Vital Metrics for Tomorrow s Dealer

Transcription

1 Vital Metrics for Tomorrow s Dealer Les Abrams Director Training & Dealer Services Cox Automotive Atlanta, Georgia les.abrams@coxautoinc.com Dick Parrish Dealership Management Consultant NADA 20 Groups McLean, Virginia rparrish@nada.org #NADA100

2 2 The views and opinions presented in this educational program and any accompanying handout material are those of the speakers, and do not necessarily represent the views or opinions of NADA. The speakers are not NADA representatives, and their presence on the program is not a NADA endorsement or sponsorship of the speaker or the speaker s company, product, or services. Nothing that is presented during this educational program is intended as legal advice, and this program may not address all federal, state, or local regulatory or other legal issues raised by the subject matter it addresses. The purpose of the program is to help dealers improve the effectiveness of their business practices. The information presented is also not intended to urge or suggest that dealers adopt any specific practices or policies for their dealerships, nor is it intended to encourage concerted action among competitors or any other action on the part of dealers that would in any manner fix or stabilize the price or any element of the price of any good or service.

3 3 Data-Rich Analysis-Poor -Assess the health of their dealership utilizing the combined visibility of NADA and Cox Automotive -Differentiate the most vital metrics a Dealer Principal must personally monitor -Formulate an action plan to address the most crucial opportunities in their dealership

4 4 Operational Best Practices Net profit before tax Percent of sales 2.2% 0.6% 2.9% 0.8% 0.5% Internal Dealership Practices = Biggest Component of Potential Profit 7.0% Average performer and external factors Region and demographics Brand / origin Size and structure Operational practices Top performer favorable external factors Source: NADA McKinsey Report 2015

5 Fixed Operations Excellence

6 6 41 % were introduced to service department at the time of purchase. 53 % said it came into play when deciding where to repair the vehicle. 1.5 times How many more times those who were introduced to the service department at time of purchase returned for service in the past 12 months. Vital metric: Introduction to service at time of sale = 100% Source: Cox Automotive Maintenance & Repair Study, 2016

7 Service BDC 7 Customers don t track needed service & recalls Outbound Calls Increase Business Declined ASR s Check-in confirmation First service Due/overdue for service Special order parts Recalls Source: Cox Automotive Maintenance & Repair Study, 2016

8 Service Lane Vitals 15 to 18 RO s/day per Advisor (max) 8 Under 5 minute welcome Check-in time Recognition Notification RFID Texting

9 9 Engage customer, Pay it Forward 5-8 minutes Drops Keys Off Trust Upsell Confidence Additional ASR Effort Ease of Quality Delivery Walkaround No Walkaround

10 10 Walkaround Advisor engage customer to help Check lights, tires, raise hood Explain courtesy Multi- Point Inspection (MPI) Ask permission for MPI s -Recommended services -Previous declined repairs -Maintenance items -Damage Time you will contact customer (text?)

11 11 Multipoint Inspections (MPI) Complete, communicate in first ¼ time Utilize Service Pricing Guide (SPG) Generate Service Recommendations (ASR s)

12 12 MPI Upsell Results Observed* % MPI Upsells Closed Avg. Labor + Parts $/Upsell Avg. GP $/Upsell** Non-Luxury 41% $162 $81 Luxury 57% $185 $93 * Approximately 150 Dealers Surveyed ** Estimated GP = 50% Labor & Parts Combined

13 13 Technician Productivity Proficiency Flat-Rate hours (FRH)/ hours available Standard Repair = 120% (9.6 FRH / 8-hour day) Express = 100% (8 FRH / 8-hour day)

14 14 Strategy / Process / Goal Measurement Vital Metric Service Introduction Introduction to Service at time of sale 100% New & Used Service BDC Service Lane Call efficiency (time on phone) 2:30 per call vs. 4:35 average address capture 90% Inbound call-to-appointment ratio 40% Outbound call-to-appointment ratio 10% Appointments that show 88% RO s with appointments 50% % time-slots utilized 2pm - close 80% Advisor RO s per day max Customer arrival to greeting time Under 5 minutes Quality walk around time with customer 5-8 minutes Time to completion of MPI First 25% of total time allotted for repair MPI - Multi Point Inspection Technician Proficiency Inspection % Over 90% ASR % Vehicle age & mileage dependent ASR Presentation time First quarter time of job ASR Presentation % Over 90% ASR Closing % +/- 50% Standard Repair 120% Express Lube %

15 Variable Excellence

16 16 Job 1 = Commitment to CRM Quick Usage Check Closing under 35% of walk-ins and be-backs

17 Commitment to CRM 17 Deal Protection True Business Tool Speeds sales process Trade vin scan Driver s license scan Imports info customer completed online Quality communication with unsold prospects Automatic price reduction notifications Similar vehicle notifications Unique content creation

