Monitoring key performance indicators (KPIs) is essential practice for automotive dealerships to maintain excellence and achieve sustainable growth. These KPIs offer valuable insights into performance, enabling managers to make data-driven decisions that optimize sales strategies and operations. By benchmarking their performance against industry standards, dealerships can remain competitive and enhance their overall performance.
Online Lead Response Time
“Online Lead Response Time” is a measure of how long a car dealership takes to respond to a customer who has been in contact with the dealership online. If someone requests to talk to a car dealer about a car, the response time should be within 5 minutes. You would never expect someone who walked into a dealership to wait longer than that to talk to someone about a vehicle. Potential online customers could have already moved to a dealership that sells the same car.
Car dealerships must keep this time as low as possible to increase sales and customer satisfaction. The adverts are only a part of generating leads. It is the dealership that closes the deal with online customers, and it starts with the response time.
Sales and Service Connection
There are two KPIs in this section. The first measures the percentage of sales customers who use your dealership for services, and the second measures the percentage of service-first customers who buy from your dealership. The first KPI measures how well your dealership maintains relationships, and whether the customer would return to service their vehicle. When the percentage is high, it is a good sign. However, if the number is low, you lose out on revenue. If you maintain the relationship, it can generate lots of new organic customers through referrals. We will touch on this in a separate point.
The second measurement shows how much your dealership services win over customers. If they have amazing service, it would influence who they will go to for future cars and services, creating a loyal customer base. Look at the sale-service connection customers and implement sales and service initiatives to start improving those, which will introduce a large loyalty basis
Repeat Customers
How many Customers are so pleased with their service that they keep coming back? That number should be higher than you think. They are the backbone of a dealership and a key element for long-term market domains. This is a measure that always needs to be looked at. Repeat customers show you are a reliable dealership and drive organic growth with no costs. Figure out what is driving people away from returning or what makes people stay. This takes us to the next best KPI to monitor
Referrals Per Sale
One of the best sources of revenue, and it can be achieved organically through word-of-mouth or written reviews. It is not only car dealerships that tend to neglect to track how people come across your business. It is often an area where everyone has room for improvement. If customers have a good experience they are more than likely to tell friends and family about their experience, the same goes for bad experiences. In this day and age, we all know how much people like to talk, especially about bad experiences. So, do not give them a reason to. The best place to start tracking these KPIs is through the average number of referrals per sale, and do what you can to help salespeople and service tech solicit referrals
