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Keynote 3.
5 Actionable Insights That Every Dealer Should Have
Actionable Insights are those views of data that cause managers to ask new questions about how processes work and take action. They differ from key performance measures and daily operating control (DOC) reports that focus on delivering a picture of progress against a strategic objective, operating budget or forecast. What are the top 5 actionable insights that every motor dealer should have?
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Motor Dealerships are a complex multi-disciplinary business operation. The aspects of activity are so many and varied that managing performance and growth requires a clear head and clarity over the objectives that really matter. Every dealership has a different combination of capabilities and franchises that add an extra layer of ‘uniqueness’ to the reporting systems required. So is it possible to pinpoint just five actionable insights that all dealership exec teams should have access to? I believe it is. In this article I suggest my top 5 list of actionable insights together with an explanation of why they’re important.
1. Consolidated Performance Scorecard
A scorecard is a dashboard that incorporates a series of objectives that an organization is striving to achieve. In most organizations the number of objectives defined in a scorecard is in the order of 12-16 as any more becomes unmanageable. A consolidated performance scorecard provides a topline view of progress towards business outcomes. It’s essential for any organization to know how it defines success and seek to achieve it. Scorecards are therefore valuable and useful management tool to articulate and communicate progress towards strategic outcomes – BUT… the point about objectives, and the key performance indicators used to measure progress towards them, is they should be ‘stuff’ that managers already know to be important. This type of reporting is therefore ‘handy’ but it would be difficult to argue KPIs are ‘actionable insights’ as they rarely encourage managers to take action in themselves. What starts the journey of objectives and KPIs becoming ‘actionable’ insights occurs when managers can drill-down into the data that is the source of the KPI. When managers drill into data and ‘become curious’ the magical and mysterious kapow! explosion happens that leads to processes being improved, new initiatives tabled and the like. A Consolidated Performance Scorecard gives the entire management team a snapshot of how THEY are performing to meet strategic outcomes. It’s my FIRST actionable insight because it STEERS the ship.
2. Consolidated DOC Side-by-Side Dealership Analysis
The Daily Operating Control is a report that summarizes how each revenue generator and discipline of a motor dealership is performing. What normally gets covered are the revenue generating pipelines of the dealership including MOTs, parts sales, red and amber Vehicle Health Check (VHC) / deferred works, service hours, warranty repairs, oil, tyres, bodyshop repairs and more. Most dealers I know favor a side-by-side analysis of branch performance because it encourages competition – and the comparison between franchises and dealerships makes for interesting reading (to understand which business units are performing well, which are performing poorly, all judged on the same scale given that organizations commonly struggle to compare performance between business units when managers seek to qualify ‘what good looks like’ using their own scale. The Consolidated DOC gives managers across the business a daily progress report and a month-to-date summary that provides opportunity to correct sub-optimal performance before it’s too late. It is the epitome of ‘actionable insights’ in the operational reporting world and becomes my SECOND ‘must-have’ actionable insight for dealerships.
3. Customer Persona Profiling Summary
It’s always been important to manage customer relationships one customer-at-a-time as Don Peppers andMartha Rodgers put it but as customers become ever more distant and empowered, the need to build digital personas has moved on to a new level of priority. I’ve struggled to understand why the Motor Retail industry has been so slow to adopt customer profiling and persona building when retailers such as Tesco with their Clubcard system and online companies like Amazon have so clearly demonstrated the business rewards, but I do see this initial reticence is changing as more dealers become ever more aware of the potential to boost growth by simply harvesting their most important asset – their customer relationships. There are many sides of a customer relationship – communications preferences, activity history, contact points, location, buyer behavior, life-time value, future life-time value, affluence… - and it’s when you combine these views that exciting things happen. There are many ways to build personas and through them, marketers and sales leaders see patterns of likes, spend habits and relationship characteristics that lead to new campaigns and better ways of sourcing customer value. A customer profiling persona summary presents a one-page view of the many different facets of your customer community. It covers not just ONE customers’ characteristics but overlays ALL of your customers in one ‘map’ of your customer universe. It makes for very interesting reading and becomes my THIRD actionable insight.
4. Customer Happiness Index
Customer happiness matters because it’s the lion in the cave that comes out to bite your business unless you keep an eye on it. There are many ways organizations can measure and monitor customer happiness but dealers can still struggle to place a ‘happiness index’ on their business that produces a snapshot of happiness and trending. In addition to manufacturer sponsored analysis, many dealers are creatively sourcing happiness data by using simple tools on their websites and paying third party. I’m also a big fan of soft-measures that systems like www.tag-check.com are excellent at sourcing. You can’t hope to buildLoyalty Beyond Reason when your customers are unhappy; it’s even a big call to ask for respect(sometimes described as love in plain clothes!). Installing a customer happiness index is my fourth actionable insight.
5. Mapping Customers and Qualifying Addressable (Local) Market
Understanding the opportunity of a dealer within their locality helps to qualify how well a dealer is doing compared to how well IT COULD be. It’s not difficult to plot customers on a map. In countries like the UK and the Netherlands mapping customers is made easier by the quality of the postcode system. In other countries like the United States and South Africa, postal codes are not very accurate and it takes street address details to accurately plot customers (far less convenient!). Once customers are plotted it’s relatively easy to assign customer attributes to records so map views can be filtered by dealership, sales team, sales person, affluence, persona, outstanding MOT reminders – whatever. If your customer records include a CAMEO (‘affluence’) profile, companies like www.improvemydata.com make it pretty easy to obtain a listing of similar customers in your region. This makes it possible to understand your MARKET SHARE! How cool is that? Maps are great!! I’ve never produced a mapping application that hasn’t shownsomething interesting for dealers to see. That’s why creating a map view of the customer landscape and qualifying the addressable local market is my fifth actionable insight that every dealer should have access to.
The list above is MY top five. If you have other opinions or examples I’d be very interested to hear about them!
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