18 18 Commitment to CRM Develop Overdue Tasks Utilization Reports Manager = Less than 5% over 2 hours Salesperson = Less than 20% over 24 hours

19 19 Pre-Owned Excellence Value Proposition Why come to your store? Attractive Inventory Online price aligns with desirability Under 20 days old = each vehicle stands on its own (NO BUCKETS) Over 30 days old = under 90% of market average price Transactional Discount (tgap) by Manager/Salesperson Less than $200

20 20 Aged Inventory Age Intolerant % of vehicles retailed in under 30 days Good = 45% Great = 60% Wholesale Aged Wholesale 10% Immediate Wholesale Good = 15% Great = 10% Immediate Wholesale Profit/Loss +/- $250 unit

21 21 Appraising -New Car Sale-to-Trade Ratio = over 65% -Appraisal-to-Trade Ratio = over 55% -Why Would They Be Low? Lack of sales staff confidence Aged inventory Hard Packs Under $200 per vehicle Recon policies Discount for older vehicles Should I sell my trade myself? -Spiff for trades (or street purchases) $100-$200 each

22 22 Vital Metric -Average Used Vehicle Price -Turn by Price Band Source: Manheim Consulting Source: NADA Industry Analysis Division

23 23 Strategy / Process / Goal Measurement Vital Metric CRM Utilization Pre Owned Walk-in / Be-Back Closing % Under 35% Manager Overdue Tasks Salesperson Overdue Tasks Price Aligns with Desirability Transactional Discount % Retailed in under 30 days Under 5% over 2 hours old Under 20% over 24 hours old 1 st 20 days Vehicle Specific - No Buckets Over 30 days Under 90% of Market Avg Price Under $200 per car By Manager / By Salesperson Good = 45% Great = 60% Aged Wholesale 10% Immediate Wholesale Immediate Wholesale Profit / Loss Good = 15% Great = 10% +/- $250 unit average New Car Sale-to-Trade Ratio Over 65% Appraisal-to-Trade Ratio Over 55% Hard Pack (Charged to vehicle) Under $200 Reconditioning Markup Discounted for Older Vehicles Vehicle acquisition spiff $100 - $200 per trade / purchase Average price per vehicle Monitor and drive lower Turn by price band Monitor for health

24 New Car / F&I /Leasing Excellence

25 25 Positive Service Experience Is Crucial Among the 22 % purchasing from a dealer and using them for service in the past 12 months: 85 % State their experience with the service department has influenced their likelihood of purchasing another vehicle Source: Cox Automotive Maintenance & Repair Study, 2016

26 26 Employee Retention Annualized Turnover Median Tenure Salesperson 67% 1.6 Service Advisor 39% 2.3 Salesperson Hours Career Path Compensation Rethink Comp as % of Gross Guaranteed Salary + Volume Bonus Vital Metric = 13 units per month Service Advisor Training Compensation FRH s produced ELR s $ Part sales Targeted spiffs CSI Recognition Source: 2016 NADA Dealership Workforce Study

27 27 As Sales Margins Tighten Source: NADA Industry Analysis Division

28 28 F&I Income Must Fill the Void Source: NADA Industry Analysis Division

29 29 Finance & Insurance F&I Manager = Deals/mo. $1,000 $1,200 Per Vehicle Sold (net) Products Penetration = 150% of total unit sales volume Finance Penetration = 75% Measure & Reward cash down payment

30 30 Finance & Insurance Vehicle Service Contract - New Vehicle Service Contract - Used Penetration % 55% 65% Guaranteed Auto Protection 60% Maintenance Contracts 15% Environmental Protection Products 20% Tire & Wheel Protection Plans 15% Key Protection 5%

31 31 Car Payment: Share of Personal Income Source: NADA Industry Analysis Division

32 32 Leasing Higher to Go 40% 35% 30% 33.6% 28.9% 25% 20% 23.7% 19.2% 15% 10% 5% Lease % of new financing Lease % of all new 0% Q Q Q Q Q Q Source: Experian Automotive

33 33 Leasing Best Practices Lease Benefits Training Salespeople, Managers Point-of-Purchase Stickers/Addendums Lease for $249/mo. Include lease disclosures Present Lease Payment(s) as Option on Every Deal Lease F&I Products Gap, excess wear & tear, maintenance, wheel-and-tire, key Manage Portfolio Assign portfolio manager Start early-outs six to seven months before term ends

34 34 Data Mining Have a dedicated Vehicle Purchase team Protect tenured salespeople Call customer asking, Can we buy your car? If They Are Interested in Selling, Ask appointment to make a financial presentation Ask them if they sell, Will we be giving you a ride home? Or, Could we present you a VIP proposal for new unit? With little or no money down Keep same/almost same payment Explain process and ask permission at original delivery

