What does a bear do in the woods? Eats corn.

My business partner for most of my adult life has been Ashton Lewis, Sr. an amazing human and Automobile Dealer in the Hampton Roads area of VA.

Ashton grew up in both the automobile and farming business. One of Ashton’s farms was located adjacent to the Great Dismal Swamp in Chesapeake, VA where corn was a primary crop.

As Ashton tells the story, he would observe a bear come out of the woods, pick an armful of corn to take back into the woods to eat or share with his friends and family.

The bear would sometimes drop an ear of corn and rather than continue into the woods, the bear would put down the armful of corn and then re-gather them all up just to save one ear of corn.

That’s what it’s like when you keep hanging onto that aged unit that you’re never going to make any money on. You spend too much time trying to make money on an aged unit and not enough time figuring out how to make money on the fresher pieces.

Your window of opportunity to make money on a used car is about 40 days or less and that’s a stretch.

Had you been smart enough to identify units that have little or no profit potential on day 1 then you wouldn’t be looking at a stone-cold loser on day 61.

The Bear-Drops ear of corn. Throws down all the others. Wastes time and energy re-gathering the ears of corn.

You-Do not identify problematic units on day 1. You waste time and money struggling with aged units on day 61. Grosses go south because you’re selling too many units late in the life-cycle. You never reach your full potential because you’re thinking like a bear.

Had the bear paid closer attention to how many ears of corn he/she could actually carry then the bear would not have wasted time and energy dealing with one stupid ear of corn.

Had you paid closer attention to what you were dealing with on day 1 you wouldn’t been beating your head against the wall trying to figure out what to do with an aged unit on day 61.

My life-cycle management process makes you a much smarter bear. That’s all I’m gonna say, Tommy Gibbs

A lot of dealers had a record-breaking month in March. Some of them have already spent too much time gawking at their financial statements, poking their chest out and patting themselves on the back.

And guess what? For some of them, April is off to a slow start.

Let me caution you; you cannot be satisfied. You can never be satisfied. Those sounds you hear behind you are the competition coming to gobble you up.

If you take just one little break, one little hiccup, it could be the very thing that puts you into a downward spiral.

People are successful for a variety of reasons, one of them being “fear.”

The fear of failure.
The fear of falling back.
The fear of giving up all they have worked so hard for.

It’s that fear that causes the successful ones to keep pushing and to keep looking for new and better ways of doing things.

Scott McNealy, CEO of Sun Microsystems, once said, “You either eat someone for lunch, or you can be lunch.” No truer statement has ever been made.

Being a hard-charging competitor can be craziness at its best. Competing is fun. Trying to get better is the lifeblood of competing, leading and winning.

Study it. Embrace it. Love it. Use it as success fuel. Use it to take you to the top of your mental game.

Develop an unstoppable competitive mindset, and it will push
you so far ahead of the competition that you won’t have to worry about looking over your shoulder.

What you have to realize is that most people are just lazy and because they are lazy they can become complacent very easily. Ultimately their lazy streak will show its head; that’s when you can “own” them.

There are times when you can have a good month in spite of yourself because the market lets you win.

No easy wins this month. Time to go to work. That’s all I’m gonna say, Tommy Gibbs

There are a lot of dealers concerned today about the lack of new car sales in January and February. Some dealers are blowing it off that the weather killed them. Maybe it did. Maybe it didn’t.

If you understand that this business runs in cycles and if you understand that a new vehicle is pushing $35,000 with payments of $550 or more then logically it’s not just a weather problem.

Many of us remember back in 2008 and 2009 that the world was coming to an end. Actually, for some new car dealers, their world of selling new cars did end.

I’ve often compared those tough years to the Great Depression.

My parents and grandparents went through the Great Depression. How they thought about money, debt and resources were very different than those of us who have come along over the last 50 years or so.

Just like during the Great Depression, I was convinced back in 2008 and 2009 that we had learned some valuable lessons that we would never forget. I’m starting to realize just how wrong my thinking was.

