LAS VEGAS — Dealerships, from sales and marketing to fixed operations, generate massive amounts of data. Sifting through the information to gauge business performance can be a huge task, so some dealerships are studying their data with a more tactical eye.
Germain Automotive Group and Del Grande Dealer Group prioritize the most important performance metrics and break down data to the simplest and most digestible form, panelists discussing the topic "DMS Driven" at the Automotive News Retail Forum: NADA here said.
Germain COO John Malishenko said there are two types of data. One is based on outcomes, including how many cars a store has sold or how much gross profit those sales have generated. The other type is predictive, dealing with tasks and activities that drive performance.
Although the industry is obsessed with outcome data, Malishenko said it doesn't solve anything. All a store can do is react to it. Germain, with stores in Florida, Michigan and Ohio, focuses on its predictive data. A narrowed focus can improve productivity and lower stress for stores, he said.
During a two-month quest to find out what information was most important, Malishenko spoke with his general managers, partners and experts to determine what tasks the stores handle every day. The result: 129 items in areas such as inventory, Web analytics and fixed ops.
Germain then asked its general managers what their individual "nonnegotiable" activities were, what their performance standards were for those tasks and who was responsible for them.
This exercise allowed managers to define key performance indicators, and to redefine what their work is and how it gets done.
"When we prioritized [key performance indicators], we in effect said these things are the most important," he said.
Jeremy Beaver, COO of Del Grande Dealer Group in San Jose, Calif., said data management is critical to how the group evaluates market demand and pricing. For instance, he said, Del Grande measures the price-to-sell gap, defined as the difference between the price the car was listed for online and how much it sold for. That pricing information is managed in various ways, including by team, store and model so the group can make the most educated decisions.
The group also studies demand and how the right pricing can boost demand.
"We have built an algorithm that shows where our stocking strategy is and where the market is transacting vehicles, based on Kelley Blue Book's fair market range," Beaver said. This is done "to make sure we are producing the right demand for our stores every single day."