We have no doubt become enamored by the numbers. We track this and that and a little bit of everything. There was a time many moons ago when the two most important things we tracked were how many ups we had and how many we sold. In some ways we may have over complicated things and in other ways not so much.
I would strongly argue the point that it is the simpler things we need to pay the most attention to. There are some people in this business who make it much more complicated than it needs to be.
Before I go any further, let’s make sure we all agree on what “look-to-book” actually is. It is: How many cars did you appraise (look at) and how many did you get. It doesn’t get any simpler than that.
I cannot tell you the number of times I ask the question, “What is your look-to-book?” And most people don’t have a clue. At best they state a guessed number because they have heard that’s what it should be.
Maybe it’s ignored for the same reason the number of ups and the number closed is often ignored…because it’s not always accurate. If you don’t get all your ups logged then you are misleading yourself with an amazing closing ratio. If you log all your ups, then you get upset that your closing ratio is too low. Oh, whatever. Get it right. Demand that it be done correctly.
And maybe it’s the same for look-to-book. Or is it? Is it that you really don’t understand the importance of look-to-book? Look-to-book is a powerful tool to help you make more deals. The more units you can capture at the front door the more gross per unit you end up making.
The question often comes up as to what your look-to-book percentage should be. Most would answer the question by saying in the 40 to 50% range. (It means nothing if you don’t put them all in the system.) My answer to the question is there is no specific number it should be. What it should be is better than you were yesterday.
You should always be thinking press it up:
The more you press it up, the more deals you are making.
The more you press it up, the more your average gross will go up. (You always make more on trade-ins.)
The more you press it up, the less of a need you have to go out and purchase cars.
Do you remember the Art Linkletter program, “Kids Say The Darndest Things?”
That happens in the car business too. Managers often say the darndest things, such as “We Never Miss a Trade.”
I’m thinking you do. Actually I know you do. We all miss trades. If you aren’t paying attention to look-to-book you have no idea what you might be missing and I’m thinking you’re missing a lot. That’s all I’m gonna say, Tommy Gibbs