From time to time I hear dealers complain that they got killed when they followed the recommendations from their software vendor about what they should buy. Maybe their interpretation of a recommendation was construed to mean you “must buy.” Or you “absolutely must buy.”

Their conclusion is bolstered by thinking that if they don’t buy these recommended units that the competition will gobble them up and they will be left out in the cold. They have surmised that this is “the answer,” and the only answer to improving their used car business.

Years ago I taught a workshop titled, “When Common Sense Meets Technology.” That’s a very appropriate title when it comes to managing your used car inventory.

For some, it’s a natural instinct that when they make a mistake on inventory they want to blame someone or something, so the easy target these days is the software provider.

See if this sounds familiar. Let’s say you’re a Ford dealer (Located right beside a Honda and Toyota dealer,) and you look at the data in your market and there is a high demand/low day’s supply for Honda Accords and Toyota Camrys. You take the recommendation (advice) and run out and buy 10 Accords and 10 Camrys. They sit and sit.

You have concluded the data was all wrong and that there was no way you could be competitive because those Honda and Toyota dealers have a certified program.

You dump the cars in the wholesale market and lose a bunch of money, swear off the software and go back to doing it the old fashioned way. And, you fire the software company and hire a new one.

As I often hear young people say “Really?” The software did
not go out and buy the cars. You are the one who loaded yourself up with too many units and paid too much.

Wouldn’t it have been smarter to test the water with onezies and twozies? How could you not see the writing on the wall?

Isn’t it logical that if you buy some high demand/short-supply units you’re going to have to pay a premium for them?

Wouldn’t it stand to reason if you’re going to go head to head with a certified program that you would have to have a price advantage?

Wouldn’t it also stand to reason that a certain percentage of the Honda and Toyota dealer’s core cars would have been traded?

And doesn’t it stand to reason they would have a little advantage cost-wise when trading for inventory? Logic would say they have an advantage you will not have.

In your mind, the data killed you. No, you killed yourself. But, you need to blame someone, so you blame the software company and fire them.

I’ll tell you what. If that had been me, I would have been thinking of firing myself. That’s all I’m gonna say, Tommy Gibbs

I don’t think any of us would deny that the car business has gotten pretty sophisticated. I wish I was a bit more analytical than I am, but I have to tell you even if I was, I think I’d still be overwhelmed at the reporting I see that some dealers and dealer groups require of their staff members.

I do see the benefit of all the tracking that’s done, but I think we have to ask ourselves, are we overdoing it? Are we taking the focus off what’s really important?

The most important thing we do is sell a car or truck. If we’re not selling a car or truck then you can track all the numbers in the world and it’s not going to matter.

When I was a dealer, one of the things we would often ask was, “Will it help us sell something today?” If not, then it wasn’t worth much to mess with it.

Without a doubt, upper manage-ment needs to be mindful of key performance indicators and they need to utilize that information to stay on top of what’s moving in what direction.

And yes, the information needs to be shared at the appropriate time, but to rant about it almost minute by minute does the opposite of helping to sell a car or truck.

Our “in the trenches management” has a ton on their plate. If we create too much focus on the wrong things then they can’t do what we are paying them to do and that’s to manage the sales department and sell more cars and trucks.

Get focused on the right things and the attitude will go up. When the attitude goes up, the sales numbers will go up. When the sales numbers go up, your bank account will go up. When your bank account goes up, you can take a nice trip and quit bugging people about the wrong numbers. That’s all I’m gonna say. Tommy Gibbs

Finally a new and exciting selling process is introduced. It has 6 amazing steps:

1. Sell Yourself-You can’t sell a car until you make a friend. Selling yourself can be confusing to some. It’s really very simple. The more you take an interest in the other person the more they will like you. The more you take an interest in the other person the more you will learn about them. Some call it “fact-finding,” some call it “qualifying.” Call it what you want, but remember you don’t sell yourself by talking about yourself. You sell yourself by asking the right questions and listening.

2. Sell the House-How much are you and your staff talking about your dealership during the selling process? Are the key points about what your dealership is all about being put on the table. What are your defining principles? What’s the history and culture of your dealership?

3. Sell the Product-Never in the history of the car business has it been so important to know your product. Are you constantly reviewing product knowledge? When was the last time you did a walk-around presentation? Do you and your sales staff walk the lot and know your inventory from one end to the other? Does the team know as much as the customers know about the benefits and features of each model? Do you and your team do a lot walk each week to review each and every vehicle in stock?

4. Write the Best Deal You Can-Even if you’re a one price dealer, the deal still has to be presented. Even ridiculous offers need to be served up. Once a person puts their name on the dotted line they are much more likely to adjust their thinking as you present a counter offer.

5. T.O.-the Golden Rule should be “never let a customer leave without checking with a manager first.” It’s the most fundamental of all selling processes. Sales would increase another 10 to 20% if this fundamental process was followed.

