When Performance is Measured—It Improves

If you are a baseball fan like I am, you have most likely watched a game or two on TV or have gone to the ballpark to root for your favorite team (St. Louis Cardinals for me). In doing so, you have undoubtedly noticed the constant display of Player Statistics at the bottom of your TV screen or boldly displayed on the huge electronic scoreboard. For each batter who comes to the plate we see their Batting Average, RBI’s (Runs batted in), # of Home Runs, OBP (On base percentage), and for pitchers we see their ERA (Earned run average), number of games won versus lost, number of starts, how many innings pitched, etc. We even see the speed of every single pitch he makes displayed on the screen. Why? Maybe it’s because we as fans want to see and evaluate the performance of each player. Maybe it’s because the team’s coaches want to see and evaluate their individual player’s performance as well as that of the team. Maybe it’s because the opposing team’s coaches and players want to see and evaluate the other players’ performance. Or, just maybe it’s all of the above. When performance is measured it improves.


Top Performers are identified as such through constant, on-going performance evaluations. If you can’t evaluate their performance then how can you identify their status as a Top Performer? All of the players inducted into the Baseball Hall of Fame do not have the same stats. They are all different yet they all excelled in the sport of baseball and became the best players in the game. As a Dealer, General Manager or department manager you can learn a lot from this analogy because unless you have the stats on every individual on your team you cannot possibly evaluate their performance. You can’t identify their strengths or their weaknesses. You can’t measure improvement or failure accurately or fairly. You don’t know who needs training and what they need trained on. Now let’s take this concept of “you can’t manage what you don’t measure” and look at it from the perspective of “Front End” versus “Back End.”

The vast majority of Dealers have processes in place to measure the performance of their sales team every single day so they can evaluate their performance. Here are some typical examples:

Finance & Insurance Department:

• Gross Profit Per Retail Unit-New & Used

• Finance Penetration as a percent of total vehicle deliveries

• Extended Service Contract Penetration as a percent of total vehicle deliveries

• GAP Penetration as a percent of total vehicle deliveries

• Lease Penetration as a percent of total vehicles financed

• Number of contracts pending loan approval

• Total F&I Gross Profit produced Month to Date

This is typically measured for each Finance Producer as well as the entire F&I department and is done so DAILY so that you can effectively identify the Top Performers from the Underachievers and act accordingly.

New & Used Sales Departments:

• Gross Per Retail Unit-New & Used

• Number of units sold Month to Date

• Number of “UPS” Month to Date

• Number of Demos Month to Date

• Number of Written Proposals Month to Date

• Closing Ratio of UPS to Closed deals

• Number of Appointments for the day

• Number of T.O’s

• Conduct a lot walk to view inventory additions/deletions

• Number of Phone UPS Month to Date

• Wholesale Profit/Loss Month to Date

• Internet Sales Leads Month to Date

• Number of Internet Sales closed Month to Date

• Results from advertising campaigns

• Used Vehicle Reconditioning Cost PUVR

Most of these measurements are calculated for each Salesperson and each Manager for the same reasons as listed above for the Finance Producers and they are done DAILY. Most sales departments start their day with a brief Sales Meeting to review many of the items listed above. These are the typical 23 “Front End” processes that separate the average Dealer from the Top Performing Dealer. How would you rate your Sales Department?

Okay, now let’s cross over the demarcation line to the “Back End” of your dealership and take a look at the Service & Parts Departments and identify the typical processes for evaluating their performance DAILY. I emphasize DAILY not monthly.

Parts Department:

• Wholesale Parts Sales

• Counter Retail Sales

• Repair Order Sales

• Gross Profit Margin

• Lost Sales

• Fill Rate

My experience has been that far too many Dealers, GM’s and Parts Managers measure all of the above for the department but too often fail to do the same for each parts employee. For example do you run a DAILY Exception Report for each employee to identify the “Unauthorized Discounts?” Do you review a Performance Report DAILY by employee to identify their performance on parts margin—Wholesale, Retail Repair orders and Retail counter? Do you compare your performance to the benchmarks in our industry? Do you measure dollar sales per employee? Do you measure transactions per employee? Remember, if you only measure the performance of the department, you can’t effectively identify the Top Performers from the Underachievers. You can’t identify their individual strengths and weaknesses.

Service Department:

• Technician’s Flat Rate Hours Produced

• Technician’s Clock Hours Worked

• Hours per Repair Order by Advisor

• Number of Repair Orders Month to Date—Retail-Warranty-Internal by Advisor

• Number of Appointments Scheduled

• # of Carryovers

• Shop Productivity

Again, based on my experience and that of my 20 Trainers working in dealerships all across the country, we can’t find very many Dealers, GM’s, Service Directors/Managers and Parts Managers who measure anything else. Those who do measure more invariably will produce more. Measure things like their Advisors’ Unauthorized Parts & Labor Discounts, Policy Adjustment, Parts Margin, Labor Margin, # of Up-sells, Closing Ratio of Up-sells, Un-sold Hours per day, # of Menu Presentations, Closing Ratio on Menus, # of Inspection presentations, etc.

For Technicians let’s measure how many completed Inspections per day, # of additional repairs sold from inspections, # of comebacks, HPRO and the number of RO’s.

To sum it up, I see most dealers measuring about 23 stats per day in their Sales Departments and only about 13 stats per day in Service & Parts. If you follow my recommendations listed above that number jumps to about 30 stats per day and the good news is it costs you absolutely nothing! Now take a pen and check off all of the stats you measure DAILY in your Sales Department and then check off all of the ones you measure DAILY in your Service & Parts Departments. How did you score—Top Performer or Underachiever? It’s all in the stats!

Don Reed—CEO DealerPro Training Solutions