I’m going to share 10 relatively simple things I’ve picked from the many I present in my workshops for you to consider doing.

1. Study The Data- Become a better student of the game. There’s so much information right at your fingertips. Use vAuto’s stocking tool to determine the fastest moving units to stock and take advantage of all the data Auto Trader can provide you.

2. 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.

3. Know Your ROI-Every deal should be tracked for ROI. As you are working a deal you not only need to know how much gross you have, but what the ROI is. Go to FixROI.com and plug in three numbers. Your cost, your gross, and the number of days the unit has been in stock. Bingo, you have your ROI. Shoot for 110 to 120 ROI. By knowing your ROI you will know what’s working and what’s not.

4. 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.

5. 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. 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.

6. 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.

7. 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.

8. Analyze Your Wholesale Pieces-Look at the numbers. How many units are you wholesaling each month? Go over each unit. How many of them could you have retailed if you opened your mind a bit either relative to pricing and/or the type of product you’re willing to keep? I’m thinking you would sell a lot more of these wholesale pieces if you had more flexibility from your parts and service department on what they charge to your used car department. Is it time for two-tiered pricing?

9. Photo Booth-and 40 pictures per car. If you haven’t accepted the fact that the Internet is your new showroom then you are doomed. You cannot and will not be able to remain competitive until you get with it. It’s the biggest no brainer since the invention of the wheel.

10. Focus on Look-to-Book-When you improve your look to book you improve your odds of selling more cars. You sell a car and you get a car. It’s not rocket science.

That’s all I’m going to say. Tommy Gibbs

One of the processes I learned early in my career as a new car dealer was a “Save-a-Deal” meeting.

I often bring it up in my workshops. About 75% of the people have heard of it and of that maybe 20% actually do it.

If you don’t know what it is or you’re not using it, you should learn about it and you should start using it. It’s simple and effective to do.

It’s actually what its name implies. It saves deals. It makes deals. It helps you sell more cars. It keeps the staff focused on what’s important.

Every morning the Dealer, GM or GSM should gather up all the Sales, F&I and BDC/Internet managers and review the activity and pending deals from the previous day.

Bring the up log into the meeting and talk about each up from the previous day. Assign certain tasks and follow up to specific managers who will report back with the results.

Make sure every appraisal from the previous day is reviewed, discussed, dissected from one end to the other. Look for a way to get the trade and make the deal.

Consider all options including shopping the trade and even burying yourself. Have a manager contact all the customers that you could not come to terms with and up the ante for their trade. Sometimes all it takes is a phone call from the right person and another $500 to make the deal.

The odds are your competitors aren’t following up with an additional offer. You win and it’s an easy way to improve your “look to book.” When you improve your “look to book,” you spend less time hanging out at the auctions.

I’ll guarantee you’ll make some deals. You’ll save some deals. You’ll make more money, have a happier life and momentum will build. When you built momentum, the team wins. When the team wins, they want more wins. “Save-a-Deal” meetings are all about winning.

It takes discipline to do a “Save-a-Deal” meeting every day. “The pain of discipline or the pain of regret.”

That’s all I’m gonna say, Tommy Gibbs

I’m thinking that even if you don’t, you probably have. We often lie to ourselves in order to justify whatever it is we’re trying to justify.

To put it another way, “You can justify anything you want to justify.”

If you want to spend a bunch of money on advertising you can figure out a way to justify it or not.

If you’re thinking about firing someone you can justify doing so or not.

If you want to add additional staff you will figure a way to talk yourself into it or not.

If you’re convinced packs are still working, you can justify it even if they aren’t.

Choose your lies wisely, that’s all I’m gonna say, Tommy Gibbs

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.

For some strange reason, 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.

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.

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

Absolutes are a powerful tool toward creating a disciplined organization.

The downside of absolutes is it chokes off the potential to have an acceptable exception.

Exceptions break the rule of discipline. Exceptions soon become the norm.

When exceptions become the norm chaos breaks out. The type of chaos I’m referencing isn’t actually like a bomb going off. This chaos is slow and gradual, often not recognized, and then – whamo – there it is, its ugly face screaming at you, “What the heck happened?”

Now here’s the real deal for those of you looking to become better leaders. You can have absolutes and exceptions in the same house. They can actually hang out with each other once in a blue moon.

True leaders can use them both and chaos will never show its ugly face. Granting an exception and going back to absolutes is very doable. The problem with leadership is that very few leaders have the skill to make effective use of them both.

Most people in leadership positions are stuck with one or the other.

At any given moment one is just as bad as the other. That’s all I’m gonna say, Tommy Gibbs

There are some dealerships and some dealership groups that penalize the used car department for every unit over 60 days old.

A standard number they take is 10% of the value of each unit over 60 days. They subtract it from the month’s gross profit, impacting the gross profit the managers will be paid on.

A fairly common way of using that 10% is to write those units down by that amount, reducing the inventory amount and thereby creating a new and lower cost for that unit.

Part of the theory is that you’ll make some of it back when you sell the unit. When you finally sell the unit after a total of 90 days of ownership you might show a little profit, but you really didn’t make any money. All you’ve really done is played a joke on yourself, but it does make you feel better.

Never forget it is not about having to dump units at 60. It’s about finding a retail buyer before you ever get to 60. (Hello, Tommy Gibbs’ Life Cycle Management Process.)

Let’s pretend you have 10 units over 60 with an average cost of $25,000 each ($250,000.) That’s not a stretch because the more expensive units are the ones that tend to age, if for no other reason than there are fewer butts that can fit in those seats.

10 units at the 10% equals $25,000 worth of write down/loss for the month. Doesn’t really fix much of anything. Much like our politicians you’re just kicking the can down the road and allowing an undisciplined, lack of processes environment to continue to exist.

