Autologica Blog

KPI,  Strategies

Big Data at the Dealership: What, When and How to Measure

big data

Having detailed information about the dealership is becoming more and more important each day. Big Data (i.e. the analysis of large amounts of information) reaches all industries including vehicle dealerships, and should be taken into account by dealers looking to maximize their benefit from the the enormous amounts of data they own.

The information generated by a dealership’s daily operations can tell us many things. We must develop the habit and have the tools to interpret this data and make smart decisions.” Vanesa Vena, Autologica Consultant.

Throughout this series of articles we will deal with the importance of having strategies based on data analysis in order to:

  • Avoid critical situations through trend analysis
  • Compare the performance of each department in different periods
  • Detect processes that work correctly so as to improve their results even more
  • Analyze where the dealer is losing money due to inefficiencies, poor operations and possible fraud situations, in order to take actions

What should I measure?

This is the first question a dealer should ask before starting to analyze its information. A dealership generates thousands of data items every day (sales, repair orders, purchases, calls to prospects, customer information, payments, debts, etc.), so it is essential to know what to look at within that huge universe of numbers, and why.

In order to start working with the dealership’s data, we propose a series of KPIs (key performance indicators) that are vital to knowing the status of each department:

  • Absorption rate: Allows you to detect the level at which each department’s revenue contributes towards the fixed expenses of the dealership.
  • Open repair orders (monthly): Shows how much work the workshop performs, and if jobs are internal, warranty-related, or invoiced to customers.
  • Parts and jobs sales by repair order: Helps detect if the business depends on parts sales, or on service and labor sales, or if it is balanced.
  • Sales funnel: Shows the real efficiency of each salesperson in a quick and accurate way.
  • Inventory status: Allows you to know how your inventory is composed based on parts activity; detects the cost of dead inventory, compares inventories among stores, finds inefficient purchases.

It is paramount that managers have a global, integrated and analytic overview of the business, especially if the departments don’t count with expert analysts of their own.

When should I measure my KPIs?

This depends on what you are using to measure and why. The Sales funnel, for example, is an indicator that can be measured monthly so as to have a complete picture of the sales team efficiency.

A report on the number of calls made by each salesperson is usually analyzed in shorter periods. Why? The key is to quickly detect when there are unmade calls so that you can reassign them before the prospect turns to the competition.

It is important to have systems that let you measure these types of indicators in different periods, but it is also important to have a plan by which, in addition to gathering data, you ask questions based on the indicators in order to continuously improve the dealership.

How should I measure my KPIs?

Modern dealer management systems take into account the importance of generating, storing, and providing an organized and clear way to use information. Among the different tools offered by these systems (as is the case of Autologica DMS), these stand out:

  • Departmental overview reports: these are the “classic” reports that show the results of a specific period on one screen. These reports are useful to see results.
  • Business Intelligence interactive reports: these reports have drill-down and drill-up navigation systems that allow you to know the composition of each piece of information. This helps each manager see the details of each KPI from the general to the particular and vice versa.

Information technologies are an essential part of the Big Data phenomenon, since it would be impossible to process such a massive amount of information on daily operations without software. These technologies “make data talk”, so it is important that you know what you want to analyze and why, as there are a huge number of possible combinations of information to analyze and cross-check.

 

Autologica DMS offers a powerful Business Intelligence tool that helps managers monitor the business.

 

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