Are you heading to or at the NADA Convention? I hope so. If you’re not going I’m wondering why? Why would you not go? Short on staff? I guess that’s a maybe. You went last year? Ugh, I guess that might be a maybe also. Can’t afford the expense? Another maybe goes up on the board. Those excuses and most others are not great reasons for not going.

Some of you live in a little box and wonder why things never change for you. If you’re like most dealers you spend the largest majority of your time in your dealership pushing yourself and encouraging your staff to do the things we all know are important.

The problem with being in the store every day is you end up in a "mental box." Your brain needs a shot of WD 40 once in a while to loosen things up and make the wheels turn faster.  It’s winter, it’s cold and if you’re not careful your brain will freeze up and not thaw until sometime in August.
It’s easy to say "the Convention is always the same, so why bother?" Not true. The only reason the Convention is the same is because you’re the same.

If you’ve gone to the Convention in the past to rub shoulders with the factory guys and attend the parties then I guess it would be the same for you. You get out of something what you put into it. If you go to the Convention and are determined to take real ideas back to your dealership and make things happen the odds will be in your favor of doing so.

It’s hard for your vision to change when you sit there and stare at those same walls and same people day after day. It’s a cancer that eats away at your soul. That’s why you need to go. You need inspiration. You need to see the possibilities. You need to go and learn something.

So, if you’ve not already made plans to go, it might be too late and that’s a shame. If you do go, you can stop by the vAuto booth #1558 and get a free copy of my "Little Used Car Book, Volume 3." My little book is not a cure all for your used car business but it’s guaranteed to give you some ideas and wisdom to help your bottom line.

Finally, I’d like to encourage you to attend your state or local association meeting and by all means consider joining a Twenty Group. You cannot expand your knowledge and your business by sitting in your office daydreaming about the possibilities. That’s all I’m gonna say. Tommy Gibbs

This past Sunday the NFC and AFC championship games were played. Oddly enough they were both decided on a winning and missed field goal at the end of the game. In the NFC Championship game Lawrence Tynes kicked a winning 31-yard field goal in overtime to help the Giants beat the 49ers and advance to a second Super Bowl in five seasons.

In the AFC Championship game New England escaped defeat when Billy Cundiff hooked a 32-yard field-goal attempt wide left with 11 seconds remaining that would have forced an overtime.

One team wins because of a successful kick, the other loses because of an unsuccessful kick. Lawrence Tynes is a hero, Billy Cundiff is a goat. Really? I hardly think so.

As many of you know I refereed college basketball for 17 years. There were games I refereed when either I or another referee were accused of losing the game with a tough call toward the end. As a referee you hate to have an impact on the game that way. The reality is a referee has never won or lost a game any more than those two kickers won and lost on Sunday.

How many mistakes do you think were made during the course of the game that could have prevented it from getting down to one kick? How many fumbles? How many blown plays? How many missed assignments? How many bad reads by the quarterback? How many botched covers by the defensive backs? How many wrong routes run by the receivers? How many poor defensive schemes set up by the coaches that put players in the wrong place at the wrong time? How many bad calls by the offensive coordinator? How poor was the overall game plan? How many times did the discipline break down?

Can you relate to any of this in your business? It’s not any one mistake during the course of a month that causes you to have a bad month. It’s a multitude of them over a period of time.

If you miss a trade in, or put too much money in a car does it matter? No, it only matters if you keep doing it.

If you buy the wrong car at the auction, does it matter? No, it only matters if you keep doing it.

If you don’t log a customer does it matter? No, it only matters if you keep doing it.

If you have a breakdown in your culture or core values does it matter? No, it only matters if you keep doing it.

If you don’t demo a car does it matter? No, it only matters if you keep doing it.

If you let one unit go over 60 days does it matter? No, it only matters if you keep doing it.

If you have an unhappy customer, does it matter? No, it only matters if you keep doing it.

If you don’t do a trade walk today, does it matter? No, it only matters if you keep doing it.

If you don’t execute your sales processes, does it matter? No, it only matters if you keep doing it.

