Information is a strategic differentiator for your dealership in today’s ultracompetitive marketplace. But knowing what to share or how to share it, is not always obvious or straightforward.
For example, a GM recently told me that sharing financial analytics with sales-managers was pointless, because their compensation structure focused on unit sales. However, I couldn’t help but wonder if openly sharing financial performance wouldn’t compel managers to also focus on cost-drivers, which impact the bottom-line.
Whether you disclose financial information, sharing dealership performance data beyond Daily Docs is essential to get your team on the same page on performance and underlying drivers. This is best done with an Enterprise Business Intelligence (BI) solution.
To get tangible results from your BI investment, you also need a cohesive organizational approach to sharing data.
Focus the Data You Want to Share
When you want to address specific performance areas or have ideas on changes, think through the objectives, sequence of actions required to achieve them and the KPIs which will need to be monitored.
For example, if you wanted to reduce your Variable Expense per Vehicle Retailed, instead of focusing on a top-line number, you might with your team identify Advertising and Compensation as two key drivers to be addressed and requiring targets and monitoring.
Set Clear Goals and Objectives With Accompanying Metrics
With drivers identified, it’s critical to get your team’s buy-in on clear and reasonable goals and the steps and timeframe required to achieve them. In doing so, you maximize your team’s likelihood of feeling empowered and engaged in the project.
At this stage, BI is indispensable for tracking project progress. The right BI platform enables you to monitor goal-related KPIs and also drill into them to identify why you are or are not getting closer to your final targets. In fact, by designing custom dashboards, you can help managers track and analyse how their efforts are producing the desired results.
Any BI solution is only as good as your team’s ability to use it. If they’re busy selling and servicing cars they might not invest time in learning how to use the application. This can result in an inability to fully track and correct progress, increasing the likelihood that goals will not be accomplished. Therefore training is key.
Through training, your team should understand how your BI platform functions, where the data comes from, how often its updated from your DMS, and how the dashboards and reports enable them to answer key operational and financial questions and which KPIs they should be monitoring closely.
Make Information More Accessible
In order to effective tangible change, as measured by the metrics and KPIs that the team has established, the team needs access to real-time analytics and data as necessary. For example, you could have large TV displays located in manager offices or break rooms with project KPIs so everyone is on the same page. You can also give individual users personal logins with customized access so they see only the information or data they’re supposed to see.
Get Your Team to Communicate With Each Other
It’s no secret that in dealerships, Sales doesn’t always talk to Service, Service doesn’t talk to Parts and so forth. But dealership performance optimization is more interdisciplinary that you might think. For example, most dealership operators will understand and agree that the amount of time required to recondition a used car so its front-line ready is one key variable in driving Used Car profits. But who should be looking at this? The GM? Sales Manager or Service Manager. Ideal answer: all three. Only working together can they set appropriate priorities, optimise business processes and track performance collectively. The first step is communication of course.
Have An Iterative Process
As you progress towards your goals and objectives with your team, circle back and continuously evaluate what’s working and what isn’t. Perhaps there are additional factors for which you initially didn’t account but have now identified need to be tracked.
For example, imagine you need to increase your Total Customer-Pay (CP) Gross by selling more per RO (Metric: CP Dollars/ CP-RO). After some analysis you conclude your multi-point inspection (MPI) penetration rate is unacceptable. Working with your Service Manager the MPI inspection rate increases, but there’s still no uptick in your Total CP Gross or in the $CP/ CP-RO metric.
Time to reevaluate. The purpose of a MPI is to uncover opportunities to sell legitimately needed repairs. Maybe your service advisors are not providing enough recommendations per CP-RO, in which case you need to track this metric alongside MPI Penetration Rate and $CP/CP-RO. Ideally, MPI penetration rate, recommendations per CPRO and $CP/CP-RO will move in lockstep- to increase your Total Customer-Pay Gross Profit.
In this way, everyone stays on the same page for what’s working and what isn’t working and remains focused on the end-goals and targets despite any road-bumps along the way.
Celebrate Wins and Successes
When your team achieves goals, make sure you take the time to celebrate the team’s collective success. Try to acknowledge and recognize the efforts of all of the team members and of course reward them appropriately, whether financial or other. As an example, if the team drives an increase in Total Gross, offer bonuses tied to overall profitability so everyone benefits and feels encouraged.
The bottom line is that when you implement a data and information sharing strategy across your dealership, you build a culture of transparency and growth and make your team feel valued and involved. As a result, managers and team-members become more intimately familiar with their numbers and are able to drive improvements because they’re in touch and because they’re encouraged and incented to care. This can only help to better serve your customers and drive your bottom line. Sounds like a win-win, don’t you think?