Shenk’s 4 Ps of Profit
After analyzing hundreds of dealerships, Bill Shenk learned that there are a few basic characteristics — his 4 Ps of Profitability — that exist in all of the most successful dealerships, the ones he calls the “Top Gun” dealers. These characteristics form the foundation of a successful dealership, and are built upon one another. If this foundation isn’t built properly, no dealership will produce profitable long-term results.These 4 Ps require you to switch hats between two roles that Top Guns understand very clearly: leader and manager. Those are very different roles.Here is a summary of Shenk’s profit points:• PURPOSE (Leadership). The foundation, or purpose, of any dealership is your marketplace identity, the personality that your store presents to the public. Everything you do should reflect this personality; this is your most important strategic decision. Your identity must be different, in some important ways, from your competitors’ identities. Try to make it reflect the personality of the customers you serve — or want to serve.
• PEOPLE (Leadership). Do your people understand and reflect your dealership’s purpose and core values? Do they have the necessary skills, from their training and background to their appearance?
• PROCESSES (Management). Is your business process-driven so that basic situations are handled consistently and routinely, or does each routine situation demand a unique decision that wastes time and energy? Are your processes documented? Is your team well-trained so there is consistency in all areas of your dealership, from how your products are ordered and how your customers are handled to interdepartmental paper flow?
• PERFORMANCE (Management). Does every member of your team understand the expected performance for his or her position? Is there a system in place to quickly and concisely measure that performance? Does everyone know what is expected of them? Are your compensation plans set up to reward top performance? It’s your job to see that they exist and that they’re used to maximize your company’s success.
This story originally appeared in the February 2012 issue of Dealernews.