Obviously I can go on and on, but the take-away for you on this should be that if you have a bad month or you’re not selling the number of cars you would like to be selling it’s not because you make a mistake here or there, it’s because you continue to make the same mistakes over and over.

Consistency is very important. If you’re consistently not getting results it’s because you’re consistently doing so many things wrong.

So, it wasn’t the kicker who won or lost the game on Sunday. It was a multitude of good and bad decisions by the players and coaches that created the final results. 

You will win or lose depending on the consistency of you and your team’s good and bad decisions. That’s all I’m gonna say, Tommy Gibbs

Someone told me something recently that makes really good sense and it goes like this, "Anything you say before the word but is a bunch of bull poo poo." I made up the part about bull poo poo, he actually said meaningless. Meaningless or bull poo poo, it’s a bunch of crap.

So let’s chat a bit. You might say something like "I have a great used car manager, but I can’t get him to understand why ROI is important." Everything you said before the word but is bull poo poo.

That’s fun, let’s do some more:

"Sam is a really smart guy, but he just won’t get with the program."

Oh, gosh this is awesome, let’s keep going.

"Ralph has been a loyal and dedicated employee, but he just can’t seem to show up on time."

"I have a great used car manager, he really knows cars, but we have a lot of stuff over 60 days old."

"We have a great website, but we just can’t seem to get our pictures online in a timely manner."

"We have prices posted on our used cars, but they don’t match the prices we have on the Internet."

"My used car manager is a great closer, but he doesn’t understand how to price used cars."

"Curtis is a nice guy, but makes poor buying decisions by buying too many high dollar cars."

"Bob is a hard worker, but he’s an idiot." 

"My used car manager is one of the best in the business, but we’re only getting 5 turns a year."

"We have great sales people, but we can’t get them to sell used cars."

"We have a great service department, but we can’t get them to get used cars through the system in a timely manner."

"My general manager is awesome, but his people skills are terrible."

"We spend a ton of money in advertising, but we haven’t figured out what role digital plays in our business."

"My used car manager is really tight with all the wholesalers, but we always lose money when we sell them a car."

"Joe is a great manager, but his paper work is a disaster."

"Steve is one of our best managers, but he doesn’t want to change from old school thinking."

Ok, I’m having way too much fun. How many of these can you come up with yourself about things in your organization? This whole "but thing" is simply an excuse and/or a weakness as to why you are not willing to deal with the problem or issue at hand.

I recently was reading a book review in the Wall Street Journal titled "Marshall and His Generals." It’s a biography of General George C. Marshall and how he shaped the U.S. Army Generals during World War II. 

To quote from the article and book: Marshall could be pitiless in relieving generals, especially those who were too old or too slow to adapt to the war’s brutal pace. His ruthlessness spawned enemies at the Officers’ Club, in Congress and in the hierarchy conscious world of military wives, but Marshall prided himself on remaining objective. As he told a gathering of governors in 1943: "The man has to have it or he doesn’t stay. And we listen to no excuses of any kind."

There comes a point in your life or business career when you need to show some real spine. You need to jump up on your desk, rear up on your hind legs and be counted.

You’re running a business. You’re not running a democracy. You can keep on "but"-ing all you want. At some point your "buts" are gonna bite you in the butt. 

Remember I said at the beginning everything before the word but is meaningless.

Ok, one last but…"Tommy Gibbs is really expensive, but he’s made me so much money I feel brilliant that I hired him." That’s all I’m gonna say. Tommy Gibbs

It was recently pointed out to me that not everyone understands the term "did you get up with…" For me I’ve always thought it made perfectly good sense. In my little world it means did you make contact with so and so.

We often fail to realize that everyone does not live in our world and speak our language. Just because we know what we mean doesn’t mean everyone else does. Our ability to communicate with others is critical to our success and even more so when you think of it in terms of an organization.

It’s not unusual for the owners or top management to have a vision for where they want to go, but they communicate that vision so poorly that it breaks apart before it ever had a chance to succeed.

