As you can well imagine I fly an awful lot. The bad thing about my flying is I don’t fly the same routes week to week. Thus, I end up flying on almost every airline that serves the continental United States and Canada.

I’m sure you probably have your favorite airline, and my favorite is Southwest by far. Southwest is the largest airline in the world by number of passengers carried per year (as of 2009.) Southwest maintains the third-largest passenger fleet of aircraft among all of the world’s commercial airlines. Southwest operates more than 3,200 flights daily.

Southwest Airlines is one of the world’s most profitable airlines, posting a profit for the 37th consecutive year in January 2010. On September 27, 2010, Southwest Airlines announced it would acquire AirTran Airways.

When I say Southwest is my favorite, it’s not even close. They win hands down or hands up or whatever. 99% of the time they leave on time, they arrive on time. What more could you ask for?

I even like they way they board. I know, I know some of you like airlines that have seat assignments. With Southwest you pay an additional $10 and you get to board first. Then it’s every man, woman and child for themselves. Go get ‘em. Pick any seat you like. I like that.

I flew American this past week. Purchased my ticket 30 days in advance and guess what? Didn’t have a seat assignment. I checked in two hours early, was the last person to board the plane and got stuck in a center seat. So much for flying airlines with seat assignments.

So what does all this have to do with the automobile business? Plenty! Both their business and your business is all about keeping it simple and communicating the “message.”

I cannot understand for the life of me why the other airlines don’t “get it.” Southwest can load and unload a plane of passengers faster than a speeding bullet. They operate on a twenty minute turn around time. Talk about fast. (What’s your turn around time when it comes to getting a used car through recon? Speed Wins, Lack of Speed Loses.)

As you may know they don’t charge for bags. Because they don’t charge for bags more people check their bags. By more people checking their bags, they load and unload faster. All the flight attendants “get it.” Their mission is hurry up and go faster. (Does everyone in your dealership “get it?” Are they all on the same page? Do they understand how critical speed is when it comes to your used car inventory?)

Southwest uses the same aircraft, Boeing 737s, with the same seat configurations on 99% of their flights. Think about that one. How much simpler can it be for the crew members when they fly and serve on the same aircraft all the time. (Do all your managers use the same processes? Are they all preaching the same message? Are they all working a different system?)

All the other airlines roll a beverage cart down the middle of the aisle. The Southwest flight attendants take your order, bring the drinks to you. I mean come on, how simple is that?  No stupid carts in the middle.

One of the most important things about Southwest is their employees like the company they work for and they have fun. Imagine that. They go to work and have fun. I can tell you from speaking to other airline employees, not only are they not having fun, they hate the company they are working for. (Are the people in your organization having fun?)

But here’s the real deal. Everyone, and I mean everyone knows their job at Southwest. Their people are well trained and understand the word “speed.” They move fast, they don’t mess around, they get it done.  Though I don’t have any surveys to prove it I’m betting they have the most satisfied customers in the industry. (Does your entire team understand the mission of your business?)

So, the moral to the story is when your team understands their assignment, are well trained, are having fun, and you keep it simple, your chance of success goes way up and you fly high, really high. That’s all I’m gonna say. Tommy Gibbs

Ice Cream and Coffee are absolutely two of my favorites, but not necessarily together.  Is there anything better than the first lick of an ice cream cone or the first sip of coffee?

The first of everything in life is the best. Your first love, your first computer, your first car, your first job, your first house, your first management position.

The more you eat the ice cream cone and the more coffee you drink the less enjoyment there is. The first taste of anything is always better than the second and so on.

Call it the “The Point of Diminishing Return of Satisfaction.” (I made that up; I make lots of things up, just work with me.)

Used cars are no different. Think of the first day that you own a used car as if it’s the first taste of coffee or ice cream. It tastes a lot better if you sell it on day one than it does on day 61.  The longer your coffee sits the colder it gets. Not so good. The longer ice cream sits the more it melts and the less ice cream you get to enjoy.  The longer a used car sits the less you make on it. The less you make on it the less enjoyment you get to have.

But even if the coffee stayed warm, and the ice cream stayed cold, your second taste of either is never as good as the first.

