Service Providers

First principles

Mark Mooney Blog 8-12“First things first.” — Anonymous (or your mother)

I was on a dealer visit recently, and one of the topics of conversation was first principles. The GM had been a math major in college, and he was talking about how first principles (I shouldn’t have cut all those algebra classes) applied to the study of physics. I know it’s hard to believe that physics took a back seat to motorcycle riding when I was young, but priorities are priorities.

A simple definition of first principles is: the fundamental concepts or assumptions on which a theory, system, or method is based. First principles are fundamental starting points that you know to be true. They are basic principles upon which success can be built, whether it’s physics or running a dealership. You can return to them as long as you know what they are and where to start.

Let’s say your sales department is not performing the way that you’d like. “Hire new sales people” might be your first thought. “They’d have to be better than what we have right now” might be another thought, but would they? You could have the same issues over and over if you don’t identify what’s causing the lack of performance in the first place.

Doing the basics, focusing on fundamentals, is where you start. First principles give you those starting points. This is not physics (thank goodness), but this is defining the methods and systems for how you want things done, from the beginning.

If your sales department is lackluster in its performance, find out what’s causing that. The majority of the time it’s no written sales processes in place, no fundamentals being followed. One of the first principles I know to be true is that a written sales process that guides and that is followed will promote greater success than everybody doing whatever they want to do.

Whether it’s your parts department, service department, sales department or F&I, inattention to basic fundamentals will diminish your profitability, plain and simple. That’s the first principle.

I’m probably not looking at first principles like a physicist (cut those algebra classes), but here’s the question. What are your first principles when it comes to running your dealership? What are the starting points that you know to be true? These are questions we need to be asking ourselves. There are fundamentals that, when followed, give us a better chance at success and a better chance of ending up where we want to be — not just remaining in business but running a profitable business.

Mark Mooney is director, retail performance for Pied Piper Management Company LLC, a Monterey, Calif., company that works with motor vehicle manufacturers and dealers to maximize performance of dealerships. One of Pied Piper’s most popular services for the powersports industry is Pied Piper Prospect Satisfaction Index (PSI) sales mystery shopping to help turn more motorcycle shoppers into motorcycle buyers.


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