I’ve written in other articles about my business partner for some 30 years, Ashton Lewis from Chesapeake, VA. Ashton is a second-generation dealer. He, his cousin, Lewis Wood, and George Pelton are the principal owners of the First Team Auto group located in Chesapeake, Roanoke, and Hampton, VA. Ashton’s son, Ashton Lewis, Jr. is the third generation and successor to the operations. The baton is gradually being handed over to Ashton, Jr. The future is very bright. These are four of the finest people I have ever met in my life.

Back in November Ashton and his team attended a Dave Anderson’s Strategy Summit held in Dallas, TX. Dave’s summit was an awesome experience for the team and has served as the catalyst to create a new and exciting vision and direction.

I had the distinct honor last week of serving as the Emcee for their kickoff meeting announcing the new vision to all their associates. Weeks and weeks went into the planning of the meeting. It was a mandatory meeting with several hundred team members attending at a local convention center. All the dealerships involved were closed down until 9:30 that morning so everyone could be present. There’s a very powerful message when you close an entire dealership down during one of the busiest times of the day.

The meeting was extremely well done. Prizes galore. Color TV sets, IPods, Kindles, and a grand prize of an all-expense paid trip to the Daytona 500 for two. But the most important part was the energy and effort put together to communicate the vision and road map to achieve the goals at hand. A full video presentation with cool lights and awesome music. (And of course me dancing around.)

Their theme is 1/10/25. 1 meaning to win all the manufacturer’s awards, 10 meaning 10% growth, and 25, meaning for the three stores located in the Hampton Roads area to sell 2500 used cars this year. No doubt that one was my favorite.

At the end of the meeting every employee received a 1 dollar bill, a 10 dollar bill and an American Express gift card for 25 dollars to cement the commitment to the 1/10/25 theme.

So, you’re sitting there thinking, what’s the point of all this chatter? The point is, if you’re going to attack something, be it a new vision or whatever, you have to "get after it." Oops, maybe that’s more slang too.

There needs to be a total all out commitment to make it happen. In order to make it happen you have to be willing to spend time and money to do so. There are no short cuts, easy or cheap ways when you are trying to achieve excellence.

This past Monday the University of Alabama played LSU for the national championship in New Orleans. Alabama won 21-0 with an amazing defensive display. In an interview on Tuesday morning the Alabama coach Nick Saban said the following when discussing his defensive team. "I sometimes get upset with my guys in practice when I don’t think they are going all out or make a mistake. But, when they toss the ball out there on game day, they come to play." When you turn the key every day to enter your business, are you "coming to play?"

The team isn’t going to commit unless they see that you are committed. They know you are committed based on your actions, words and follow through. You cannot just talk the talk, you have to walk the walk. (Yikes, more slang.)

It doesn’t matter if you have a new vision or an old one that needs a kick in the butt due to evaporation or whatever. If you don’t communicate it to the masses in terms they can understand, it’s not going to happen. They have to buy into it and then live and breathe it every day.

If you want to be better in 2012 than you were in 2011 it’s not going to happen by sitting around thinking about it. It will only happen when you are committed to communicating the message in a way that all can understand.

Have you "gotten up with Dave yet?" That’s all I’m gonna ask. Tommy Gibbs

I’m talking with a dealer the other day who needed some help with his used car department. Based on the conversation he is struggling in both new and used car sales.

It’s not unusual when you struggle with one you struggle with the other. There are exceptions to that rule as there are some dealers who see themselves as being a “new car dealer” and some who see themselves as being a “used car dealer.”

For years the have made money doing it that way and I’m not about to say they are wrong. I will say they could have made even more money had that not been a single minded car dealer.

The fact is you can be both. When the two departments are managed correctly they compliment each other. When they are both rocking they help to fire up the the parts, service and body shop business which and the bottom line explodes.

I looked at the aforementioned dealer’s website and here’s what I discovered. He had 87 units in stock. Of the 87 there were 67 units that had a retail price of $29,000 or more! 11 others over $14,900 and he had 9 under $14,000.  According to the dealer more than have of his inventory is over 60 days old. Ok, rock star how much water do you think he’s got sitting there?

This picture is not all that unusual. For the life of me I can’t figure out why dealers let this happen to them. Most of this dealer’s inventory happens to be 2010 and 2011 models and a lot of the inventory was purchased from Enterprise.

