When I’m in dealerships one of the first things I ask a dealer and the members of his/her management team is how many used cars are they selling each month. Then I ask them based on the “market” and based on what they know about their organization what they think their real potential might be.

For instance, it’s not unusual for a dealership selling 75 used a month to tell me they think their potential is 90 to 100. This same dealer tells me his competitor two blocks up the street is selling 200 units a month. And of course I’m scratching my head wondering if they can sell 200 why do you think your potential maxes out at 100?

As the conversation develops the dealer implies that I don’t understand his/her market. Really? Here’s a serious piece of reality for you; what makes your market different is your thinking, not so much your market.

When I further press the question about the dealer up the street selling 200 units a month these are some of the comments I frequently get:

1. The dealer up the street has a lot of Inventory. Answer: Go get more inventory. (What I’m really being told is we’re not committed to the used car business.)

2. The dealer up the street focuses on AutoTrader. Answer: Focus more on Auto Trader. (What I’m really being told is we’re not committed to the used car business.)

3. The dealer up the street has the right inventory. Answer: Buy the right inventory. (What I’m really being told is we’re not committed to the used car business.)

4. The dealer up the street pays more money for his/her cars. Answer: Start paying more for your cars. (What I’m really being told is we’re not committed to the used car business.)

5. The dealer up the street has better trained sales people. Answer: Do a better job of training your sales people. (What I’m really being told is we’re not committed to the used car business.)

6. The dealer up the street has better processes and gets his/her cars through service faster than we do. Answer: Fix the issues in your service department. (What I’m really being told is we’re not committed to the used car business.)

7. The dealer up the street has an awesome website and great looking photos. Answer: Get a better website and take some better photos. (What I’m really being told is we’re not committed to the used car business.)

8. The dealer up the street is a big vAuto Dealer. Answer: Become better at using vAuto. (What I’m really being told is we’re not committed to the used car business.)

Making a commitment to selling more used cars isn’t rocket science. No doubt there are a lot of little pieces to the equation, but the real deal is for you to be passionate about the commitment of doing so.

I know what it takes to be successful and that’s why I’m constantly stirring up your thinking. That’s all I’m gonna say. Tommy Gibbs

Pay plans are a very touchy subject. I’m always being asked about pay plans. It’s one of those subjects like religion and politics. I’m brave so I’m jumping in.

There are as many different pay plans as there are dealerships. It’s fair to say that how much and how a manager is paid depends totally on the dealer’s philosophy of the business. More often than not the dealer’s philosophy was developed early based on what “worked” when the dealer himself (or herself) was actually a manager.

We tend to think that everyone thinks like we do, and so if the way we were paid when we started made us successful, then it will work for others along the way. Or we think it’s worked so well for the dealership over the years…so why change? Nothing could be further from the truth.

Let me point out that as a new car dealer for 20 plus years, I was always searching for the “right plan.” I’ve always felt there had to be a better way. I fully understood that just because it worked for me, or let me say I made it work for me, that did not in any way mean it was the perfect plan.

I believe that every manager in the front of the dealership should be paid based on the same bottom line. My definition of the same bottom line means to add up the used car gross, the new car gross and the net F&I and pay them all on the same number. To do anything else is counter productive in producing the maximum gross, teamwork and future growth.

However, the actual percentage they get paid is totally dependent on them achieving monthly performance levels which are adjusted each month based on a number of factors such as inventory availability, previous performance, forecasts, and staffing levels.

If you want to include a small salary, the salary levels for each manager might be different depending on a number of factors, such as responsibility, years on the job, etc.

To keep it simple, assign each manager no more than three or four levels of achievement to shoot for. This concept is designed to put maximum gross on the books and at the same time push each manager to make sure they are achieving maximum performance in their individual department.

It’s simple enough to figure out by sitting down and determining how you feel about what levels of performance you find acceptable and backing into some highs and lows. If you feel 60 units a month is acceptable for your new car manager then maybe that job is worth X dollars a year. Maybe 75 units puts your thinking at XYZ dollars per year and so on. You can think about it in terms of gross or units.

A pay plan like this requires the GM to adjust the levels each month based on inventory, time of year, number of sales people on the staff, etc. It’s really not that hard. You sit down at the end of the month, review a few numbers, plug the new standards in and review them with each manager. Getting them to agree they are achievable is half the battle.

Here’s a sample. CLICK HERE

I need to go work on my own pay plan. That’s all I’m gonna say, Tommy Gibbs

What would you think is the number one issue used car managers complain about?

