5RPM SIMPLE TRICKS FOR - Automotive News

1 5 SIMPLE TRICKS FOR MANAGING GROUP PERFORMANCE A PUBLICATION BY RPMCADENCE DAILY, WEEKLY, & MONTHLY TASKS that improve speed, consistency, and accountability across every phase of pre-owned retail publication ofDue to dramatic changes in the competitive landscape, dealers that once charted their own course through gut feel must learn new ways of harnessing information to make fact-based decisions. The ability to take data understand it, process it, extract value from it, and take action will separate the best Automotive retailers from the rest of the pack. A growing number of dealerships recognize this truth, but are stymied by how best to make it happen.

2 Why?1. First, they lack the clear visibility into their pre-owned operations required to accurately diagnose the source of problems and take corrective action. 2. And secondly, they are unable to institutionalize fundamental management processes that span each phase of the pre-owned life-cycle, and drive consistency and acountability across their RETAIL PERFORMANCE MANAGEMENT (RPM)The primary focus of a successful RPM strategy starts with gaining better visibility into the entire pre-owned operations lifecycle, and most importantly, act on opportunities for securing quicker turn and higher gross simultaneously.

3 However, in order to achieve this, dealers require a strict management discipline across all phases of their pre-owned retail white paper provides insight into a fundamental management cadence that Used Car Operators can perform Daily, Weekly, and Monthly to expose risk, identify opportunity, and institute greater accountability across the CADENCEDAILY TASK LIST1. Analyze sold units from the previous day. 2. Analyze appraisals from previous day. 3. Execute your pricing plan by aging buckets. 4. Assess Time to Market and Low Online Ad Performance. 5. Analyze screen run lists and online wholesale ANALYZE SOLD UNITS FROM THE PREVIOUS DAY.

4 Identify trends in your previous day sales, and devise a plan to replace this inventory with additional pre-owned units. TIPS & RECOMMENDATIONSLook at the Days to Sale, Margin, and Market Days Supply of the car in the market. What is your current stocking position? How did you acquire this car (trade or purchase)? Was this a market performer, or a store performer? Does it make sense to replenish your stock based on current conditions and the results that you saw at your dealership? You may want to consider reaching out to other dealers and put together deals for their aging inventory (that match your core needs).

5 Simply locate cars already in the market that have already been reconditioned and have low Market Days Supply. They may be overpriced or poorly marketed by their current dealer. In addition, check your Custom Inventory Analysis for the segments that make you the most gross and/or that you turn the FirstLook s Market Velocity Stocking Guide ( ) to identify fast moving vehicles in the marketplace in those segments and drill down into the current market listings. Identify aging units in the market and buy them wholesale before they go to TASK FirstLook s Market Velocity Stocking Guide2. ANALYZE APPRAISALS FROM THE PREVIOUS DAY.

6 Review past appraisals with your sales consultants, and put a game plan together to recapture potential lost & RECOMMENDATIONSHost daily save-a-deal ( ) meetings, have another set of eyes look at your low-performing sales TASK FirstLook s Make-A-Deal Summary Report3. EXECUTE YOUR PRICING PLAN BY AGING together a game plan for execution. Which cars do you price? It is easy to look at your aged cars or just the cars you bought/traded for (if multiple people are appraising), but then you are just making daily updates to the prices. Here are few recommended best practices:1. Stick to your Aging Policy and re-evaluate based on activity and market PHYSICALLY pull the keys to each car on the planning tab.

7 Book it out, check market listings, open the car (does it smell like a wet dog?), start it, check the tires, do a walkaround . If you are doing this everyday, there will only be a handful of cars on the list. TIPS & RECOMMENDATIONSDraw a line in the sand, and say When a car hits XX days, I will re-evaluate its position in the market for pricing and ONLY when it hits this age. You HAVE to give a car time to adjust to new pricing and have a chance to sell. Be in the game . Don t just look at a report to tell you the cars you are asking above AND below market average, know WHY you fail into each category on EVERY TASK FirstLook s Current Inventory Pricing Risk Report4.

8 ASSESS TIME TO MARKET AND LOW ONLINE AD your Time to Market and streamline your process from appraisal through recon, and into Online ads. Follow up in your service drive to push cars through recon and get new inventory to market. TIPS & RECOMMENDATIONSR ecommended Benchmark: Time to Market should take no more than: 72 Hours. Time to Market will vary based on the dealership. Know YOUR setup and benchmark based on your top performing months and shoot for a 20% improvement each TASK FirstLook s Digital Performance Analytics5. ANALYZE SCREEN RUN LISTS AND ONLINE WHOLESALE opportunities today and & RECOMMENDATIONSBid and buy Online using our Live Auction Opportunities ( ).

9 Don t waste a day out of the dealership watching cars across the block, buy your bread and butter cars from your Inventory Management tool. For volume cars at the live sale, use the Vehicle Analyzer to see how YOU perform with those cars off the TASK FirstLook s Live Auction SearchWEEKLY TASK LIST1. Examine wholesale results from your biggest local sale. 2. Analyze missed deals for the Assess your core inventory s current stocking Examine previous week s wholesale performance for your sleds. 5. Touch each unit that is in the top bucket of your aging EXAMINE WHOLESALE RESULTS FROM YOUR BIGGEST LOCAL did your best retail performers fare vs.

10 Book/MMR? If similar inventory to yours in failing at auction, then your potential customers will have much less competition in the retail marketplace to choose & RECOMMENDATIONSC ompare book vs. cost, MMR vs. cost of your aged units in your top bucket. What way are the trends going? Will getting out of your poor performers now benefit you in the long run? Also, group the auction sold results by make/model and check it against your top performers/ highest volume in current inventory units. If there are a lot more running through the auction, your retail prices may have to be more competitive.