Tag: Data

Information is Good. Knowledge is Critical.

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Working in retail automotive, we hear a lot about data. It’s practically everywhere—troves of it. In fact, most dealer management systems are filled with all the data we could ever need. And if we had time, we could dive in, all day long, and consume it.

It sounds like a joke, but when it comes right down to it, a lot of us simply throw our hands up. Instead, franchise dealerships operate month-to-month—most of the time looking back at past performance. How did we do? Where did we fall short? Were we close to hitting our goals? Just imagine if we could flip that. Harnessing predictions, unlocking data’s true potential, and influencing key-decision-making would make it possible to act fast, and take swift action based on data, not just our gut feelings. The events of 2020 and 2021 taught many dealers a lot of valuable lessons about the ability to pivot and adapt to change. But if we can’t leverage data—without always being reactionary—the true cost to our business will always be realized in hindsight.

Actionable Insights We Can Use

As a Performance Manager, I have the privilege of spending time working one-on-one with franchise dealers, helping them get the most out of their technology. Whether we’re standing up a new Dealer Management System, working out a new integration, or updating processes, there’s almost always a rough spot or two to work out. But there’s never a lack of data to sort out. One of the more rewarding parts of the job is seeing the “lights turn on” for those new hires and team leaders who’ve tapped into their DMS and found data and analytics that deliver action-based insights. And that’s kind of the whole point. If your reports aren’t easily digestible, organized by role, and flexible enough that senior leaders have access across departments, then they probably won’t see much use.

KPIs that Drive Productivity

Everyone who has worked in a dealership has been frustrated by underperformance. Yet, the push to “just do better” or “increase production” rarely does the trick. Upping the hours your service team works doesn’t result in higher profitability. It usually results in burnout, overworked staff, and a net loss. Data from your DMS—when paired with Critical Analytics—works like a high-powered calculator. With detailed dashboards and reporting modules, our partners get drill-down KPIs into the daily performance output of team members across the dealership. This is the kind of data that you can use to take small steps, day-by-day, month-by-month, to improve by setting benchmarks and goals that result in sustainable productivity. So you can ditch the guesswork and help your employees, all the while avoiding burnout.

The Future is Data-driven

Data is not a temporary technical advantage. It does more. And we’ve yet to unlock its potential within the dealership. Right now, we’re at the tip of the iceberg of how data analytics can improve our industry. When it comes to understanding where our revenue comes from (or why it’s suddenly going to crash), we need to use data to look six months or further into the future of our business projections. Critical Analytics within the DMS provides monthly predictive dealership pacing, based on how you’ve performed so far. So, for example, when those cars come back onto your lot to sell, you can be prepared. But, our team is still thinking bigger. Imagine harvesting DMS, CRM, F&I Data all together to look even further. There’s more to the picture that we’re not seeing. The insights are there.

Data from your DMS matters more than ever. Automotive technology is more integrated, more interconnected, and more powerful than it’s ever been. If we can make the mindset shift from hindsight to foresight, our ability to drive change before a disaster will be unmatched.

Ready to learn more? Schedule a demo with your Performance Manager to uncover the data within your DMS using Critical Analytics today.

About the Author

Tom Tellepsen | Dealertrack DMS Performance Manager

 

Tom Tellepsen is a Performance Manager at Dealertrack DMS with over 18 years of experience helping franchise automotive partners reach their goals by optimizing budgets, building better operational procedures, and obtaining the right mix of tech and talent. Prior to joining Dealertrack, Tom worked as a General Manager and General Sales Manager in some of Virginia’s leading franchise dealerships.

Data and the Disconnected Dealership

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Does your DMS provider enable the free exchange of your dealership’s data?

More and more of your business relies on the accurate exchange of data. As customers shop for cars online, they freely share their information with the dealerships they do business with. This includes sharing personal information like addresses and contact information, as well as more sensitive financial information contained on credit applications. Customers exchange this information for a more convenient and seamless car buying experience, but with the caveat that your dealership will keep it protected. And according to our study, 86% of thriving dealers agree that having accurate and complete customer data is a top priority.

If the technology driving your operations doesn’t deliver the data you need to connect people, cars, and services in a fast, secure, and accurate capacity—you need to take a serious look at the risk you’re facing

Your Right to Your Data

Under the guise of protecting customer privacy, some DMS providers believe that dealerships don’t have the right to share information between their own systems. Simply put, the debate between data security and data access isn’t an either/or scenario. Your dealership doesn’t have to choose one or the other. It can have both. Especially as the industry shifts to incorporate more digital technology (in an effort to enable a more seamless online buying experience for your customers), sharing dealership data between dealership systems is critical to business continuity.