Ok, you got that right, the Service Department.

Let’s be more specific. Do you think they complain the most about the pricing they receive or the time it takes to get a car done?

Ok, you got that one right too. It’s the time it takes to get a car in and out of the service department. 

I’d say in many ways the market has become “equalized.” What I mean by that is a large percentage of dealers are now using a pricing tool to manage their inventory. They know that if they price the cars “right” that the customers show up.

Not too many years ago only a small number of dealers used a “pricing tool”, thus they had the advantage. There is still an advantage to using it, especially if you do it right, but to continue to dominate your market there are some other elements you have to get an edge on.

I’m fascinated when I’m talking to dealers and managers about their challenges that in most cases whatever the issues they are struggling with are “fixable.” Someone, usually the dealer, just needs to want to “fix it.”

I doubt that there can be any disagreement that “speed” is critical in today’s market. We all understand we cannot let a car sit and that getting it on line and online as fast as possible is extremely important.

The why don’t we just go ahead and fix the speed issue in the service department? Is it because we’ve always done it that way and we don’t want to rock the boat?

Let me say this as nicely as I can. In today’s Internet-oriented, fast-paced world, if you don’t rock the boat, the boat will soon sink. You cannot and will not survive this business if you don’t speed your processes up.

Used Car flow in a typical Dealership:

2 days sitting before getting ticket written.

1 day before it goes into shop.

2 days in the shop.

2 days in and out of clean up.

2 days before the photos are taken and posted online.

You may be better or worse than this, but on average it takes most dealerships 7 to 10 days to get a car ready and out into the market. The reality is 99% of the dealerships don’t really know how long it takes. It’s a guess at best.

The number one excuse that we get from the shop is that they are too backed up and customers come first. I understand that. I really do. When you’ve got retail customers screaming at you, then of course it’s easy to set your best customer, the used car department, to the side. Doesn’t make it right, but I get it.

What other options do you have if the shop is truly backed up and you have 10 used cars you need to get done for a big sale this weekend? Let’s pretend it’s Wednesday and there is no way the shop is going to get it done.

Maybe that’s when dealer needs to step up and make some big boy/big girl decisions. Here are two options:

1. Pay the technicians extra, lots of extra, to stay late and finish them up. The dealer has to make this happen because the service manager won’t do it. The reason they won’t do it is the training we have given them over the years. We’ve taught them to manage “the numbers.” They have been well schooled in controlling their cost of sale/labor. They have been taught they need to retain in excess of 70% of the sales number, so if they paid people extra to get your cars ready it would kill their numbers and they would be “bad managers.”

I’m just wondering whether the technicians would be willing to stay if you paid them double time. How about $100 bonus per car that they get out of the shop completed that night? Do those numbers scare you? So let’s do some math. If you had 10 cars to get out that cost you an extra $1000. What does it cost you if those same 10 cars don’t get on line this weekend? Hmmm…

2. Let’s say that’s a real bad idea. Why would you not sublet those cars out to a jobber? Oh, that’s right, I forgot. We want to keep all the revenue in house that we can and it’s against our policy to send cars out. One of the reasons a dealer gets to be the dealer is he makes the policy and he gets to break the policy. (or she, please….)

Of course we don’t want to lose the revenue and it’s not a good thing when you don’t have total control of the quality of the work, but sometimes you have to make an executive decision if you’re going to keep things moving. For me it’s far more important to get those 10 cars ready for sale this weekend than it is to sit on antiquated “company policy.”

Hey “Super Hero,” I didn’t say you allow just anyone to make these decisions. It’s the dealer or maybe the General Manager, but sometimes you have to do what you have to do to make things happen.

See, I started this article out saying that in most cases whatever the problem is in your store is fixable. You just have to want to “fix it.” Getting inventory on line fast is a very fixable issue. Speed is critical.

Realize that most dealers won’t “fix it.” They will find hundreds of reasons why they can’t or won’t “do it.” So, to get “the edge” all you have to do is be the exception to the rule. Making speed a priority will get you the edge.

Using vAuto software gives you an edge when you’re pricing your inventory. Your “decisions” give you an edge when it comes to getting your inventory ready for sale. That’s all I’m gonna say. Tommy

Here’s what you have to understand, just because you are having success doing it your way, doesn’t make it perfect. Your way is not perfect. There are many ways to be successful in the car business.

