As a dealership, you most likely have several departments that make up your total book of work. You have the sales department, parts department, service department and finance department, who are all striving to hit different revenue goals, all while keeping customers happy. With so many moving parts, sometimes it can feel overwhelming to know what metrics you should be looking at and what those numbers mean to your dealerships success.
Here are some key dealership metrics that you should keep an eye on in this upcoming selling season. Monitoring these metrics will ensure your business stays on track this year. Keeping track of metrics can be seen as time consuming or overwhelming, but if you prioritize metrics to make decisions, not only will you see benefit, but your dealership will improve as well.
- Breakdown of Department Sales – Getting a breakdown of each department’s sales and the revenue each brought in will give you a good idea if certain departments are under- performing or if they are meeting/exceeding expectations. With that information, you can review historical and projected performance based on those numbers. For underperforming departments, look at the numbers and identify the area in which they are struggling. For departments that are exceeding expectations, what are they doing well? Could it be shared and copied throughout all of the departments?
- ROI on Advertising Efforts – Do you use third party advertisers or advertise on TV or radio? What about digital marketing? Getting reports from these outside companies is key to being able to see your return on investment. If you aren’t seeing an increase in revenue while using different advertising methods, talk with them and ask what they’re doing to make sure your dealership is seeing value from their services. Also start comparing what you are seeing from traditional advertising such as radio and TV, and compare that to visitors and leads that came in through digital marketing efforts such as Google AdWords and SEO. Then make an informed decision as to whether it makes sense to keep all advertising going.
- Total Operating Costs – While this one may seem pretty self explanatory, it is vital to make sure you are on top of your TOC. Overhead costs can creep up if you are not monitoring them, so it is important to track these costs over time.
- Gross Profit – Again this is pretty straight forward, but your Gross Profit will be one of the main metrics that will point to how successful your dealership is doing. Tracking your gross profit will ensure that you are both maintaining sales volumes and that you are selling at the appropriate profit margins. Breaking your gross profit down by department is also a very effective way of identifying trends for your department managers to work on.
- Phone Calls and Internet Leads – How many leads came in online and over the phone? You know people come into your store all different ways, but keeping track of the follow-up on leads over the phone and on the internet is key to making sure you are getting the most out of your prospects. Have a daily or weekly meeting depending on lead volume and just run down the list of prospects to see where your sales staff stands with each potential customer.
- Closing Ratio – Your sales closing ratio based on each lead source is key to understanding your sales team and how they operate. If you are closing 1 out of every 10 phone calls but 1 out of every 25th internet lead, why is that? Closing ratio can also get you a good idea of what the most qualified leads are and where they come from. It also may allow you to see which sales person needs help with which types of leads.
- Advertising Spend – How much money are you spending on advertising your dealership? Take a look at that number and make sure your return on investment is such that it warrants the spend. Sometimes budgets can be stretched unnecessarily, so it is important to get ahead of this and make sure you are spending enough to also get a valuable boost in traffic to your store or online.
- Average Sales per Person – This metric will help you evaluate your sales staff and let you know who needs guidance and who should receive more qualified leads.
- Repair Event Cycle Time – What type of jobs are taking up most of the techs time? Are they lucrative enough to warrant that? When tracking average completion time, it will also help you determine your techs skills and who might be better for certain projects. Repair Event Cycle Time (RECT) will help you identify what things are slowing down completion, delaying customer satisfaction and your receipt of payment.
- Customer Follow-up and Feedback – Are customers being contacted frequently and are prices transparent? If not, your service department could be losing valuable revenue. It is a widely known fact that consumers have a hard time trusting service departments. They always feel like they are being nickel and dimed or misled about their unit or vehicle. It is vital that the service department make sure that your customer knows exactly what you are doing and why you are doing it. The more transparent you can be, the more trusting they will be.
- Technician Productivity – Comparing your billable hours against the hours that your technicians were paid is a common way to determine their productivity. Sharing technician productivity % with each tech is a good way for them to understand their performance relative to flat rate billable hours.
- Breakdown of Store Vs. Online – If you have an online store, it is very important to keep tabs on it, especially how many orders you are doing on it vs the store. Are certain items really popular in the online marketplace? If so, consider throwing some advertising dollars to further increase your online sales.
- Average Transaction Price – This will let you know what types of inventory you are selling. If big ticket items are selling, driving the average price up, think about ordering more if the demand warrants it.
BiT Dealership Software is focused on boosting your dealership metrics and propelling your dealership forward. As a leader in the dealership software field, BiT allows your sales department to easily follow up on leads, email quotes and close more deals than other leading software providers. Your service department can easily manage work orders, technicians, leads and more as well.