You’re going to hear a lot about the “Life Cycle” of your used cars this year. My definition of “Life Cycle” would be how long you allow a car to hang around and more important, what elements impact and extend your “Life Cycle?” The management of “Life Cycle” is the most important element of maximizing the potential of your used car department.

Doesn’t it stand to reason that if you can shorten the Life Cycle of your used cars that you’re going to enjoy them a whole lot more and make more money? Dealers and used car managers are always looking for that magic bullet. We all know there is no magic bullet, but if there was one it would be called the bullet of “Life Cycle Management.”

When you shorten the life cycle you make more gross and sell more used cars. 

Poor “Life Cycle” management impacts:
A. Slow Turn
B. Aging
C. Volume
D. Gross
E. Poor ROI
F. Attitudes
G. Ability to Trade at the Door
H. Future Acquisitions

There are many factors that create a slow turn and a long life cycle. 

Life Cycle Factors:
A. Acquisition to Write Up
B. Write Up To Shop
C. Shop & Parts Issues
D. Willingness to Re-Route (Sublet and/or jobber for parts)
E. Detail/Clean Up Issues-Same as “D”
F. Photos-Quality and Quantity
G. Posted on Internet
H. Pricing
I.  Gross Attitudes
J.  Pay Plans

If you focus on fixing “Life Cycle” factors then your coffee is always warm and your ice cream is always cold and the taste doesn’t get old.  That’s all I’m gonna say. Tommy Gibbs

Do you ever feel like all you do is put things off? Things you know you need to just get handled, but for whatever reason you keep setting them aside?

I’m in my 10th week of a grueling exercise program called P90X. I’m a former Marine and I’ve been an athlete in one form or another all my life, but I’ve gotta tell you P90X is a killer.

One of my best excuses for not doing it each day is I’m in a hotel room and it’s too much trouble to bother with it. But, one way or the other I’ve learned to work it in. Thus in 10 weeks I’ve lost about 9 lbs, an inch and a half off my waist and gained some much needed muscle that’s so important to have at my age.

So what’s the connection? As much as I try putting it off, I’m always so much happier and successful when I “just do it.” When I put it behind me and it’s done I have a much more productive day.

One of the challenges we all have in life is to make decisions that need to be made in order to ultimately make us and those around us more successful. Be it exercising, cleaning your desk off or decisions on the direction of your company, the sooner you get it done the better.

In the mid 80’s my business partner Ashton Lewis introduced me to the Franklin Planner. You know the day planner book that you write everything down in. It’s the deal where you prioritize things you need to do with a letter A, B or C. Then you number them A1, A2, and so on.

This concept takes a few minutes of your time each day, preferably early in the morning or at the end of your day to prioritize those items for your next day, week, month, etc. It was astonishing as to how much more I got accomplished each day by doing so. There is something special about writing things down and checking them off.

And the fact of the matter is when I make use of it like I know I should I’m so much more productive. If you don’t write it down (and even when you do) your brain is constantly fighting with you to put it off to another day. Never forget how important the saying is “the pain of discipline or the pain of regret.” You’re going to have one or the other and you get to pick.

Can you recall a time when you wanted to do something important, yet you managed to make enough excuses to leave it for a later date? Putting something off once makes it easier to put it off again, and before you know it, several weeks have passed and you still haven’t done it?

If you are in a Leadership position don’t think for one moment that others don’t notice that you are either a “doer” or a “do notter.” (Yep I made that word up.) When others see you putting things off they tend to follow your lead and over time your organization develops a “do nothing” attitude.

See if this makes sense?
 
1. Delaying things becomes addictive. Even if your intention is to put it off “just this one time”. The act of putting it off sets a chain reaction that will make it easier to delay this task again. In fact, it becomes more likely that the task will be postponed again.

2. The more we make excuses, the more we buy into them, the easier it is to make additional     excuses to support our mind-created beliefs.

3. The more we put things off the bigger the task becomes. It snowballs larger and larger, until the task becomes so big that you will never get it done.

4. Constantly thinking about doing something but avoiding the actual act of doing it takes energy. You end up spending more energy pondering it and making excuses for it than just getting it done.You’ll actually save time and attention energy by just doing it.   