When your DMS provider gives you free and unfettered access to your data, you can work with both customers and vendors to facilitate shared data processing, storage, and analysis, without having to navigate multiple systems just to complete a simple task. It boosts efficiency for you and saves time for your customers during the car buying process. It also allows your dealership to advance into a new age of automotive retail with data that will become increasingly important to your business’ success.

Your Right to Cost Transparency

Now that you know you shouldn’t have to choose between your data and your customers’ security, you should also know that enabling these two compatible dealership components shouldn’t be a financial burden to you. The costs associated with data integration and data security, storage, and analysis should be fully disclosed upfront by your DMS provider and justified by the value they add to you and your customers.

Your dealership’s access to your own data is self-evident. Knowing how much you’re paying for data integration should be self-evident too. Those costs should never limit or financially encumber your business. Your systems should be easy to work with. They should help you avoid the tedium of inputting customer data into multiple systems. And your tech provider should be able to clearly explain each cost with full transparency.

As your dealership continues to incorporate more digital elements and your customers continue to trust their information with you online, make sure that you have a tech provider that can prioritize both sides of the same customer data coin to give you and your customers a better car buying/sales experience.

TO LEARN MORE ABOUT HOW THE RIGHT DMS TECHNOLOGY AND PARTNER CAN HELP YOUR DEALERSHIP EVOLVE TO MEET THE DIGITAL DEMANDS OF TODAY’S CUSTOMERS, GET YOUR COPY OF THE DEALER’S GUIDE FOR MAXIMIZING PROFITABILITY.

 

 

FUEL DEALERSHIP GROWTH BY MEASURING THE RIGHT KPIs

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Is more data always better when it comes to financial reporting? While dealerships certainly want visibility into what is happening in their operations every month, amassing lots of data points from every department is fruitless if you don’t know which numbers matter the most.

Often, dealerships try to diagnose what’s happening within their business by implementing custom report builders that are not built for the specific needs of the vehicle sales and service industry. These builders require the assistance of outside programmers to build and customize the solution, ongoing maintenance to keep up with changes introduced during software upgrades and patches, and alterations as business operations evolve.

After all that effort, most dealerships end up running the same set of reports every month, but they may not be using them to uncover opportunities for improvement that can make a real difference for the success of the business.

A better approach to financial reporting focuses on specific key performance indicators (KPIs) that can guide dealerships toward improved operations and profitability. The first step is gaining an understanding of which KPIs enable critical analysis of financial results, and how to uncover improvement opportunities in the findings.

Less work, more value

For dealers, the ideal financial reporting solution would do most of the heavy lifting to enable meaningful analysis of data by providing dashboards and reports that offer a holistic view of information from multiple departments across all stores. Managers would be able to drill down into data as needed to explore operations from multiple perspectives without chasing down input from every store.

To get accurate views of how new vehicle, used vehicle, and service and parts departments contribute to the profitability of the business, dealers need:

● Flexible reporting modules for every department in the store
● A view of data across all dealerships in a dealer group
● The ability to easily filter, group, and segment the data with a few clicks to answer any question
● A clear understanding of the KPIs that matter to the critical analysis of how the business is performing

The KPIs that matter

Every dealership is striving to increase gross profit by maximizing revenues and controlling expenses. While there are lots of things to measure and monitor throughout each department, there are three essential KPIs that every dealer should evaluate regularly. Effectively managing these reports can immediately drive better results for the overall success of the business.

1. Contracts in Transit
The faster dealers can move assets to cash, the healthier the dealership. Karli DeVall, a corporate controller for Tim Dahle & Red Rock Auto Groups, knows how important cash flow is for her business.

“It’s all about the cash for me,” said DeVall. “I want to be able to measure contracts in transit and get the average days delivery to cash, not just for the store, but for specific finance managers, lenders, and sales managers, so we can figure out who is delaying the process.”

DeVall wants to be able to assess KPIs on a weekly and monthly basis to measure how teams are progressing.

“If the executive team is only talking about performance every six months, it’s hard to move the needle,” said DeVall.