I’m thinking Enterprise must have some really awesome sales people working for them because more often than not when I see these problems Enterprise has played a role in it.

Oh, I’m not blaming Enterprise because what needs to take place is dealers need to have the discipline to say “NO” to “EASY.” Buying these types of cars is easy. Heck, I did it back in 1902 (not really 1902, it’s just a redneck saying) when the factory was selling program cars by the thousands. I stood there with my hand in the air like everyone else. I’m living proof that it didn’t take any real brains to buy those cars.

I hate to be the bearer of bad news for this dealer, but the reality is he only has 9 units in his inventory that fits the pocketbook of the majority of used car buyers. The retail sweet spot for used car sales remains around $15,000 or less. That doesn’t mean you shouldn’t have some more expensive cars in stock, but it does mean that if you’re gonna get to play the game then the majority of you inventory cannot be over that number.

I realize we live in a high tech world and today’s automobile dealer has a lot on his/her plate. But, so much of this business remains common sense. Common sense tells you the make up of this dealers inventory is a formula for disaster.

It’s a really bad start when you have made really bad purchase decisions and then you compound the bad purchase decisions with bad inventory management. Two wrongs don’t make a right.

Two wrongs make for a really bad start. That’s all I’m gonna say. Tommy Gibbs

So, I was thinking about not writing this week figuring most of my readers would be so busy selling cars that they wouldn’t have the time to read in the first place. Mentally this was a great opportunity for me to do less work, not more. 

The problem with me is that I always seem to find myself in a mindset to do more not less.

I have come to realize everyone does not think the same. More people probably think about doing less than more people doing more. I’m hopeful you’re thinking about doing more this week and even more in 2012. If you’ve not gotten 2012 planned out, you’re probably going to be happy doing less because for sure you won’t be doing more.

For you to do more you have to "do different." Different than what you’ve been doing. "Doing different" means stepping out of your comfort zone and getting on with it. I really don’t like that term comfort zone. I think it should be called "lazy zone." Sometimes we are just plain lazy and won’t get off our fat duffs to do the things we know we need to do.

"Doing different" would mean that we need to do is shake the joint up once in a while, but for heaven’s sake why would we want to do that?
It would only cause us to have to do more.

"Doing different" would mean infusing some high energy into the organization, but that would require us to do more, so why do more when you can just as easily do less?

If you were to do more you would have to be blatantly honest with yourself. Being honest with ourselves really requires a lot more. Do you remember the quote by Jack Nicholson in the movie "A Few Good Men," when he says "You can’t handle the truth"? Maybe you can’t handle the truth.

Doing more may mean you coming to grips with the fact that you have really bad processes in place. No, that’s not true. It means acknowledging that the processes you thought you had in place aren’t really in place at all. Now, that will require you to do more, but it is so much easier to do less by pretending and lying to yourself that you’ve got great processes and your little world is ok.

Doing more means having to terminate an employee who cannot and will not change. We often think of our older staff members as those who won’t change, but that is not always the case. Doing less means keeping those "closed minded" folks on board. Doing more means getting rid of them.

Doing more means spending some money to get to the end result. Doing more would mean hiring a guy like me to help you get it done. Doing less is sitting on your hands thinking you can make it happen without spending any money. Deciding to do less is cheating yourself and your team of more success than you can handle.

I’d like to say more, but I’m feeling lazy. So that’s all I’m gonna say and not a bit more. Tommy Gibbs. 

Since it’s the holiday season there’s a good chance you will be sitting around chatting and hanging out regardless if you celebrate Christmas, Hanukkah or another holiday. The odds are also that you might take the time to enjoy a cup of coffee.

The first of anything is always the best. Coffee is a great example. I highly anticipate each morning the first taste of my cup of coffee. It’s amazingly the best. Most things are like that. The first time you kissed your wife, husband, girlfriend or boyfriend is far better than the smooches you get today. The first lick of your ice cream cone is better than the last and so on. It’s called the law of stuff tastes better at first. (Yes, I made that up.)

Used cars are that way too. Selling one in the first 10 days tastes a lot better that selling it on day 50. The biggest difference between selling a used car and getting a kiss is that selling a used car is based on math. Kissing is based on kissing. Imagine that?

