There’s a 60-year-old Peanuts comic strip that really speaks to the age of data analytics. In the strip, Linus is poring over some of the more telling numbers behind the ineptitude of Charlie Brown’s baseball team. “I think you’ll find,” Linus prefaced, “that (the statistics) say something to us.”
He continues, “Last year our opponents scored 3,040 runs to our six! They made 4,900 hits to our 11 and they made 19 errors to our 300.”
Poor Charlie Brown was neither amused nor enlightened. “Tell your statistics to shut up!!” he shot back.
Truth is, the eternally downtrodden pitcher did not need statistical backup to confirm what he already knew—his baseball team was a complete and utter failure by any objective measure. And this strip was set a good 25 years before the advent of sabermetrics, which in the last 15-20 years has truly devised a mountain of statistical information intending to granulate performance in baseball and other sports as well.
The Voice Behind Numbers
To Linus’ point, what do statistics tell us that we don’t already know? Many of the numbers tend to reinforce what we can plainly see on the playing field. But for those of us who are not always watching or are biased by past performance, both good and bad, advanced metrics can remind us that all things can (and do) change.
The correlation with business is obvious, and when a pandemic is thrown into the mixture, past performance is no longer a key indicator for monthly or quarterly projections. Constantly taking the fiscal temperature of your business is the best method for recognizing downward trends. Rectifying a negative development is another matter altogether.
As we close out August’s State of the Industry report on countering margin erosion, we asked our dealer panel about how they use data analytics to keep a short leash on margin performance.
Brad Yocum, market director for Function4 of Sugar Land, Texas, notes his dealership constantly monitors the profitability of the products and services in order to adjust pricing as needed. “These metrics are also being used to make sure that we are staffed properly and need to reallocate resources to areas that are in need,” he said. “We also assist customers in building these same types of tools from their information that may be located in several different areas.
“Today, it is more important than ever that companies make good decisions to provide their businesses with the right information to be prosperous going forward.”
Team Effort
Woodhull LLC of Springboro, Ohio, relies on e-automate and CEO Juice to help generate a wide range of financial reporting. CEO Susie Woodhull notes her company’s management bonus program issues goals for a number of operational metrics that reinforce and ensure the dealer’s margins are being managed across the board.
“For our service manager to know what are receivables are and what our days sales outstanding are, that’s great,” she said. “But it’s also important for a warehouse manager and the administrative manager to know what our incompletes are and where we’re trying to keep that in line.
“For me, with that incompletes statistic, I can run a whole department on that. It tells you: is the tech trained? Do they know what they’re doing? Is the customer getting serviced correctly the first time? I think analytics are important, but I feel it’s a question of what analytics are you watching that helps you manage the bottom line.”
Numbers are vital, but most executives do rely on experience and intuition in gauging the market and potential for a shift in client needs and demands. Count Chip Miceli, president and CEO of Schaumburg, Illinois-based Pulse Technology as one of them.
“I have a software program that gives me updates, sales- and profitability-wise,” he said. “But I have a sixth sense for that kind of information and rely on intuition and my industry knowledge as well.”
For Fraser Advanced Information Systems of West Reading, Pennsylvania, its leadership team focuses on analyzing its financial position monthly on both the hardware and aftermarket ends, according to Melissa Confalone, vice president of sales.
“We also regularly measure and analyze aftermarket gross profit on our largest clients to find monthly trends or red flags,” she said. “This allows us to proactively address any issues and adjust strategies as needed.”