Focus on new cars
Focus on used cars
Focus on both

Packs
No packs

Four square selling system
One price selling system
Do your own thing selling system
If I could…would you

Paying on gross
Paying on volume
Paying on a combination of the two
Paying a salary, plus

New car managers appraising cars
Only the used car manager appraising cars
Anybody can appraise cars

Trade walk
No trade walk

Lot walk
No lot walk

My Life Cycle Management Process
We will find a butt for every seat

Separate recon team
All cars go in the main shop

Buying cars online
Never buying cars online
Attending weekly auctions
Buying cars from the public

Separate used car sales building
Sell everything out of one building

Teams in the service department
Groups in the service department
Conventional service department

Newspaper advertising
Radio & TV
Internet
Little bit of everything

10 Photos per car
40 photos per car
100 photos per car

Charge the used car department full retail from the service department
Discount service work to the used car department
Charge a set fee to each car
Charge no recon to a used car and make it a line item

Using a menu in F&I
Not using a menu in F&I

Hiring only green peas
Hiring only experienced
Hiring anyone who can fog a mirror

And the list goes on and on.

You should want to be perfect, but you’re not. The only way to get close to perfect is to keep looking and to keep trying for perfection. If your store is making $1,000,000 a month you’re still not perfect.

There is always more to do and something to fix. That’s all I’m gonna say, Tommy Gibbs

For years we have used the terminology, “Gross Profit Is a State of Mind.” That may have been true years ago. Not so much today. Gross is a state of pricing, processes, and doing a lot of little things each day. 

Tips On Improving Gross Profit:

1. Do a better job of training the sales people (and sales managers) to sell the value of your company and the value of the vehicle, and your grosses would be a lot better. The Team needs to learn to say “no” and to convince the customer that you have the best deal going.

2. Provide more information. The more information your sales people have about your inventory and how it’s priced to market, the more likely they are to do a better job of convincing the customers you’ve got the best car at the best price. You have to sell the sales staff before you sell the customer.

3. Do more and better research. The more research you do on what’s hot and what’s not in your market, the better off you will be. Grosses go up when you are selling a product that’s high in demand and low in supply. Key components for you to utilize are vAuto Stocking Tool, Auto Trader Data and data from Auto Count USA (Experian.)  If you’re still making decisions on what to buy based on gut instinct, you may want to rethink that.

4. Rethink “Buckets.” Buckets are a solid discipline process, but you can’t take a position that all cars in the first 20 days are priced a certain way and at day 21 another way and so on. There are some that need to be over market and some under market, regardless of age. All cars have to be evaluated on their own merits and this must be done daily, not in 15 or 20 day windows. One of the biggest problems I observe is that cars don’t get re-priced soon enough. You might want to start to pay close attention to how often cars are re-priced. Some of your older inventory may have been ignored along the way.

5. Track GAP and ROI. Dealers who are tracking GAP and ROI are seeing a big difference in their average grosses.  If you’ve not bought into this process then maybe it’s something you should take a hard look at. If you need the GAP/ROI spreadsheet, send me an email and I’ll get it right to you. (It’s Free!)

6. Fix your reconditioning timeline. If your most profitable car is a 20-day car (and it really is) how can you allow the service department to bog you down with it spending 7 to 10 days in the shop? This is one of those things that’s fixable, but it has to be done by the dealer. If the dealer wants to fix it then it gets fixed. Speed wins; the lack of speed kills. It’s as simple as that.

7. Re-do your website. How does your website look? Your website is the “New Showroom.” Do your pictures tell a good story? Do you have 12 to 20 photos? If that’s all you have then you are not in the game. You need at least 40 and they need to be done in a photo booth. If you don’t have a photo booth you need to make a commitment to get one. Saying you don’t have the space is a poor excuse. You can make it happen if you want to. Kind of like the issue in service. You can fix it. You just need to do it.

8. Install EWR into your “Trade Walk.” If you’re not familiar with Early Warning Radar, read this article. EWR will help you eliminate your problem cars.  Early Warning Radar Even if you’ve read it before, read it again.

The used car department takes a lot of energy and effort to achieve the volume and gross you need to make big money. You can say that “gross is a state of mind” all you want, but what really creates gross is your mind getting in gear and fixing the things that impact gross, not sitting around thinking about it.