You might want to take some of that money you’re blowing and invest in coaching your team to a higher level of competence and continued performance. That’s how you grow a team. That’s how you grow an organization.

A penalized team loses games. A well-disciplined team wins games. That’s all I’m gonna say, Tommy Gibbs

Where can I find a good used car manager? Yep, I get 15 to 20 emails a month asking me that question.

Often, when speaking to a 20 group or at a convention, someone will approach me and ask me if I know anyone they can hire for the used car manager’s position.

Very seldom do I have a name. Think about it. For the most part, if someone’s really good at what they do, they are smart enough to stay put. Whoever they are working for is smart enough to treat them well so they do stay put.

99.9% of the time when someone leaves an organization all the inventory problems come to the surface upon their exit.

My advice is always the same; you need to find someone within your organization, someone who knows your culture and who you can develop for an even greater position.

That’s what leaders do. They grow their team. They don’t run out and hire other people’s problems.

I often say if I were in your shoes, I’d find someone internally with a strong work ethic, who is open minded, technologically savvy, has some common sense, and I’d coach them to greatness.

For at least 6 months I (meaning the dealer or GM) would hold their hand. They would be my assistant. We’d be like Siamese twins and we would do everything together. He/she would follow me around like a puppy dog.

Here’s how it would work:

I do it and they are with me. (The best part about this is you’re going to find out where all the obstacles and landmines are located. Because you have the power, you will fix a lot of issues that have been holding your used car operation back.)

Eventually, I’d hand it off to them and they would do it and I’d be with them. I’d watch. I’d critique.

At some point, they would do it. They don’t need me except on issues outside of the scope of their authority.

And then, here’s the biggie, (this is how you grow) they do it, and someone is with them.

This is how you compound and grow your organization. Just like compounding interest.

Until you take this approach, your ability to grow will always be limited. To do anything else, you’re just plugging holes with a temporary worn out cork.

That’s all I’m gonna say, Tommy Gibbs

Don’t you just hate it when someone says, “We’ve always done it that way.” What I find so very interesting is that more often than not we don’t actually say it. We just do it.

It’s one of those weird things in business that happens and we just look the other way. Not going to make any waves that what we’re doing doesn’t put us in a competitive position. Nope, just going to go with the flow. The old “father knows best” theory.

There’s not one person reading this that will disagree that the business is undergoing dramatic changes on a daily basis. We’ll soon have chips in our heads and sensors on our fingertips.

The pricing of new and used cars on the worldwide web is as normal as sleep and 3 meals a day.

The other thing that’s normal is we still charge full retail from the parts and service department to the used car department. Talk about putting yourself in a non-competitive position. Whamo.

A lot of smart people read my newsletters. I know you’re smart because you read them. I’m sure someone out there’s going to figure out a better way.

Those that figure it out will sell more vehicles.

Those that sell more vehicles will pile up more total gross.

Those that pile up more total gross will make more money even though they aren’t charging full retail to the used car department.

We’ve always done it that way is such a stupid thing to say. That’s all I’m gonna say, Tommy Gibbs

I realize this may not be a fit for some of you. And yes, there are some who believe this is old school, old fashioned and outdated. But, there are some who can make this work. And if it helps someone sell a few more units, I can handle a little criticism.

Memorial Day is just a few weeks away. It’s not too soon to be thinking about putting on a Memorial Day sale.

Consider Having An Onsite Tent Sale:

1. Put the tent up as close to the road as possible. Pick the best strategic position on your lot.

2. Put tables and chairs in the tent.

3. Put ALL of your people in the tent.

4. Everybody goes in the TENT!

5. Work all deals in the TENT!

6. If at all possible, move your computers into the tent and do F&I in the TENT.

7. Hang banners from the TENT saying “TENT SALE.”

8. Promote it with Direct mail and/or with a “private invitation” only deal for Thursday before you kick off your regular ads.

9. Do anything you can to make it look like a circus.

10. Rent those jumping air things for kids.

11. Balloons and more balloons.

12. Pop Corn, Sodas, Hot Dogs.

13. Lots and lots of spiffs for your sales people and managers.

14. Do a great kick off breakfast on Thursday for your staff.

15. Don’t do it just for the sales staff; get as many of your
employees involved as you can. (Feed everybody lunch every day of the event as well.)

16. Send out memos and emails to all employees explaining in detail what’s going to be happening.

17. Rope off special parking for customers. Hire an off duty police officer or security guard to direct them.

18. Answer the phone XYZ Dealership Tent Sale in Progress.

19. Do a fundraiser at the same time for the local little league or whatever.

20. Post the event on your website.

21. Do an email blast to all your customers advising them of the sale. If your CRM system is sophisticated enough make sure you tell them you need their specific trade and will pay top dollar for it during the sale.

22. Giveaways generally don’t do much except cause people to show up to get their gift and leave, but having people register for a free car is a good way to get info on them when they show up. Pick out a $1000 or $2000 car and give it away.

23. Along that same line, give the salesman who registers the winning ticket some sort of prize. Gift card, $200, whatever floats your boat.

24. Make up a bunch of signs like real estate signs that say “Tent Sale in Progress” and put along the grass in front of the dealership.

25. If you’re close to the interstate do some signs with arrows and put them up close to the ramp. (Oh come on, the worst that can happen is they make you take them down.)

26. Rent a chicken suit or some kind of character and have them walk up and down in front of the Dealership with a placard that says “Tent Sale in Progress.”

It’s not complicated and it’s not expensive. You just have to be creative. Get some of your key people together and throw some ideas around.

That’s all I’m gonna say, Tommy Gibbs