5. We can only move on with our lives when we can get past our internal conflict between our story of procrastination and our desire to get it done. You really start to be productive when you can change your attitude.

Isn’t it interesting that once you make a decision and move on that you look back and think “what the heck took so long to make the decision in the first place?” Life is so much better.

So my final point is I have a confession to make. When I started this article I was using the need to write to avoid doing my P90X program. Thus, after writing the first paragraph I stopped writing, did P90X and I feel so much better about myself. I’m off to a great start today…just can’t wait to make some more decisions. Let the fun begin. That’s all I’m gonna say. Tommy Gibbs

Most dealers are seeing their average gross profit continue to head south. Dealers using pricing tools to drive traffic via the Internet have become frustrated that even though volume has gone up average gross keeps going down.

A lot of dealers want to blame the Internet and their pricing tool.  Pricing is neither the fix nor the problem. Pricing in and of itself is just a small part of the equation.

There’s a cultural revolution going on and by and large most dealers are fighting it rather than embracing it.  The Internet and the way the customer wants to shop and receive information continue to challenge a dealer’s conventional way of doing business.

The Internet has become “the showroom.” Therefore, until you match your staff, pay plans, selling process and culture to the “new showroom” not only will your
gross continue to go down, but your frustration will continue to go up.

TEN and WIN:

1.  If you are using some sort of bucket system whereby you price your cars from day 1 to day 10 at a certain percentage of market, and then you make changes at day 11, etc., consider doing a daily “unit evaluation.” Each unit has to stand on its own relative to the market and other conditions. 
You are selling yourself short (in some cases selling yourself high) when you pick an arbitrary number like 98% of market to start your pricing at. Each unit has to be weighted based on many elements including supply and demand and your previous history with that unit. The key point here is you have to spend a little more time analyzing each unit before you jump out into the market with a “price.”

2.  Creating value starts even before the customer shows up. 40 to 60 pictures in a studio setting is an absolute must. If you’re still doing 12 to 20 in a non-studio environment you are at a huge disadvantage from “Jump Street.”

3.  Make sure you have descriptive window sticker prices on your cars. Your window sticker prices should have the full retail value printed on them. Not your selling price or Internet price. The full retail value. That number needs to be part of your sales person’s presentation when creating value with your potential buyer.

4.  Use a “hang tag” with terminology like “Internet Value Price” or “Internet Market Value Price.” Of course that price should match what you have on the Internet. Some dealers are still posting a higher price on the car than the Internet hoping a drunk falls into the dealership and pays “the price.” Very bad strategy.

5.  Make sure you are displaying the “Internet Value Pricing” definition throughout the showroom and that your sales people take the time to explain it to every customer before they start negotiating.

6.  Your sales staff has to be convinced that the prices you are putting out on the Internet are a great value. Make sure you bring pricing tool examples into your sales meetings each week and show the sales staff how “right” your cars are priced. The sales people have to become believers in your “pricing.” The customer “thinks” the price is too high. We have to give the sales staff the ammunition to offset the customer’s thinking.

7.  More documentation. You have access to all the cars in the market. You cannot allow the customer to win the “information battle.” You don’t have to prove to the customer that you are the cheapest. You just have to prove you are competitive and then make sure you sell the value of your vehicle and your dealership. The greatest thing about used cars is there are no two alike!

8.  Make sure you are tracking GAP, which stands for “Give Away Profit.” GAP is the difference between the Internet price and the transaction price. You will find out who is screwing what up when you track GAP. Dealers tracking GAP see an increase in average gross profit by at least $300 per unit. You can’t measure what you don’t track.

9.  Change your pay plan. Sales people need to be rewarded on how little they give up based on the GAP concept. Set your pay plan based on the Internet asking price. The simplest way is if they hold the line on that number they make X. For every dollar they “give up,” X comes down on a sliding scale.

10. Gross Profit Improvement Grid. Develop an under allowance grid based on ACV. If you don’t want to make up your own contact me and I will share mine with you for free. The bottom line is your sales process should be disciplined to serve up an under allowance on the first pass on every trade.

The more this business changes the more it stays the same. It’s a lot like football. It’s all about blocking and tackling. Yes, trick plays are cool once in a while, but the bottom line is that winning teams have solid fundamentals.

