By Alysha Webb, Editor and Publisher
This week Greg Porter looks at the mysterious “X” factor in determining the value of a dealership. It refers to a multiple of something, often earnings. While it is a starting point, Porter suggests there are other equally important factors. He is just teasing us, however, as he won’t tell us what those factors are until future issues.
What if one of those factors – indeed, the most important factor – was a dealership’s ability to use customer data and analytics to figure out a customer’s needs and desires before they even walk into the door, then use that to improve the customer experience? Dealerships that do that will be the winners in the automotive market of the future, Gary Silberg, KPMG’s national sector lead partner for the automotive industry, told me.
That ability doesn’t quite exist yet, but he figures there are plenty of start-up companies out there working on the software to make it possible. Already, world-class dealerships know a lot about you by the time you walk in to their showrooms because of the internet, Silberg pointed out. KPMG will release a white paper on the topic at the Los Angeles Auto Show in November.
Being world-class at data gathering won’t be enough to win in the future. Dealerships will also need to be world-class in their ability to analyze that data and make it actionable. “We don’t think the current dealers have the capability and talent to make that happen,” said Silberg.
KMPG figures that ability will drive M&A in the future. How will “X” be determined in that scenario?
If that isn’t enough to think about, Willie Beck of Capital Automotive also offers some advice on when selling then leasing back the property your dealership sits on might be a good choice.
Enjoy!
