Business Operations: Make Up of Platinum Performers

Operations: Make Up of Platinum Performers

Leaving-Business-Repair-Garage-BayAs a percentage of all customer visits, Platinum Performers are 200% more likely to schedule appointments (50% vs. 25%), which allows their businesses to optimize schedules and workflow, forecast trends and quote more jobs. In quantifiable terms, scheduling more appointments equates to a greater likelihood of increased cars per bay per month, as Platinum Performers average about 75 more cars per bay per month (8.0 cars/bay/day x 30 days vs. 5.5 cars/bay/day x 30 days).

Platinum Performers are more likely to have a formal business plan than other tire dealers in the survey, but still fall short. Just half of Platinum Performers have formal business plans.

The top dealers are also more likely to have an employee handbook, formal marketing plan, customer retention plan, benchmark competitors, customer service surveys, formal budgeting process, practice energy management techniques and have a formal continuous improvement program in place.

Platinum Performers are also more likely to be more efficient with their annual operating budgets. On an average basis, 38.9% goes to payroll/benefits/training (48.2% for other performers); 34.2% goes to fixed expenses (29%); and 26.9% targets controllable expenses (22.8%).

Other Operations Details:

  • Platinum Performers fall flat in a number of areas where one would think the best dealers would excel:
    • When it comes to continuous improvement efforts, just 36.4% of Platinum Performers report having a formal program, compared to an even worse 25% for other dealers.
    • Just over half (54.5%) say they have a current formal business plan in place, vs. 32.4% of other dealers.
    • Still, 72.7% of the best dealers have a formal budgeting process vs. 32.4% for other dealers, and 72.7% say they have a current employee handbook vs. just 58.3% for other dealers.

“I like to know what’s coming in so I know what parts and tires I need to stock as well as how many techs I need for the day. Nowadays with tire deliveries, most vendors deliver twice a day – you don’t have to keep $300,000 worth of inventory in stock. We schedule on average about 40-50 work orders per day.” – Paul Hovis, Owner of Hovis Tire & Auto

  • Platinum Performers report a median customer retention rate of 85% (80% for others), and say that repeat business makes up 78.5% of their average weekly sales (75.2% for others). Those results are a bit of a surprise given that only 63.3% of Platinum Performers have a customer loyalty program vs. 44.4% for other dealers; and just 54.6% of the top dealers perform customer satisfaction surveys and follow-ups compared to 42.6% for other dealers.
  • Platinum Performers maintain control over their day-to-day routines; as a group they report that 50% (median) of their daily appointments are scheduled in advance vs. others with just 25%.
  • But getting jobs on the schedule is still a tough task, no matter who you are. Platinum Performers fill 70% of their schedule by phone (compared to 60% by other dealers), 27% by walk-ins (20%), and just 5% using online scheduling systems (1%).
  • On a median basis, Platinum Performers see 8 cars/day per each of their service bays compared to 5.5 cars/day per bay. That equates to a Platinum Performer seeing 64 cars per day vs. 33 cars per day for other dealers, based on an eight-hour day.
  • Remarkably, Platinum Performers focus less of their operating budget on employee expenses vs. other dealers. In 2013, the median was 40% of revenue for top dealers compared to 50% for other dealers.
  • Happy employees are the most productive and successful. The best performing dealers took good care of their employees and provided them with key growth opportunities. Here’s how they stack up on key benefits:
    • Paid Vacation Days: 100% (Platinum Performers) vs. 85.6% (Others)
    • Paid Sick/Personal Days: 63.6% vs. 50.5%
    • Dealer Paid Medical Coverage: 63.6% vs. 45.1%
    • Profit Sharing: 45.5% vs. 25.2%
    • Management Training: 54.6% vs. 40.5%
    • Technical Training: 100% vs. 71.2%
    • Sales Training: 72.7% vs. 60.4%
    • Promotion Opportunities: 63.6% vs. 47.8%
    • Apprenticeship Program: 63.6% vs. 23.4%
    • Accident Prevention Program: 54.6% vs. 32.4%

“It’s hard to drive your business to success if you don’t have a target. Your organization and all of its members need to know where that target is. That’s the motivation and reason why we have a business plan.” –Chris Monroe, Owner of Monroe Tire

  • For the most part, Platinum Performers and other dealers earmark the same share of revenue for IT (median 2% each), equipment and tools (median 3% each), and vehicles (median 1% and 2%, respectively).
  • Where top performing dealers really differentiated themselves was in non-equipment related facility improvements and advertising/marketing. Platinum Performers ear­marked 5% of sales for improvements and another 5% for advertising/marketing, compared to 2% and 2.8%, respectively, by other dealers.
  • The proof is in the performance, and the best dealers garnered a 12% median net profit in 2013 vs. 6.3% by other dealers.

Click here to continue: Platinum Performers Marketing

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