It’s been said that “gross is just a state of mind.” That’s only partly true. Gross is a state of fundamentals, disciplined processes and the ability to adapt your organization to the marketplace. That’s all I’m gonna say, Tommy Gibbs

As many of you know during the years that I was a new car dealer I also refereed Division I NCAA college basketball.

As a division I NCAA official I was required to attend the NCAA clinic held each fall just prior to the kick off of the basketball season. The purpose of those clinics were primarily to cover something called “points of emphasis” and to go over the new rules for the upcoming year.

“Points of Emphasis” means that during the previous year there was a rule in place that the officials did a lousy job of calling. It could be something as simple as “palming the ball” or a little more complex like a “block/charge foul.”

In those meetings that all Division I NCAA officials are required to attend, every Division I NCAA college basketball coach is also required to attend. I hope you can get a visual on this unique gathering. You have college basketball officials and college basketball coaches in the same room. The term “interesting” is an understatement.

What do you think is the number one complaint that college basketball coaches have about college basketball officials? I’m thinking you probably got it right. It’s the lack of “consistency.”

What do you think the number one complaint is that your sales staff has about sales management? Got that one right too. “Consistency.” As a matter of fact, it would not matter what department or business you might be in. The number one complaint from all subordinates about management is the lack of consistency. Being consistent is about having processes and procedures that you believe in. The trick in management is to be consistent in demanding high standards, consistent in achieving high quality, and to reach such ends using methods that oftentimes requires flexibility, reassessment, change, etc. which can cloud the issue of being consistent.

Even with some flexibility in the equation, a leader has to be able to display consistency. When a Leader is consistent people can depend on them. That leads to trust, which leads to amazing results.

However let me caution you. There is good consistency and bad consistency. If you have really bad management techniques or bad processes you may be consistently getting it wrong.

Good consistency doesn’t require a major overhaul, but must be tweaked daily. Bad consistency not only requires a major overhaul but it may require a total change in habits and if change doesn’t take place then the next step may require changing people.

If you think of companies you enjoy doing business with you will find a common thread of consistency. McDonalds, Chick-fil-a, Southwest Airlines, Starbucks, FedEx to name a few.

You may not like everything about them, but when you compare them to their competitors they win hands down when it comes to consistency.

So, to its core, consistency is really important. It’s important for you and it’s important for those around you. I try to be consistent by sharing simple, but effective ideas with you each week.

That’s all I’m gonna say, Tommy Gibbs

Yep, that’s what I said. Take them off. Take them off right now. I’m talking about those casual clothes that you and others around you have convinced you is ok. You know golf shirts and the business casual deal.

The argument and justification that the customer feels more comfortable and relaxed is a bunch of malarkey. The only person being more relaxed is you.

Look Einstein, the customer is making the second largest purchase in their life next to a home. Do you think they want to do business with a slob? The answer is a big fat no.

Oh, I know if you are dressed in a suit then it’s too intimidating for the customer and they won’t buy the car. Really? You’ve got to be kidding me. Look if your people skills are not better than that and you can’t overcome wearing a suit, then it’s a miracle you’ve lasted this long.

Most of you are in some sort of authority position. Trust me on this one. When you dress casual there has to be an element of loss of respect by those around you. If you want to be more productive then dress like you are productive.

Respect comes from looking the part. When one is attempting to wield power, if nothing else, he or she must look the part. Why do you think the military and police officers wear uniforms? Yes, it defines them and who they are. There is an automatic respect for them based on appearance alone.

Not to bring politics into this, but I think most would agree that the President of the United States is one of the most powerful people in the world. Does he really need to wear a suit? No, but it brings respect to the office and the position. You are no different.

Often times I’ve had 20 Group consultants tell me “hey we will all be dressed casual so feel free to dress casual for the meeting.” As much as I appreciate the offer I have never taken them up on it. For me it’s not about trying to create respect for me, but I dress up to be respectful of them. I’m honored to have the opportunity to serve them, just as you should be with your customers and associates. When you give respect you get respect.

I have a little challenge for you. For the next week dress up when you go to work. Make sure you wear a suit and preferably a long sleeved white shirt. Make it a point not to leave your office without your jacket on. (Ladies, it’s no different for you, you can wear suits also.)

