Automotive Marketing Professional Community for Car Dealers, OEM and Suppliers
Every year about this time we begin to contemplate. What was our final score for 2012? How did we end up? Did we just SURVIVE or did we THRIVE?
For most of you, that reality was written months ago and on the 10th of January you’ll be reading the results you already suspect. You may even be feeling some anticipation (much like a kid on Christmas morning).
For those of you who spent more time on the “naughty side of retail life” you are hoping for a miracle to turn poor effort and lack of accountability into a Kodak perfect picture moment when you open your present (EOY Financial)…only get ready for the stinky picture…the one with the sad tear-streaked face when you finally tear open your package of coal.
And for the rest of you…”Smile!” click…click…click post it to FB ‘cause you got a HappyFace!
So, the real question is, did you THRIVE in O12 or did you just SURVIVE O12?
Here are 3 Thrive/Survive Reality Checks for you to contemplate right now:
1. Did you have a significant increase in Service Customer Pay Gross Profit? Let’s define significant. Was your increase at least 20% or more? Before I get a slew of “Hey, we got ___(fill in the blank) and it was significant to us” emails, you have realize that any organization that experiences an increase in Gross Profit, whether they are selling soup or nuts, that is greater than the year before would consider it “significant”, “fantastic”, “beyond expectations”…you get the point.
It just so happens that 20% is considered significant and noteworthy (and all that other stuff) because most of the business world runs on extremely small margins and mucho dinero is made every day in this country by people smarter than me betting on the tiniest increase and decrease in those margins.
Imagine what a day at the stock market would look like if the Fortune 500 companies all reported a 20% increase in Gross Profits. Wow.
So, yes, 8, 10, even 18% is a nice number when it comes to a Gross Profit increase. But 20% and above is pretty damn significant.
Those dealerships that are thriving…INCREASE! Those that are surviving…SAME! So, I have to ask the question, did you start 2012 with the Goal of staying the SAME or did you want an INCREASE in Service Customer Pay Gross Profit?
2. Next Thrive/Survive Reality Check is your Service Customer Pay RO Count. In 2012, did you INCREASE your Customer Pay RO Count or did it just stay the SAME?
2012 will be a pretty good Sales year when all the numbers are tallied. Last I read, total sold units in 2012 will be somewhere north of 14 million and represents an overall increase of nearly 14%. 2011 was not all that bad (relatively speaking and compared to previous years) when it hit over 11 and a half million units sold. So, that would indicate that based on these numbers, there are additional Service Customers in the marketplace looking for a Service Facility.
Which begs the question, where did all of the Customers from 2011 and the first 6 months of 2012 go for Service? Was it your Dealership? If not, why not? What is keeping the Customer you worked so hard to sell from coming into your Service Drive for Service?
In every Dealer that we complete a Profit Potential Analysis and review the previous 2 years of RO Counts, I can honestly say that in my experience, there is always room for growth. In fact, I do not believe I have heard any Dealer Principal say:
“No thanks to increasing the Customer Pay RO Count in our store, we have enough.”
So if you have not had at least a 10% INCREASE in Customer Pay RO Count in 2012, that would be an excellent place to begin your Goal Setting Process for 2013.
3. Lastly, have you had an INCREASE in CSI or stayed the SAME? Honestly, the CSI Score is without a doubt, the craziest number ever to have been invented to measure a Dealerships performance. Sometimes it can feel like you are trying to hit a mouse in a hurricane with a beach ball.
And many Dealerships consider it a Success just to maintain “Zone Average.” I get it. But the Dealerships that are THRIVING have invested themselves into a new thought process when it comes to CSI…changing the “gottadoit” to the “wantadoit” and the P-step Program “Process,Participation,Prevention” and making a difference in their CSI Score.
SURVIVING means every week/month when the new scores come out, the Service Manager and General Manager have a moment referred to as “Show-me-the-money-or-get-out-the-honey.” Either you hit the numbers or you start spreadin’ the honey. It can be fun in a kinda “You bet your job” sorta way, I guess.
Take a minute on the morning of Jan 10th to consider and ponder and contemplate 2012. Look for other areas you consider vital and important to your business, your Dealership. And take a look at the three areas we just talked about, Service Gross Profit, Customer Pay RO Count and CSI.
As the zero one three business year kicks off in your store and you are starting to write your Goals are you thinking of SURVIVING or THRIVING?
My best guess is you have started to consider THRIVING the year away.
Written By Leonard Buchholz