Is It Easy?

We’re talking about your job. Yes, your job.

We know it’s not easy, that’s why you’re asked to do it. If it were easy, we’d put someone in it with a lot less talent. Less drive. Less enthusiasm. Less moxie. Less grit. Less get up and go.

Your job was never designed to be easy. If it were easy no one would care. And if it were easy, you’d be paid a lot less.

Sure, you’re not paid enough. But, it’s not always about what you’re being paid. It’s about what you’re paying to the big picture.

Sometimes it takes some serious grinding it out to get the pay to match. You will eventually get to the point where you’re being paid for more than you are actually doing.

Never forget that you’re contributing. You’re contributing in a big way. A way that others can’t contribute. We need you to keep doing what’s not easy.

Just stay the course. Of course, the course is not always easy, but needed. That’s all I’m gonna say, Tommy Gibbs

Why Do You Tolerate This Mess?

As a new car dealer for over 20 years the training of salespeople was big on my list of priorities.

We always had someone in charge of training of which I was always a part of. At one time we even had an offsite training center that was state of the art with video cameras for role play, etc.

As I’m writing this, I’m sitting here shaking my head because I just don’t get it.

Over the last few weeks I’ve driven by the same dealership at various times of the day and there are always 4 or 5 salespeople standing out on the “porch,” looking like they are getting ready to mug the next customer that shows up.

If I were a customer there is no way I’d be pulling into customer parking and take a chance with that mob standing there.

How can this being going on in today’s world?

Where’s the leadership?

Have we not learned anything over the past 20 years?

All that money you’ve tied up in your CRM and technology going right down the drain.

The owners of the dealership are friends and clients of mine.
I know their culture.
I know their standards.
I know what they believe in.
This doesn’t match any of it.

If you’ve ever wondered why you can’t get and keep good people here’s part of it right here:

People want to feel productive.
People want to feel like they are contributing.
People want to work for an organization that’s disciplined and gives direction.

Why would anyone with half a brain want to work in an organization that has no more direction than this?

Here’s the reality; that store isn’t alone. Some of you have the same issue.

Open your eyes, there’s a hot mess out on your porch and it’s costing you money.

Oh yes, there’s training going on at your dealership. It’s happening right out on the porch.

That’s all I’m gonna say, Tommy Gibbs

The Next Time You Need A Used Car Manager

First I want to make it perfectly clear the amount of respect I have for those who have been in this business for many years.

Those that have grinded it out, those that have street-savvy, and those that at times made chicken salad out of chicken poop.

There is no adjective to describe the admiration I have for you.

That being said I want to speak to those of you that are in charge of the hiring and struggle to find that superstar used car manager. The used car manager you need may very well be right under your own roof, and you’re walking right by him or her a dozen times a day.

For whatever misconceived reason, when you need a used car manager, the first thing you want to do is find a used car guru that works someplace else and lure them away.

I don’t have to tell you the challenges of hiring from the outside. I don’t have to, but I will.

1. The person you hire isn’t going to have the same culture that you’ve been working so hard to develop.

2. Their thinking about the used car business isn’t going to necessarily align with yours. That doesn’t mean either of you has it right or wrong. It just means it’s going to be frustrating and more than likely expensive.

3. If you’re running an ad in Automotive News, most of the respondents are going to be from outside your area. I’m not even going to attempt to list all the issues tied to bringing someone in from afar. If you don’t understand those issues then you’ve got a lot more problems than I can help you with.

4. When you hire from the outside you are looking for a miracle worker to fix the mess left from the last miracle worker. Most likely the mess will get bigger. All you’re doing is rinse and repeat.

5. You’re doing nothing to encourage people to want to grow and develop within your organization when you keep going to the outside. You need to promote from within.

The real answer is that you don’t need someone from the outside with a bunch of experience. What you need is to commit to giving someone from within a chance and a whole bunch of your personal time and energy.

What you need is:

1. Someone that’s a young “thinker.”
2. Someone that has high energy.
3. Someone that believes in your culture and store.
4. Someone that’s coachable.
5. Someone that has common sense.
6. Someone that understands technology.
7. Someone that has integrity.
8. Someone that has a strong work ethic.
9. Someone that has good communication skills.
10. Someone that’s hungry.

If you don’t have someone or multiple someones like this in your organization then you need to rethink your organization. That’s all I’m gonna say, Tommy Gibbs

The Pain of Efficiency

If you’re going to continue to make money, and hopefully make even more money, you will have to become more efficient.

Your processes will need to become more efficient.

Your management team will need to become more efficient.

Your entire dealership will need to become more efficient.

You must become more efficient when it comes to speed and cost of your reconditioning. I know it’s a sore subject for some of you, but the sooner you address it the sooner you will move forward.