My state of mind is, “That’s all I’m gonna say.” Tommy Gibbs

Yes, you may very well be lazy. Let’s admit it, we all get lazy once in a while. Some people are lazy all the while. (I meant to say it that way.)If you’re not lazy and if you’re serious, dead serious about wanting to sell more cars, then you should do a “lot walk” at least once a week. I didn’t say trade walk, I said lot walk.Before I share a great tip with you on how to make it work to the maximum, I want to define it for you so we are all on the same page.A lot walk is done once a week, preferably on Friday after you’ve had your weekend “kick off” sales meeting. All the members of the sales management team, the sales staff and the service manager go on the lot walk. There should be very few exceptions for any of these people missing the lot walk. You will hear all the excuses in the world. You should say “Talk to the hand…you’re going on the lot walk.”The lot walk should be orchestrated by the Dealer, GM or GSM depending on how you are set up. If that’s you, you are going to be the one that stirs the pot during the lot walk, but the real spokespeople are going to be the used car manager and the sales staff. The Used Car Manager-I am appalled and horrified at how little some used car managers know about their inventory. They know very little about their cars and even more shocking they often do not know where all their cars are. A real used car manager thinks of each of these cars as if they were his/her children. They know what they wore to school today, they know when they last ate, they know when they last pooped, they know who they hang out with, they know if they are late from school, and they know if they oversleep. They are always very concerned about their “children.” Rob Seifert is one of the best used car managers I ever worked with. Yes, Rob had his quirks, his strengths and weaknesses just like all of us, but one thing Rob always knew was his inventory. From the moment we owned it until it went away, he knew everything about it, where it was at any given moment and what we needed to do to get it sold. The Sales Staff-if you’ve struggled with the lot walk in the past I want to share another layer to the equation that will help you over the speed bumps. My good friend Tim Deese introduced me to Adopt-a-Car back in the ’80s. It works very well when you have the discipline to work it. It has the potential to evaporate quickly so I want to suggest you consider trying it for 60 days. When I say try it, I mean announce that you’re only going to do it for 60 days so you don’t look stupid when the evaporation factor bites you in the butt. You can always renew it. The fundamental adopt-a-car program is that each sales person has their own used car inventory and they get paid extra money if they sell their own units. If another sales person sells one of their cars they still get paid on it. If a sales person trades a car in, that car is part of his/her inventory. All other inventory is distributed on a rotating basis to the entire staff. When you first start the program you will have some orphan cars that you would do the same with. My suggested pay plan looks like this: In order to make this work you have to have the discipline to take cars away when a sales person doesn’t adhere to the program. The main reason we are going to pay them to sell their own inventory is to get them to help us make sure the car is standing tall at all times. Here are some reasons to take a car away: 1. Cosmetic problems 2. Trash in the interior 3. Gas on empty 4. FTC and/or window stickers edgy 5. Hang tags not properly displayed And now for the lot walk kicker. During the course of the lot walk the sales people must be able to recite the following on their inventory: 1. Year, make and model of the car 2. Mileage of the car 3. How long have we owned it? 4. The Internet Price and Last price change 5. Something they know about this car. It may be one owner or something they looked up about this model on the Internet. You can come up with your own list, but if you are going to pay them to sell their own inventory then you need to require them to know something about it. Make sure that when you do the lot walk you take a copy of the inventory with you and check them off as you go. “Voila,” there will be some missing cars and the used car manager and sales staff need to have an answer. Anything else is just plain lazy. I’m not lazy. That’s why I send you this stuff. That’s all I’m gonna say, Tommy Gibbs

I was standing in the airport the other day (nothing unusual about that) and I overheard one guy say to another, “Go sell something.” And he responded by saying, “I’ll do my best.”

I have some shocking news for that guy, just as I have for you. Your best is not good enough. Never has been, never will be. 

We often hear people in business and sports speak of giving 110%. Well, it’s the same deal with 110%. 110% isn’t good enough because, trust me, someone else is giving 111%. There is always someone willing to do more than you.

The fact of the matter is you can always do more. Sure, there are all sorts of excuses as to why you don’t do more, and they are just that…excuses. If you’re a sales manager and have 10 sales people working on your team I can guarantee you that if you think back over the course of the previous month, you could have helped and pushed those sales people to get one more unit each. Maybe even two units for some of them.

If you’re the dealer or general manager I’m thinking you too could be doing more. We can all do more. I kick myself at the end of every day because I know I can do more.

Maybe you got distracted, maybe you got busy, maybe you got satisfied, maybe you got sideways about something goofy and your mind went out in left field.

The Superstar players don’t get distracted. They don’t let busy beat them. They are never satisfied, and they don’t let others get them off track when they hit a wall.

You and I both know you can do more. That’s all I’m gonna say. Tommy Gibbs.

There’s always talk about where the value of used cars is going. Are they going down, stabilizing or going up? Just this past week there were reports in Automotive News that indicated values may be on the upswing.