Our reliance on new car sales and what they bring to the table has never been greater. New car sales are a good thing, but when we rely too heavily on them for our bottom line, it can put us in a trick bag when things go south.

There were hundreds of dealers who lost their franchises in 2008-2009. Many of those dealers attempted to turn those nice buildings into used car operations.

A good number of them failed. The reason they failed was
because of their reliance on new car sales they had never taken the time to study and learn the used car business.

If you are the Dealer, General Manager or General Sales Manager, you’d be wise to amp up your thinking on used cars. If you have high dollar aged units you should be really concerned.

Sure, enjoy your new car business as much as you can for as long as you can, but never forget, the stronger you are in used cars the more new cars you will sell and the less likely you are to have your own Great Depression.

If you’re smart you should be asking yourself, “what if this isn’t a little weather blip on the map, but a tough couple years ahead of us?”

You may not always be able to sell new cars, but you can always sell used cars. That’s all I’m gonna say, Tommy Gibbs

1. Think in terms of improving gross in small increments. Try paying the managers a bonus for achieving nominal increases each month. Start by improving gross by $50 a unit. Do that over the next year and you will see a slow and effective way to increase your gross. You can only eat the elephant one bite at a time.

2. How could I talk about your grosses without mentioning “Life Cycle Management?” Life Cycle Management is designed to help you create a sense of urgency on those cars that are most likely to kill your grosses. The faster they go away the better your gross will become. My UpYourGross software tool puts you on the path to better grosses and more efficiency.

3. Track GAP and ROI. When you do, grosses go up. How much are you giving up once the customer shows up at your store with a price from the Internet? If you don’t know then you can’t fix it. (GAP-Give-Away-Profit)

4. Improve your look to book. You make the most money on units you trade. You will trade for more if you get serious about improving look to book. Review every appraisal from the previous day in your “save-a-deal” meeting every morning. Someone in management should be responsible for calling every customer that had a trade and up the ante.

5. Shoot the moon on the right stuff. Since the beginning of the car business, higher grosses are driven by some home run cars. You have to understand which ones are home runs, singles, doubles, and triples.

6. Try some old-school. If you’re not a true one-price dealer serve up an under-allowance on every trade. It should be part of your discipline each time you appraise a unit.

7. If you’re still struggling with gross maybe it’s time to let me train your entire management team? My message is powerful and long-lasting.

Fix what you can fix. That’s all I’m gonna say, Tommy Gibbs

1. Can you reduce your recon cost? Are you being as efficient as you can possibly be? Does service have carte blanche? Is service still selling the used car department the same old same old?

2. Would you sell more units if you could keep more units? In other words, are you letting some of your less expensive units get wholesaled because they cost too much to recon?

Try using this coupon to encourage your used car manager to keep and retail some of that cheaper stuff. It’s found gross profit.

3. Can you speed up reconditioning? Very few of you really know how long it takes to get a car through service and clean up. Is your sales management team constantly crying about how slow service is? Might be some truth to it. Check it out. “It’s not the big that will eat the small, it’s the fast that will eat the slow.” Our Recon Tool will show where the pitfalls are. It’s easy to use and doesn’t create brain damage.

4. Re-evaluate your packs. Have they outlived their usefulness? Are packs ultimately affecting your average gross in a negative way? Are they giving you a false picture?

Dale Pollak refers to packs as taxing yourself. I think we are all taxed way too much. If you got rid of packs could you buy and trade for more units? If you bought and traded for more units, wouldn’t you sell more units? If you sold more units wouldn’t you have more gross going to the bottom line?

5. Have you made an all-out effort to convince your sales and management staff to sell the value of your company, your product and the fact that you have the best prices in the market? You’re becoming a one-price dealer whether you want to or not. Deal with it.

6. Re-think what you are stocking and the when, how and how often you tweak your pricing. Far too often prices are not massaged soon enough so you end up pricing your cars at the end of the cycle at crappy grosses.

