[3 minute read] What auto dealers can do to quickly step-up the performance of their dealerships…
Fine-tune dealership profit performance in 3 easy steps
What automotive dealers can do to quickly step-up the performance of their dealerships…
02 July 2018
How to fine-tune your automotive dealership’s performance in 3 easy steps
Many senior executives in the motor industry often ask me what they can do to quickly step-up the performance of their dealerships. I’ve always found that the following 3-point plan works very effectively:
Step 1: Make sure everyone has a shared understanding of your vision and mission
Everyone in your dealership needs to understand and buy in to exactly what you are trying to achieve.
This often gets neglected because of lack of time and because it’s seen as a bit fluffy and ‘airy fairy’. In fact, it’s the single most important thing you should do. It doesn’t take long, and can even be done at an informal team meeting over pizza and beers one evening.
As a team, paint a picture of where you want the dealership to be. What is the target, what does great service look like, and what are the do’s and don’ts?
You wouldn’t believe how much time this saves in the long run because everyone is focussed on the ultimate end game. It creates a clear direction for the business. And if anyone steps out of line the others will remind them, so you automatically get peer policing. People take ownership of the results and their performance rather than seeing it as something that has been imposed on them. So lo and behold, just by doing this your dealer performance will automatically increase. You must have discipline in any team but you get this automatically here without having to wave a big stick.
The team lays down their own rules, abides by them and is self-policing.
Step 2: Ensure everyone has a thorough understanding of performance metrics
I find it extremely worrying how few managers fully understand the main performance metrics in their department and how to influence them. They are often too buried in the tasks – working hard but not SMART. On one occasion, I asked a Service Manager what his overall efficiency was and he simply didn’t know. His response was, I’m too busy to be worrying about stuff like that – he was gone in 3 months. In footballing terms it’s like saying; “Let’s not worry about scoring any goals and winning matches, let’s just make sure the kit is clean and laid out neatly in the dressing room before the game.”
It’s all about focus. Focus on what matters and what makes a difference – know your KPIs and how they work. Make sure everyone in your department knows them too and the role they play in affecting them.
Step 3: Focus on the ‘why’, not the ‘what’
Many dealers place too much emphasis on telling staff ‘what to do’ rather than explaining ‘why to do it’. Of course explaining the ‘what’ is easier and takes less time but it doesn’t create an understanding of, and buy-in to, your dealership’s vision. A bit of time invested early on can reap massive dividends later. If people understand the reasons for doing things then it’s easier to get them to perform. They also begin to appreciate their role in the overall performance of the dealership, so their jobs become more meaningful and motivating. This way, you get everyone pulling in the same direction and it makes managing so much easier.
Short, regular, but relatively informal team meetings do the trick. They reduce conflict and politics, because people can have their say and air any grievances in a more positive environment. Staff feel they have a stake in the dealership and start to take more ownership of issues – you’ll see any blame culture, moaning and back-biting start to fade away.
Nothing does more damage to a business than office politics. Some people use it to get on in life and their career, but it’s bad for morale and it’s bad for business.