Let’s say for the moment there are a few models, a few markets, or a few situations where that may be true. You can skin this cat anyway you want to, but trust me on this. If they are going up, it’s temporary and if you decide that your new business model is to hold cars longer because the values see a sudden spike you’re making the worst bet of your life.

There is no sure bet. But there are some really bad bets. A bad bet is to hold on to your inventory because cars are scarce. Really, it’s a bad bet. The whole notion that you need to hold your inventory longer is as flawed as an old pair of jeans with those cool rips and tears in them.

The number one thing you should keep in mind is “buying and selling in today’s market.” You will never go wrong if you follow this discipline. “Today’s market” can be defined as a maximum of 20 to 30 days.

If today you pay too much money (or what you believe to be too much money) because the market is up, as long as you sell it while the market is up, then you will be making a solid bet.

To do anything less is a bet on “the come.” Gamblers bet on the come all the time. And they win once in a while. It’s funny how we want to remember those few wins. They are like a drug we just gotta have more of. Have you ever noticed all those gigantic, gorgeous casinos in Las Vegas? They were built with gamblers betting on the come.

They were not built by people who understand how the game is really played. Whatever the gamblers thought, it was wrong. Holding your inventory will turn out to be wrong.

Dealers who buy into a bad bet of keeping inventory often have poor processes in place, have lazy people who don’t want to scramble to find cars, and don’t understand the concept of “buying and selling into today’s market.”

A better bet than holding your inventory longer is to “shoot the moon” for gross profit for the first 20 days or so. Asking for more when the law of supply and demand is on your side is a very good bet.

As I often say, “Don’t be stupid.” Don’t think for a minute you can hold out for a $4000 gross for 45 days and then lower your price and you will be ok. You won’t.

Here’s another good bet for you. It’s now August, September is right around the corner. The fall will soon be here. Halloween, Thanksgiving and Christmas are on the way. Lower prices will follow. It’s a sure bet. That’s all I’m gonna say, Tommy Gibbs

Don’t hate me for thinking CarMax has the best model. As I often say, if I purchased another dealership today I would steal a lot of what they do. They are doing a lot of things we all know to be true and correct. Did you see this recent ARTICLE in Automotive News about CarMax?

The numbers are staggering. They outsold the number 2 seller, Auto Nation, in used cars by 227,107 units. It is not at all unusual for them to be in a market and not only are they number 1, but they outsell the 2nd place dealer by 250 units or more. It’s also not unusual for them to have the top 3 stores in any given market. (Their 2013 report came out in Feb. and they actually sold 447,728 retail units for the 2013 Fiscal year.)

According to their annual report, they have 117 stores and 4 new car operations, so they focus primarily on used sales. We all get that. Auto Nation, the number 2 seller of used cars, has 170 stores and 210 franchises, so obviously they have different models and are dealing with different issues. It’s much easier to focus on used when you don’t have to worry about generating profits from new, service, parts and body shop operations. But still the numbers are staggering.

CarMax made $460,000,000 last year. Not bad. So what do they do that you don’t do and what can you take away from their operations to make you better? Here are 10 key points that you need to be aware of:

1. They have a controlled environment. You can’t get into the inventory without going through the showroom. “Hey, who’s helping that guy in the red shirt?” You will never hear that statement in a CarMax showroom. How often does it happen at your dealership? Why is it that when you build a new facility or do a re-model you don’t set your ingress and egress up the same way? “It’s not complicated.”

2. They use a greeter-up system. Every customer gets the full routine regardless of what they are there for. If they come in to buy or sell a car they get the full routine. What happens in your store if someone comes in and wants to sell you a car? Odds are the sales person will dump the customer on a manager just as fast as they can so they can go find a real customer. You may not want to do a greeter-up system, but it’s hard to deny that your sales people will do a better job with every customer if they know they aren’t getting another one until all the other sales people have had their turn. “It’s not complicated.”

3. They will buy anything. You will only buy something you can retail. They don’t care what it is. It can be stone junk or a $100,000 sports car. They are building the reputation, “We will buy your car even if you don’t buy ours.” They want to get as many people inside their store at some point so that when they are ready to buy a car they end up at CarMax. At some of their stores, 70% of their traffic comes from people who want to sell them a car. And believe it or not some of your sales people and/or managers are sending your customers over to CarMax to get a figure on their cars. “It’s not complicated.”