There are many issues dealers are scrambling to deal with as we move into the most competitive environment in the history of the automobile business.

In order to do volume in used cars you need to have a “costing advantage.” By “costing advantage” I mean what’s added to the car once you own it, which includes packs and reconditioning.

To have a costing advantage you have to re-think your packs (which usually gets down to pay plans) and most importantly, what you charge the used car department from your shop.

Your sales managers don’t have control over gross as they did 20 years ago. The market conditions such as days supply are having an impact on how you price your vehicles.

More and more dealers are moving toward becoming one-price dealers and saying “no” when the customer shows up and wants a discount.

Becoming more efficient means improving the amount of time it takes to get a unit through recon and to the front line. Every day that a unit is not on your front line available for sale is costing you money. UpYourGross.Com

Sadly, most dealers do not actually know how long it takes. And even when they do, they turn a blind eye toward the problem.

They let the proverbial tail continue to wag the dog when it comes to fixing the service timeline problem.

If you’re going to do more volume you need to have an advantage when it comes to getting cars through your system and the cost tied to doing so. You must become more efficient.

The pain of efficiency, or the pain of regret. You’re going to have one or the other and the cool thing is you get to pick. That’s all I’m gonna say, Tommy Gibbs

6 Bullet Points

This is always a tricky time of the year.

It is not unusual for “Fall Optimism” to come back to haunt you when “Winter Reality” sets in.

After several record profit months, it’s easy to get high on our new founded mentality of standing tall and asking for “all the money.”

Sure, you can hold that unit longer…ahhh, maybe not.

Often there’s a disconnect between the desired goals and the skill level of those who have been put in charge of obtaining the numbers we need.

Are you ready? Is the team ready? Are you ready for the fall and winter?

It’s important to know what you deserve for any given car or truck on your lot. Knowing and understanding that is based on two parts:

Common sense.

Knowing and getting what you deserve means having a true understanding of the market and every unit on your lot. They are all different, yet we often treat them all the same. It’s knowing when to fish or cut bait.

Yes, even in this wacky market there’s a time to cash in and make certain units go away.

6 Bullet Points To Help You:

1. Redundant Training- It ain’t redundant until you’re perfect. You’re used car department isn’t perfect. Don’t confuse getting lucky and today’s unusual market with your management skills. You’d be far better off thinking you’ve recently gotten lucky than thinking you’ve figured it out. Maybe you have and maybe you haven’t. Now is the time to amp up the training for your entire team.

2. Rolling 30-Day Sales Travel Rate-Pay close attention to the number of units you currently have in stock vs. the number of units you have sold over the last 30 days. You may even want to view it over the last 15 days. Almost without exception, we are seeing inventories starting to outpace the sales travel rates. If you’re using our UpYourGross software tool, it’s right there on the scoreboard page for you to see.

3. Ask For More On The Right Units- Keep in mind the word lucky. You’ve recently gotten lucky on some units. Betting on lucky will not serve you well.

Yes, there are some that you need to start way high. Some very low. My UpYourGross software will help you know which units are which.

Once in a while, you gotta “ask for it all.” You can’t hit it out of the park if you don’t take a full swing. If it’s a low mileage, really nice car you deserve more money for it.

4. Not selling in Today’s Market-Your most profitable car is a 20-day car. If you are retailing a lot of cars at the 30, 45, 60 plus day mark, you don’t have a chance. Speed wins; the lack of speed kills.

Start charting those units that you sell at 45 days and beyond to see what they are doing to your average gross profit? In the movie “A Few Good Men,” Jack Nicholson might have been talking about you. You can’t handle the truth.

5. Lack of quantity and quality of photos –stop reading this. Go look at the used cars on your website. How hard is it to maneuver through your website? And, if you don’t have a photo booth, you cannot be competitive in today’s market. It’s an investment you can no longer afford to avoid.

6. Use Early Warning Radar-You have to be able to spot a problem child on day one, not day 61. Every one of your aged units (Your oldest unit is an aged unit) has a story to go with it. That story started back on day one and somebody wasn’t paying attention.

Fix your Radar system and your used car operation will become more efficient and more profitable.

You get what you deserve when you do the work to deserve what you get.

That’s all I’m gonna say, Tommy Gibbs

When Should You Do It?

Jeremy Foley is the former Athletic Director at the University of Florida. Foley had a 40 year career in leadership positions in collegiate athletics.

You can well imagine the number of people Jeremy Foley has had to fire over the years.

Of course he’s not always made the perfect decision when hiring and firing, but based on the school’s success, he’s been right far more times than he’s been wrong.

One of Foley’s sayings is, “If something needs to be done eventually, it needs to be done immediately.”

