I have a question for you at the beginning of this new year: what are you planning to do differently in 2006 to improve your dealership performance?
Hopefully, 2005 was successful for you and your staff, but are there areas where you have the potential for improvement? If there are opportunities, what are your plans to take advantage of them? I remind you of the folly of continuing to do the same thing while expecting different results.
I spent a day with a good friend who is a successful dealer. My visit wasn't to discuss operations and profitability, but what steps he could take to increase the performance and accountability of his management team.
He is a hands-on dealer who recognizes the need to extend authority and accountability so his management team can elevate the overall performance level of his dealerships. He knows that if he can manage at a macro level, not only will it improve his people, it will allow him the desired time to give back to the community.
We identified several key performance indicators that will allow him to gauge performance from a macro level. To maximize performance, he is meeting with each manager individually to discuss these performance indicators and their critical success factors.
The key performance areas we identified include departmental and dealership profitability, customer satisfaction, franchise performance versus competition in the marketplace (sales effectiveness), employee productivity and asset-management standards compliance. There are others, but I cite these as examples of what he can monitor and have a real feel for what is happening in his operation.
Critical-success factors are something the individual manager must identify. Specifically question each manager. Example: if you want to sell an average of 100 new vehicles a month, ask the new-car manager what actions or resources are required to do that?
To accomplish this volume goal, we must look at salesperson productivity. If our sales personnel average 10 units per month, we need 10 salespersons, but if the average individual volume is eight, we need 12.5 sales personnel on staff.
We must initially cover our volume goal and then address “illness versus the symptom.” If our turnover is too high, if we don't have an effective training program in place which will elevate the performance to a satisfactory level, or if we don't measure the basics (i.e., demo rides and write-ups), how then are we going to raise our performance level? Remember not to do the same thing if you are expecting different results.
Discussions need to occur with each manager prior to embarking on your plan. They must present you their list of critical-success factors along with a written explanation. Using the sales management example noted, he or she would identify monthly sales volume as a factor. Underneath that factor the manager potentially would list increasing sales-personnel count, while a training program is initiated to improve individual performance. Another item might be increasing Internet sales volume and focus.
Use Excel charts and graphs to track monthly and year-to-date performance. These charts provide a visual exhibit of progress and provide points of discussion at monthly management team meetings.
This year can be your best ever. But before you can witness and enjoy this success, openly discuss your key performance indicators and the accountability you will insist on in order to accomplish them.
Tony Noland (firstname.lastname@example.org) is the president and CEO of NCM Associates, Inc.