Often when I’m speaking to dealers I come across as being against packs. I’m not against packs. I’m really not. I always say if they are working for you, by all means stay with them.

I don’t have any facts to back my numbers up, but if I were guessing, I’d guess that 75% of new car dealers around the country are using hard packs, soft packs or both.

Of the dealers still using them, I’d guess that 25% are using them in such a way that they are having some success and improving their bottom line.

The other 75% are hanging on for dear life and actually hurting themselves, if for no other reason than the psychological damage it does to the sales and sales management team.

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.

For most dealers when they pack cars they are creating just the opposite.

If you know your history, you know that the reason dealers added packs and charged full retail from the service department to the used car department was because sales managers worked from cost up.

This is no longer true, as your sales managers don’t have control over gross as they once did. That’s why dealers are more and more becoming one-price dealers and saying “no” when the customer shows up and wants a discount.

So, without saying they are a one-price dealer, many dealers are taking a tougher stand as well as changing sales people’s pay plans to match their new-found pricing and marketing strategy.

Remember, as we move more toward a one price concept, the skill and pay level of the “desk managers” will be much lower than in today’s market. There will be more effort made to sell the store and the product with less effort on “penciling the deal.”

I like packs, but only if they are working. I question whether they are working as well as some dealers think they are. That’s all I’m gonna say, Tommy Gibbs

I’m a baseball fan. One of the things I find interesting about baseball is after the game is over the manager of the team is required to hold a news conference and explain what happened.

Win or lose they have to talk about it to the media and people like me in the world of sports. When they win, it’s much easier. When they lose, not so much.

When they lose they try to sugar coat it a bit by talking about the things they did well. When they lose they say things like:

A. “We couldn’t get the timely hits.”
B. “Our starting pitcher had trouble locating the strike zone.”
C. “We had a couple of mental mistakes in the field.”
D. “Our bullpen let us down.”

Often the news media will press them to elaborate on this and that. Once in a while a manager will say, “We just really sucked.” Maybe not exactly like that, but that’s what they are saying.

Then they will talk about what they have to do in tomorrow’s game to get better.

Suppose you had to explain your performance today? For the week? For the month? For up to this point in the year?

What would you say?
What would you fix?
What would you change?

Suppose you had to explain it? That’s all I’m gonna ask. Tommy Gibbs

Most would agree that the automobile business is very good these days.

When business is good we often pound our chest and become lax in paying attention to some of the more important things. When you’re generating some decent profits, it’s easy to take your eye off the target.

There’s an old saying that selling cars, which equates to gross, will hide a lot of sins.

When business is good, that’s the time to amp it up. That’s the time to dial it in. That’s the time to go for the jugular.

On a daily basis you should ask yourself:

1. Are you letting certain expenses get out of line?
2. Do you have too many people?
3. Do you have too few people? Sometimes too few is just as bad as too many.
4. Have you accepted that the average gross profit that you’re getting is all the gross profit you can get?
5. Do you have the right pay plans for today’s market? For today’s sales people and sales management?
6. Have you gotten lazy about holding people accountable?
7. 50% of your advertising dollars are wasted. Do you know which 50%?
8. Are you looking under every possible rock to find used cars to sell?
9. Have your processes started to get sloppy and evaporate?
10. Are you truly engaged in the business or are you just staring at your computer?
11. Have you put training and coaching on the back-burner?

Business is good. The worm will turn. Be ready. That’s all I’m gonna say. Tommy Gibbs

I’m not always right, but I’m often right because I pay attention and I study the car business every day. I’m not a numbers genius, but there are some numbers in the car business that even I can understand and that can’t be denied.

A few months ago I introduced my readers and clients to my 30/30 spreadsheet. Dozens of dealers send me a copy of their spreadsheet at the end of each month.

As you can see from the below examples it’s very telling. If you weren’t a believer in selling units fast there’s a pretty good chance you will be if you start tracking 30/30.

Your goal each month should be to improve the percentage of units being sold in your first 30 days of ownership VS those being sold after 30 days.

Let the convincing begin. That’s all I’m gonna say, Tommy Gibbs

Could it be that you’re too smart for the car business? No really, I’m convinced that some people are just too smart for this business.

