Spring. It brings warmer weather, an election, a change of government, continued stock supply constraints, a softer market, and more clean car changes. Plus, a chance for a strong 2024.
Despite the uncertain market, right now is a great time to plan for your business, to make it match fit for next season. Let’s talk about why October is the month to do this, and how you might make this happen.
Later in the year, it gets hectic; December is always a busy short month, January key people are away, November is the last full month that helps you nail down the final result for the year, and October is the brief lull of sorts before everything gets hectic. That is why it is a great chance to set the scene for next year. Plus, if you create the plan now it can be quick and easy to refine it if required.
First up, a plan is more than just a budget, they are related. It's not uncommon for a business to create a budget without doing the plan, or for the Financial Controller to create the budget without much input from the wider team. I’ve worked with dealers who haven’t set their plan until their brands have set their targets, which unsurprisingly is quite challenging.
Start right at the top. What do you want your business to be?
Let’s start with real challenging questions what do you want to be remembered for? How do you want customers to think about your business? What sort of employer do you want to be?
These questions will help you define what you want your business to be and that should be more than just words like profitable and successful, and could include things like caring or community-focused best dealer in the network, or dealer of choice to work for, for example. Capture these thoughts and make sure they are written down.
Your team has the answers. Involve them at the outset.
Your plan should not be one person's work. This is not a numbers exercise, although the numbers are a key part of it. Your team understands their department well and possibly is looking for the opportunity to show you that they can do better with the right support. Ask them where they think they can improve their performance and what resources they may need to achieve this.
Having department managers set their own goals, even if you've had to nudge them to think bigger, is much more powerful than telling the department's managers the numbers you think they need to achieve. A team planning session can be a powerful reset for the year ahead.
Set the scene.
Use your planning round as an opportunity to pull everyone together to share your vision and goals for the business. Create the environment to empower your teams to work better across departments to help shape the plan for next year. A planning session is best done off-site, sometimes supported by a facilitator, who can provide the structure and framework to help you develop a strong integrated plan.
Think about what benchmarks you want to achieve.
Benchmarks are an important part of your plan. For example, what ratio of used vehicles to new vehicle sales do you want; two used for every new? How much F&I income per business manager, what's your service retention rate, what percentage of margin comes from the service department, and what's your net profit as a percentage of sales. These need baking into your business plan and your preferred KPI's need to be shared with your department managers, so they are fully aligned.
Your targets should not be your brands' targets.
Your targets are much more than what your brands would like you to achieve. For example, you may have a GP target or a used vehicle target, you might want to exceed last year's volume by a certain percentage, or you might want to be the best-performing dealer in the region. The key thing here is that while the manufacturers’ targets should be a guide or a sense check, they shouldn't define your business. You oversee your destiny and your journey.
Be ruthless about lead attribution and lead management. Have a cost-per-lead target.
Few dealerships really care about lead attribution and lead management. No one will say that they don't care, but it is unusual to see a cost-per-lead target or a cost-per-sale target baked into a business plan. It's even more unlikely that you'll see some lead quality scores set his targets, for example like the AutoPlay lead health score. Even though this is often seen as highly operational, the best dealers are always the ones that care the most about lead management, because that leads to better customer communication.
Make CRM a distinct part of your marketing mix (and ensure that you have a budget for existing customers and customer retention).
Perhaps your business has considered cost per lead, but has it considered marketing spend for existing customers? It is acknowledged that it costs significantly more money to acquire a new customer than to retain an existing customer.
It's very easy to spend a lot of money and effort on social media. Few would argue that it shouldn't be an important part of your marketing mix. However social content should be in line with your overall marketing plan and should not sit outside it.
Don't confuse looking after existing customers with posting on social. Looking after existing customers should have higher priority and be more targeted.
Have a business improvement plan for anything that doesn’t neatly fit within a box.
Not every objective fits within the existing structure or framework, so ensure that your business has a place to capture ideas and opportunities that you can revisit when the core objectives have been planned for. Think about where you underperform. Or where your facilities are stretched.
You should ask, ‘Where do we underperform and what can we do about it?”. Ask your team, what level we should be able to achieve.
Get a customer’s viewpoint (look at Google and Facebook comments as well as service retention).
Lastly, make sure that your business addresses any customer experience failings. Your business should be customer-focused. Take a moment to read the last half dozen Google reviews, and the last 20 or 30 Facebook and Instagram comments, and be sure to look at your service retention and sales pump in and pump out data if available. This broad review will give you a sense of how well your business performs from a customer’s viewpoint. Be sure to share your view of how you think the business should be perceived and the standards that you want the team to achieve.
Focus on what will make the biggest difference.
If you have a long list of ideas that you would like to implement for the coming year or further afield, make sure that you have applied an impact and effort matrix across the ideas. Not all ideas are equal, there is limited low-hanging fruit, and some appealing ideas can suck up a disproportionate amount of effort for a limited reward. Better to focus your efforts on projects with the biggest output for the least input.
Which brings us back to the start. You have a short window of opportunity, to make your business stronger. There are lots of online support or suggestions to running an off-site business planning day. If you can see the benefit, but don’t have the time to set up a planning session, perhaps reach out to an external resource for help.
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 Automation
• Go To Market strategies for emerging brands
You can contact us at hello@boostauto.co.nz