You will often find that to be a characteristic and trait of exceptional leaders. They see what needs to be done and they do it immediately.

You as a leader know there are things you eventually need to do, but for whatever reason, you keep putting it off.

You know there are people you need to eventually replace. If you know you need to eventually replace them, then you need to do it immediately.

You know you need to eventually change your pay plans. If you know you need to eventually change pay plans, then you need to do it immediately.

You know you need to eventually get rid of packs. If you know you need to eventually get rid of them, then you need to do it immediately.

There’s a long list of things you know you need to eventually do.

If you want to be a better leader, you would do them immediately.

That’s all I’m gonna say, Tommy Gibbs

Are There Too Many Dealerships?

I’ve been saying since the 1980s that there are too many dealerships. If you’ve been around that long, you probably have too. The law of supply and demand has always worked to our disfavor when it has come to making the kind of money we should make based on the amount of money and risk we have in play.

I believe the over-dealerization (A word I made up, go with it) started in the 1970s as the Japanese imports started to come onto the scene. Those franchises followed the footprint of the domestics with a strategy of, well there are three Chevy or Ford stores in the market, so we need three Toyota, Honda, Datsun, etc.

As more and more importers discovered our thirst for inexpensive, gas efficient, and higher quality vehicles, the number of new car dealerships mushroomed. Even to this day, dealers are willing to stand in line and spend big bucks for a chance at an open point that might just turn out to be the next great Honda franchise.

Those domestic franchises had been set in place many years before when the road systems made traveling from one store to the next, a bit time consuming and often not worth the ride.

Today in some markets you can go to 5 Chevrolet dealerships within 5-minute intervals. Or, can now you can make that same journey in 2 seconds with the click of a mouse.

Saturn had the right idea. Give a dealer multiple points in a specific market and let the dealer decide the if, where and when. Setting up a non-negotiating selling process and selling everything for full window sticker was the rule of the day. In the end, they just didn’t have the product to be competitive.

The last few months have been the equivalent of having fewer dealerships because of less product availability.

Individual dealers and dealer groups are reporting record profits nationwide. Do you think it’s because dealers have all of sudden gotten that much smarter?

That’s not to say that the smartest of the smart haven’t done a lot to maximize their profit potential, but there is a tendency to ignore the reality of the situation and to think, “hot dang, we got this thing figured out.”

The only thing that’s been figured out is the law of supply and demand which works every time. When you have a low supply of vehicles and an ample number of buyers, your gross and net profit goes up. The reverse is also true.

This honeymoon won’t last forever. Fewer dealers will. That’s all I’m gonna say,

Money & Power

One of the most interesting things about the automobile business is the dealer has “the power” to fix anything that needs to be fixed.

That being the case, the only real question becomes if the dealer has the will and the money to fix what needs to be fixed then why don’t the fix the things that need fixing?

Think about that for just a moment. They have the power. They often have the money.

But, more often than not they don’t have the will.

So, there you have it. It’s not money or power. It’s a matter of having the will to fix what needs fixing.

Having the will means dealing with all the messy details to get it done.

Where there’s a will, there’s a way. That’s all I’m gonna say, Tommy Gibbs, Tommy Gibbs

Fat Grosses & Paychecks

I’m thinking your salespeople’s paychecks have been pretty good of late.

Especially if you’re paying on gross. Good for them. I’m an advocate for salespeople making more money.

But, wait…what did they actually do to earn those bigger grosses and paychecks?

I’m thinking they are a victims of a good set of circumstances which in part has been the law of supply and demand and the way you have priced and held the line on little or no negotiating of prices.

You have to ask yourself does it really make sense to be paying them on all that gross when they haven’t had much of an impact on it?

The same holds true for paying on gross in the overall scheme of things.

When you’re giving cars away, it’s not the salespeople giving them away. It’s the way you’re pricing them because you have too much inventory or need to make something go away.

This may not be a good time to change your pay plan. But, it’s a good time to ask yourself why are you still paying on gross? That’s all I’m gonna ask, Tommy Gibbs

Stop Training

One of the things I remember about advertising is it’s hard to gain momentum, but really easy to lose it.

In the good ole days, if you were pounding the airwaves and decided to take a break, it was really difficult to get it going again.

When things are rocking is not the time to pull the plug; it’s the time to crank it up.

It’s that way with training too. My business is always good, but it’s even better when times tighten up. When times are tough dealers are looking for answers.

Right now, most dealers are busy selling cars, having record months in gross and their bottom lines.

I don’t train salespeople, but why would you spend money on sales training when Johnny 7 car is now selling 15 and his grosses are $500 more than they have ever been?

I wouldn’t worry about it. This is going to last forever. That’s all I’m gonna say, Tommy Gibbs