Retail Operations Best Practices

Consultant’s Approach to Developing Sound Compensation Strategies for Dealership Managers and Salespeople

There are today, and there probably always will be, as many different compensation plans as there are dealerships. That is the nature of our business: to be individualistic; to have a unique dealership culture reflected in the way we treat our customers and our employees. Management and sales "pay plans” are certainly a part of that unique culture.

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What Is Opportunity Management?

I clearly recall the first (of numerous client-dealers) to say, “I need your help to increase my Up-Count.” My follow-up question was, “Do you know how many Opportunities To Do Business (OTDB’s) you currently have by Control Category and by salesperson?” The blank look I received, led me to explain: “Until you are able to accurately measure your true OTDB count by Category we have no basis to gauge improvement; right now you MAY HAVE a sufficient number of OTDB’s to achieve your sales objectives! Why would you consider changing your marketing strategy, if you’re NOT doing an acceptable job with the OTDB’s you currently enjoy?”

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An Important KPI for Fixed Operations Planning and Management

Planning for success in any department requires an assessment of available inventory levels. The inventory for sale in the dealership’s service department and collision center is quantified as “billable technician flat rate hours.” This inventory requires far more scrutiny, understanding and management than other dealership inventories, because the inventory component is time…and once it’s gone, it’s gone. Time is irreplaceable.

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