35 35 Strategy / Process / Goal Measurement Vital Metric Retention Finance & Insurance Salesperson yearly turnover Under 40% Avg units / month per salesperson 13 Deals per F & I Manager / month Income PVR (net) $ $ 1200 Product Penetration 150% of unit sales volume Finance Penetration 75% Cash Down Payment Measure and Reward Other 'Key' Products Penetrations Vehicle Service Contract - New 55% Vehicle Service Contract - Used 65% GAP 60% Maintenance Contracts 15% Environmental Protection Products 20% Tire and Wheel Protection Plans 15% Key Protection 5% Leasing Lease % of total sales Aftermarket product penetrations Trend Trend Data Mining Program volume Trend

36 Digital Marketing Excellence

37 37 INTERNET Website Effectiveness User Experience (UX) DEALER WEBSITE DEALERSHIP Vital Metrics Time and % to complete critical tasks Bounce & Exit Rate Reports Specials pages Separate Desktop from Mobile #NADA100

38 38 INTERNET DEALER WEBSITE DEALERSHIP CONVERSIONS s Form Submissions Phone Calls Chats Texts Saves/Wish List Measurement Pre-visit Contact to Appointments Appointment Show Rate Show to Sold Rate Lead to Sale Rate Vital Metric 35% (Including duplicates, junk, and no-reach) 65% 65% 15% #NADA100

39 39 INTERNET DEALER WEBSITE DEALERSHIP Paid SEM Display Earned SEO Backlinks Owned Blog OEM Conversions s Form Submissions Phone Calls Chats Texts Measurement Pre-visit Contact to Appointments Appointment Show Rate Show to Sold Rate Vital Metric 35% (Including duplicates, junk, and no-reach) 65% 65% Saves/Wish List Lead to Sale Rate 15% #NADA100

40 40 56% of buyers who purchase from a dealership just show up Walk-ins Phone 14 % 25 % 56 % Chat Text 3 % 1 % Social Media 1 % Source: 2015 IHS & Autotrader Automotive Buyer Influence Study #NADA100

41 Marketing Attribution 41 By the way... What brought you in today? Drive by Walk in Too lazy to ask #NADA100

42 Source: Google 42

43 43 Research Site OEM Website Ratings & Review Site Google Dealer Website Purchased Product or Service Who gets credit for this sale? Online Classified OEM Website You Tube Dealer Website Purchased Product or Service OEM Website Research Site Dealer Website -Pay Per Lead -Pay Per Sale Purchased Product or Service Last Click Attribution

44 44 Research Site OEM Website Ratings & Review Site Google Dealer Website Purchased Product or Service Online Classified OEM Website You Tube Dealer Website Purchased Product or Service OEM Website Research Site Dealer Website -Pay Per Lead -Pay Per Sale Purchased Product or Service Referrals

45 45 Research Site OEM Website Ratings & Review Site Google Dealer Website Purchased Product or Service Online Classified OEM Website You Tube Dealer Website Purchased Product or Service OEM Website Research Site Dealer Website -Pay Per Lead -Pay Per Sale Purchased Product or Service Assist Multi Point Attribution

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48 48 Dealer Website Visit Quality Score (Click Quality) MICRO CONVERSIONS Score New Vehicle Lease Special Website A Vendor B Social Media Dealer Website Watched a video Photo Gallery views Visited Map and Directions page Visited Meet the Staff page DIRECT CONVERSIONS Submitted a lead Called dealership A C B

49 49 Digital Retailing: The Sales Process Moves Online -Trade-in Valuation -Negotiation -Credit approval -F & I

50 50 Satisfaction Declines after 90 Minutes at the Dealership Vital Metric: Time from YES to Delivery Source: Autotrader Sourcing Program

51 51 $9,500 Average Gross Profit Per Employee $9,351 $9,000 $8,500 $8,410 $8,446 $8,000 $8,018 $8,120 $7,500 $7, Top Perfomers Source: NADA Industry Analysis Division

52 52 Strategy / Process / Goal Measurement Vital Metric Website User Experience Website Conversions (by source) Lead Handling (by source) Time & % to complete critical tasks Trending Bounce rate/ Exit rate reports Trending Desktop vs Mobile reporting Trending s Trending Form submissions Trending Phone Calls Trending Chats / texts Trending Saves / Wish list Trending Pre Contact to Appointment 35% Appointment to Show Rate 65% Show to Sold Rate 65% Marketing Attribution / Effectiveness Digital Retailing Leads (contacts) + Assists + Website Visit Quality Tool(s) Usage Time to complete key tasks Time from Yes to delivery By source Trending Trending Trending Employee Productivity Gross per Employee $9,350

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54 54 you better start swimmin' or you'll sink like a stone, For the times they are a' changin'!..bob Dylan #NADA100

55 Questions 55