Auto Sales, Human Resources, Uncategorized

Turn It Around by the Numbers

My goal was to write a very specific guide on gathering information that would help track a dealership’s progress by the use of metrics. This is the sixth draft and it is garbage.

Metrics or KPI are great tools, but metrics are not going to turn anything around, if your dealership is dying, tracking the fading pulse is not going to help you.

I am going to publish this but understand: If your dealership is in decline, or if you are brought into a dealership to turn it around, the only thing that will save it is your culture. If you want the magic bullet, it is not tracking your hours per repair order, sorry, I wish it was that easy, the magic bullet is to realistically assess the culture in each of your departments and if the culture is broken, fix it. KPI and metrics are important but not more important, in fact not even close, than a no excuses no exceptions, leader led leader enforced culture revolution.

DTCARGUYCULTUREREVOLUTION

So what is the right culture? Along with culture what part does process and KPI play? It is a tease, I am working on that post now.

All of that being said, here is the pile of garbage I had been working on.

Having witnessed the death of various car dealerships from both the outside and inside, I understand. If you are present during the decline or are tasked with turning around a failing dealership it may seem like an impossible task – but there is a clear path to follow to stop the decline. It all starts with the hardest and simplest rule.

Rule #0
First and foremost, DO SOMETHING NOW.

This is especially difficult if you have been there during the good times and have watched the ship start sinking. Having been in that position a couple of times there is an inclination to blame external factors, and sometimes there are external factors, but if you are really honest usually it boils down to something you, your managers or your dealership could have done better.

The NOW part of the DO SOMETHING NOW statement is very important. It means today, right now, get started.

Think about this: Does one month of decline equal a downward trend? If you are only paying attention to your metrics once a month, one month is not a trend – of course until the second month ends. If you only look at your numbers once a month it takes at least a month for you to notice that things are changing and sometimes it is well into month 3 before a trend is recognized.

Which brings us to Rule #1.
Pay attention to your metrics (benchmarks, KPI, whatever you want to call them) daily.

You are deep in the weeds most days with customers, employees, recalls, manufacturer webinars, and the list goes on; and you don’t have time to look at numbers every day. Understand that everyone in the business has the same pressures and time in a day but if you really care about your dealership and your employees you will make your Metric Report the first thing you do in the morning or the last thing you do before you go home every day. This is the difference between being average and being a star.

That brings us to Rule #1A.

Define your metrics and how to quickly build a Metric Report.

Start by defining what is important to measure and track. Of course all dealerships have unique circumstances however there are certain benchmarks that always need to be tracked. The biggest yardstick that we are all measured by is profit and you know how to measure that. Obviously everything else becomes slightly less important if it is one record net profit month after another, and if that is the case I would not finish reading this I would be out spending that money. Still reading? Join the 98% of us that are not riding back to back to back to back record net profit months.

The first place to start building benchmarks is in the Service Department. The reason to start in Service is twofold, first, as a generalization, most General Managers and Owners came from the Sales Department and although most have gained an understanding of the fixed side of the building many do not understand the importance of both Service, Parts, and Body Shop (if equipped). Starting with these metrics in service puts the gears in motion to tracking and rebuilding:

RO/Advisor (Repair Order per Advisor) Pretty simple formula here although there are two parts to watch, the overall formula is the total count of RO’s divided by the total number of advisors. You also need to watch what the actual count is for each advisor.

TARGET METRIC: 15 TO 20 RO’S PER DAY PER ADVISOR (20 TO 25 PER DAY IS POSSIBLE DEPENDING ON THE MIX OF WORK BUT WATCH CSI)

Sales/Advisor (Sales per Advisor) Again pretty simple formula Gross Sales divided by total number of advisors. Again watch that each advisor is actually selling their share.

ELR (Effective Labor Rate) Total Sales Dollars divided by Total Flagged Hours.

TARGET METRIC: IS A MOVING TARGET BUT ELR SHOULD ALWAYS BE BETWEEN 90 – 100% OF YOUR POSTED LABOR RATE

HRS/CP RO (Hours per Customer Pay Repair Order) Total Customer Pay Hours divided by Customer Pay RO count.

