u.s. retail performance guidelines for variable operations
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U.S. RETAIL PERFORMANCE GUIDELINES FOR VARIABLE OPERATIONS
Dear Clients, Colleagues, and Friends,
It’s hard to believe that it’s almost been one year since the NCM Institute temporarily closed its doors, alongside some of our clients, due to the stay-at-home orders sweeping the nation. At that time, none of us knew what the future held, and we certainly couldn’t have predicted that we would be looking at some of the most profitable months in recent history. It has definitely been a whirlwind, but the industry that I have fallen in love with demonstrated that we can adapt quickly where needed.
For those of you that are regular subscribers to this publication, you will notice that many of the KPIs look different than you are used to seeing. This is not surprising given that most of these numbers are Benchmarks based on full year 2020 data from thousands of dealerships. As you can imagine, several things impacted the financials for our clients, such as changes in supply chain and consumer behavior, dealerships who had full or partial closures, and changes in personnel counts/structures. However, even though these same variables remain to be seen for this year, the 2020 numbers are still a great place to start for reviewing areas of opportunity for your dealership. As we always say in class, the Benchmarks don’t give you the answers to what it should be, but it gives you the right questions to ask yourselves. We hope as you examine your goals, you will use these numbers to continue to challenge yourself, both in the areas that were at their historical highs, as well as the areas that were at all-time lows. Even as the market changes, our most progressive dealers have already started action planning on how to sustain the desired results, and focus on the areas that need to return.
The time is now to start asking yourselves… “What’s Next?” But don’t forget…it doesn’t stop with these numbers. As they say, “A goal without a plan is just a wish” – Antoine de Saint-Exupery. I hope that this year, as you are making your goals, and then considering your plan, you will remember the value of the NCM community. I wish you and your dealerships, employees, and your family nothing but prosperity and happiness in this new year.
Best Wishes,
Brandiss Drummer VP, Education and Client Programs
Contact Us:info@ncmassociates.com 800-756-2620
*Including any administrative pro-rates.
VOLUME IMPORT FRANCHISES
LUXURYFRANCHISES
DOMESTICFRANCHISES
Total Sales Compensation % of Adjusted Gross
Total Sales Compensation per Vehicle Retailed
Total Financial Services Compensation % of Adjusted Gross
Total Financial Services Compensation % of F&I Net
Total Financial Services Compensation per Vehicle Retailed
Total Supervision Compensation % of Adjusted Gross*
Total Supervision Compensation per Vehicle Retailed*
Total Other Salaries & Wages % of Adjusted Gross
Total Other Salaries & Wages per Vehicle Retailed
Total Direct Comp. Expense (sum of #5-#8) % of Adjusted Gross*
Total Direct Comp. Expense (sum of #5-#8) per Vehicle Retailed*
5
6
7
8
9
CONTROLLABLE EXPENSES
13%
$562
5.1%
16.1%
$223
11.4%
$496
4.6%
$198
34.1%
$1,479
10.5%
$400
4.4%
15.9%
$166
9.3%
$354
4.2%
$160
28.4%
$1,081
9.8%
$627
3.8%
19.4%
$242
8.6%
$554
4.0%
$257
26.1%
$1,680
VOLUME IMPORT FRANCHISES
LUXURYFRANCHISES
DOMESTICFRANCHISES
Front Gross Profit $PVR*
F&I Net Income $PVR**
Other Sales Department Gross Profit $PVR***
Adjusted or All-In Gross Profit $PVR (sum of #1-#3)
1
2
3
4
*Fleet Gross Profit, New Vehicle Dealer Exchange Income, Used Vehicle Wholesale Profit [Loss], and any Cost of Sale Adjustments and Manufacturer/Distributor Incentives that are identifiable to departmental gross are to be included in “Front” Gross Profit for your dealership.
**Per Retail and Lease Unit, Net of Adjustments and Chargebacks, but before any Financial Services Compensation.
***Doc. Fees, Hard Packs, Manufacturer/Distributor Incentives that are not identifiable to Departmental Gross and any other reported “Below-the-Line” Income [Net Additions & Deductions] related to Vehicle Sales should be included in “Other” Gross Profit.
