When you think about setting goals for your dealership, my guess is that you, like most of the dealers we work with, don’t even know where to start.
Our team at Bob Clements Intl. has tried to simplify goal setting for dealerships. Yes, it still takes time and hard work, but what’s different is that we consider the rhythm of your dealership. We typically discourage implementing new goals during the busy season. Instead, now is a good time to set goals and implement changes.
Let’s work through identifying goal. On a sheet of paper, write down each department represented in your dealership and under each of those headings, write the words “stability,” “growth” and “accountability.”
Next, circle “stability” under each department that didn’t generate a profit last year. If what you are doing isn’t making you money, you need to stop doing it or figure out how to make money doing it. This is the first area where you need to begin making changes. Each department has several things that can produce stability.
Service: You need the right data as a first step toward stability in this department. This starts with your technicians clocking in and out of work orders. Yes, there are other numbers you should look at, but everything is built on your technicians’ time.
Parts: To improve stability in your parts department, start by looking at your margins. Your target margin will vary based upon the equipment you carry, but all of the targets are above MSRP. MSRP is determined by turning a part 4 times a year. If it’s not being turned 4 times a year, the part’s price should be above MSRP.
“Your first focus should be to achieve stability…”
Sales: Achieving stability in sales starts by measuring the activity of your sales team. We require every salesperson to make a minimum of 20 touches a day. This could be a phone call, email or someone walking in your door.
Improving Across All Departments
Next, look at the potential for growth across all your departments. In order for sustained growth to occur, the department needs to first be stable. Assuming you have achieved stability, which departments are ready for growth? Here is what we typically see by department.
Service: Growth often occurs when you are utilizing your team to their full potential. This could mean rolling out a compensation plan based upon efficiency for your technicians or bringing in a service coordinator.
Parts: Growth in the parts department happens when you train your parts people to become parts salespeople, teaching skills like upselling and cross-selling.
Sales: The key in wholegoods is having a marketing plan that mimics how and when we need our growth. If we know that 20% of our wholegoods sales happen in April, we need to spend 20% of our marketing budget 6 weeks prior to that timeframe.
The last category is “accountability.” Look at the departments listed and ask yourself, “Are there any departments that have achieved stability and growth?” If the answer is “yes,” it’s time to set accountability goals.
Service: Accountability in the service department might mean having regular meetings with your team to share numbers and financials. You create accountability for yourself and your team when everyone knows what the goal is and what needs to be done to achieve it.
Parts: In the parts department, accountability could mean having a plan to “burn down” your parts inventory at the peak of season. This practice frees up cashflow during the slow season and also allows you to place orders with your manufacturers to get the best possible discounts.
Sales: For many of our dealers, a goal of sales accountability is to focus on the little things. This can be as simple as making sure all customer information is entered into your CRM. This is often one task that salespeople can get lazy on and its effects are wide-reaching.
While each one of your departments may be at a different point of maturity, it’s important to keep in mind that you must start with one thing. Your first focus should be to get each department to a place of stability, and from there you can determine a plan for growth and accountability.