If someone asked you today what are your top 10 metrics for looking at your dealership's performance, what would they be?
At the front end there would sales volumes, new and used GP per unit, days stock on hand or stock turn, F&I penetration and GP per unit, days supply, maybe units per sales staff per month. At the back end there would be ROs per month of course, workshop efficiency, utilisation, workshop absorption maybe, parts GP, retail warranty internal mix for the service department (and outwork or sub-let) and then monthly sales per tech. Maybe not all of these, perhaps many more.
Have you have worked which are the key metrics for your business, that act as a barometer for your businesses health? These are the key metrics that perhaps save you from digging deeper, or that accurately give a strong indication of how you are tracking?
For example years ago when I worked for Volkswagen UK, we used to say that Golf was a barometer of the brand. When Golf sold well in Europe and the UK, the brand was in good health. This is still broadly true today, even though consumer tastes have changed.
Whilst the list is not exhaustive, it raises a number of valuable questions. Where do the marketing metrics sit in this KPI report? What are your golden marketing metrics? Boost Auto believes there are just four, but the key is to use them both as a short term measure and a long term measure. For example brand building is proven to help you sell more products or services in the long term, even though there might not be a clear call to action. But using the four metrics shown you will be able to prove (or disprove this). And short term measures with a clear call to action (Book a test drive now, Register Your Interest) are great for looking at effectiveness of a campaign in terms of actions taken.
What is powerful about these four metrics is two drive down cost, while two are very results focussed. This means there is a natural tension between cost and result. Hey, you could half the marketing budget and drive down cost per lead and sale. But you'll likely also drive down the volume of leads and sales. So if you focus on the results, spend will increase. Improved performance and efficiency will follow as you try to balance outputs and inputs.
Here are seven reasons that you should use these golden marketing metrics for your business. Your sales team, your marketing manager and your CFO will thank you for it.
Managing the cost per lead or sale is a great start. It will help identify the most and least effective parts of your marketing budget.
They will help improve the accountability of the marketing function.
They will increase accountability on the sales departments about capturing enquiry correctly, and focus on conversion rates (enquiry to test drive, test drive to order). As a result it will drive sales effectiveness.
Your business will be able to establish benchmarks for its own performance.
They create a test, review, test again process and culture within the marketing department to drive performance improvement.
Sales and marketing will be more closely aligned.
You will sell more cars for less money in the medium term and long term.
Have a discussion with your sales and marketing team today to get these metrics in place, and make them part of your monthly management meetings. If you aren't quite sure where or how to start, you know who to call...
Boost Auto is an automotive consultancy working in six main areas.
Sales and Marketing effectiveness for brands and dealers
Green fleet facilitation for large corporates
Go To Market strategies for emerging brands
Market Insights & Trends
Business Planning and facilitation
Boost Blog #27