Most dealerships never reach their full potential. That’s because they don’t know how to consistently improve their processes and grow their revenue.
While dealerships used to find success despite their suboptimal processes, shifts in the market are ensuring that this is no longer the case.
From a decline in global sales to a client base that increasingly demands digitised customer experiences, the industry faces several disruptions. Australian dealerships, for example, experienced a sales slump in previous years. Although COVID-19 has led to surging demand for cars in Australia, low vehicle supply and semiconductor computer chip shortages have meant that dealers are unable to capitalise on this sales boom.
With so many challenges facing the industry, 50% of automotive executives believe that dealerships will only survive the next 10 years if they invest in and use digital technologies. So how do you use digital technologies to improve your business? The first step is to get dealership reporting.
Think of your dealership as a machine with many interlocking parts: it performs best when every part is well-maintained. But because your dealership has so many functions, it becomes impossible to keep track of how every part is performing. That’s where dealership reporting comes in. The right tool measures how each part is performing, giving you the insights needed to drive performance.
But it’s not just about having digital technology. It’s about having the right digital technology. Many dealerships, for example, are saddled with expensive, inefficient and outdated systems that prevent dealerships from reaching their potential. In this guide, we cover what the right dealership reporting and analytics tools look like and how they can benefit your business. We also share steps to setting up dealership reporting. Let’s dive in.
Typically, dealership reporting refers to any system that can give you the clearest possible view of how your business is performing. Reporting software does this by pulling data from every department and putting it in one place. In this way, dealership reporting creates a ‘single source of truth’ that you can go to for key insights into your business.
Top companies have long recognised the importance of business reporting — according to this Bain survey of 334 executives, the majority of high-performing companies invest heavily in data and reporting tools. And, as McKinsey research shows, companies that make data-driven decisions are 19 times more likely to achieve profitable results. That’s because instinct and experience are no substitute for in-depth reporting.
From tracking cars as they go through refurbishment to monitoring aftermarket sales, dealership analytics gives you granular-level insights into dealership performance. This helps you pinpoint inefficiencies — a necessity for effective management and coaching. As dealership managers frequently have to make quick decisions that impact per car profitability, reporting tools give them the information they need to make the right call. For example, reporting software can tell you how close you are to hitting your manufacturer targets. This may sway to accept a deal to hit these targets and unlock additional bonuses.
While getting dealership reporting is critical to improving your business, it’s also an opportunity to stand out from your competition. According to Todd Smith, CEO of 360converge, “less than 2% of dealerships are using data to unlock the full potential of their store’s sales and service.” How are you going to remove friction from your sales process? Or do you have a strategy to retain your existing customers? Is your marketing able to address the desires of your local market? With the data in hand, you’ll be able to address these issues when your competitors can’t.
With easy access to the inner workings of your dealership, such as sales performance and revenue per vehicle, you’re better positioned to develop and achieve meaningful long-term goals. However, while reporting can help you maximise performance across your dealership, it can be difficult to know where to start due to the amount of data it captures. Here are three of the most impactful ways that you can use reporting tools to boost performance:
We cover more metrics that dealerships should be tracking in this blog post— including the importance of measuring Price to Market and Cost to Market.
In business, timing is everything. To improve revenue, dealerships need reliable and consistent real-time data. When armed with this data, dealers are empowered to remove bottlenecks and make better, timelier business decisions. In this section, we share more examples of how real-time reporting benefits dealerships.
How reporting boosts sales
If you’re running an auto dealership, you want every sales rep performing at their best and with access to the same high-performing tactics and prospect data. But salespeople tend to be ‘lone wolves', each one with their own systems and ways of doing things. Worse, reps are always competing with each other for the best commission — so, in their mind at least, it’s in their best interest to keep the best tactics and lead information to themselves. This prevents other reps from accessing the same high-performing tactics and prospect data.
Reporting dashboards provide a solution by giving managers live reports into which vehicles are being sold and who has been selling them. As numbers don’t lie, this data is essential in bolstering sales rep accountability, driving performance and developing optimal and standardised procedures. At SalesLogs, for example, we offer a tool that’s specifically designed to boost sales rep performance by tracking individual and department performance.
How reporting improves dealer margins
Each dealership department represents a different revenue stream, so building resilience means improving margins across every department. Like your sales teams, your departments perform at their best when they have the latest deal and prospect data, along with efficient processes to guide them. Dealership reporting helps you identify inefficiencies while also eliminating friction points; for example, by ensuring real-time alignment across teams on everything from deal status to contact reports.
Along with improving processes, the more data your reporting tools gather, the more easily you can recognise short-term purchasing trends or shifts in customer preferences. Learn more about improving efficiencies by reading our post on data analytics for car dealers.
How reporting leads to better inventory management
Reporting tools help provide meticulous inventory tracking, so you can limit shortages, shipment delays and product deterioration. This can benefit upselling, as you’ll be aware of the options offered both by your dealership and manufacturers.
Efficient inventory management is especially important for used and wholesale sales, where vehicle status and refurbishment costs need to be monitored — and decisions need to be made about whether incoming cars should be added to retail or wholesale stock. By giving you the numbers, dealership reporting helps you get the most profit from these decisions.
Data analytics and accurate reporting can have a tremendous impact on long-term success, but only if you invest in the right tools for the job. Before we explore your options, it’s important to unpack three common dealership software challenges that prevent accurate reporting:
Issues with dealership software
Business culture contributes to the creation of silos, along with spreadsheeting tools that result in scattered data that’s stored on personal computers in locked-off personal drives. Often, dealership managers intentionally hide their spreadsheets to maintain data integrity — all it takes is one careless data entry to ruin a chain of functions and calculations. To avoid this, you need software that consolidates data from all your departments and offers multi-level permission for data entry.
Choosing the right tools
When selecting a reporting tool, you can avoid reporting challenges and save both time and money by partnering with expert solutions providers. At SalesLogs, for example, our tool drives team performance with leadership boards that track real-time sales data. Our KPI dashboards offer multi-level reporting, including detailed insights into how your sales, finance, aftermarket and wholesale departments are performing.
In our ebook on boosting performance and future-proofing dealerships, we explain how to select the right dealership tools. We also dive into how onboarding your stakeholders helps you quickly see ROI. When searching for a reporting solution, we recommend the following steps:
Want to learn more about how you can use dealership tools to boost performance? Download our free ebook.
By giving you a clear view of your dealership’s performance, reporting tools help you improve processes and increase revenue. This is the key to unlocking your dealership’s full potential.
At SalesLogs, we’ve worked closely with over 1,000 teams to build our dealership reporting solution. By pulling together all your data, our tool gives you a single source of truth to understand business performance and maximise profitable decision-making. Our features include real-time feeds for your whole fleet, DataGrid — our easy-to-learn data capture tool — and multi-level permissions to help you control who sees your data and at what point.
If you’d like to see how the SalesLogs dealership reporting can unlock your dealership’s potential, then click the button below to book a demo.