From the January issue of UCD
By Brad White
You’re closing the books on another year, and it’s time to look ahead and build a projection model for the next. Where can you improve, and how?
As you plan to grow your sales or improve other operations, are you taking a realistic view of where you are and where you can go? Are you setting your employees—and yourself—up for failure with overly ambitious expectations?
While it’s good to be ambitious when laying out aspirations for the new year, it’s most important to establish what NIADA 20 Group Moderator and Consultant Brad White calls SMART goals.
“In putting together projection models, you set goals for where you want to be throughout the year,” White said. “But as we progress through the months and activities, you should be creating SMART goals, which are specific, measurable, achievable, realistic, and time-bound.”
White explained that SMART goals, with these five characteristics, set employees, the dealership, and ultimately the dealer up for success.
It starts with looking at your past performance and analyzing those numbers—whether they pertain to sales, collections, or service.
“You learn from experience. You look at your year-to-date figures and averages,” White said. “You’re also looking to see if the data is static across the board or shows more seasonality. Consider your tax season and other times of the year when business is booming, as well as periods when business may slow down, such as January or December.”
Analyzing past results helps establish a baseline to determine achievable and realistic goals. This is also a good time to review your staffing to ensure you have the right people and sufficient staff to meet these goals.
“If you are looking at sales, for example, you need to make sure you have enough salespeople to achieve your monthly goals,” White said. “The same goes for collections and service.”
When setting achievable and realistic goals, consider individuals’ past performance. Don’t expect a salesperson who averages 15 cars per month to suddenly sell 20 without additional planning.
“If you have a 15-car salesperson and now expect them to hit 20, you’re putting undue pressure on that person,” White said. “If you know they’re a 15-car salesperson, you need to figure out how to support them to achieve more. It’s not the employee’s responsibility to figure that out—it’s the manager’s job. You have to set your employees up for success.
“Before you set a goal that exceeds what an employee has historically achieved, you must have a plan in place to help them get there.”
Unrealistic goals can lead to frustrated employees or, worse, cause you to lose consistent performers, leaving you to find replacements at a cost of time and money.
“The undue pressure of hitting an unachievable goal may even prevent the employee from reaching their usual performance level,” White said. “On top of that, you risk losing them. I’m a big believer in focusing on people’s strengths rather than their weaknesses.”
A better approach might be tackling the ultimate goal in steps. White suggested developing a plan with the employee to increase from 15 to 17 cars one month and add another step in the future. The same approach can be applied to the collections department by making gradual improvements in percentages.
Each goal should have an end date—whether weekly, monthly, quarterly, or annual. When considering the time element, account for seasonal swings, days closed, and total working days in the period.
“A lot of times, we base goals on 26 working days because that’s how many days a dealership is open in a month. But if you’re setting individual goals and a salesperson is off every Tuesday, you should base their goals on 22 days per month,” White said.
Goals shouldn’t be ambiguous, such as saying, “We want to sell more cars” or “We want to collect on more accounts.” There must be measurable numbers, percentages, or totals.
When introducing goals, provide specific details and actions. Discuss how employees will reach the goal, such as the number of phone calls needed or appointments to be set. One-on-one meetings throughout the month can help ensure progress and reinforce the actions needed to achieve the goals.
White emphasized that coaching doesn’t stop with setting the goal or the initial action plan.
“Staying on top of things, being realistic, following through, and coaching throughout ensures you meet your goals,” White said.
Following all five steps for setting SMART goals can also help minimize emotional decisions that could negatively impact the dealership in the long term.
While SMART goals guide you into the new year, don’t dismiss those more ambitious targets. Use them as stretch goals or additional benchmarks to strive for. They just shouldn’t be the primary metrics you manage by. Stay focused, stay SMART, and stay goal-oriented.
