When you’re in business you have a ton of issues to deal with. None are more important than communicating with staff and management team to help them improve performance and profitability.

When you’re in a dealership day-to-day it’s like living with family members and therein lies the problem. It can be difficult to hold family accountable.

There’s tons of data for you to sort through each day to help you create a roadmap of accountability.

You often ignore it and look the other way because you don’t want to lose your family members.

Actually, sometimes it is family and that can create all sorts of issues for you and the team.

The problem is a lot of people see the word “accountable” as a negative word. Holding people accountable is actually a tool to coach them to the next level.

Coaching is about pointing out those things they may be missing. The reason you see what they don’t is because of your experience and the data you have at hand.

People don’t do things because either:

A. They don’t know what to do.
B. They know what to do and refuse to do it.

As a leader, you’re responsible for making sure they know.

Once they know you’re responsible for making sure they do it whatever it might be.

When are you going to stand up?

That’s all I’m gonna ask, Tommy Gibbs.

I’m getting a lot of questions about inventory turn these days.

Many dealers admittedly expressing concerns about units they have let age.

Even though values remain high, dealers are starting to see a leveling off of the market and the upward spiral of values starting to come back to some sense of normalcy.

Lately I’ve been preparing for my NADA convention workshop titled, “Putting Common Sense Back Into Your Used Car Department.” As a reminder it’s in Dallas on January 26 thru January 29.

Just in case you’ve gotten a little lax, I’m going to share a few bullet points from that workshop that I’m confident will help you get back on track.

1. Press Your Cost Down-This is probably the simplest and most effective thing you can do to improve your business. Know what your average cost per unit is every day and do what you can to reduce it. If you are at $18,000 today, do what you can to get it to $17,500 and so on. There is no magical number.

It’s about keeping the less expensive units and making sure the more expensive ones turn fast. If you figure out how to reduce your recon cost on the cheaper units, then you’ll figure out a way to retail more. Having lower price used cars on your lot is going to becoming more and more challenging to do. Creating a great focus on this segment will pay huge dividends for you.

2. Attack the 10 Most Expensive Units in Stock-Make a list each day of your 10 most expensive units in stock. With one exception make sure they are priced really, really right. The one exception is if you know you always make money on a unit that’s on the list then use some common sense, don’t give it away.

Consider putting bonus money on those 10 units regardless of the number of days they have been in stock. Sooner rather than later. Make sure the service manager gets a copy of the list each day and create a sense of urgency to get any of those through the shop quickly.

3. Life Cycle Management-There is nothing, absolutely nothing, you can do that will improve all aspects of your used car business more than understanding my process of “Life Cycle Management.”

Think Fast, Be Fast-You are working with a depreciating asset. Yes, your inventory has gone up during these crazy times, but those days are likely to be behind us.

Everything, including decisions on what to keep and not keep has to be done fast. Pull the trigger quickly on units that you are suspicious about. Don’t hang on to them hoping and wishing something good is going to happen.Early losses are far better than late losses. If you are paying attention and recognizing problem units early in the life cycle then you will have a lot less need to take units to the auction and lose money on them at 45 or 60 days. There are certain “Trigger Points” you need to focus on during your daily “Trade Walk.” Knowing how to use EWR (Early Warning Radar) pays big dividends.

4. Lot Walk-If you do a lot walk once a week with all the members of your sales and management team then without a doubt you will sell more units. The lot walk gets your entire team to know and understand your used car inventory.
The more knowledge they have the more they sell. Don’t get confused between a lot walk and a trade walk. They are both different and they both play a major role in your success.

5. Daily Inventory Pricing-The market changes every day and so should your pricing. Sometimes you can ask more, sometimes you can ask less. You cannot and will not achieve maximum results by changing prices every 10 to 20 days. Pricing takes intense management. It’s not something you do when you get around to it. You would be far better off if someone priced the car who is not in charge of appraising and buying them.

“The Pain of Discipline or the Pain of Regret.”

Do the little things every day and you’re less likely to have much regret.
That’s all I’m gonna say, Tommy Gibbs.