At the end of the day make some notes as to how productive you’ve been. Then in the second week go back to your old way of dressing. I will guarantee you that you will have been far more productive the first week rather than the second.

A dark suit and a long sleeved white shirt never go out of style I don’t care what planet you might be from. That’s all I’m gonna say, Tommy Gibbs

For most dealers Thanksgiving starts the close out of the year. It centers around Black Friday and rolls through the last week of the year. As you attempt to finish strong you also have to put a plan into place to jump start 2011. Here are some very basic things you need to take into consideration that will help you finish strong and to get ready for your best year ever.

A. Re-commit yourself– and your thinking towards being the very best you can be. Take stock of all those great ideas running around in your head. Write them down and make a commitment to get them done by certain dates. Post it on the wall in several places that you will see frequently. If you have a private restroom, put it on the mirror.

B. Re-evaluate-the appearance of your inventory. Let’s do a little checklist:
       1.    Look at your inventory online. Are they all there? Do you have 40 + pictures & prices posted?
       2.    Take a lot walk. Are the vehicles in straight lines?
       3.    When was the last time the entire lot was rotated?
       4.    Are you using angles to display your inventory?
       5.    If you are using license plates do they all have one or do some have them on the front, some on the rear and some not at all? Some cars do not have a bracket on the front. Why would you even bother if you can’t put a license plate on all units?
       6.    Do they all have your decal on the rear of the vehicles?
       7.    Are all old decals removed?
       8.    Do you have fresh FTC stickers on each vehicle?
       9.    Do you have fresh window stickers on each vehicle?
     10.    Do you have the year of each vehicle on the front and rear windshield? Yes, front and rear.
     11.    If you have other decals or markings on the windshields, do they all have same or similar markings?
     12.    Do you have hang tags? If so, do they all have hang tags? Are some lying on the floor?
     13.    Do they all have at least a quarter of a tank of gas in them?
     14.    Are they nasty, dirty on the outside?
     15.    Are you making use of your entire front row for used vehicles?
     16.    When the public rides by or pulls onto your lot can they easily identify where the used cars are?

C. Refocus-To be successful in the used car business (or any business) you have to be focused and be totally committed. Your entire management team has to understand your commitment to the business. This doesn’t happen through osmosis and a meeting every six months. From now until the end of the year meet with these key staff members twice a week to discuss where you are and where you’re going.
Make sure a weekly lot walk is part of your routine.  Every car in your inventory must be touched. If it’s in service, touch it. If it’s in prep, touch it. If it’s in the budget center, touch it. Everybody touches it.

D. Re-Recon-Take every unit over 30 days old back through a recon process. (You’ve already missed your best window of opportunity to make gross; that would be the first 20 days.) Most of them should not need mechanical work done, but if they do, get it handled. Most importantly, put a full clean up back on them. I can’t imagine you having to spend more than $75 or so a car, but whatever the amount, it’s going to be worth it.

E. Re-Invest-in yourself and your management team. Do something to gain some knowledge. Hire me, visit CarMax, or visit a dealer friend in another state that does a good job in used. Attend a workshop. Join a Twenty Group. Join a Used Car Twenty Group. Do something besides sitting there and waiting for something to happen. You may think you already know all there is to know about the used car business and you will just be wasting your money. The fact is you may actually know a lot, but you need something to jar your brain and get it going again. You have become real good at talking the talk, but you may not be walking the walk.

F. Re-think- your management team. Do you have the right person running your used car operation?  Yes, that person may have been with you for years. Loyalty sometimes equals mediocrity. Maybe they have some great skills, but the fact is that you may not be making the best use of their talents. Used car managers today have to be “Asset Managers.” 
It is not a matter of just being a “Car Guy.”  They have to have a good blend of common sense and ability to make use of technology. In my travels, about 75% of the dealers have the wrong person managing their used car operation and they wonder why they are not maximizing their full potential? (Even if you have the right person, they have to have the right tools, processes and your full support to be successful.)
The dealers with the most successful used car operations are those who have taken ownership of the used car department. The more involved you get, the more success your dealership will have.
I’m thankful for lots of things this holiday season and I’m especially thankful that you’ve taken the time to read my little Zingers…That’s all I’m gonna say.

