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Flying Your Dealership to New Heights




Have you ever seen the cockpit of a commercial airplane and noticed the instrument cluster that the captain and co-pilot monitor? Most planes have over 100 instrument clusters or dials to guide the pilots’ actions. The instruments inform the pilots of the plane’s condition and the environment around the aircraft. Some instruments are lagging indicators, telling the pilots what has happened, and others, like radar, are leading indicators that indicate challenges they could face on their path forward.

In line with my “think like a pilot” theme, I’m not suggesting that you surround yourself with as many dials and instruments as commercial pilots. However, there are some key leading and lagging indicators you should monitor for the success and sustainability of your dealership.

The ‘Good to Great’ Dealer Dashboard The Machinery Advisors Consortium (MAC) “Good to Great” Dealer Dashboard has 14 essential measurements:

  1. Customer retention rate

  2. Return on assets

  3. Participation rate on deals in their assigned market

  4. Closure/success rate on those deals

  5. Used equipment gross profit

  6. Used inventory turns

  7. Used washout cycles

  8. Service and parts absorption

  9. Rental, service and parts absorption

  10. Employee turnover rate

  11. Average days of work in process

  12. Stocking parts fill rate

  13. Rental utilization rate

  14. Service and parts gross profit as percent of total dealership gross profit

Like in the pilot’s cockpit, some of these are lagging indicators that show what has already happened, such as return on assets, for example. Others, like the participation and close rates, are leading indicators of your calculated market share. Participating in 50% of the deals combined with a 50% close rate results in a 25% market share. If you achieve a high market share, it is likely because of thorough market coverage plus the professional capacity of your sales organization to close deals.

The Smile Dial: Attitude is a Leading Indicator of Altitude

I suggest you place another leading indicator on your desk, which I call the “smile dial.” Many dealers have a formal weekly gathering of their staff to check the vital performance signs of the dealership. During the next meeting, take a smile count. How many of your teammates arrive at the meeting prepared with a smile and a warm personal greeting? Smiles are contagious. When you encounter a colleague with a broad grin or a friendly smile, it’s usually a leading indicator of personal satisfaction and passion for their work. These characteristics are contagious.

Take a notepad, walk through your dealership twice a week, and count smiles. Pick a routine time each week, like Tuesday at 10:00 and Thursday at 2:00 and start in different departments. Start counting smiles and stop when you get to 10. Register the time it took for your smile dial to reach 10, and bring your report to the next staff meeting.

Transforming dealerships achieve success through the combination of three Ps: good products, good processes and good people. The number of smiles your employees and teammates express will be a good leading indicator that your products, processes and people are performing at top levels.

Customer satisfaction links directly to employee satisfaction. Happy people and robust processes supporting superior products and services make your customers happy. A quick reaction to address a poor product, an inefficient process or people performance issues will result in happy customers who return to your dealership for future business. Dealerships and OEMs use net promoter scores (NPS) or other customer surveys to assess customer satisfaction. When you meet a frown or a sour look, ask questions immediately. In many cases, you’ll find a problem looking for a solution. The sooner you fix underperforming products, weak/misaligned processes or undermotivated people, the sooner you will change the “altitude” or success of your dealership. The NPS or other surveys will tell you how well you did as a lagging indicator.

“Flying” your dealership with attention to the smile dial will pay dividends. When discussing the MAC “Good to Great” flywheel where customer retention is #1, one of our clients said it best: “If the customer is king, kings want to fly first-class. There are several businesses in my market that can satisfy customers. Our dealership strives to move beyond customer satisfaction to customer happiness. Satisfied customers could find another dealer to satisfy them, but happy customers want to return to the business where they are the happiest.”



If you want your dealership to be the dealer of choice for your customers, you first must be the employer of choice. Such employers have empathy for the needs of their employees. Happy employees are going to create joyful experiences for your customers. Your weekly smile dial walk-through and calculations will help you know your altitude.


As published in Farm Equipment Magazine

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