I’m not going to deny that to be in the business today requires a much higher degree of thinking and intellect than it did 30 years ago.

But, there are some people who over-analyze, over-think, over-chart, over-spreadsheet to the point where they forget we’re in the car selling business.

One of the best dealer operators I ever met would take a chance, throw it against the wall and bam, lots of cars got sold.

He didn’t overthink it. He just went for it. Oddly enough he was right more often than not and he didn’t need a spreadsheet to tell him to “let ‘er fly.”

I love being around smart people. I always learn something from them. Sometimes I learn what not to do as much as I learn what to do.

Don’t overthink it. Just sell cars. That’s all I’m gonna say. Tommy Gibbs

For some of you this isn’t going to be pleasant. Or at least it may not be if you do what I’m going to suggest.

Regardless of your position in the dealership, owner, new car manager, BDC manager, used car manager or even if you’re not a manager, go click on your website… right now, yes right now go look at your website.

Even if you think your website looks great, I dare you to go look at it. (Don’t be chicken.)

I’m only going to pick on used cars, but if you take the time to click on all your buttons I’m betting you’re going to find some things that will drive you nuts. We all need to pretend to be our own customer and see what works and what doesn’t.

Click on the used car section and tell me what you see. Take it a step further and scroll through a few used cars…keep scrolling…

1. How many photos per car do you see?
2. How many lousy pictures do you see?
3. How many are taken outside?
4. How many have shadows?
5. How many have a factory photo?
6. How many have no photo?
7. How many don’t have a price?

Depending on what you just looked at there’s a good chance you are saying, “What the heck are we doing? No wonder we’re not selling enough used cars. No wonder we’re not making much gross per car.”

Can we all agree that somewhere between 80 and 90% of all customers who shop for used cars look on the Internet? If that’s even close, how do you think you’re gonna drive traffic with photos that look like what you’ve just viewed? (Did you see any with snow on them?)

The concept of a photo booth has been around for years now. Progressive organizations that understand the real world have a photo booth.

You won’t come close to maximizing your sales until you maximize your exposure. You will never maximize your exposure by taking photos outside.

I’m exposing you by daring you to look at your website. Don’t like what you see? Don’t be sad. It’s going to be ok. Just fix it. That’s all I’m gonna say. Tommy Gibbs

The most misunderstood topic I discuss in my workshops are SETS & SUBSETS. For some dealers it’s not a good fit. For others it’s a great way to drive traffic.

I will be the first to agree SETS and SUBSETS are not for everybody. They are especially not for you if you haven’t solved a lot of your other used car issues.

I’m not going to try to sell you on SETS & SUBSETS, but I do want to show you that first, it’s not all that complicated and second, it’s something you’ve done with success in the past in one way or another.

SETS & SUBSETS are all about setting up a price leader to drive traffic to the store.

What’s so bad about that? Don’t you do that right now? I have to believe that in one way or another you do it with your new car business, so why not do it with used?

The lead or number 1 car is the most important car in the SET. You can do SETS in 2, 3, 4, or 5 car SETS. Experience has taught me that going deeper than 5 just confuses the issue and makes it much more difficult to manage.

If you had 5 similar cars and you wanted to advertise them as a group (you did this back in the program car days), wouldn’t it make sense to advertise the least desirable of the 5 as a price leader in hopes of driving traffic to the other 4, or better yet, to your store?

The lead car is simply the least nice of the group. Make it safe, but don’t make it too pretty. This is not about bait and switch. It’s about the customers transferring themselves to another car in the SET or to one out on the perimeter.

The key to SETS is picking the right lead car. It needs to be desirable in the “public’s mind,” and most important is that it should be the latest model you can find for that SET.

Two of the biggest mistakes that dealers make are trying to make a profit on the lead car and picking too nice of a car to be the lead.

The lead car is a “loss leader.” More often than not the car that dealers pick to be a lead is really a number 2 car. A 2 car is a profit maker and one that you’ve fully reconditioned, so you would want to make sure you haven’t made it the lead.

