One of the hardest things to accomplish during times of uncertainty is maintaining focus. With the distractions in our industry, it almost seems impossible.
In recent weeks, we've seen record recalls, scaled back dealer appointments, a Japanese auto maker fighting for its life and higher gas prices — not to mention onslaughts of natural disasters.
For many, the reaction to disorder is withdrawal from the normal course of business practices that have provided a road map to success. In times of stress, many people retreat to their least effective and worst habits.
When faced with potential risk to their asset base, many dealers slowly reel in expenses usually including inventory, personnel and advertising.
Often, such cutbacks result in further deterioration of profits and, sometimes, customer satisfaction ratings.
A driver uses a dashboard to get information that's needed to maximize performance and efficiency. That applies to driving your dealership variable operations as well.
Visualize an instrument panel displaying information on inventory levels, turn rates and your best and most profitable sellers. There's also a gauge to monitor how managers are managing.
With the proper gauges, each of these performance areas can be analyzed, regardless of the distractions of doing business.
Consider inventory. Arguably, few assets other than real estate represent a larger investment than new- and used-vehicles in stock.
While a knee-jerk reaction to sales erosion might include a reduction in inventory, without an inventory dashboard, critical parts of the decision-making process may be missing.
For instance, how precisely do you know what your best-selling new and used vehicles are?
Do you know precisely which vehicles generate the most profit and F&I gross?
Do you know precisely which vehicles customers are asking for and how well your managers are utilizing that information on appraisals and at auctions?
With today's technology available to dealers, having a software system that serves as such a dashboard is more a question of functionality than availability.
Whatever system is chosen to optimize inventory and measure management, performance must be smart enough to be simple.
Dealer management system vendors can provide an infinite number of reports, with some more useful than others and some requiring too much “slicing and dicing.”
Other resources include “inventory restocking” software that will say what sold and when, but don't drill down for speed of turn, profit potential and specific customer price points. Still others provide auction links and fee-based transactions while neglecting to show sales trends.
Your dealership dashboard should become a reality. With the proper readouts, you should be able to:
Plug profit leaks and ensure you are stocking the right models, trims and price points that perform best in your store and market
Provide tools for your managers to make sure they're doing the right thing every time on every deal and every appraisal
Measure the performance and consistency of your managers with snapshots that identify risks and opportunities throughout your variable operation The difference between being simply good and being great is often the result of accountability and process.
Utilizing a dealership dashboard as part of your information technology can provide the focus and insight you need to withstand the distractions and disturbances that are part of the automotive landscape, while assuring you're getting the most out of your new-car, used-car and F&I departments every day on every deal.
Rob Mancuso, a former dealer, is senior vice president of Resource Automotive, provider of inventory optimization and management tools that measure variable operations.