4. They hire only green pea sales people. As great as you and I are, we can’t get a job at CarMax. And because they only hire green peas they never have people questioning how things are done. They do it the CarMax way because it’s the only way they know. When it comes time to promote, they have people who know the CarMax culture, the CarMax way. They don’t have to reinvent the wheel every time they promote someone or open a new store. “It’s not complicated.”

5. Their pay plans are based on volume. The sales person is interested in telling the CarMax story. The better they tell the story the more cars they sell. The more cars they sell, the more money they make. Some of the pay plans that new car dealers have almost take a rocket scientist to figure it out. We make it complicated. “It’s not complicated.”

6.They hire part time sales people. A great way to staff up and staff down depending on the time of the week, time of the month, time of the year. Besides the cost savings, they have happier people because they are not standing around during the dead time of the day. Nothing sucks the blood out of enthusiasm like idleness. “It’s not complicated.”

7. 99% of what they put on their lot they retail. Yep retail. Their concept is pretty simple. They have figured a way to ultimately find a retail buyer for their car as opposed to dumping a car when it ages out. Of course they have a timeline to meet, but they retail it, not wholesale it. “It’s not complicated.”

8. They make money on all the stuff they buy and trade that they don’t want to keep for their retail operation. (324,779 units to be exact.) They do that by holding their own internal wholesale auction each week for wholesalers and used car buyers. All that junk that they bring in that you think they paid too much for gets wholesaled to somebody vs. letting Bubba and the gang get. And they make a profit on it. There’s gold in them there hills. “It’s not complicated.”

9. They are a one-price store. Their staff does a great job of explaining one-price to the customer. Do they sell every customer? Of course not. Some people want to negotiate. But, do you sell every customer? Of course not. But the odds are pretty good that their sales staff tells the story better than yours. (Remember they only hire green peas who don’t know any different.) Because they are a one-price store their managers spend time developing people, following processes, vs. working deals. When was the last time you shopped a CarMax store? It should be at the top of your bucket list. “It’s not complicated.”

10. The pricing of their inventory is done at the upper level of management not by those who are buying and trading for the units. When you are doing the buying/trading for cars and you are also responsible for the pricing you become prejudiced in terms of what you will price at. When they price cars they are simply concerned with the law of supply and demand and have no emotional interest in the car. “It’s not complicated.”

And of course it’s not all that complicated for them because they only sell used. Don’t hate me, but they have the best model, that’s all I’m gonna say, Tommy Gibbs

My Processes Aren’t Complicated. That’s Why They Work So Well!

There are two things in the car business I’ve always found painful to deal with and that’s pay plans and advertising. Advertising is the great mystery. If you could write a book on the “Mystery of Advertising,” and actually solve it you would have a number one best seller.

And then there are pay plans. How to make them work for the company? How to make them work for the staff? Those are tough balancing acts. One of the great challenges of the day is to become more efficient. With grosses becoming more and more challenging and expenses going up and up, it becomes that much harder to achieve a strong bottom line.

As we move forward we need to rethink who we are paying and how much. There’s a disconnect when it comes to paying high achievers, the real producers, and those average and below average players enjoying the ride.

There are some we need to pay more and some we need to pay less. If the ones we pay less feel slighted and can’t handle it, then we need to let them move on. The sooner the better. They are stealing from you and your top producers because you’re paying mediocre people who are doing below average work far more than they deserve.

Ownership is often trying to solve the problem on the high end when the real problem may be in the middle and lower end. Oh, don’t get confused by that statement. There are plenty of over achieving under paid people throughout an organization regardless of the position in the chain of command. The problem is ownership identifies what they think is the quick fix, rather than the right fix.

Average people don’t deserve average pay. They deserve less than average. Top people don’t deserve top pay. They deserve over the top pay. They are the ones who are leading and making it happen.

I cannot tell you the number of times I’ve seen dealers want to cut a top performer’s pay when the reality is they are more than earning it. It’s the low performers who are killing you. It’s often a top GM or a GM of a group of stores who the owner wants to cut…that’s the very guy or gal that’s making sure the others are actually producing.

While I’m discussing performance let me share another tidbit with you. For the most part people need to be challenged about every 3 years or less. If you want to up performance and productivity move your people around from management position to management position and from store to store. It’s very seldom someone can perform well in the same job year after year.

We all need to be challenged. Dealers challenge themselves by buying additional stores and/or other businesses. It’s no different for the management team. So, if you want to increase performance and productivity challenge your team and pay your top people more and average performers less. I’ve said enough about pay and that’s all I’m gonna say, Tommy Gibbs