Nov. 30, 2009 – Setting non-negotiable standards key to profitability

These articles recap some of the opportunities uncovered by Gart Sutton & Associates’ powersports specialists during consulting visits.
These are followed by recommended actions that address the issues. Our goal is to provide ideas to help improve your dealership.

The dealership
This dealership started with a single major metric line in the 1970s. The store was moved to a new, professionally designed facility a few years ago. Both owners have done most of the jobs in the store and have a good understanding of departmental operations. They have worked well together for many years. They carry motorcycles, ATVs and watercraft and sold just under 500 new and used units this past year.
They are primarily a rural dealership that draws from many nearby communities, some with significant population. Altogether, their market area contains more than 200,000 people. Their local area is currently suffering from unusually high unemployment.
They are located on a main road into a town of 40,000, but they have no freeway visibility. Since they are located less than a mile from a major freeway, it was suggested they use billboards to build awareness and attract more of the passing traffic.
In this first part of a series on the dealership, we’ll report on the analysis of GSA consultants on the overall dealership.

Analysis
They do not have job descriptions or an organization chart. We discussed developing non-negotiable standards for each department as a basis for their job descriptions. They must define their roles as owners as well, and then develop their organization chart. Once completed, they need to provide a copy of that chart to each employee and ensure they clearly understand the chain-of-command procedures.
The owners share the GM duties. In general, one owner takes care of the sales and P&A departments while the other focuses on the service department and dealership accounting. They need to discuss and clarify their owner and GM roles. They have a tendency to micromanage — become too involved in the day-to-day operations of the departments. They would benefit from empowering the department managers and focusing more on owner/general manager duties.
The surveys we collected from the employees yielded some interesting insights. The number and type of responses to the question: “List tasks that should not be a part of your job” could indicate a lack of team spirit. When asked to list the top five reasons why someone should buy from this dealership, many could not come up with five reasons. This indicates inconsistent messages about the branding/identity of the store. It is important to decide on a marketing position and maintain it consistently in all dealership advertising. You must create a culture within the store that understands and supports that position.
When asked to list the top five things they would like to see changed or improved, a large portion of the staff listed communications. Generally, this can be addressed by regular meetings, such as daily department huddles, weekly manager meetings and monthly store staff meetings.

Action Items
Define your business identity: What differentiates your business from the others? Develop business vision and mission statements. Utilize this common theme in all your marketing efforts going forward.
Empower managers to manage. Provide departmental goals. Have them develop individual goals and incentives, discipline, hire and fire staff with owner review and approval.
Put all procedures in writing. Require department managers to do the same.
Hold weekly manager meetings. Initially, focus on Action Plan status. In the future, focus on performance numbers.
Hold monthly total store staff meetings. Keep them positive and upbeat.
Daily manager and department huddles should be encouraged.
Develop a waiting area for sales and service customers.
Consider utilizing 20-group reporting software to help establish the profit centers and compare with benchmarks.