6. Follow Up-the mentality should be follow them till they buy or die.

So there you have it. The most amazing selling system ever invented, which by the way was the selling system I was introduced to back in 1972. Has the business changed? Of course it has. Do we shape the selling system a little differently today? Of course we do.

But the fundamentals of the business never change:
1. Sell Yourself
2. Sell The House
3. Sell The Product
4. Write The Best Deal You Can
5. T.O. The Customer
6. Follow Up

That’s all I’m gonna say, Tommy Gibbs

My best friend in high school was a wild and crazy guy who lived the last 20 years of his life in Key West, Florida. He often used the saying “Don’t panic and never follow the crowd,” when it came to evacuating the area to avoid approaching hurricanes. He never left Key West when the news media started their “run for cover” broadcasts.

Advertising is and will always be the great mystery of the automobile business. It didn’t get easier with the advent of the world-wide web, that is for sure. If anything, it has further complicated it.

Even with the sophisticated tracking of Internet leads, it’s still no piece of cake to figure out what works and what doesn’t.

When industry leaders such as Mike Jackson of AutoNation make comments in Automotive News that they are pulling away from third party leads then it creates a panic in the industry and some will say “Well, if it’s good enough for AutoNation, it’s good enough for me.”

But is it? AutoNation operates over 200 dealerships. They have an economy of scale that most of us can only dream about. When you have those numbers you can exercise experiments and do things that are impossible for a single or small group of stores to do.

There’s no argument that the power of the Internet is here to stay. Customers will sit right in your showroom and shop another dealer on their phone or iPad. Driving all over town is a thing of the past. Who remembers those days of finding newspaper ads lying in the front seat of a customer’s car as you did the trade appraisal? Not so much anymore.

When I hear dealers talking about dropping third party lead providers due to cost or the perceived lack of leads, the first thing that comes to mind is how powerful is your exposure on those sites? Generally I find several things:

1. You’re not stocking what the market wants. Maybe it’s time to re-evaluate how and what you stock?

2. Over-pricing, not market competitive. In many cases the worst person to price your used car inventory is the used car manager. They are often prejudiced because they either appraised or purchased the unit.

3. Infrequent price changes. In some cases units haven’t been re-priced for 30 to 45 days. Did I say the used car manager was the worst person to do the pricing? They have too many things to do to be able to keep your pricing up to date.

4. Lousy photos. If 80 to 90% of all people who shop for a used car shop the Internet how do you think you can be competitive by taking photos outside? You are shooting yourself in the foot by not having a photo booth.

So, before you jump on the Mike Jackson panic bandwagon let me suggest you take a hard look at those things you can actually control.

And always remember, “Don’t panic and never follow the crowd.” That’s all I’m gonna say, Tommy Gibbs

If you follow baseball, you may remember the Kurt Gibson story. Gibson had a bad leg injury and could barely walk, much less run, as the Dodgers took on the Oakland A’s in the 1988 World Series.

In Game 1, with the Dodgers losing 4 to 3 in the 9th inning, manager Tommy Lasorda decides to pinch hit Mike Davis, who eventually walks.

Lasorda then pinched hit the injured Gibson. Gibson battles the count to 3 and 2. Now down to his last strike Gibson hits a 2-run homer to win the game 5-4. Most people remember seeing Gibson hobble around the bases.

I’m just wondering…how deep are you and your team digging when it comes to selling more used cars?

Has the team decided that it is what it is?

Or are they digging deep, getting after it and determined to make it happen?

I hear people crying all the time about three major things:

1. They can’t find inventory
2. They can’t do volume
3. They can’t improve gross profit

Yet I see others who are making it happen. They are digging deeper to find the cars and trucks they need. By finding the cars and trucks they need, they are doing greater volume. By doing greater volume, they are improving their total gross profit.

Maybe it’s time to suck it up like Kurt Gibson and dig just a little deeper. Let the digging begin. That’s all I’m gonna say, Tommy Gibbs

You may have heard these numbers by now, but just in case you didn’t I will share them with you. Last year there were 15.6 million new cars and trucks sold in this country. That’s a number you have probably read a lot about.

A number that you’ve not heard much about is the 41.9 million used that were sold.

Both numbers are up from 2012. Actually over a million more new and a million more used were sold in 2013 than in 2012.

Here’s the breakdown of the 41.9 M Used:
New Car Dealers: 15.7 M
Independent Dealers: 14.2 M
Private Sales: 12.0 M

Did you sell more used in 2013 than you did in 2012? If you didn’t, shame on you. If you didn’t, have you come to the realization that the market was there and you weren’t?

Regardless if you were up or down last year, your goal should always be to get more than your fair share. I can’t define “more than your fair share.” Only you can do that by taking a look at your total used car market.

Here’s a reality check for you. Average gross profit per unit sold continues to come down. With grosses coming down and expenses going up, can’t you see that at some point you’re going to find yourself in a “trick bag?”

