Marketshare & Profitability: You do not have to choose

A New Measure of Success

There are many ways to measure success in the automotive world. Optimizing market share, increasing individual dealer sales, maximizing profitability and increasing customer retention are just a few examples. But to reach your success goal, each of these approaches requires focus, knowledge, experience and science.

Sometimes, seemingly divergent goals must be achieved in tandem. To manage this dichotomy, science can be applied to measure multiple variables and analyze their correlation with key drivers. For instance, sales and profits can both be increased to the benefit of OEMs and dealers. This can be accomplished with a thorough evaluation of the drivers of sales effectiveness and the return on investment (ROI) at the dealership level. The benefits are actionable advice aligned and targeted for each dealer's specific needs and a continuous and up-to-date approach for managing underperforming dealers.

The Secret of Success: KPIs

Key performance indicators (KPIs) exist in various forms, such as by department or as a percent of sales or gross, and are consistently used to determine where the greatest improvements are needed. However, if everything is important, then nothing is important. Unless the list can be narrowed down and specific, targeted plans put in place, dealers will find it very difficult to obtain the desired improvements.

By focusing on fewer KPIs and finding the root causes for underperformance, dealers can impact operations more quickly and gain greater ROI. This concept, which has proven successful throughout the United States and Europe, allows manufacturers and dealers with limited resources to focus efforts on areas that will have the greatest impact on profits and retail sales.

Traditional Approach

• KPIs based on experience and intuition
• Sales performance considered versus a group average
• Sales and profits analyzed independently

Scientific Approach

• KPIs based on correlation to sales and profits
• Utilizes sales performance against objectives
• Sales and profits optimized together

By integrating an analysis of dealership operations and OEM operations, we can establish a process that considers sales effectiveness as well as dealer profitability delivering win-win results for both the OEM and their dealer partners. For more information, contact outlook@urbanscience.com.