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New Year’s Resolutions.

Christmas may already be long forgotten memory but despite being the end of January, there is still time to make some New Year's resolutions. What is great about the new year is it gives us a pause from doing and a moment to think about the opportunities for the year ahead and how to make your business perform more strongly.

Here are six resolutions that may help you find more business, more efficiencies or more profit, and ideally all three.

1. Operational effectiveness.

This can be as narrow or as wide as you like. Take a close look at the heart of the detail that makes your business run well.

Ask your managers to identify three things in their department that get in the way forming of them performing more strongly. Then ask them which of these three issues will have the biggest impact. Sometimes asking the question will identify minor irritants that have a limited effect on operational effectiveness but a large effect on morale or staff satisfaction. Take time to drill down to identify the real roadblocks that take up time and energy yet deliver little. This might be processes for example, it might be paperwork, it might be approval process is, or it might be manual paper based processes that frankly in the 21st century should have been automated by now. Ask your team also to tell them what forms are currently being filled in either manually or individually on a spreadsheet and then being emailed to internal departments. Spreadsheets and paper based forms highlight an opportunity to do things better. Documented processes, internal standards, inter-departmental collaboration and automation are the keys to unlocking improved operational effectiveness.

There will likely be some processes that exist because “that's the way we've always done it”. Beware, these are not conducive to an effective business.

2. Lead management.

It is time to investigate how your team perform with incoming inquiry. It is not enough to generate leads and to look at sales results, nor is it good enough to say these are tracked in AutoPlay. It is time if you haven't already to take a close look at lead volumes inquiry to test drives, and test drives the sales. Use your January data to draw a line in the sand, to use as a baseline to measure future improvements against.

Next, pass the baton to your sales managers to improve upon these ratios. Help the team identify and to understand the barriers to better performance and provide them with the tools to perform more strongly. You could consider things like templated vehicle listings, super features performance in TradeMe, templated email response (automated emails even), automated SMS messages, improving your AutoPlay dashboard to tailor it better to your business and of course, sales training.

In a tough market good lead management can make a huge difference in volume and profit, with no additional expenditure or investment required, yet many dealerships treat AutoPlay as the answer, when in fact AutoPlay is a tool to improve performance.

3. Outwork

It is common for dealers who sell commercial vehicles to have an ever increasing amount of outwork. Tow bars, wheel swaps, tyres, canopies, bull bars, flares and of course panel and paint are all items that are often outworked. By taking a closer look at the dollar value for your business you can determine whether this is margin you are happily forgoing or whether this is something you should bring in house.

Regardless, many dealers will decide that they are happy without the status quo. But should you add, say an Oil Changers franchise or a tyre brand franchise to your business for example. You might have enough outwork for an unviable business, yet alternatively one might be able to argue that you have enough business to get your department or new business unit off the ground without starting from scratch.

4. KPI setting.

Larger dealerships typically set KPIs and have monthly management meetings to measure performance against these KPIs. Smaller dealerships often have a less formal monthly meeting structure.

However, it is critical that department have goals - ideally that they have set themselves - and are held accountable to meeting these goals. Managers should have bonuses that align with that department KPIs.

For smaller businesses, department manages will likely surprise their DP or owner with the KPIs that they set for themselves and their departments. What is important that Managers have input into the goals, as well as management time to develop plans to meet these goals. A top down planning road risks leaving managers disengaged which is the reverse of the desired outcome.

5. Used car performance.

A strong used car department can add enormously to dealerships performance. Good stock turn, excellent used vehicle appraisals, a good understanding of a perfect stock profile, a home brand focus and strong bidding for prime stock with clear used vehicle volume margin goal, a stock turn goal and refurb KPI's will transform your used vehicle performance.

Often in my dealership visits I see dealers with only a vague concept of stock profile, and a poor understanding of the importance of being a used car brand advocate for the brands that the dealership sells new.

6. Marketing effectiveness

Do you know how many leads that your business needs to generate to create one sale? You should. Do you know the cost of a lead the cost of a test drive and the cost of a sale? You should. Do you know which is more effective Facebook e-mail or Google search or trade me? You should. Do you understand the cost per acquisition for a service customer or for a sales customer or a new after-sales customer? You should have a clear idea even if you do not have an exact figure. And then in planning your marketing spend for the year ahead you can direct your investment to where it will generate the biggest return. For many dealers trade me have become the biggest marketing expenditure because there is a fear that without vehicles being listed on trade me customers will not see the vehicles for sale. Yet while this might be true for used vehicle stock and perhaps demo, this is unlikely to be the case for new vehicle sales.

Trade me challenges dealers because it absorbs such a large portion of their overall marketing budget, when in fact it raises the question where do leads come from? Bear in mind that without a strong online presence or with a trade me first approach then of course leads will appear to always come from trade me, in the absence of other marketing channels. Used 2024 to experiment, to measure effectiveness of marketing spend and to be bolder and how you search four new and repeat customers. For multi brand businesses, take a holistic approach to sales and after sales and customer life cycles as well as customer lifetime value.

It is time to be deliberate in your focus for your business and to share your thoughts, aspirations and goals with your wider team. It starts by analysing last year’s performance. Then it requires a degree of boldness and assumption making to decide what your goals should be for the year ahead. The targets that are set for your dealership by the brands you represent should not be the targets that your business seeks to achieve.

While 2022 was undoubtedly a very strong year for your dealership 2023 was assuredly a tougher year to navigate. 2024 by contrast will feel flat, with higher interest rates, low business confidence, yet supported by a growing population, meaning that this year's growth in the economy will be modest and certainly weaker then the last two years. However, this is not a prediction of the year ahead; it only needs to be so, if you choose not to challenge yourself and your managers.

Just as when the market was strong, that did not mean that your dealership was run well, when the market gets tougher your performance shouldn't automatically worsen. It is time to take a long hard look at your dealership and set the goals that will help your business improve in the year ahead.

©2024 Boost Auto.

Boost Auto is an automotive consultancy working in seven main areas.

• Sales Training

• Sales and Marketing effectiveness for brands and dealers

• Market Insights & Trends

• Business planning and facilitation

• Operational Effectiveness

• Get Ready Automations

• Go To Market strategies for emerging brands.

You can contact us at

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