It’s also important to know which units you can shoot the moon on. You don’t have to give everything away, but you have to know the difference between a unit that you can make gross on and a unit that needs to be moved quickly. Know when to hold ’em and know when to fold ’em.

It’s a safe bet that anything you have that’s 45 to 60 days old isn’t going to make you much money. Lord help you if you have units over 60. Retailing out of that hot mess alone will eventually improve your gross.

There are many parts to improving gross profit. Look for Part 3 next week.

That’s all I’m gonna say, Tommy Gibbs

You can make an average of $3,000 per unit on front gross profit. Yep, you can do it.

Achieving $3,000 on the front is easy enough to do. It really is.

You can do it overnight. Yes, all of you can. I believe in you and I know you can do it.

When dealers are screaming about low grosses, they often point to the fact that their cars are priced too low on the internet and therefore the easiest solution is to increase the prices.

The fact is you can improve your grosses dramatically overnight by increasing your prices. I mean really, if you don’t ask for it how do you ever think you will get it? Remember you can always go down but it’s impossible to go up.

Yep, that works for me. Raise your prices, ask for more and you will get more. Gross has always been a state of mind. Whatever mindset you are in then you can achieve it.

So, right now, right this minute, right this second, all of you need to stop giving your cars away, raise your prices and the grosses will go up.

As good as that all sounds there are a number of little problems with raising your prices:

1. Your used car volume is going immediately in the tank.

2. Your total gross is also going so far south you will lose your butt.

3. Your profits are going to be pooh pooh because you have totally cut off the spigot of cars going through service.

4. Stealing trades will become the norm and new car volume will go into the tank because you are reluctant to step up.

Doing used car volume and achieving high used car average gross goes against the laws of nature.

I’m not saying you can’t improve your grosses, but the days of doing $3,000, $2,500, and in some cases $2,000 are history.

Your best opportunity to improve your overall business is to improve your volume. Improving volume improves business in all your departments.

You can’t spend average gross profit. You can spend total gross profit.

Stay tuned for part 2 next week when I’ll give you some realistic tips for actually improving gross profit.

That’s all I’m gonna say, Tommy Gibbs

I’m not talking about turning your used cars faster. I’m talking about picking up how fast you walk. The tempo of your gait says a lot about you. If you want to energize your team you first have to energize yourself.

If you know me, you know I’m not a very patient person. One of the things that drives me nuts is when people waddle along on a moving sidewalk.

If you’ve ever traveled through the Atlanta airport, I’m sure you’ve seen the moving sidewalks that come to an end, you get off, walk about 25 feet and get onto another one.

I was recently on one with a group walking like a buffalo herd that had just eaten a massive meal. After the exit, I decided to see if I could out-walk them on the side while they walked on the moving sidewalk. Of course, I won.

When you pick up your speed, you energize yourself. When you energize yourself, you energize your team. Speed and energy go together.

Slow walkers tend to think slow and move slow. Not only are they slow, but they are also slowing down everyone around them. By and large, they aren’t going anywhere. It’s obvious that wherever they are going isn’t important or they’d be in more of a hurry to get there.

People who walk fast want to get somewhere fast. But more than that, fast walkers are people that have high energy and are go-getters. Fast walkers are confident, courageous and all about having a no-fuss in life. They expect other people to keep up with them and they have a low tolerance for those not in a hurry to get things done.

They often don’t tolerate a lot of words and if they do, they want you to spit it out fast and get on with it.

Think fast.
Talk fast.
Move fast.

That’s all I’m gonna say, Tommy Gibbs

Most of my messages are geared toward management, but today I want to talk to your sales staff. You should forward this to every salesperson on your team and suggest they sign up for my newsletters.

If you’re a salesperson, I want to help you re-frame what you do every day and what a great opportunity you might be missing. If you’re in management, this is a message you need to share with all.

Have you ever wanted to be in business for yourself?

Have you ever thought about going into business, to get someone else to invest the money and you reap the rewards?