TARGET METRIC: EASY ANSWER IS 2.0 TO 2.5 BUT AS WITH MOST OTHER MEASUREMENTS THE MIX OF WORK IN THE SHOP WILL DETERMINE YOUR DEALERSHIP’S NUMBER.

Technician Productivity – Actual time worked by a technician versus the number of hours available in other words Hours Worked/Hours Available

TARGET METRIC: 85% TO 88%

WIP (Work in Process) There are variations to WIP but the first concern should be How many Open RO’s does each advisor have and why are they still open at the end of the day?

Parts:

Sales/Parts Person
Parts/CP RO
Parts Turn
Parts Gross / Parts Profit on Wholesale, Internal, Retail

#Automotive #CulturalRevolution #Culture #KPI #ManagebyMetrics #dtcarguy #advertisingboss #carCultureRevolution

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Uncategorized

Marketing is a Waste of Money

Are you ready to throw away some money? Are you ready to waste some time too? Great. Here is the simple formula: Develop an awesome marketing campaign; support it with television, radio, social media, and search marketing; follow up with having no people to handle the calls and leads. That sounds crazy but businesses, specifically your local automotive dealerships, do it every  month.

The disconnect is especially evident when a consumer sees a high energy television commercial and then calls and speaks with an untrained and unmotivated so-called salesperson or receptionist. The caller usually hangs up without proceeding with setting an appointment or making a purchase, wasting their time, the company’s time, and wasting those advertising dollars. There are ways to avoid this massive money pit.

The easiest way to avoid this is to hire quality people, train them, and compensate them well. Easy, right? At the very least you should always be training. At the very very least you should be training on what the advertisement is and what people should say when customers call or come in. Phone training is difficult because it is not just the words you want people to say but how they say it. A great script delivered with no feeling or excitement is the same as having no script.

It really comes down to training. Who is training your people? Who trained the trainer?

If you want to stop wasting your advertising dollars feel free to email me at dtcarguy@dtcarguy.com

PS. I really dont think that advertising is a waste of money because once you get trained people they need something to do, but which comes first? Join me next time.

Uncategorized

You Hire Who You Attract

Companies often think of marketing and hiring as two different and unconnected jobs and departments, but I propose that hiring is your biggest advertising need if you are trying to grow a business. If your marketing department is not involved with attracting job applicants you are wasting the money you spend advertising your jobs.

It may only be one thing that ruins your job advertisements.

I had been noticing that our recent pool of job applicants for our sales department seemed younger and less experienced than the previous batch of young inexperienced applicants. As I pulled up the online job posting that our hiring manager had posted everything seemed fine until I reached the end, he had posted a salary of $20,000 a year.

If you want a job where you make $1600 a month that is fine, but I wont expect you to be my top producer in my sales department, or my BDC, or as an advisor or mechanic in my service department. If that amount of money is my top producer in any of those positions I am going out of business quickly.

You get what you pay for is as true in hiring as it is anywhere else. When you advertise for people who are satisfied with a minimal amount of money every month don’t be surprised when those same employees give you a minimal amount of work every month.

Motivating people who are success and money oriented is pretty easy, reward them with recognition and money and they usually work on their own to achieve whatever goals are set before them. Motivating people that are not success or money oriented usually ends up being a guessing game and who has time for that?

Advertise BIG for employees, don’t be afraid to use your top producer as the template for your job ad. Does your top salesperson make $300,000 a year? Advertise that instead of advertising to attract more of your worst producers. Get marketing involved in the way you advertise your jobs and you will get better candidates.

Posted 04/06/18 on https://www.advertisingboss.com

 

Auto Sales

February Strategy

Welcome to February, what is your play this month? It is a short month for sure but typically if you work in any kind of production based job you have the same goals as any other month so how you handle the first few days really is the difference.

