Helping dealers make sense of all that data

Managing financial performance is challenging at the best of times, but with seismic changes approaching the retail automotive sector the pressure to understand and interpret what your financial data says about your business is more important than ever.

With the increasing amount of data available, on financial performance, customer journeys, connected and electric car sales, it is tough to make sense of the value that lies within. Indeed, there is a danger that you’ll end up with the 1,000 yard stare as some dealers report too much data, others report too little and most struggle to distil the data into meaningful impacts and recommended actions.

I believe it is now more crucial than ever for dealers to embrace the reporting process to their brand partners. In the past it was often seen by dealers as a threat that brands might use the data to penalise them, but now combining their financial data with the customer and market data from the brands enables dealers to better evaluate performance compared to competitors and expected market share within a certain area.

Armed with this data dealers can begin to build strategies to address problems. All brands and retailers are looking at the future of representation points and the answer lies within the data they already hold.

With recent figures from the SMMT suggesting that both new and used car sales have been hit hard by the lockdowns of the last year, dealers need to put robust key performance indicators in place to help them optimise current performance and plan for the future. Take electric vehicles.

Data shows that EV sales are growing rapidly as brands shift production from ICE vehicles to hybrid and pure EVs. This has significant implications for dealer revenues. Short-term there are opportunities with hybrid vehicles for aftermarket support, but longer-term it will mean less services revenue, at the same time as agency models hit sales revenues. How do dealers work out the implications for their businesses?

With the digital shift and development of omnichannel strategies, dealers need to understand these changes will affect their sales performance. Using financial and sales/registration data dealers can build a series of opportunity calculations, which can be used to identify where the most potential for growth lies. This requires integration of all company information in one place for both backend and customer facing application, combining it with core financial data.

For example, looking at factors such as customer satisfaction indices, comparing them to sales data such as the number of internet leads and live chat interactions, telephone calls and the number of demonstrations per month. This enables the brand to evaluate performance at the network level, for example contrasting the number of demonstrations to phone calls or purchases. However, it also enables the more pro-active dealers to score their performance at the local level and use those measures for discussions with their brands for more support.

With the right data analytics and visualisation technology it is possible to use this data to derive detailed insights on critical aspects of the business improving forecasting of used and new car sales performance by dealer, region and brand. It also provides a level of deeper insight around profit drivers and key performance indicators by dealer and rank by improvement opportunity. This enhanced analysis of composite financial data delivers more sophisticated monitoring of used car prices across a single brand’s dealer network, provide daily sales and aftermarket revenues figures and real-time in-month forecasting of sales performance by dealer, region and brand.

Despite the current economic landscape, dealers who get to grips with their financial data and integrate it properly with the other sources of information within their organisations will thrive in the digital agency future. It will be critical to see a change in approach with the dealer principal becoming more active in comparing internal processes with actual performance. It is up to the principal to assess whether the team is efficient, performing and driving sales. A sound understanding of financial data is key to having confidence about the prospects of a dealership moving forward.

Robert Jones is CEO at ASE Automotive Solutions