One of the skills necessary to succeed in business or life for that matter is the ability to ask the right questions at the right time and be able to cut though the B.S.

Having the ability to read people is critical to your success in life and business. People do lie.

An easy clue that something isn’t right is when someone constantly tells you how great they are even when you didn’t ask. Key words here are “you didn’t ask.”

Have you ever met someone and within the first few minutes of the conversation they start telling you they are all this and that?

It’s one of those conversations where it’s all about them and nothing about you. Isn’t there a country song “I wanna talk all about me?

If someone is telling you about all his or her great accomplishments, then you should be really suspicious. It’s not unusual for people to inflate how wonderful they are, but there’s a point where it goes beyond a little exaggeration into the area of lying.

As I’ve gotten older, I was a far greater football and baseball player in college than I actually was. (Think on that one for a minute.)

I’ve interviewed hundreds if not thousands of people in my business career.

If a person starts telling me how honest they are I’m thinking they aren’t very honest. I don’t trust you because you say you’re honest, I trust you because you’ve earned it over a period of time. (Isn’t that what happens in relationships? Trust is earned by actions and deeds.)

When someone wants to be a name-dropper by telling you all the big-name people they have hung out with and all the great things they’ve done, I would suggest you be very leery and start checking them out. If they are truly all that great, their greatness will come through and they won’t have to tell you.

I continue to be amazed at just how gullible some people are. Even people who I respect and perceive to have their lives together are easily convinced by a smooth talker. There are a lot of people in prison today who are smooth talkers. They are called con men.

You will notice that those who can “do it” don’t tell you they can “do it,” they just go “do it.”

They don’t brag or boast about it and if anything, they are humble. They show up, roll their sleeves up and get with it. The Michael Jordans of the world don’t have to talk the talk, because they can walk the walk.

When you hear all that talking, start watching their walking.

That’s all I’m gonna say, Tommy Gibbs

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

How was your June?

How have your first six months been?

It’s been a crazy year and I know that most of you have set some all-time records.

I can understand why you might be beating your chest a little bit.

Your record-breaking pace may mean you’ve gotten lucky or it may mean you’ve got your act together.

Either way, you 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.

But let’s suppose you’ve not been setting records or maybe you recognize you’ve done well despite some flaws in your plan of attack.

Since we still have 6 more months to go, I have a couple of questions:

1. If you’re a record-breaker, what are you going to do to get better?

2.If you’ve not been breaking records or have broken some despite yourself, what are you going to do to get better?

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.

Your other choice is to do nothing. Go sit in your office, stare at the wall and count your money.

If you do nothing, your pile of money will likely go down and the year will soon be over.

That’s all I’m gonna say, Tommy Gibbs

There are two sides to “Not Knowing.”

1. Upper management, owners, owner/operators or dealers have a plan in place to keep the staff in the dark. They only want them to know what they consider are those things that they think they need to know. They don’t teach, they don’t coach, they don’t lead; they just say do your little job, pat them on their head, send them on their way and frequently pay them very well.

In addition, upper management doesn’t seek out B players to help turn them into A players. And thus the B players don’t seek out the C players to help them get to the B level. The theory is by keeping people in the dark they will perform their assigned jobs better.

2. Managers don’t bother to learn. They don’t seek out information. They come to work, do their job and go home.

I’m often appalled, surprised and shocked when I ask questions at all levels and people don’t have the answers. It occurs at the top and down the chain of command. I’m not talking complicated questions.

I will sometimes ask the most basic question and people don’t know the answer. I’m left to assume:

1. They don’t care enough to know.
2. They just don’t have the knowledge to know.
3. People don’t know what they don’t know.

In all cases, these are the same people who complain about things that never get done around here. No one is held accountable. There are no consequences when people don’t perform.

What else can you expect when you don’t know?

That’s all I’m gonna say. Tommy Gibbs

As most of us know, constipation can be a terrible thing. When you are constipated it’s virtually impossible to be as productive as you might otherwise be.

Exercise, drinking lots of water and in some really bad cases taking a strong laxative can often relieve the problem and get you back on your “A Game.”