Auto dealerships and anyone in the automotive business should have already been working in January getting ready for tax time, but if not it is not too late. You may not have control of the inventory at your dealership so getting the right mix of cash cars and lower priced vehicles for financing is not something you can fix. How you respond to what inventory your dealership has is totally something you control however, so make sure that you do what you need to do to sell the inventory you have.

Many salespeople will spend the first half of February complaining about inventory and how management does not provide the right inventory and how the competition is so much better at having the right inventory. Many salespeople will waste time complaining instead of just making it work.

The first February tip is that the month is short, hit the ground today with gears engaged and every day in February remind yourself that this month is short and you have no time to be negative you only have time for selling this month.

Advertising

Marketing Mix

No question, as a business owner or marketing manager there are endless choices of how to burn your marketing budget. In many markets an effective televison campaign can be the entire marketing budget of a small company. How does a small business choose the balance between marketing mediums? What are the options that are available in competition or in unison with digital advertising? Consider these options.

1. Print. In most local markets this would be the local newspaper although in larger markets there may be multiple newspapers or other local magazines. Does print media make sense? In some markets there may be a reason to be present in print but overall this is an aging demographic that may not be the best choice for media dollars. Consider that every part of print media companies are in decline.

“This overall decline in circulation coincided with a double-digit decline in advertising revenue for the industry as a whole. A separate Pew Research Center analysis based on the year-end financial statements of seven publicly traded U.S. newspaper companies suggests that advertising revenue across the industry declined even more sharply than in recent years: a 10% decline, which outpaces the 8% decline in 2015.” (Barthel, M., Pew Research Center, 2017)

2. Television. An obvious favorite of all advertisers television is the “big dog” of most traditional advertising budgets. The real determination of how effective television is often depends on frequency and reach but in reality the effectiveness of television is held in the message. If a business has a strong and unique message the cost efficency of television can make the decision to advertise here simple. The danger of relying totally on television is that similar to print it is a shifting and shrinking media. Even events that usually are ratings and advertising rockstars are slipping in popularity and revenue, the rating estimates for the 2018 Olympics are down 28 percent from previous years.

“The user behavior that cable TV providers fear most — cord cutting — is projected to accelerate over the next five years. EMarketer estimates that by 2021, over 81 million U.S. consumers will have either cut their cords or never signed up for one in the first place, up 64 percent from today.” (Willens, M.,https://digiday.com/media/state-tvs-decline-five-charts,2017)

Both of these major competitors of digital advertising are worthy of consideration in any advertising budget but both are slipping in reach and both can be extremely expensive. Although it would be simple to say that traditional media such as print or television should be eliminated they do have a place in any media plan.

#mediamix #advertisingboss

Life

Jump Off the Train

This has been sitting in my Draft folder long enough so it is time to post.

The most common response to anything negative in our lives is to ride the N(egative) train as long as we can, searching at each station we come to for someone to commiserate with us and agree how bad we have it. Soon we have gathered together all of the poor souls we meet along the tracks and have filled the N train cars with gloom and despair. Listen, you can hear sayings like, “Why do things like these always happen to me?” and “It seems like I take one step forward and two steps back.”

Whether you are the conductor or a passenger you can stop the train and get off, but dont believe for a moment it is easy. Trains gain lots of momentum and once they are under way they are hard to stop, but the N train is a little different because negativity builds speed and energy exponentially so sometimes it is not about trying to stop the train, but learning how to jump off the train without getting hurt.

If you are surrounded with negative people in a negative place and dont have the capacity or authority to change the situation dont be afraid to jump off the train. It usually hurts when you hit the ground but there is usually some kind of pain when you make a change, but trading pain for a fresh start is worth it.

Life, Uncategorized

Showing Up

There is a direct relation between success and showing up. Showing up wont guarantee a win but not showing up almost always means you are going to lose. I have always thought that if I wanted to be dedicated it meant I needed to be obsessed with whatever, never taking days off, working all day every day. As I get a little older I have begun to realize I was right all along, if you want to be a success at something it means there are other areas of your life that are going to suffer, so get over it.