You will only stay out of the “trick bag” by doing more volume and getting more than your fair share. Let the unfairness begin. That’s all I’m gonna say, Tommy Gibbs

Did you notice that you are getting really comfortable with having aged units around? You’ve justified in your mind that it’s ok because the selling season is finally here. Since you think that’s a brilliant plan, please let me know how the ROI turns out for you.

Did you notice that the selling processes you think your team is using, aren’t the selling processes you’re using? Some members of your management team are doing their “own thing.” If you don’t believe it, sit down individually with your sales people and ask them how each manager starts and works a deal.

Did you notice that you are no longer doing a “save-a-deal meeting” and “trade walk” each day? You’ve accepted it as fact that everybody is so busy that they don’t have time to do it. You’ll be surprised at how many more deals you will make by doing a “save-a-deal meeting.” And, how many more used cars you will end up keeping and retailing when the management team does a “trade walk.”

Did you notice that the management team doesn’t understand Life Cycle Management? Life Cycle Management starts on day one, not day 61. If you are having aged units and/or losing money on units wholesaled at the end of the life cycle it’s because they are not using “Early Warning Radar.” If you don’t think Life Cycle Management is important, go ahead and tell me the story on your oldest unit in stock. Yep, they all have a story. Had you been focused on Life Cycle Management that unit would have been gone long ago with little or no loss and maybe even a profit.

Did you notice that the sales and management team doesn’t do lot walks anymore? Did you ever wonder why your sales people don’t sell more used? It’s because they don’t know the inventory.

Did you notice you get lots of lip service on those processes you know need to be followed in all the departments? Guarding the processes is one of the most important functions of leadership.

Did you notice that the average cost per used car in stock keeps creeping up and up? The reason it’s happening is because you are not paying attention to it every day. Pressing the average cost down is a fundamental discipline. The pain of discipline or the pain of regret.

Did you notice you’re selling vehicles for less than what you have them posted online? That’s because the sales team isn’t sold that you have the best product at the best price. Before you can make the customer a believer you have to get the sales staff to believe. Tracking GAP will create a focus that forces you to hold more gross profit.

Did you notice that sometimes you just don’t notice? Your job as a leader is to notice what’s going on. My job is to keep reminding you.That’s all I’m gonna say, Tommy Gibbs

Believe it or not, no one has ever told me I’m too expensive after spending money with me. Of course, people inquire all the time about my training, pricing, what I do and how I do it. Often they don’t ante up.

I can only assume they think I’m too expensive or maybe they know they aren’t ready to do the things they know they should do. The same thing happens to you too.

I also happen to think your product or service is worth a lot more than you’re getting for it.

If we’re talking about your cars and trucks I’m thinking there’s a lot more value to those vehicles than you and your staff are talking about.

If we’re talking about your organization, I’m thinking there’s a lot more value to your organization than you and your staff are talking about.

If we’re talking about the talent and equipment it takes to service your vehicles, I’m thinking there’s a lot more value in your service department than you and your staff are talking about.

I’ve got over 30 years’ worth of solid leadership skills and automobile experience to share with you. No fluff, no puff…real stuff, even high tech stuff. I’ve been a student of this industry and paid the price to learn the things I want to share with you.

In your case, you’ve got millions of dollars invested and thousands of hours of talent to share with your customers. I’m thinking we both need to ask more money for the value we bring to the table.

You’re worth a lot more and so am I. That’s all I’m gonna say, Tommy Gibbs

Everything you say before the word “but” is meaningless.

You might say something like “I have a great used car manager, but I can’t get him to understand why ROI is important.”

This is fun, let’s do some more:

“I have a great used car manager, but we have a lot of stuff over 60 days old.”

Oh, gosh this is awesome, let’s keep going.

“We have a great website, but our photos are awful.”

“We have prices posted on our used cars, but they don’t match the prices we have on the Internet.”

“My used car manager is a great closer, but he doesn’t understand how to price used cars.”

“Curtis is a great buyer, but makes poor buying decisions by buying too many high dollar cars.”

“My used car manager is one of the best in the business, but we’re only getting 5 turns a year.”

“We have a great service department, but we can’t get them to get used cars through the system in a timely manner.”

“My general manager is awesome, but his people skills are terrible.”

“We spend a ton of money in advertising, but we haven’t figured out what role digital plays in our business.”

“My used car manager is really tight with all the wholesalers, but we always lose money when we sell them a car.”

“Steve is one of our best managers, but he doesn’t want to change from old school thinking.”

This whole “but” thing is simply an excuse and/or a weakness as to why you are not willing to deal with the problem or issue at hand.

Ok, one last but…”Tommy Gibbs is really expensive, but he’s made me so much money I feel brilliant that I hired him.”

Gotcha! 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.)

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. If you don’t like what you see, then fix it. That’s all I’m gonna say. Tommy Gibbs