Unlocking Growth: Benchmarking for Automotive Dealerships

At RWA Automotive, we are committed to enhancing our customers' success through advanced automotive business intelligence and data analytics solutions. Our goal is to constantly innovate, providing automotive dealerships with the best tools to optimise their operations. The challenges of 2024 have prompted many dealerships to explore new growth opportunities, and we're here to help uncover those possibilities using data. 

Each week, our Customer Success team holds an average of 23 meetings with clients. During these discussions, we’re often asked to share insights on industry trends, challenges, and best practices based on the data we collect. Following the October budget announcement, we recognised a unique opportunity to support our customers in a new way - by identifying additional avenues for profit growth. This led to the exciting launch of our benchmarking project. 

What is Benchmarking?

Benchmarking is a key practice in data analytics, especially in the automotive industry. It involves comparing key performance metrics to industry best practices, with data kept anonymous and categorised for relevance - for example, volume brands are compared separately from premium brands. Through this process, we identified 20 key business drivers and established an “RWA Automotive best practice” standard, which we then use to provide actionable insights to our customers.  

Why Is Benchmarking Important? 

Benchmarking offers numerous benefits to automotive dealerships, including:  

• Driving Performance & Setting Strategic Goals: Dealerships are familiar with league tables, but benchmarking goes beyond internal comparisons. By providing access to broader industry best practices, it enables dealerships to set more ambitious goals and see what’s truly achievable. Benchmarking also helps set strategic goals based on competitor performance. For instance, if your competitors are sourcing 75% of their used cars from their service department, benchmarking data highlights areas for improvement in your own business.
• Competitive Advantage: Benchmarking allows dealerships to measure their performance against competitors. If you’re not on par, the data will reveal where improvements are needed, giving you a clear path to enhance your competitive position.
• Innovation: The insights pulled from benchmarking foster innovation, as dealerships can adapt to emerging trends and improve their operations. Our Customer Success team continually enhances our solutions based on the insights from this process.
• Profitability: Ultimately, benchmarking is about driving profit. By setting data-driven, realistic targets tied to the bottom line, dealerships can improve their financial performance. Our team works closely with each business to ensure these benchmarks are achievable and provides ongoing support. 

Benchmarking in Action: A Case Study  

Through our benchmarking project, we identified significant opportunities within the service department, particularly related to parts and Vehicle Health Checks (VHC). For example, the average VHC check rate among our volume customers is 80.5%, but many dealerships report lower figures.  

We recommend a best practice of a 95% VHC check rate for every vehicle that enters the service department. Many customers already target this internally, though exceptions, such as staff cars, are accounted for. By comparing the number of vehicles processed versus those checked, and applying average income from VHC checks, we’ve calculated an opportunity worth between £0.5m and £1m for our customers. With an average of £110 per check, growth in this area can add up quickly. 

This benchmark becomes a tangible KPI, motivating service departments to reach or exceed the standard, while also highlighting areas where internal processes may need improvement. 

Weekly, Actionable Data 

The next phase of our benchmarking project is the introduction of a weekly flash report. This report will provide dealerships with a snapshot of the previous month’s averages, enabling them to make swift adjustments and anticipate trends faster than ever before.  

Conclusion 

If you're interested in learning how automotive business intelligence, dealership analytics, and data analytics can help drive success for your dealership, get in touch. We're here to support you in unlocking new opportunities for growth and profitability.