Most of you have had a good run with inventory turn, but some of you have gotten slack and you have stuff aging on you.

Having 60-day-old plus units in stock is a lot like being constipated. You can never perform your best when you’re all stopped up.

60-day-old units will make you sluggish and hold back your potential to be as productive as you might be. Your “A game” will never show up when you have used car constipation. Think of it as poop in the chute.

Dealers will often give their used car inventory a laxative, flush the system and start over. It can be a risky and costly approach.

The problem is that even when they “blow it all out” it doesn’t do that much good in the big picture.

Since they don’t change their diet or exercise, so the inventory continues to be constipated and therefore hold them back from achieving their maximum potential.

A good diet for the used car department would be to have good solid processes. A good exercise program for the used car department would be to understand the role that speed plays toward good health. Good diet and exercise can help you avoid used car constipation.

Constipation makes you stinky. You don’t want to be stinky. Having aged units makes you stinky. You don’t want to be stinky.

It’s not a matter of fixing a one-time constipation issue.

It’s a matter of the right diet and exercise to live a happier and fuller life. If you give a hoot you’ll clean up your poop. That’s all I’m gonna say, Tommy Gibbs

One of the things I’ve noticed about people in general is the fear of “stretch.”

The majority of people would rather sit on the sidelines, complain, moan and groan rather than to “stretch” themselves. “Stretching” means taking risks. Taking risk can be scary.

That’s one of the reasons why there are more poor people than rich people. By and large rich people take risks. It’s far easier to “not do” than “to do.”

Stretching means throwing yourself into the arena and being subject to criticism and yes, failure..

Only when you fail will you figure out how to succeed. The fear of failure is what holds people back from success. Continuing to sit on the sidelines is comfortable.

Stretching your mind, body and soul ain’t. Let the stretching begin.

That’s all I’m gonna say, Tommy Gibbs.

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’ve most recently got.

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 than selling it on day 70. 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?

Here’s the problem:

Dealers often failed to recognize those units that need to be first, as in sold really fast.

Those will be your most problematic units such as ones you’ve buried yourself in, bad color, auction purchases, high dollar unit, etc. These are units that you do not have a favorable cost to market or days supply.

You have to accept the fact that you’re not going to make a as much gross on those as you might make on others. Never forget they serve a worthwhile purpose in your business model. There are benefits galore at turning and burning these units.

Because the pandemic has had a dramatic impact on the law of supply and demand, some of our older kisses have been really sweet.

Unfortunately some dealers have been hypnotized into thinking an old kiss is always going to be just is good as a fresh one. Maybe you’re a great kisser or maybe you just slobber a lot.

Do yourself a favor and take a look at a handful of your oldest units in stock. Ask yourself, “why are these units still here?”

The odds are good that whatever you come up with was there on day one and you ignored it.

This article isn’t mean to be a commercial for my software product, but if you had been using my life-cycle management and recon tool, the odds of you still staring at those units would be about slim and non.

If you want to improve gross profit and volume, you have to know which ones to hold and which ones to fold and never forget all kisses are not equal.

That’s all I’m gonna say, Tommy Gibbs.

When you’re in business you have a ton of issues to deal with. None are more important than communicating with staff and management team to help them improve performance and profitability.

When you’re in a dealership day-to-day it’s like living with family members and therein lies the problem. It can be difficult to hold family accountable.

There’s tons of data for you to sort through each day to help you create a roadmap of accountability.

You often ignore it and look the other way because you don’t want to lose your family members.

Actually, sometimes it is family and that can create all sorts of issues for you and the team.

The problem is a lot of people see the word “accountable” as a negative word. Holding people accountable is actually a tool to coach them to the next level.

Coaching is about pointing out those things they may be missing. The reason you see what they don’t is because of your experience and the data you have at hand.

People don’t do things because either:

A. They don’t know what to do.
B. They know what to do and refuse to do it.

As a leader, you’re responsible for making sure they know.

Once they know you’re responsible for making sure they do it whatever it might be.

When are you going to stand up? That’s all I’m gonna ask, Tommy Gibbs.