Reading is really important to me. Mostly I read stuff to help me with my business. What I find so interesting is more often than not when I read something it’s something I already know to be true. 

I don’t mean that as a "know it all," but after you’ve been in business for as long as I have, and since I’m a student of the game, I’ve either seen it all, heard it all or done it all. That’s just a fact of life. 

But, what I also know to be true is that we have to be reminded from time to time about some of the many things we know to be solid, fundamental business principles.

I’m reading a book right now titled "It’s Okay To Be The Boss," by Bruce Tulgan.   If you’ve not read it you really should. The premise of the book is pretty much what the title says. It’s really ok to be the boss especially if you know how to manage yourself.

One of the key points the book makes is that if you walk into a restaurant and get poor service then you should not be mad at the person performing the service. You should be mad at the boss.

If people are performing poorly then it’s because they were the wrong hire, they haven’t been properly trained or they are not doing what they have been trained to do. In all of those cases, it’s the boss’s fault.

The boss has a responsibility to hire the right people, make sure people know how to perform their jobs and then demand that they do so. The greater responsibility of a boss is to hold people accountable to do what they are supposed to be doing. It’s foolish to try to hold someone accountable if you’ve not done your job correctly as "the boss."

The biggest issue is that most "Bosses" don’t hold people accountable.  Even when they do it’s a half-hearted effort at best and there are no consequences tied to that accountability.  (Talk about a morale killer.) Accountability with no consequence is an empty threat that falls on deaf ears.

My good friend John Malishenko, the Director of Operations for the Germain Group out of Columbus, OH and Naples, FL uses a quarterly "action plan" to make sure people are doing what they say they are going to do. John has some factory background (don’t hold that against him) so he’s used to using such a tool. Might be something you should try. It’s a whole lot more likely something will get done when it’s put down in writing.

An "action plan" clearly stays what the issues are and a plan of action to fix them. It tells you who’s going to do what, how and when. The biggest problem with action plans is "follow through" and "accountability."

It’s one thing to lay it out, it’s a far greater thing to make sure it’s done and that there are consequences if it’s not.  The answer is not always to "fire someone," but sometimes the answer is to "fire someone." The automobile business is famous for hanging on to the wrong people far too long. 

Yes, it’s always important to see the "good" in people, but you also have to see the "bad" in people and have the courage to take action. Either get them on track or put them on a track heading out the door.

Never forget, you’re not running a democracy. You’re running a business that should generate the greatest profits possible for its investors and stockholders.

If the action plan is laid out and the goals are not being achieved then either you are a lousy action planner or you’ve got the wrong people taking action. At some point the only choice is to fire someone. 

Please don’t fire me. That’s all I’m gonna say. Tommy Gibbs

AutoNation and some of the other public groups have just had the most amazing revelation and that is that it pays to retail every used car that has a breath of life left in it? Really? Wow, that’s an amazing discovery! 

How many people did it take sitting around a conference table to come up with this brilliant idea?
Automotive News continues to let us know how smart Mike Jackson and the folks at AutoNation are.

I am really surprised that the auto dealers of America have been able to survive all these years without the wisdom of these brilliant executives. How in the world did some of you make it?

Here are three excerpts from articles that appeared in Automotive News over the last 30 days or so with a link to the full article that you must read if you have any intention of staying in business. (Because they are so much smarter than you.)

“AutoNation Speeds Up Effort To Sell Older Used Cars, Snags 7 Fiat Stores” (LINK)
By Amy Wilson
Automotive News — October 28, 2010 –
“It’s an opportunity to retail a vehicle that we normally would wholesale,” Maroone said. “It’s incremental business, and it helps us create another retail customer.”

“Groups Find Gold In Old Used Cars” (LINK)
Amy Wilson
and Donna Harris
Automotive News — November 8, 2010

“Older vehicles are part of Penske’s growth strategy, Tony Pordon, senior vice president, wrote in an e-mail. Some of these cars would have been wholesaled in the past, but we found them to be in demand, so we modified our processes," Pordon said. "That’s the beauty of this business — work with your customers, right?"