So, at the risk of boring you let’s go over some numbers on the chart at the bottom of this page. When discussing ROI the sweet spot that you are looking for when analyzing return on investment is somewhere between 110 and 120%. The most accepted practice when calculating ROI is to use only front gross.

In example "A" it’s a car that you have 12,000 tied up in. You make $2500 on it, sell it in 25 days and earn a very respectable 303% ROI. How many of you would like to earn a 303% return on investment of a stock you owned in the stock market? Me too, that’s as strong as goat’s breath.

When looking at the three numbers that calculate the ROI what you should be seeing in example "A" is that all three of the components that create the math lined up nicely. You only had $12,000 tied up, the gross was respectable at $2500 and you only kept the car for 25 days. Sweet!

In example "B", it’s the same car, same numbers except the car stayed in stock for 60 days. When you run the math, the ROI is still a respectable 131%. Can you figure out why it was so good? That’s because you only had $12,000 tied up in the car, and you made a decent gross of $2500. So, let me ask you something…how often are you going to keep a car for 60 days and make $2500? Only when a miracle happens. But, we humans tend to want to remember the miracles.

So, somewhere tucked in the back of your brain, you’re thinking about that one time back in 1902 that you had a car in stock, kept it 90 days, made $2500 and the little voice is going off in the back of your head, "I think I can, I think I can, I think I can." The reality is you can’t, so stop thinking that silliness.

In example "C" you have a car that you have $27,500 tied up in, you make $2500 on it and hold it for 25 days. You earn a respectable 141% ROI. It should be obvious why you did as well as you did and that would be you made a respectable $2500 gross, and you turned the car in 25 days.

So, the question is what hurt the ROI in example "C"? Well, well, well aren’t we smart. Yep, the amount of money you had tied up in the car. So, Einstein, what’s the moral to the story? Yep, you got that right too. If you have a lot of money tied up in a car you gotta turn it FAST!

Look at example "D." The miracle happened. You made $2500 after keeping the car for 60 days, but you still went in the tank with a horrible ROI of 61%!

You can’t fix what you don’t know. You need to know your ROI on every deal. Once the formula is in place all you need is the three numbers mentioned above.

I have an excel spreadsheet that calculates both ROI and GAP. (GAP stands for Give Away Profit, it’s the difference between the Internet asking price and the transaction price.) Just send me an email and I would be glad to send it to you. I also have a website, FixRoi.com, that you can go to, put the three numbers and bingo it calculates ROI.

You need to focus on cars that turn quickly. Keeping a used car around past 30 days or so is like a really bad kiss. You can deal with a bad kiss, but it’s just not as satisfying as a fresh one. That’s all I’m gonna say.

Many of you probably know my good friend and outstanding car dealer, Alan Spitzer from Elyria, OH. If you know Alan you also know that when the government took over GM and Chrysler, Alan lost 10 of his Chrysler and GM franchises, some of which ultimately were reinstated.

Alan and his daughter Alison have written a great book titled "Grand Theft Auto." If you’re at all related to the car business it’s a book you need to read. Another good read on the subject is "Outraged" by Tamara Darvish and Lillie Guyer.

Most of my readers are actually in the new car business. And, for most of my readers, being in the new car business is a huge part of the equation of their success. What a blessing it is to have a new car shingle hanging in front of your business. I am in no way against the new car business/franchise. It’s one of the greatest businesses anyone could ever have an opportunity to be in.

However it becomes a reality day in and day out that the factory is not exactly on your side. A few years ago I wrote an article titled What Happened to Jim Press. Jim Press was for many years a top Toyota executive prior to moving on to Chrysler back in 2007.

The crux of that article was not so much about Jim Press as it was to make the point that "you’re never as smart as you think you are and you’re never as dumb as you appear."

We often find ourselves in a good set of circumstances and other times in a bad set of circumstances. Of course those who can figure a way to maximize either of those are the real winners.