Welcome to the amazing world of the automobile business:

You have free office space.

You get rewarded based on how hard you work.

You have opportunities for advancement.

You have healthcare, vacation and retirement opportunities and Christmas bonus programs.

You have a management team working to help you be productive.

You have a free computer system.

You have a CRM/DMS and other software provided free of charge.

You have staff and technicians available to handle customer problems.

You have free marketing, advertising, and a website developer.

You have an administrative staff to help process your deals, DMV work, etc.

You have millions of dollars of inventory to sell with zero personal investment.

You get special spiffs/incentives from the factory.

You get all the free training/coaching that you can stand.

You have a detail/clean up department that gets your vehicles ready for delivery.

You don’t have to pay a penny for phone, electricity and other utilities.

You can demand an assistant when you become productive enough.

You have an Internet/BDC department begging you to take leads.

You have free janitorial service.

You have free coffee.

You have your own personal financial officer (F&I) working to put your deals together.

You work out of a multi-million dollar facility located on prime real estate.

You have an opportunity of a lifetime with no personal financial investment.

You need to “own” your own business. That’s all I’m
gonna say, Tommy Gibbs

In sports, you often hear about how powerful momentum and intensity can be. The last two minutes of a football game will frequently determine the outcome.

You will often see players and coach’s greatness shine through in the most helter-skelter moments. There’s a good chance the last two minutes of the Super Bowl this weekend will determine the outcome.

In the automobile business, the last day of the month is like the two-minute drill of a football game.

I have some what ifs for you:

What if you approached the 15th of the month as if it were the last day of the month?

What if you approached every Friday and Saturday as if they were the last two days of the month?

What if you approached every Wednesday and Thursday as if they were the last two days of the month?

What if you approached every Monday and Tuesday as if they were the last two days of the month?

What if you approached every day as if it were the last day of the month?

What day is it? It’s the last day of the month. It’s always the last day of the month.

The clock is ticking. You’re running out of time-outs. Pick it up. Let’s go. That’s all I’m gonna say. Tommy Gibbs

It’s January and we’re off and running. Actually, some of you are running, some of you are walking. The runners have been training hard for the last few months. The walkers have been talking about training hard.

The runners were getting into shape back in November and December by laying down “the plan” for 2019. The walkers were thinking they needed to get in shape and get a plan for 2019.

Runners are never happy. I’ve never seen a runner smile. Walkers are well, walkers. They often smile because they are dreaming of the things they would like to do. Whatever they are dreaming stays in their dreams.

The runners have a firm plan going into 2019. The walkers have a “kind-a-sort-a” plan going into 2019. Walkers talk about a plan, runners actually execute the plan.

Walkers are afraid if they make a plan they might have to change it. Runners know there are mud puddles and they just have to jump over a few to get where they want to go.

Runners like challenging their leadership skills by changing the plan. Walkers are afraid of change and would rather go with the flow than rock the ship.

Runners love Dave Anderson’s book “If You Don’t Make Waves You Will Drown.” Walkers would rather read “Winnie the Pooh” and dream about Pooh Bear.

When I do a workshop, I recommend, suggest, and urge those in attendance to write out an action plan for the next 90 days using the top 3 or 4 processes from the workshop. At the end of 90 days re-write the action plan adding 3 or 4 more processes to it.

Any time you’re planning, there should be 30 day, 90 day, 180 day and 365-day action plans. The weather and the terrain are going to change and you need to be ready for a change.

Walking along whistling a happy tune will make you feel good for that one little moment in time. Running hard with a flexible plan will exhilarate your soul and brain and will allow your team to leap tall buildings with a single bound for a long time to come.

Runners take money to the bank. Walkers go to the bank to borrow money so they don’t go out of business…yet.

Becoming a runner means harder training, greater commitment, and disciplines that most people don’t have and will never have. That’s why there is so much room at the top. Some will, most won’t.

It’s very simple to go from being a walker to a runner. Just do it. That’s all I’m gonna say, Tommy Gibbs