Are you running the dealership, or is the dealership running you?
It’s hard to think of any other business with more moving parts than an automotive dealership. It’s a dynamic you can’t fully appreciate unless you are part of the chaos that is automotive retail. As the old adage says, “you can only control the controllables,” and that statement could not be more true in the exciting and sometimes frustrating environment that we maintain.
For automotive groups in a growth posture, the key to sustainable success is in the controllable and the focus on processes. This is true in both sales and service. A2Z has worked with very successful auto groups, and we have adapted our processes to fit the clients and often times leverage the findings of successful processes into the functionality of our platform. Let’s unpack three key insights that ensure you are running the dealership and the dealership is not running you. Keeping a pulse on these critical insights is also very powerful for those with the responsibility that transcends multiple rooftops – if you can master the measurement and accountability within these insights – you can have a pulse and manage expectations on each store with objective benchmarks.
Speed matters, and getting off the blocks in the race to meet the customer’s needs is critical. Showing hustle at the onset of a new opportunity speaks volumes to the end client. Plus, we are all busy – the buyers who reached out may be doing so in a small pocket of time available. This is the mindset you should have with every prospect.
What to measure: Initial Response Time, Internet
This key metric not only gives you a solid feel of the “hustle” factor of your team but just measuring it and presenting it will send a very clear message that if you want to say you are customer oriented, you need to prioritize when they reach out.
Pro Tip: Things we have seen work in our travels: CRMs are evolving to assist in the initial response time. For instance, our friends at Drive Centric utilize AI to provide that initial response and can be a backstop when our sales staff or BDC cannot respond quickly when the are having face-to-face time with clients in the showroom.
By nature, data is black and white, but it can be easy to make something as clear as math turn subjective and a topic of debate if our dealership is running us and we are not running the dealership. Take time to ensure your measurement practices are void of subjective nature. Ensure your targets are based on historical data, not a pie-in-the-sky number and in return, ask everyone else to ensure that everything is in the math when accounting for key metrics. The truth is you can’t improve if you don’t know where you currently are, and you can’t expect people not to try to manipulate the ratios if the objectives are not based in reality.
What to Measure: Leads by Advisor, Engagement Rate, Visit Rate, Closing Ratio, Closing Ratio Including Orders
Pro Tip: Things we have seen in our travels: Groups that measure effectively lead with key ratios that are measurable over time. If you are starting our journey in measurement or have the appetite to standardize, start here.
- Number of opportunities by advisor. Measure this in the 30-day period for every sales representative and pair it with the below metrics. Keeping a pulse on this ensures that you find your sweet spot for the ideal number of opportunities by an advisor and also helps clarify staffing decisions.
- Engagement Rate. This measures two-way conversation and indicates if the initial lead response is compelling and the sales representative is answering the initial question and encouraging a conversation for the prospect to take the next step
- Visit Rate. Of all the opportunities, how many actually visit the dealership? We know that 95% or more vehicle sales happen in the showroom. You can’t really sell a vehicle or have the best trade evaluation process if the prospect is not invited and welcomed to the store.
- Closing Ratio. Measuring this with an “all in” no subjectivity mindset is how to keep it consistent month over month and see if the store is making progress. Getting closing ratio by the source is also powerful, so you know what dials to move when you need more activity and are picking the most effective methods instead of introducing more busy work with poor lead quality
- Closing Ratio Including Orders. The trend of less inventory on lots is anticipated to continue. Keeping a pulse on this metric ensures that your store builds processes and trust in the order process.
Sales to Finance Time Efficiency
No matter what assessment you reference – the customer perception is that it takes too long to buy a car, and there is probably nothing worse than having guests that are committed to purchasing only to be introduced to the bottleneck of finance on busy days. It can kill your throughput and put your operation in a position where you are always having to find new customers because the ones you did earn won’t be back
Time stamping the interaction with guests in your CRM or an external tool such as Google Sheets can clarify where the bottlenecks are and identify the metric that the team needs to focus their attention on improving.
What to Measure: Sales to Finance Efficiency – Time
Pro Tip: Things we have seen in our travels: This is where A2Z fits in the puzzle. A Dealership Experience Platform (DXP) is needed to centralize tools for vehicle selection, menu, and desking. Turn many tools into one. The efficiency loss is due to tools that do not talk to each other, which introduces a clumsy transaction process that is inefficient and lacks transparency to the customer – even if it is not intentional. Streamline the last mile and make it measurable with our DXP.
Internal Assessment of Satisfaction
The manufacturer, for better or worse, dictates many of these measurables. These should be factored in but don’t forget what your prospects see – online reviews. You can be doing so many things right, and that can be lost by not taking any initiative to have a say in the narrative of reviews.
There are many tools native to your CRM and those that specialize in the practice, like Podium and Reputation.com.
What to Measure: Invitation Rate, Star Rating, Number of Stars benchmarked against market share
Keep this metric simple.
Review Request Rate. The target should be, at minimum 7 out of 10 sales should have a proactive reach out soliciting a review. In our opinion, Google is king because of its prominence on Google My Business. The second is DealerRater because those ratings are very close in context on third-party sites with low funnel shoppers. An invitation rate of 70% should be the standard for sales representatives and the store at large. The number of reviews and the star rating should be benchmarked with your competition. If you have a larger market share than a competitor in sales, but they have more reviews – you know you have work to do.
Pro Tip: What we have seen in our travels: Set expectations and ensure they are celebrated when achieved. It does not always have to be monetary – You can have a dedicated parking spot for the highest-rated sales advisor on google that is prominent on your lot – That celebrates them and communicates to people on your lot that you care about their experience.
Want to take it to the next level? Standardize and measure the most critical moments in your dealership – The Last Mile. Modernize automotive retail with A2Z Sync. Our Dealership Experience Platform guides the guest through a standardized and measurable process that increases CSI, output, and profitability. Our in-store tools empower automotive groups to transition to a modern experience – even to the extent of implementing a single point-of-contact selling model.