Why is it that “back in the day”, you made a lot of money selling fewer cars with fewer stores and less headaches?

What was it that was different?

If you are a real old timer, you probably remember the “pocket doc”. That piece of paper that you had in your top pocket and wrote down the numbers from each manager as you did your morning walk. That simple DOC along with the walk was your control. But today you are too large for that. With three or more stores, you do not have time to walk every one of them in the morning and meet with your managers. Besides, you have computers that spit that information out to you every day.

So why is it that with all this technology and the ability to get the numbers any time you want, your return on sales is down?

Well, first of all, technology is a tool not a solution. The systems we have in place and even the ones coming down the pike require someone to input the data and someone to read and interpret the results. It does absolutely no good to have that information compiled at the management company level and never reviewed at the store level.

Establishing when you get the reports and who creates and provides them is the essence of the shift in profitability.

Back in the day, when you did the walk around, your managers had to know the information. Your managers knew what was important to you and responded accordingly. As the General Manger you understood Fixed Operations and the impact they had on the bottom line. You were cognizant of how internal repairs, be they at cost or full retail affected commissions, employee morale, the salability of cars and gross profit. You were the “hands on” entrepreneur.

Now you depend on General Managers to be your “hands on” entrepreneur. Usually, a great front-end guy who can sell and motivate the troops to sell. Unfortunately, they usually do not have the depth of experience that you did when you ran the store. The results usually become clear quickly. The store is not doing as well as when you ran it yourself.

The problem is that you know what it takes to be profitable. You intrinsically understand the metrics and the relationship between Ups, Demos and Deliveries. And you know what questions to ask to determine where your store needs improvement. But with 3 or more stores you are too busy to be asking the questions. Why between employees, factories, vendors and the community, you barely have time to get to your son or daughter’s Little League game let alone play a round of golf.

 It has been said that what you measure improves. So. before we get to what must be measured let’s get past the fear that you are becoming a “bean counter”.

The fact is that you may not be looking at these metrics daily. You want your General Managers to be looking at them. You do however need to look at them more than once a month after it is too late to do anything about them.

So, for our purposes, I am taking the stand that you must have your General Mangers send to you daily the following information, signed off by them.  The information is all readily available; all you are doing is making sure they are giving the dealership the same scrutiny you would give it if you were operating it daily.

Sales Department:

The following is critical daily information:

1. Number of Appointments for Today/MTD
2. How Many of Yesterday’s Appointments Showed
3. Total Number of UPS Yesterday/MTD
4. Total Number of Demo Rides Yesterday/MTD
5. Total Number of Write-Ups Yesterday/MTD
6. Total Number of Units Sold/Delivered Yesterday/MTD (Dependent on Spot Delivery Rules)
7. Inbound Phone Calls Yesterday/MTD
8. Gross Profit Yesterday/MTD
9. Gross Profit MTD Per Vehicle Retail (PVR)
10. Wholesale Profit/Loss MTD
11. Number of Units Tracking for Month
12. Gross Profit Tracking for Month
13. Estimated Units at EOM
14. Estimated Gross Profit at EOM
15. Estimated Wholesale Profit/Loss EOM

Finance & Insurance Department:

1. Total Gross Profit Yesterday/MTD
2. Gross Profit Per Vehicle Retail (PVR)
3. Chargebacks MTD
4. Pending Deals – Delivered not Approved – Count
5. Contracts In Transit > 5 Days Old
6. Product Penetration Index MTD

Other Sales Information Daily:

1. Used Units on Hand
2. Used Units over 60 Days in Inventory
3. Average Cost/$$ per Car for Used Inventory
4. Estimated Month End Day Supply – Used Units
5. New Units on Hand
6. New Units over 180 Days in Inventory
7. Units on Order
8. Inbound This Month
9. Estimated Month End Day Supply – New Units

Internet Department:

1. Number of Leads Yesterday/MTD
2. Sales MTD – Units
3. Gross Profit MTD
4. PVR MTD
5. Closing Ratio
6. Tracking – Units
7. Tracking Gross Profit
8. EOM Expectation Units
9. EOM Expectation Gross Profit
10. EOM Expectation Closing Ratios

Service Department

1. Appointments for Today
2. Yesterday Appointments – Count
3. Yesterday Appointments – Shown
4. Gross Profit Yesterday
5. Gross Profit MTD
6. Gross Profit Tracking
7. Customer Pay Gross Profit % MTD
8. Work In Process
9. Customer Pay Effective Labor Rate
10. Customer Pay Hours per RO
11. Month End Gross Profit Estimate

Collision Center:

1. Estimates Written Yesterday/MTD
2. Estimates Converted MTD
3. Work Scheduled – Balance of Month
4. Gross Profit MTD
5. Gross Profit Tracking
6. Customer Pay Gross Profit % MTD
7. Work In Process
8. Customer Pay Effective Labor Rate
9. Customer Pay Hours per RO
10. Month End Gross Profit Estimate

Parts Department:

1. Gross Profit MTD
2. Gross Profit %
3. Gross Profit Tracking
4. Month End Estimate
5. Wholesale GP
6. Parts in Process
7. Day Supply
8. Receivable Issues

OK… So now you are overwhelmed. But this is easily put into a simple reporting spreadsheet that the General Manager or Controller can e-mail to you daily. It is much more than a DOC that would come out of your Dealer Management System; it is a combination of information from various sources.

Most importantly, this requires input from your management team. The General Manager cannot bring these numbers together without the input of his/her team.