Ok, back to Alan Spitzer and Grand Theft Auto. On page 28 Alan and Alison wrote:

…in the winter of 2008, in a series of conference calls with its dealers, each more desperate than the one before, Chrysler sales and marketing president Jim Press, along with executive vice president Steve Landry, took their case directly to the dealers across the country. Many dealers interpreted these requests as thinly veiled threats to order their quota of vehicles, whether they needed them or not. In almost all cases, they did not. The calls continued into 2009, right up to the Chrysler bankruptcy.

There was an infamous call on Feb. 5, 2009, when Press said to his dealers, "You have two choices. You can either help us or burn us down." And then shockingly: "Those of you who don’t give us the orders, you better hope we fail … because we’ve got a long memory!"

That was Jim Press making the call, but this sort of call could have been made by any auto executive during the course of the history of this business. Maybe not as blunt as Mr. Press, but certainly with the tone and meaning being the same.

So, what’s the point? When you consider the pressure on the new car franchise from the factory and deals like True Car, then you have to draw the common sense conclusion that the only franchise you have total control over is your used car franchise.

My good friend and terrific car dealer Dick Swope out of Louisville, KY, often quotes his father Sam Swope, "We value every one of our new car franchises, but our philosophy is we are a used car dealer who just happens to be a new car dealer."

It’s fascinating to see the money dealers are willing to tie up in a new car franchise, on a bet, like Fiat, yet they won’t invest but so deep into their most controllable and best franchise, used cars. (Have you seen the Jennifer Lopez Fiat commercial? I mean really, do you think she’s ever going to be seen driving a Fiat?)

Many dealers are "sorta" in the used car business. They stick their toe in the water, sometimes a whole foot, but few, very few will get in with both feet. Getting in with both feet means making the same commitment with people and resources as dealers do with a franchise like Fiat.

Grand Theft Auto by Alan and Alison Spitzer was about stealing your business from you. Being in the used car business is about taking control of what is rightfully yours. Used cars are like a college education. Once you get it no one can ever take it away from you. I hope you "get it." That’s all I’m gonna say. Tommy Gibbs

Let me teach you how to effectively and profitably move your used car inventory.

Get out your October financial statement. It’s just a few weeks old, so pull it out. From a timing standpoint this is a perfect time of the year. I always looked forward to analyzing the October financial statement. I can’t say that math was one of my best subjects, but I can divide by 10 real easy. At a glance I know what the averages are for any line item expenses, sales volume and gross profit.

What also makes October a perfect time is it sets the stage for the next year. Now is the time to start planning for 2012. Waiting until the last week in December to get your plan together is a really bad strategy.

This is the perfect time to dig in and firm up your fundamentals in all departments. This is the time to get back to basics. This is not the time to cut back on your training. This is when you need to amp up your thinking and stretch your organization.

If you don’t have a solid foundation of basic processes you will never maximize your success. This is the time to take control of the "evaporation factor" that’s been occurring all year long. This is the time to stop the "process bleeding."

Your long term plan should include joining a Twenty Group and attending the NADA convention. Look, we all get lazy, and get caught up in our daily routines. Attending these meetings gets you revitalized. It gets you outside of your daily box and opens your eyes up to what the possibilities might be. Seems like a no brainer.
  
Teamwork is critical if you’re going to maximize your bottom line. To keep your team on the same page you have to constantly communicate to them what the expectations are and what processes they are expected to follow. There is no "shake ‘n bake" solution. You don’t fix it and walk away. You fix it and re-fix it.

What to do?

1. Ask yourself if you can improve your processes?  If you focus on revamping your processes, what effect do you think it will have on your business? It is an absolute fact, that regardless of how well disciplined you are, over time your processes are going to evaporate. The best piece of advice I can give you is to lock yourself and your management team in a room and review every detail of your selling processes.
Be bluntly honest with yourself. Then take the necessary action to get you back on track. 

2. Can you improve your team? Got the wrong players? Now is the time to make the changes. If you already have the right team in place then it’s time to let them know what your expectations are and show them the plan and the path to achieve those expectations.

3. Don’t think of your planning as "you now having a plan." Think of it as a "mission." Plans can fall apart. When you’re on a mission you stay after it until you succeed. 

I’m on a mission to get you to re-think what you’re doing…That’s all I’m gonna say, Tommy Gibbs