What Metrics in your Dealership are Important to Measure

What metrics should you measure at your dealership?

Date

The main problem for all business managers is what information do you need to ensure efficiency and profitability are being achieved. The information needs to be timely, easy to access, and concise. What is the problem facing all businesses? How to control the business and ensure efficiency and profitability. It sounds simple, but to achieve this business managers need information that is timely, quick to access, and concise. The management saying “you can’t manage what you can’t measure” has been around a long time, and it is valid. But unfortunately for us in the Power Sport market we collect so much data, that over time we forget what is “important” to measure. In some ways we are now an industry that is at risk of “paralysis by analysis”, with sophisticated business systems inundating us with reports, graphs and readouts that consume so much of our time to read and interpret. Now, this article has only one intention, and that is to provoke your thoughts about what is “important” information for you. The simple question to ask yourself is “will analyzing this particular report guide my action plan in response to that information ??”. In other words if the information flow does not help your decisions and timely action, then it is useless to you. Please indulge me while we take a step back in time. The Industry did develop solutions to the problem of management information, but it is now obsolete. When did the Auto Industry, and by extension the Power Sport Industry commence? An exact date is debatable, but it was definitely in the very early 1900’s. That is about 120 years ago. That makes us an old industry by modern standards. Our argument is that over this 120 year period the industry has transformed, revolutionized and evolved to the point that just about every metric, management procedure and productivity improvement program possible has been thought of or adopted. We believe this dynamic has created more complexity and confusion than answers provided.

We, at Blackpurl, think it is time for a reset.

The new solution to your problem is different to the traditional and obsolete approach. The solution is to focus on the “concise” part of management information. Today’s business environment does not allow the time for managers to pore over reams of reports. We must redefine what information is IMPORTANT and will truly guide you towards efficiency and profitability. Let’s just take a minute and think about what it is that we do in our business.  We BUY something, We HOLD it then We SELL it. Sounds too simple ?  Not really, just that we buy, hold and sell a lot of different things which makes it look complicated.  What we propose is only worrying about measuring these activities first, and if the measurement result is not in $ then you don’t need to know about it.  The cheapest is not always best and the best is not always cheapest. Look at value for money. Paying a few dollars extra per hour for a good technician is worth it if they are highly productive and don’t create rework. Paying a little bit more for quality parts is rewarded by low return rate and higher customer satisfaction. Measuring Gross Profit is the metric to trust. More money earned means you are buying right, and able to sell at a decent price because of the perceived quality by the consumer. 

Are you holding right?

What is the monetary leakage from your business due to Parts Inventory Control? What money is wasted from poor unit trade-in valuation and blow outs in unit reconditioning costs? What Service Labour Sales dollars are lost due to poor management process? The list of questions is exhaustive, but what matters to YOU? 

Are you selling right?

Percentages, averages, unit numbers against target, market share, etc; do not pay the bills, only dollars do. We have all seen horror stories of Dealers receiving awards for the “Best Market Share” and “Dealer of the Year”, only to be bankrupt and closed a few years later. The reason is obvious, they became so focused on achieving a goal that rewards the wrong behavior, that they forgot the real reason for being in business.  Dollars earned are all that matters. Market share domination and awards feed the ego, but not necessarily the family. We are not saying that there is anything wrong with being a Market Leader, just make sure it is suitably profitable as well. To wrap up this conversation we want to leave you with the following to consider: 1) There are a multitude of things in your business you can measure, but what is important? 2) We believe there are only 12 feedbacks that really matter and we are developing Blackpurl as the tool to give you this feedback automatically The question is, do you want to learn more about this way of looking at your business? If so please reach out to one of our introduction professionals by booking a demo.

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