One of the main challenges facing manufacturers is the performance dispersion across the network, as our MD Simon Porri shares with us:
Dealer Gap Analysis
The 2023 Insight Report by Cox Automotive highlights the pressure on the dealers, so, unsurprisingly, there’s a growing gulf in performance as some retailers embrace the change and others resist it:
“Dealers are being forced to rethink their business options to keep hold of margins and decision-making too. We believe this age of agency could prove to be a significant opportunity for many dealers, as they will have no choice, in many cases, but to broaden the appeal of their customer offering. That could include more intense (and greater) expertise in financing or other additional services such as car sharing, battery servicing and after-sales.” *
As OEMs enforce this new way of working, they have a responsibility to set clear expectations, offer a supportive environment, and have processes in place to drive improvement. If a dealer is still underperforming, then it may be necessary to part ways to narrow the performance playing field. We’re going to explore a five-step process that OEMs can follow to drive positive network performance.
Step 1. Set Clear KPIs
Setting Key Performance Indicators, linked to your organisation’s objectives, is paramount to being able to monitor progress and benchmark performance. Crucially, the network needs full visibility of these and the Area Managers should ensure that all dealerships have understood what is expected of them.
Step 2. Centralise Data
Hunting across multiple systems, including your CRM and sales platform, to pull together data manually is a massive time drain and prone to inconsistencies. Therefore, this data should be brought together into one business performance dashboard. By having a secure single source of truth, all of your metrics are in one place, ensuring you get accurate, meaningful insights for your network quickly. This also enables transparency and everyone can access the appropriate data simultaneously - no need to go back and forth with updated Excel documents.
Step 3. Track Performance & Communicate
Now that all the data is in one location, it’s time to take action to drive the desired outcomes. Most data visualisation and BI software stall at this point, so ensure you choose a solution that incorporates an action planning area. From the holistic overview, the OEM can identify which KPIs are at risk and allocate dealerships actions to remedy this.
Furthermore, Loop has some automated tools to give you a helping hand, including:
- Improvement Opportunities – the platform surfaces suggested improvements the retailer can concentrate on to make the greatest impact on the balanced scorecard.
- Potential Score Calculator – a visual slider that allows retailers to forecast how their potential actions could influence their performance within the network.
- Performance Comparison – up to five KPIs can be compared against one another to drill down on metrics and help identify issues.
Not only can actions be set from one system, performance can be easily benchmarked and best practices shared across the network following a dealer gap analysis. This can help plug knowledge gaps and streamline processes. This gives under-performing retailers proactive measures, in the hope that the performance gap across the network is lessened.
Step 4. Collaborate
Business performance surveys add another dimension to your metrics, gathering both qualitative and quantitative feedback from your retailers. For ease, you should look to set up, run and monitor your surveys through the same platform as your dashboards, avoiding scattered reporting and aiding follow-up tasks. Not only will this give your retailers visibility of the improvements driven by completing the surveys, but it should also aid motivation and productivity by having been an integral part of the process.
Wider collaboration and communication with the network will also boost performance. Again, time can be saved by using your central platform to plan and record visits. Better still, use a system that has templated agendas that can be modified for purpose and shared directly through the tool. Ensuring you collaborate via one system will immediately give you an auditable chain of communication, invaluable should a dispute arise.
Step 5. Initiate an Improvement Action Plan
OEMs can monitor dealerships to see if actions are being followed up, operating standards are being upheld, visits are making a difference, and whether KPI targets are being met. If not, a retailer improvement action plan needs to be initiated. This should detail clear expectations and associated timescales that improvements must be made. Ensure at this stage that appropriate resources are made available to the dealer and have regular reviews to discuss metrics. More immediate action may be required if a retailer isn’t meeting required legal security or compliance standards.
The 5-step strategy of setting clear KPIs, centralising data, tracking performance, effectively collaborating, and, where needed, creating improvement action plans, is crucial for success. As the role of dealers evolves, this approach ensures they can adapt, thrive, and maintain robust performance within a dynamic and competitive market landscape, with the support of the OEM. If you’re ready to find Business Performance Management software that turns insights into actions to improve KPI performance, come and discover Loop’s range of BPM customisable modules.
Source: *https://coxautomotive.h5mag.com/insightreport2023/the_new_dealer
