The retail automotive industry is full of motivated and ambitious dealership professionals who want to win. They are driven to work hard and get results. However, a major obstacle when realizing this goal is that many employees, although they want to win, don’t know what success looks like. This is especially true when it comes to new employees. Effective dealership leaders need to show their teams what success looks like and how they can get there.
Metrics that Lead to a Winning Team
Defining success is more nuanced than simply saying “sell x cars per month”. Although this is a very important metric that we should be tracking and constantly improving, it isn’t the only key behavior we should focus on. Dealers that focus solely on the end result, find themselves in a difficult position when they have underperforming members of the team. If “sell x cars per month” is the only metric you are focusing on, and someone doesn’t hit that goal, then that person must be a bad hire, right? That might be the case, but it might also be that this employee has the right traits and competencies but is struggling in other areas that are affecting their ability to get that end result. We won’t know unless we track the right metrics and use data to get a full understanding of the effectiveness of our employees and how they can potentially address that lack of performance.
Effort vs. Performance Metrics
It’s critical that we measure the key actions and behaviors that lead to success. This behavior will be unique for each role and organization and it’s the responsibility of the leadership team to identify these specific actions. However, these metrics generally fall into one of two categories; Effort or performance metrics.
Effort metrics measure how hard an employee is working towards success. The employee has total control over this metric and failure to hit effort goals are generally an indicator of low effort or a lack of understanding of how they should be focusing their time. For example, a BDC rep with a goal of x calls per month is a good example of an effort metric. That BDC rep is in total control of the number of calls they make and should be able to hit a reasonable goal for this metric regularly.
Performance metrics generally depend on multiple factors and are usually a culmination of the effectiveness of several different actions leading to an end result. Back to our previous example of the number of cars sold, this a common example of a performance metric.
It’s important that you focus on both categories of metrics. If done correctly, effort and performance metrics should complement each other and give managers a deeper understanding of the efficacy of their people. Poor effort could be a sign of employees who lack motivation or perhaps they are focusing on the wrong actions. If performance is lacking, but the effort is exceptional, there could be a skill gap there that needs to be addressed with training and coaching.
Each organization will be unique but it’s important that both categories of metrics are prioritized. Having this data will lift the fog that we sometimes have to manage through and allow leaders to better understand, support, and guide their people to success.