SALES AND GROSS PROFIT
$2,110
$1,390
$840
$4,340
$1,802
$1,252
$746
$3,800
$3,986
$1,580
$867
$6,433
Revised January 1, 2021. Proprietary and confidential.COMBINED VEHICLE DEPARTMENTS
U.S. RETAIL PERFORMANCE GUIDELINESFOR VARIABLE OPERATIONS
1
Revised January 1, 2021. Proprietary and confidential.COMBINED VEHICLE DEPARTMENTS
(Continued)
VOLUME IMPORT FRANCHISES
LUXURYFRANCHISES
DOMESTICFRANCHISES
Opportunities per Salesperson per Month1 2
Units per Salesperson per Month
Ranges for Staffing Level1
Adjusted Gross per Salesperson per Month
# of Salespersons per Mgr. (includes Closers and/or Team Leaders)
Units per Manager per Month
Adjusted Gross per Department Mgr. per Month (includes F&I)
Gross per Assigned Department Employee per Month*
EMPLOYEE PRODUCTIVITY
55-65
11.4
11-14
$49,476
3.8
40.1
$174,034
$19,953
≈60
65-80
12.9
11-14
$49,020
3.5
41.7
$158,460
$17,450
≈60
65-80
10.7
11-14
$68,833
3.7
38.3
$246,384
$28,685
≈60
16
17
18
19
20
21
22
23
24
VOLUME IMPORT FRANCHISES
LUXURYFRANCHISES
DOMESTICFRANCHISES
Net Advertising & Promotion Expense % of Adjusted Gross
Net Advertising & Promotion Expense per Vehicle Retailed
Net Floorplan Interest Expense % of Adjusted Gross
Net Floorplan Interest Expense per Vehicle Retailed
Demo Expense % of Adjusted Gross
Demo Expense per Vehicle Retailed
Net Delivery Expense % of Adjusted Gross
Net Delivery Expense per Vehicle Retailed
Vehicle Policy & Claims Expense % of Adjusted Gross
Vehicle Policy & Claims Expense per Vehicle Retailed
Total Controllable Dept. Expense (sum of #9-#14) % of Adjusted Gross
Total Controllable Dept. Expense (sum of #9-#14) per Vehicle Retailed
10
11
12
13
14
15
CONTROLLABLE EXPENSES (CONTINUED)
3.5%
$150
-4.0%
-$173
0.3%
$12
0.2%
$10
0.5%
$22
34.6%
$1,500
5.3%
$201
-2.2%
-$83
0.1%
$3
-0.1%
-$3
0.4%
$15
31.9%
$1,213
3.6%
$232
-2.7%
-$172
0.3%
$18
0.3%
$17
0.4%
$28
28.0%
$1,803
U.S. RETAIL PERFORMANCE GUIDELINESFOR VARIABLE OPERATIONS
2
Maximum Deals per F&I Manager (including Director) per Month1
1Based on industry best practice guidelines. All others are NCM Benchmarks®. 2Varies substantially based on sales structure in store. *Does not include below the line or incentives not identifiable to departmentalgross.
(Continued)
Revised January 1, 2021. Proprietary and con idential.COMBINED VEHICLE DEPARTMENTS
AVERAGE
Lead Response Time*1
Engagement Rate - 1st Day*1
Engagement Rate - 30 Day**1
Appointments - New Leads**1
Appointments Made1
Appointments Show of Made Appointments1
Close Rate of Shown Appointments1
Total Close Rate of All Leads1
Appointments - Sales Calls1
Appointments Made1
Appointments Show of Made Appointments1
Close Rate of Shown Appointments1
Total Close Rate of All Leads***1
Digital Sales as a % of Total Sales****1
Dealership Website Leads*****1
Manufacturer Website Leads1
3rd Party Leads (Including OEM 3rd Party)1
3rd Party Classified Used/New Vehicle Listings1
25
26
27
28
29
30
31
33
E-COMMERCE
15 Minutes 5 Minutes
U.S. RETAIL PERFORMANCE GUIDELINESFOR VARIABLE OPERATIONS
3
TARGET
*The minimum “connect” rate [phone or email conversation] from your internet leads.**The percentage of prospects that should come in to the dealership from internet hard leads and phone leads generated from
websites.***Number of attributable electronic, mobile, and telephone leads as a percentage of Unique Visitors to Dealership Website.****Includes dealership website, manufacturer leads, and third party leads.*****This is factored using typical lead sources commonly available in the market, including independent third party sources andmanufacturer-based lead sources, as well as the dealership website leads, excluding SEO and SEM.1Based on industry best practice guidelines. All others are NCM Benchmarks®.
Average Cost Per Lead1
Average Cost Per Internet Vehicle Sold1
"Fresh" Leads Distributed to Producing Employee Per Month1
Per Full-Time "A-Z" Internet Salesperson1
Per Full-Time Combination Internet and Floor Sales Person1
Website Conversion Rate1
Per Full-Time BDC or Internet Appointment Setting Specialist1
32
34
20.0%
60.0%
32.0%
60.0%
55.0%
11.0%
60.0%
60.0%55.0%
20.0%
40.0%
15-18%
11-13%
10-12%11-13%
2-5%
$30-35
$200-250
60-80
35-45150-200
ALL FRANCHISES
25.0%
70.0%
35.0%70.0%60.0%
15.0%
65.0%70.0%
65.0%30.0%
40.0%20-23%
13-16%
12-15%13-15%
5-7%
$30.00
$200.00
80
40
150.00
VOLUME IMPORT FRANCHISES
LUXURYFRANCHISES
DOMESTICFRANCHISES
Liquidation Policy1
Dollar Days’ Supply*1
Unit Days’ Supply**1
Reconditioning Cycle Time1
Annual Inventory Turn Rate1
Percent of Inventory Under 30 Days Old1
Stock Walk “Bucket Jumper” Touch Points (Days in Stock)1
ASSET MANAGEMENT—USED VEHICLES
Day 61
30-45 Days
16, 31, & 46
Day 61
30-45 Days
16, 31, & 46
Day 61
30-45 Days
16, 31, & 46
41
42
43
44
45
46
47
(Continued)
Revised January 1, 2021. Proprietary and confidential.COMBINED VEHICLE DEPARTMENTS
U.S. RETAIL PERFORMANCE GUIDELINESFOR VARIABLE OPERATIONS
4
*Wholesale Units are included in the Inventory Calculation but not in the Sales History or Sales Forecast.
**Same planning and calculation methodology used In Item Number 42.
1Based on industry best practice guidelines. All others are NCM Benchmarks®.
3-5 Days
8-12 Times
70-80%
3-5 Days
8-12 Times
70-80%
3-5 Days
8-12 Times
60-70%
30-45 Days 30-45 Days30-45 Days
20 GROUPS | CONSULTING | EDUCATION | BUSINESS INTELLIGENCE | TRAVEL SOLUTIONS
NCMASSOCIATES.COM800.756.2620
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