Running a car dealership? You know it’s a numbers game, right? But with so many KPIs to track, it can feel like you’re drowning in data. How do you know which numbers really matter?
Whether you’re a seasoned pro or just starting out, it’s easy to get lost in the sea of metrics. But the truth is those numbers hold the key to unlocking your dealership’s true potential. Instead of just collecting dust in a spreadsheet, they can help you set real goals and make real progress.
Your KPIs are your roadmap to success. They show you where you are, where you want to go, and how to get there. Focusing on the right KPIs and setting S.M.A.R.T. goals (Specific, Measurable, Attainable, Relevant, and Time-bound) helps you increase dealer profitability.
Today, inventory data platforms (IDPs), like Lotlinx’s VIN Manager, have the insights you need to improve these KPIs by merging inventory data, customer behaviors, and media consumption insights. The power of an IDP helps sharpen your focus on key metrics and make smarter, data-driven decisions.
The pros at Lotlinx put together a guide to the essential KPIs every dealership should track. These metrics give a complete picture of your performance—beyond just the bottom line.
1. Lead Risk
What It Is
Not enough people are interested in certain vehicles.
Why It Happens
Sales teams don’t always know what customers want, so they end up chasing leads that don’t go anywhere.
Solution
An IDP like VIN Manager helps target the right buyers with data-backed insights, ensuring you attract the right leads.
2. Markdown Risk
What It Is
Dropping prices too much (excessive markdowns) can hurt profits.
Why It Happens
Sometimes, prices are lowered too quickly or by too much, based on guesses rather than real data.
Solution
Use AI to see real-time demand and avoid unnecessary discounts. VIN Manager uses real-time demand data to help avoid unnecessary markdowns and price vehicles competitively. Questioning whether to markdown? Download our free infographic to get answers to your most common questions.
3. Media Risk
What It Is
Wasting money on ads that don’t work.
Why It Happens
Ads aren’t always targeted enough to reach the right buyers.
Solution
Use an IDP that optimizes ad spending to highlight the right vehicles to the right people.
4. Market Days Supply Risk
What It Is
Vehicles sitting on the lot for too long.
Why It Happens
Marketing might not be effective, or the wrong vehicles were acquired.
Solution
Use predictive analytics to identify potential problems early and adjust strategies. VIN Manager tracks market trends and predicts when to adjust inventory, helping you sell vehicles faster.
5. Price to Market Risk
What It Is
Pricing vehicles incorrectly.
Why It Happens
Pricing decisions aren’t always based on real-time market data.
Solution
Use real-time data to make informed pricing decisions that align with demand and competition.
6. Selldown Risk
What It Is
Having to slash prices to get rid of excess inventory.
Why It Happens
Too much inventory builds up, requiring drastic measures to sell it quickly.
Solution
Use predictive analytics to manage inventory turnover, avoid inventory buildup, and price proactively. Click here to learn more about your inventory turnover ratio.
7. Carryover Risk
What It Is
Holding onto inventory for too long leads to higher costs.
Why It Happens
Vehicles don’t sell despite price reductions, resulting in wasted space and money.
Solution
Use AI-powered dealership inventory management software to make data-driven VIN decisions and avoid holding onto vehicles for too long.
Why Lotlinx is the Ultimate Solution for Dealership Inventory Risk
Lotlinx takes the guesswork out of managing your inventory. We analyze data from over 26,000 dealer websites and track how car shoppers behave across 160+ automotive websites, giving you the insights you need to make smart decisions about your vehicles.
Benefits of Partnering with Lotlinx
- Reach the Right Buyers: We make sure your ads reach the people most likely to buy your cars.
- Stay Ahead of Problems: We help you spot potential issues before they become big headaches.
- Boost Your Bottom Line: We help you protect your profits and run a smoother, more successful dealership.
Take Control of Your Dealership’s Risk Today
Every dealership faces risk, but how you handle it can make the difference between success and failure. Lotlinx helps you turn risk into opportunity. With our AI-powered technology, you can increase sales, boost your profits, and run a more efficient dealership.
Ready to build a more profitable future? Get VIN Manager. Call 1-877-VIN-RISK for more information.