Key Dealership Performance Metrics You Should Be Tracking in 2023
Are you a dealership owner or sales department manager wondering what dealership performance metrics you should be tracking in 2023? In this blog, we outline some key performance metrics you should be tracking, with the help of industry experts with 20+ years of experience.
As a dealership owner, it’s essential to have the right information at the right time. Keeping up-to-date with data allows you to reach your goals and hit your targets. Knowing which metrics to track can be overwhelming which is why we spoke with Bob Clements to hear his list for the top metrics your general and sales managers should know.
One of the most important things to evaluate monthly as an owner is an overview of sales from the top 10 customers. You want to make sure that you know exactly who your high performers are, that you’ve spoken to them, and you have the right salesperson assigned to them. Knowing these metrics can help ensure dealership success.
Key Metrics for Owners and General Managers:
- Sales by Department: total revenue of a single department
- Customer Count: total number of customers who came to the store that day
- Average Sale by Department: number of sales or transactions for a department
- Composite of Daily Records: A compilation of your daily reports
- Labor Costs as a Percent of Sales: Total Amount you pay employees in a given week compared to sales dollars for the same week
- Composite of Weekly Reports: A compilation of your weekly reports
- Total COGS: Amount you spend to sell your products
- Total Operating Costs: Amount you spend on employees, insurance and non-overhead
- Gross Profit: Amount you make less the costs required to sell
- Overview sales of Top 10 Customers: A list of the all the interactions your dealership had with it’s top 10 customers in a month
Tip: As an owner/general manager, once you get a hang of these reports, consider adding industry data into your regular routine to make sure you’re hitting industry benchmarks.
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Metrics for Sales Managers:
In many cases, you as an Owner or GM might be the one responsible for managing the sales department. If so, add the below to your monthly review list.
One of the key statistics for the Sales Manager to monitor is your customer acquisition cost. While it’s important to fuel and monitor your marketing strategy budget, you need to understand how that relates to your customer acquisition cost to make sure that you spend on marketing is going the right place.
Here’s a full list of what your Sales Managers should be monitoring:
- Total Sales: Amount earned from all wholegood sales.
- Total Transactions: Total amount of transactions that took place at your dealership on a given day.
- Average Transaction Value: Total value of all transactions divided by the number of transactions or sales.
- Composite of Daily Reports: A compilation of the daily reports.
- Overview of Trade-Ins and Cost to Dealership: The number of trade-ins on your lot and their overall cost to your dealership.
- Composite of Weekly Reports: A compilation of your weekly reports.
- Avg. Sales by Person: Total number of wholegood sales revenues over the total number of transactions per employee.
- Avg. GPM by Category: Average number of dollars you make after deducting the costs associated with selling each wholegood, categorized by wholegood type.
- Total Marketing Cost: Total amount spent on marketing.
- Customer Acquisition Cost: Total cost of acquiring a customer.
More Metrics you should know:
Knowing what to track is helpful, but knowing what they mean is important. Check out these 8 metrics and how to calculate them:
- Sales volume: This metric evaluates the number of units sold by a dealership during a particular period.
- Gross profit margin: This metric shows the profit made from sales, calculated as the difference between the selling price and the cost of the equipment.
- Gross profit per unit: This measures the profit made on each piece of equipment sold, calculated by dividing the gross profit by the number of units sold.
- Inventory turnover: These measure how quickly the dealership is selling its inventory of outdoor power equipment, calculated by dividing the number of units sold by the average number of units in inventory.
- Service revenue: This measures the revenue generated by the dealership’s service department, which is an important source of income for outdoor power equipment dealers.
- Parts and accessories sales: This measures the revenue generated by the dealership’s parts and accessories sales, which can also be an important source of income.
- Customer retention: This measures the rate at which customers return to the dealership for repeat purchases or service, which can indicate the dealership’s reputation and level of customer satisfaction.
- Net profit: This measures the dealership’s overall financial performance, calculated as total revenue minus total expenses.
On top of setting up recurring meetings to review these metrics, the best way to implement an effective process is to invest in a DMS that can automate this reporting for you. This way, the information will be readily available to you, whenever you need to review it. To learn more about Ideal reporting, click here to go through our self-paced demo.