2. Sales to Accounting Reconciliation
Current reporting options generally only provide controllers with access to what’s happening in the finance office and accounting in separate reports that are generated from different parts of the DMS. The results rarely, if ever, match. The monthly process of reconciling every posted vehicle deal requires a time-consuming manual audit to determine if there are reporting discrepancies.

A better approach is to see all deals in one report that lists information from both departments as well as any differences.

For example, imagine a dealer has 18 deals on the books but has a discrepancy between the gross in the business office of $60,000 and the gross in the accounting records of $74,000. Currently, figuring out which deals are still hanging, and why, requires a lot of manual investigation.

A holistic view of every deal (including capped and uncapped deals) reveals the status of deals with banks, chargebacks, and other issues that can hold up finalization. With that information, F&I managers can take action to fix discrepancies, push financing decisions, and finalize every deal in a fraction of the time.

A clear view of deal flow also enables analysis of the performance of individual F&I managers in terms of cash collection. This data can be used to inspire competition between managers, increase efficiency, and close performance gaps by enabling informed coaching conversations.

3. Income Statement
For dealerships that operate multiple stores, providing the ability to map each individual chart of accounts to a standard, holistic view of the performance of the entire auto group enables critical financial analysis.

The process should be automated so managers and controllers have access to the information as soon as the books close. Without an in-depth reporting tool, dealers burn a lot of time putting each individual store’s report into one consolidated Excel sheet. Custom segmentation of data, for comparing metrics of smaller subsets of the overall group, can take days to configure.

For example, to get a consolidated view of what’s happening in her auto group, DeVall must pull data together manually from multiple general ledgers, as well as the business office, and inventory reports — and then spend a considerable amount of time formatting the results to make them usable and presentable.

She observed that it would be valuable to be able to easily group data however she wants, so she could figure out group performance and provide actionable recommendations based on KPIs. For example, how are the Nissan dealerships in the group performing? How can we compare high-volume stores on an equal standard with lower-volume stores? What data can we provide for managers to drive next month’s performance?

“When you set goals and then give managers the information they need to track those goals and be accountable, all of a sudden people start moving and things get progressively better than when you weren’t talking about them,” said DeVall.

Finding the right balance

These three KPIs are the starting point for the types of data dealerships should track when implementing a better approach to financial reporting. It’s a smart way to identify and narrow the data that’s valuable, from the entire universe of a dealership’s operations.

Want to learn more? Click here to download key takeaways from our on-demand webinar, “Mastering the Art of Data-driven Practices,” to learn more about the steps that can help you maximize the power of your data for improved results.

The New Rules of Data Access in Auto

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Your dealership runs on technology. And technology runs on data. Mostly. Having access to the right data, at the right time, without problems like hidden fees or nightmare integration challenges, is extremely important. In the brave new world of “all things Big Data,” dealers need to know the three rules of Data Access.

Rule 1 – Data Must Work Well With Others

In one study1¹, dealers used an average of 6.8 third-party software integrations to run their dealership. That’s a lot of getting along and playing nice. While this sounds like a lot, the fact that your have the ability to pick and choose the systems that work together is quite remarkable. “(Dealertrack) doesn’t restrict us to just one particular product,” explains Ken Barczyszyn, CFO of Dwyane Lane’s Auto Family. “We can have other relationships with other vendors and products and Dealertrack is open to that.” See it in action.

Rule 2 – Data Cannot Cost an Arm and a Leg

With multiple software integrations, dealers face the real risk of being taken advantage of by unscrupulous vendors. Accessing your very own data can suddenly come at a cost—a cost that can add up to $42,000 per year². If that sounds unbelievable, consider that many of these fees often go unnoticed and simply add up over time. With as many as half a dozen vendors charging you to access what you already own, those data fees chipping away at your profits can start to feel unfair. See how it adds up.

Rule 3 – Data Must Not be Held Hostage

If you’re considering switching to a new technology like a state-of-the-art Dealer Management System (DMS), consider this: signing a contract should protect, not prohibit, the data that you own. Your data—customer names, personally identifiable information (PII), and records of your transactions—need to be protected. But that doesn’t give a vendor the right to hold them hostage from you. Learn why it matters.

Discover a truly open DMS and find out what your technology is costing you. Learn more.

Sources:

¹https://us.dealertrack.com/content/dealertrack/en/challenges/data-fees.html
²https://us.dealertrack.com/content/dealertrack/en/challenges/data-fees.html