Nothing sucks the blood out of enthusiasm like idleness. “It’s not complicated.”

7. 99% of what they put on their lot they retail. Yep retail. Their concept is pretty simple. They have figured a way to ultimately find a retail buyer for their car as opposed to dumping a car when it ages out. Of course they have a timeline to meet, but they retail it, not wholesale it. “It’s not complicated.”

8. They make money on all the stuff they buy and trade that they don’t want to keep for their retail operation. (324,779 units to be exact.) They do that by holding their own internal wholesale auction each week for wholesalers and used car buyers. All that junk that they bring in that you think they paid too much for gets wholesaled to somebody vs. letting Bubba and the gang get. And they make a profit on it. There’s gold in them there hills. “It’s not complicated.”

9. They are a one-price store. Their staff does a great job of explaining one-price to the customer. Do they sell every customer? Of course not. Some people want to negotiate. But, do you sell every customer? Of course not. But the odds are pretty good that their sales staff tells the story better than yours. (Remember they only hire green peas who don’t know any different.) Because they are a one-price store their managers spend time developing people, following processes, vs. working deals. When was the last time you shopped a CarMax store? It should be at the top of your bucket list. “It’s not complicated.”

10. The pricing of their inventory is done at the upper level of management not by those who are buying and trading for the units. When you are doing the buying/trading for cars and you are also responsible for the pricing you become prejudiced in terms of what you will price at. When they price cars they are simply concerned with the law of supply and demand and have no emotional interest in the car. “It’s not complicated.”

And of course it’s not all that complicated for them because they only sell used. Don’t hate me, but they have the best model, that’s all I’m gonna say, Tommy Gibbs

My Processes Aren’t Complicated. That’s Why They Work So Well!

There are two things in the car business I’ve always found painful to deal with and that’s pay plans and advertising. Advertising is the great mystery. If you could write a book on the “Mystery of Advertising,” and actually solve it you would have a number one best seller.

And then there are pay plans. How to make them work for the company? How to make them work for the staff? Those are tough balancing acts. One of the great challenges of the day is to become more efficient. With grosses becoming more and more challenging and expenses going up and up, it becomes that much harder to achieve a strong bottom line.

As we move forward we need to rethink who we are paying and how much. There’s a disconnect when it comes to paying high achievers, the real producers, and those average and below average players enjoying the ride.

There are some we need to pay more and some we need to pay less. If the ones we pay less feel slighted and can’t handle it, then we need to let them move on. The sooner the better. They are stealing from you and your top producers because you’re paying mediocre people who are doing below average work far more than they deserve.

Ownership is often trying to solve the problem on the high end when the real problem may be in the middle and lower end. Oh, don’t get confused by that statement. There are plenty of over achieving under paid people throughout an organization regardless of the position in the chain of command. The problem is ownership identifies what they think is the quick fix, rather than the right fix.

Average people don’t deserve average pay. They deserve less than average. Top people don’t deserve top pay. They deserve over the top pay. They are the ones who are leading and making it happen.

I cannot tell you the number of times I’ve seen dealers want to cut a top performer’s pay when the reality is they are more than earning it. It’s the low performers who are killing you. It’s often a top GM or a GM of a group of stores who the owner wants to cut…that’s the very guy or gal that’s making sure the others are actually producing.

While I’m discussing performance let me share another tidbit with you. For the most part people need to be challenged about every 3 years or less. If you want to up performance and productivity move your people around from management position to management position and from store to store. It’s very seldom someone can perform well in the same job year after year.

We all need to be challenged. Dealers challenge themselves by buying additional stores and/or other businesses. It’s no different for the management team. So, if you want to increase performance and productivity challenge your team and pay your top people more and average performers less. I’ve said enough about pay and that’s all I’m gonna say, Tommy Gibbs

A couple of years ago I shared a video with you done by Rory Vaden. Rory is a young dynamic speaker whose theme is “Take The Stairs.” To summarize his concept for you it simply means taking the harder way. (VIDEO)

Most people would rather take the escalator than walk up the stairs. Human nature is to go the easy route. The route of least resistance. Many people fall into that category. They won’t take the hard way. It’s so much easier to stay with what they’ve got. “Don’t dare take the stairs.”

Here are four examples:

1. You’re reluctant to go to an “up system.” If you have half a brain you know it’s the only way to go, but you won’t do it because of the “fear factor.” The fear that all your “Superstars” will quit. You have to agree that if you think through all the elements of an up system it makes total sense. “Don’t dare take the stairs.”

2. Keeping used cars in your inventory past your timeline, whatever that line might be. “Fear factor” bites you again. It’s the fear of upsetting your used car manager by holding him/her to a discipline that, again, you know makes total sense. There are many elements to managing your used car inventory. It is not about losing a lot of money at the end of the timeline. It’s about daily disciplines and processes that you need to enforce. It’s easier to allow yourself to be sold on all those stupid reasons to keep those aged units in your inventory. “Don’t dare take the stairs.”

3. You continue to focus on average gross profit and you should, but you have to also be smart enough to understand the role that ROI plays in the equation. Some would rather live in the past of an imaginary concept of getting both high grosses and high volume. The easy way is to beat your management team up about how bad their grosses are. The hard way is for you and your team to understand the importance of tracking ROI and the role it plays in your bottom line. (FixRoi.com) “Don’t dare take the stairs.”

4. Bubba still works for you. Bubba did a great job 20, 15, 10 or even 5 years ago. But, Bubba just won’t accept the role of technology in our business. Oh, Bubba says he’s on board, but you keep getting the same old stupid results and he keeps on selling you on the fact that he “gets it.”

Bubba wants you to believe that using technology is a race to the bottom. Not true. Using technology is a tool to position you in the best place to maximize gross, turn and volume.
Bubba says it’s not his fault the numbers suck because the market is so screwed up. Bubba keeps telling you he’s all over the new age technology concept, but the reality is that nothing is changing for you except your numbers keep going further in the tank.

One of Bubba’s biggest attributes over the years has been his ability to “sell.” Especially selling you. You like being sold. We all like being sold. Being sold is far easier than using your own brain to think it through and to replace Bubba’s butt. “Don’t dare take the stairs.”

Taking the stairs requires pain and discipline. You get to choose whether to take the stairs or not. For me, I’m done writing this. I have a bunch of stairs to go climb. That’s all I’m gonna say.Tommy Gibbs