If you want SETS to work, you have to advertise your lead car at what you have in it or less. If you try to make a profit on the lead car the traffic probably isn’t going to show up. The sole purpose of the lead car is to drive traffic to the dealership.

When done correctly one of three things will happen:

1. The customer shows up and buys the lead car.

2. The customers transfer themselves to the 2, 3, 4 or 5 car.

3. The customers buy something out on the perimeter.

The key is that the customers showed up on your lot today and you have a chance to sell them something.

So, there it is. SETS described in its simplest form. It’s not all that complicated or any great trickery with the consumer. You’re just advertising a price leader and giving the customers some other choices when they show up.

Might be a good fit for you. Might not. That’s all I’m gonna say, Tommy Gibbs

Can I get an amen that it’s hard to find good technicians? Heck, can I get an amen that’s it hard to find technicians period?

I’m going to be more specific. How about used car technicians? Tough gig isn’t it?

Regardless of how you slice it and dice it there are only about 3 models to pick from when you think about how to get used vehicles through the mechanical shop.

1. Goes thru your regular shop, assign vehicles to technicians in the same rotation as a retail customer. Everybody in the shop works on your used vehicles. Works well for the shop, not so well for the used car department.

2. A separate used vehicle shop. Works much better for the used car department, but there can be issues with keeping the technicians busy when there is any kind of slow down with incoming used vehicle inventory. And, very difficult to do due to space restraints.

3. Within your regular shop you have separate used vehicle technicians that only work on used and a used vehicle service writer who coordinates their activity. Of the three choices, given the issue of facilities and staffing this is the one that has the most potential to create efficiency and harmony.

The major problem when service managers think about having someone dedicated to working on used is they don’t want to pay them what they are worth.

There are many reasons for this and one of them of course is the service manager doesn’t want to upset the top “franchise” technicians in the shop by paying the used vehicle technicians at the top level.

And even more to the point, they have been taught very well that they must keep their cost of sale in line in order to make a profit and for their numbers to look good to upper management.

The reality is a good used vehicle technician needs to be one of the highest paid technicians in your shop. A good used vehicle technician’s skill level has to be equal or greater than whoever your top dog might be. And, you need to pay them as such.

So, if you’re mentally fighting with the cost of sale thing, let me suggest that you can keep your cost of sale in line for service and let the used vehicle department participate in some of the additional compensation required to get and maintain top level used vehicle technicians.

It might be an incentive that’s paid based on some formula that in the end compensates the used vehicle technician for what they are really worth, not for what the shop thinks it can afford.

Paying more is not always the answer. But, paying people what they are worth is far better and a lot more productive than paying them what the shop thinks it can afford.

If you can improve your speed and efficiency it’s money well spent. That’s all I’m gonna say, Tommy Gibbs

Can you believe it? The year is half over. Time really does fly doesn’t it?

How was your June? How have your first six months been? It’s July. Half the year is gone. Kinda scary isn’t it?

Some of you have had a great first half. Some of you, not so much.

Some of you have been running full speed ahead. Some of you have been dragging through the sand.

Something has been holding you back. There may be some legitimate excuses, but maybe you just had the wrong plan in place. Just because you had the wrong plan does not mean it’s too late to fix it. You’ve still got 6 more months to go.

Those of you who have had a good first 6 months 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.

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.

To do so means to review your plan and the strategies you have in place. And, make the changes that are necessary to get you where you know you need to go.

Your other choice is to do nothing. Go sit in your office and stare at the wall. Enjoy your seat and pretty soon it will be over.

That’s all I’m gonna say, Tommy Gibbs

Make a list and attack your 10 most expensive units every day. 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. Most dealers bonus their sales staff when the units have aged. Do it early, you will be much better off.

Make sure the service manager gets a copy of the list every day. If one of those units happens to be in the service department, the service manager has to understand they must get it out of the shop in a hurry because it’s one of your 10 most expensive units.

Also give copies to the sales managers and F&I managers every day. The entire team needs to have top of mind awareness that these vehicles need to go.

In many cases your top ten most expensive are also some of your oldest units in stock. Duh…that’s because there are fewer butts that can fit in those seats. That’s all I’m gonna say, Tommy Gibbs