How to Measure Success
How do you measure success? Specifically, think about what requirements must be fulfilled in order for you to say, “We had a successful year!” If you’re like many dealers, you probably measure success by how much profit you generated.
Would you ever consider measuring success by the number of positive online reviews you have, or whether your employees are happy? Success can mean different things to different people, so in order to measure success, first you have to define what success means to you.
Now measuring success by just one element, like profit, can be very detrimental for the business. You can have a great year or two profit wise but be killing the business in the long term. There needs to be a balance.
Without a clear definition, success is impossible to achieve. In the book 7 Habits of Highly Effective People, author Steven Covey recommends starting with the end in mind.
When we define success purely in financial terms, it seems kind of hollow. When you sell or turn over the management of your dealership to someone else, what’s more important, a healthy balance sheet or your legacy as a leader? Sure, it’s better if you have both. But there’s a lot of value in your business that has nothing to do with finances or revenue. When it comes time to sell your dealership, that value is worth something, so it’s worth taking the time to identify and measure.
Successful companies are much more than the sum of their balance sheets. When you look at the most successful companies, they tend to share the following traits:
- Successful companies have loyal customers. Loyalty starts with a great customer experience, but to retain loyalty your dealership must be perceived as trustworthy. To earn loyalty from customers, your dealership must be loyal and honest to your customers.
- Successful companies are ranked as top places to work. When a leader’s mission is to make their employees happy, amazing things happen. Happy employees take better care of their customers, increasing customer loyalty and retention rates. Also companies that are on the “Best Places to Work” lists attract and retain the best talent.
- Successful companies have values. Your dealership should have an inspiring mission statement and a list of core values that defines how decisions are made in that organization. It’s important that once your values are established, that leadership “walks the talk” of those values.
- Successful companies have long-term goals. The best leaders make decisions with the long-term consequences in mind. Sometimes, this means suffering a short-term setback. That’s okay, because in the long run your business will be more competitive.
- Successful companies are innovative. Great leaders encourage managers and employees to think outside the box. Instead of saying, “That’s the way things have always been done,” instead ask, “Can you think of a better way to do it?” I guarantee your current employees have all the resources to solve any problem you have. Not only that, but they’ll be thrilled to come up with solutions, if they are only asked.
To build a successful business, it’s important to first define what success means to you. Then, decide on a benchmark. How will you know when you have achieved success? Set your goals and break those goals down into actionable steps.
When success is tied to happy customers, happy employees, values and innovation, saying you’ve had a successful year will feel a lot more satisfying.
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Mike Esposito is President & CEO of Auto/Mate Dealership Systems. During his tenure at Auto/Mate, Mike has grown the company's auto dealer client base to more than 1,000 rooftops.