Here’s more brilliance on the other side of the table:

LETTER TO THE EDITOR (LINK)
“Selling Older Cars Will Hurt Dealers” (In response to Auto Nation Article.)
RONNIE ROZIER, Honey Brook, Pa. November 22, 2010

“But selling older, junk cars is a publicity nightmare for a franchised dealer in the long run. Selling bad cars always has been a bad business model. Some franchised dealers are fooling themselves into thinking it is a cash cow for them, but it will be short-lived before it starts hurting their main business of selling new and certified pre-owned vehicles”.

Ok, can you tell I’m a little annoyed with all of this? First of all, there is nothing new or brilliant about selling older cars.

Any dealer with half a brain has known since they opened their doors that it makes good sense to retail everything they can. I’m not about to go into all the benefits of doing so because “I just know you know.”

In the above “Letter to the Editor”, the writer criticized dealers for selling older cars and said “Selling bad cars always has been a bad business model.” No crap Sherlock. It’s not about selling bad cars. It’s about selling older cars. Duh…just because a car is older doesn’t make it a bad car and it’s not a bad decision to sell it. 

I think I just get tired of Automotive News wanting to make us think some of these people with the public companies are so brilliant when they just ain’t “all that.”  Reading these articles is like wiping my butt with sandpaper…That’s all I’m gonna say.

I mentioned a few Zingers ago that you were going to hear a lot about "Life Cycle Management" during the course of this year. With gas prices and the national debt going through the roof; inflation starting to creep in and ultimately interest rates rising, your ability to manage your inventory will be one of the most important areas for you to refine and attack.

Recently I’ve introduced to my readers and clients EWR, "Early Warning Radar." Today I want to explain it in more detail and share with you a very important element to make it even more effective for you.

EWR starts off with a "Trade Walk" every morning right after your save-a-deal meeting. (If you are not doing a save-a-deal meeting you are already a step behind.) All members of the management team, including the service manager go on the "Trade Walk." There is only one definition for the word all.

All trades as well as all "purchase units" are parked in a staging area and are part of the "Trade Walk." During the "Trade Walk" a decision will be made as to what you will do with those vehicles. For the most part your choices will be to wholesale, retail, or possibly to run them through the shop for further determination, etc. 

You never, ever want one person to be the decision maker on these cars. The more managers you get involved on the trade walk the better. Two heads are better than one may be a theory you can get your head around.

There must be an Expiration Date or "ED" set on each vehicle. A good starting point is some cars get 20, some 30 and some get 45 days. You can come up with your own criteria. In my little world purchase cars as a rule get 30 days and trades get 45 days.

All three Expiration Dates are important but the most important one is the 20 day or EWR units. During the trade walk you want to establish if any of the following are present about each unit:

1. Equity position (the lack thereof.)
2. Make-a-Deal Car (Did you step up on something to make another car go away?)
3. Odd Equipment (Maybe it needs leather and/or sunroof?)
4. Previous Sales History (You’ve just not done well with it in the past.)
5. Bad Color
6. No Experience (You just don’t know much about it.)
7. Service History (Been in and out of your shop a lot.)
8. Potentially Large Repair Bill (going to cost a lot to get it on line.)
9. High Miles
10. CarFax Report (Somewhat suspicious.)
11. Gut Feeling

If a car has any of these or especially more than one, then it’s an EWR car. We have developed EWR stickers (Click Here To View) The sticker goes on the windshield and stays there until it’s sold. There is a place on the sticker for you to write the "ED" date.

"ED" date is 20 days from the date the car has come into your inventory. This sticker will serve as a reminder every time you walk by the car that the clock is ticking and you can clearly see when it has to be gone by.

Now, I’m going to give you the piece of the puzzle that makes "Life Cycle Management" really work for you. It’s the part I believe we have had wrong for years. Most dealers produce an age report that shows how many days they have had a car in inventory. Stop it.

Start doing this; each car should be tracked based on how many days it has "left to go," or its expiration date, better known as "ED." Not how many days it has been in stock. Of course your tracking will be a minus number of days if you allow a car to go past its "drop dead" date.

If you set the "time lines" during the "trade walk," and track them the way I’ve suggested you will be amazed at how your intensity will improve towards turning your inventory.

My time is up. That’s all I’m gonna say.