We live in a fantastic time in history where we have the technical capabilities to track so much data at a granular level to improve the dealerships productivity and financial results. When we look at fixed operations for example we can track service R.O.s, labor hours per technician, shop load time, service bay turn and so much more giving you the insight and levers to adjust your dealerships fixed operations to squeeze every ounce of productivity and profit out of your space and human labor capital. In fact I was recently speaking to a dealer who installed a vending machine in the middle of his shop that technicians can retrieve small items from like rags, filter etc like you would see at an airport to cut down on the technicians having to walk to the shop counter and wait plus adding the benefit of reducing potential slippage of these small items not being recorded and tracked what technician they went to and when. This is an example of efficiency at its finest. There are hundreds of examples of this for the fixed operations department, but my question for today is why don’t we operate the variable side of the business with this level of precision?
Recently I was at NADA in San Francisco attended the Automotive News private dinner. I would like to thank Jason Stein for your incredible hospitality and the whole Automotive News team for your amazing event. At the dinner I met David Long from the The Niello Company and we both clicked like the two guys in the movie “Step Brothers” when we started talking about this particular topic.
Salespeople, Managers, Finance Personnel and more from the variable side of the business are all people who we almost do zero efficiency or effectiveness tracking beside the basics. How many leads did you get? How many appointments did you set, how many of them showed up and bought? Finally we ask how much was the gross of each of those transactions? This is all good foundational “block and tackle” data that is core to the dealerships very survival, but I ask why aren’t we getting more granular?
As I said in my opening paragraph we live in a time when we can track things to the millisecond and process terabytes of data in a fraction of that time, yet we are still only tracking the most basic things on the variable side of the business.
So let’s have some fun and ponder what might be possible with a few scenarios. Why not track time to complete a sale from the second a customer enters the building till they leave, while measuring this data set against gross revenue of the transaction? What could we learn? How could it impact our processes? How about revenue generated per employee by the hour, day, week or month stacked against another metric? How about number of touches to the desk during a transaction against revenue generated? I am giving you a couple of examples here, but there is actually so much more that we could be tracking, analyzing and understanding to improve this side of the business. When I was talking with David we rattled off a dozen before we said we should talk more often and both smiled as if we has just built bunk beds. Sorry for the “Step Brothers” movie references if you haven’t seen it.
My goal was only to get you thinking about leveraging data that surrounds us that can make processes better, while also preserving profitability and enhancing the shoppers experience during the transaction. The items above would be easy to put in place within the dealership and I am sure you can probably come up with a whole bunch of ways to slice the data and analyze it. You first have to collect it. You can only manage what you can measure. Let me know what data you think would have the most impact or what information would make your job easier or more effective in your comments below.