PDF 5RPM SIMPLE TRICKS FOR

[Pages:22]5RPM SIMPLE TRICKS FOR MANAGING

GRCOAUDPENCE

PERFORMANCE

DAILY, WEEKLY, & MONTHLY TASKS

that improve speed, consistency, and accountability across every phase of pre-owned retail operations.

A PUBLICATION BY

A publication of

RPM CADENCE

Due 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. 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 dealership.

ENTER RETAIL PERFORMANCE MANAGEMENT (RPM)

The primary focus of a successful RPM strategy starts with gaining better visibility into the entire preowned operations lifecycle, and most importantly, act on opportunities for securing quicker turn and higher gross simultaneously. However, in order to achieve this, dealers require a strict management discipline across all phases of their pre-owned retail operation.

This 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 dealership.

DAILY TASK LIST

1. 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

market.

DAILY TASK LIST

1. ANALYZE SOLD UNITS FROM THE PREVIOUS DAY.

Identify trends in your previous day sales, and devise a plan to replace this inventory with additional pre-owned units. TIPS & RECOMMENDATIONS

Look 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). 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 fastest. Use FirstLook's Market Velocity Stocking Guide (1.1) 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 auction.

1.1 FirstLook's Market Velocity Stocking Guide

DAILY TASK LIST

2. ANALYZE APPRAISALS FROM THE PREVIOUS DAY.

Review past appraisals with your sales consultants, and put a game plan together to recapture potential lost trades. TIPS & RECOMMENDATIONS

Host daily "save-a-deal" (1.2) meetings, have another set of eyes look at your low-performing sales managers.

1.2 FirstLook's Make-A-Deal Summary Report

DAILY TASK LIST

3. EXECUTE YOUR PRICING PLAN BY AGING BUCKETS.

Put 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 criteria. 2. PHYSICALLY pull the keys to each car on the planning tab. 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 & RECOMMENDATIONS Draw 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 car.

1.3 FirstLook's Current Inventory Pricing Risk Report

DAILY TASK LIST

4. ASSESS TIME TO MARKET AND LOW ONLINE AD PERFORMANCE.

Accelerate 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 & RECOMMENDATIONS

Recommended 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 month.

1.4 FirstLook's Digital Performance Analytics

DAILY TASK LIST

5. ANALYZE SCREEN RUN LISTS AND ONLINE WHOLESALE MARKET.

For opportunities today and tomorrow. TIPS & RECOMMENDATIONS

Bid and buy Online using our Live Auction Opportunities (1.4). 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 cuff.

1.5 FirstLook's Live Auction Search

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