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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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.

Auto Sales, Uncategorized

Are you Ready to Sell?

Salespeople are typically an easy group to distract is a statement I debated about writing at all. The point of the post started out being that small things that you, as an owner or manager, never questioned were working with processes in place may be the reason you aren’t as successful as you want to be. 

That seems like a great place to start a post, especially after discovering that in our organization people that should be able to process credit cards can’t always because they don’t always have access to the terminal. Crazy, right? Wait, this is the crazy part and why I say salespeople are easily distracted. The way I discovered our logistical issue was by walking in and discovering a salesperson with a string tied to a broom handle trying to open the door to reach the credit card terminal. He had a sale and was not going to let a locked door stop him.

So when I say salespeople are easily distracted I say it to emphasize the importance of removing every obstacle between your people and the sale otherwise your sales team may spend there day with broom handles and strings. 

Auto Sales, Life, Sales Management

You Cant Teach Talent, You Cant Learn It Either

Each of us has a talent.  Few properly identify their talent.  Fewer still correctly use that talent in their lives.  Those that do can soar with the eagles.
 
From this idea, I learned that you cannot teach talent.  As a manager I often believed that I could take anyone that was ambitious enough and make them into a great salesperson.  I knew how to train them effectively, how to coach for success, how to build a team, so I was convinced I could make everyone around me acheive greatness.  The truth, however, was that I could make better salespeople, but unless there was some underlying talent, I could not make them into great salespeople.
 
Coaches in most sports know that there are players on their teams that have more talent than others.  Having the most talent on a team does not ensure greatness; this is why coaches continue to make all their players practice constantly.  Talent without honing the required skills for success is merely wasted talent.
 
Skills are essential to learn, regardless of a person’s level of talent.  As opposed to talent, skills can be taught.  As a manager I learned that I had to focus on teaching skills, not talent.
 
The first step is to identify the talents that you need to make a successful team and go recruit them.  Secondly, you must be involved in the hiring process; not being involved creates a handicap in your management potential.  If this is not possible, your recruiter should understand what talent is needed to complete your team.  Once you have gathered the talent you need, practice and drill the essential skills each team member needs to fulfill his potential.
 
Understand one thing, not all talented people have the desire necessary to acheive greatness.  Sometimes it is necessary to cut a team member, even a talented one, if they are not executing the skills you have taught them.  Remember, too, that most people don’t recognize their own talents,  You must be the expert and provide the mirror for them to see their potential.
 
Never believe what someone tells you during an interview regarding their intrinsic talents.  Devise your own style of identifying the characteristics of the talent you are seeking.

*Thanks to my new editor, Michelle Moravec, she is the Booklady!

Auto Sales, Sales Management

What Color Balloons Today

Attention all salespeople, please report to the office for a Sales Meeting. OK, today is going to be huge! We are going to move some iron so let’s get out and balloon up, make sure to use the Big Balloons!

How many times have we heard that or said that at a morning meeting? Unfortunately, many times that ‘Big Day’ turns into a day of disappointment. So our question should be Why? What should we do to ensure how our day will be busy and productive?

Some of us remember the good old days when it really did just take us unlocking the doors, putting out some balloons and writing up sales. Granted, we lost sales by being sloppy but it didn’t matter because someone else was right behind them for us to help. In case you missed the memo, those days are gone and odds are they are gone for good.

In response to the new reality we must decide to take control of our production and not rely on outside factors to determine our paycheck. When was the last time you were not concerned with floor traffic because you had a full schedule of appointments? Hopefully that was today. If not today, why not? Maybe it is just a failure to understand the numbers.

Take just a minute to review the numbers for the average salesperson. The industry average for shown appointments is thirty percent. The average number of shown appointments that purchase is forty percent. Now let’s do the math to determine what your activity goals should be.

If you want to sell 10 cars and there are 22 working days it’s simple math. 10 Units = 85 Appointments, it’s that simple (85 times 30%=25.5) (25.5 times 40%=10)

Are you still with me? The bottom line is that you can plug in your specific numbers and figure out how many appointments you need each day to reach your production goal. But there is a difference between knowing and doing, but that is a whole new discussion.