Stay Competitive With Automotive Business Intelligence
Guide To Boosting Dealership Profit and Performance
Car sale profit margins shrink every year. In Australia, for example, salespeople are now only able to nett 0.4% profit per car sold — that’s according to this Deloitte study. Partly this is because pricing information has become so freely available. As customers follow the cheapest deal, dealerships are forced to offer increasingly competitive deals. At the same time, more and more customers are going online to buy cars and get aftermarket products.
As research by McKinsey shows, traditional methods are inadequate in helping businesses in uncertain and low-profit markets. That’s why dealerships are embracing business intelligence solutions to stay competitive on thin margins and adapt to customer expectations. In this page, we unpack what automotive business intelligence is and how these tools benefit your dealership. Let’s dive in.
What Are Automotive Business Intelligence Tools?
Traditionally, many dealerships tracked their data using spreadsheets and whiteboards. At best, these methods create a partial but often out of date picture of dealerships performance. The accuracy of this picture is further eroded when managers have to collate data from scattered department spreadsheets that have different standards for data entry.
To improve profits and performance, you first need a clear view of how your business is running. Business intelligence solves this problem by giving you tools to easily collect, manage and analyse business data. But not all solutions are created equally. As each department in your dealership generates a revenue stream, you need tools that can track each stream, along with the status of every vehicle in your fleet. Unlike generic digital tools, automotive business intelligence is specifically tailored to capture and track this data.
But to stay competitive, dealerships need to do more than improve processes and revenue. They need to capture more business by meeting changing customer expectations and offering greater value. This is another area that business intelligence can help with.
Improving Business Value With Business Intelligence
Increasingly, customers are expecting digital dealership experiences. This includes being able to go through the entire sales process online, like going on virtual product walkarounds, consulting with sales representatives and signing contracts. To meet these expectations and increase business value, dealerships need to digitise their offerings and set up digital deal pipelines.
But without the right tools, there’s so much that can go wrong with digital dealerships. Imagine the following example; a customer spends weeks researching the car they want, using your dealer website in the process. This customer then moves to the final buying stage. But it’s only then that they discover the car is unavailable.
This misalignment is a common problem for traditional dealerships, where obscured pipelines may lead to one team altering a deal without informing your other departments. When refurbishing cars, for example, this can lead to a selling price being set without your salespeople knowing that an extra fix is needed. The result is that your price doesn’t reflect your costs.
So, how do you ensure that your virtual dealership matches your actual onsite offerings? And how do you ensure proper deal flow through digital channels? The first step is to use automotive business intelligence to gain a clear view of all deal pipelines and inventory. By monitoring all inventory and deals, you can easily update your digital channels and guarantee a smooth customer experience.
Using Business Intelligence Tools to Boost Profits and Performance
Do you have a clear view of how each of your departments is performing? And do you have the data to boost performance and maximise profit? Business intelligence gives you the information you need to improve your dealership. By using these tools you can:
Make more profitable decisions
Dealers frequently need to make fast decisions that affect the bottom line. But in the heat of the moment, it can be difficult to know which decision will best drive profits. Dealerships business intelligence removes this doubt by giving you data on real-time cash flow and how each choice impacts overall profits.
For example, imagine a scenario where your customer makes a low offer on a vehicle. Before making a decision, your sales manager refers to your business intelligence tool. After crunching the numbers and comparing the offer against customer demand and your current averages, you discover that the deal is in your favour — and that the overall deal averages, including the profits made by other departments, are still above your KPI targets.
Improve business performance
Every dealership has its own goals and objectives. But how do you know what parts of your business need to improve to achieve those goals? By tracking dealership performance, your business intelligence solution can help pinpoint areas to improve. Once armed with performance data, you can develop actionable items that will contribute towards achieving your objectives.
For example, imagine you want to increase how many people use your service department for routine maintenance. With business intelligence tools, you can figure out the percentage of people who bought a car through you but who are getting serviced elsewhere. You can then leverage this data to target these customers to win back their business. You can also use these same customers as leads to figure out how you can improve your offerings to land future customers.
Specific benefits for dealership departments
Beyond improving overall dealership performance, automotive business intelligence can empower your departments to do work more efficiently. Here are some department benefits:
- Aftermarket — get more aftermarket sales with business intelligence data that lets you predict short-term purchasing trends or shifts in customer preferences. By collecting customer data, your aftermarket teams can adapt their prices in real-time, ensuring that each customer is given the most appropriate price for their situation.
- Financial Controllers — accurate and secure dealership analytics is vital for charting the strategic and financial direction of your dealership. Dealership solutions help financial controllers by replacing a mess of spreadsheets with a centralised hub for reliable business intelligence.
- Sales — arm your sales team with the same high-performing tactics and prospect and inventory data. Live reporting boosts accountability while helping you recognise when one of your salespeople needs support. SalesLogs, for example, is built to drive sales with features like detailed KPI tracking and leaderboards.
- Used and wholesale — enjoy better inventory management with business intelligence that limits human error by guiding how vehicles are appraised and registered. As cars enter the refurbishment phase, dealership solutions feed your teams live information that helps you update profit forecasts while keeping your costs in check.
What to Look For When Choosing a Business Intelligence Solution
For general managers, it’s easy to get excited about adopting new software but not everyone in your dealership will feel the same way. Many might be opposed to new tools, especially if they feel like change is being forced on them. This is a major problem — difficulties in adopting digital initiatives can lead to lost deals, increased inefficiency, low morale and slow ROI.
To maximise value from adopting new dealership software, you should select tools that are easy to learn. The less complex your solution is, the faster your stakeholders will pick it up — and the faster you’ll see ROI. Another strategy to reduce friction is to involve your employees in the selection process, especially as involving your stakeholders in decision-making can increase the likelihood of successful software adoption by close to 50%.
When selecting a dealership intelligence solution tool, we recommend the following steps:
- Discuss dealership intelligence tools with your key stakeholders — involve your managers in this process. Their insights will help you understand the reporting challenges that your dealership faces, along with what features prospective reporting tools need to provide to allow for painless data capture.
- Research and demo dealership solutions — this stage is about narrowing down your options. Try to demo each tool and ask product consultants to unpack how their service can speak to your unique challenges. Ask questions like: how does data entry work? And how easily can the general manager track performance in each department?
- Choose your solution — once you’ve narrowed down your list, perform a cost-benefit analysis before deciding on solutions. Ask yourself the following questions; is it secure? Is it easy to learn? Will it integrate with my current system? Will it scale if my dealership grows? How long will it take to see ROI?
Want to learn more about how you can use dealership tools to boost performance? Download our free ebook.
How SalesLogs Can Help
To stay competitive and meet changing customer expectations, dealerships are embracing business intelligence solutions. You can enjoy a smooth transition and fast ROI by partnering with experts who have a strong history in the dealership space.
At SalesLogs, we offer automotive business intelligence that’s trusted by over 1,000 teams. By pulling together all your data, our tool provides a single source of truth to track all dealership profits and performance. Our features include DataGrid — our easy-to-learn data capture tool — powerful KPI trackers and accurate real-time tracking for every vehicle in your fleet.
If you’d like to see how SalesLogs’ dealership solutions can drive your profits, then click the button below to book a free demo.