Performance Measurements Task Force Final Report

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Performance Measurements Task ForceFinal Report

• Approved by Executive Committee
• February 3, 2006
• This policy is a recommendation only. Its
  adoption by
• NAAA members is strictly optional.

2
Task Force Members

• Jeff Heichel, Chairman Carl Scandura
• Randy Beil Milton Schoof
• Jim DesRochers Paul Seger
• Steve Greenfield Doug Shore
• Steve Houston Russ Stegall
• Bob Rauschenberg Bob Sullivan

3
Task Force Name Change

• Over the course of several meetings, decisions
  were reached that data from this taskforce would
  not be used to compare benchmarks across
  consignors. Because of this change, it was
  deemed appropriate to refocus the taskforces
  mission statement and rename the outcome. We
  therefore changed the name of the taskforce from
  Benchmarking to Performance Measurement.

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Mission Statement

• To build consensus and establish a core set of
  performance measurement(s) that can be used by
  consignors and auctions alike. Its suggested
  these core metrics would apply to all, while
  still allowing individual consignors flexibility
  in choosing other measurements, so their specific
  needs can be met. The intention is to drive
  consistency, cooperation and collaboration
  between auctions and consignors through
  establishment of shared goals.

5
Performance Measurement Questions Answers

• For Whom are Performance Measurements
  Established?
• Consignors to evaluate their remarketing efforts
  and establish consistency of auction performance
• Auctions to enable auctions to better achieve
  consignors goals
• Who Establishes Metrics?
• NAAA Task Force developed Core with guidance
  from commercial sellers
• Consignors develop their own additional
  individual metrics
• Who Provides Data?
• Auctions
• Consignor
• Third Party Provider (e.g., ALG, NADA, Black
  Book, MMR)
• Who Owns Data? Who Develops Reports?
• Individual Consignor owns and develops reports
• Auction can provide archived data
• Future possibility of NAAA/Third Party to create
  reports

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Remarketing Performance Measurements

• Performance Measurement metrics seem to fall into
  three general groups
• Maximization of Vehicle Price
• Time to Sell
• Value Added Services/Individual Consignor Metrics

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Performance Measurements by Segment

• To ensure each key segment was properly
  addressed, sub-teams were identified in the
  following areas, studying performance measurement
  within each of their respective vehicle
  consignor types
• Manufacturers
• Fleet/Lease
• Banks/Finance

8
Performance Measurements Findings

• After considering each of the three distinct
  vehicle consignor types, we found many
  similarities between most of the performance
  measurements. Below are listed common metrics
  across all three consignor-types, in the area of
  retention
• Conversion Rate (AKA Sales Percentage)
• Attendance
• Internet Sales (LiveBlock, Simulcast, Online
  Ringman)

9
Performance Measurements Findings

• Similarly, we found consistency within the Time
  to Sell category, as the point of differentiation
  between consignor type was the portion of time
  measured during the remarketing cycle.

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Time Definitions By Segment
Manufacturer Segment Days to Sell
Manufacturer Segment Days to CR
Fleet/Lease Segment Days to Sell
Fleet/Lease Segment Days to CR
Bank/Finance Lease Days to Sell
Bank/Finance Lease Days to CR
Bank/Finance Repo Days to Sell
Bank/Finance Repo Days to CR
Days to Consign
Days to Transport
Days to CR
Days to Sale
Days to Funds
Repo Date (Repo)
At Auction
CR Complete
Date of Sale
Funds Received
Consignment
Turnback Date (Manufacturer)
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Performance Measurements by Segment

• We will now examine the detailed performance
  measurements for each of the three consignor
  types
• Manufacturers
• Fleet/Lease
• Banks/Finance

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Manufacturer Segment
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Manufacturers Segment Retention

• Price
• For rental, off-lease and company vehicles
• Retention Percent ( of invoice vs. index)
• For repos
• Percent of wholesale value (e.g. Black Book, MMR,
  NADA)
• Conversion Rate (AKA Sales Percentage)
• Units Sold/Units Offered
• Attendance
• Purchasing Dealer Ratio (vehicles sold/purchasing
  dealers)
• Participating Dealer Count
• Internet Sales If applicable

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Manufacturers Segment Time to Sell

• Repos, Rentals, Off-Lease and Company Vehicles
• Days to Sell (From auction arrival date to sale
  date)
• Days to Condition Report (CR) (From auction
  arrival to CR)

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Fleet/Lease Segment
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Fleet/Lease Segment Retention

• Price
• Retention Percentage
• Percent of wholesale value (e.g. Black Book, MMR,
  AMR, NADA) Sales price/Index Value
• Conversion Rate (AKA Sales Percentage)
• Units Sold/Units Offered
• Attendance
• Purchasing Dealer Ratio (vehicles sold/purchasing
  dealers)
• Participating Dealer Count
• Internet Sales If applicable

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Fleet/Lease Segment Time to Sell

• Two Metrics
• Total Days to Sell (From vehicle consignment to
  auction to sale date)
• Consignment to Condition Report (CR) (From
  vehicle consignment to CR)

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Bank/Finance Segment
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Bank/Finance Segment Retention

• Price
• Retention Percentage
• Percent of wholesale value (e.g. Black Book, MMR,
  NADA) (Sales price/Index Value)
• Conversion Rate (AKA Sales Percentage)
• Units Sold/Units Offered
• Attendance
• Purchasing Dealer Ratio (vehicles sold/purchasing
  dealers)
• Participating Dealer Count
• Internet Sales If applicable

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Bank/Finance Segment Time to Sell

• Lease Product
• Days to Sell (From auction arrival date to sale
  date)
• Days to Condition Report (CR) (From arrival at
  auction to CR)
• Repo Product
• Total Days to Sell (From vehicle consignment to
  auction to sale date)
• Days to Condition Report (CR) (From auction
  arrival to CR)
• (Varying state-to-state legal requirements must
  be considered when comparing performance metrics
  for repos)

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All Segments Value Added Services

• It is agreed that the cost of services should be
  measured
• There is considerable concern over the
  proprietary nature of the contracts and
  anti-trust issues
• This will not be included in our final report of
  core metrics
• Value added services will be recommended as a key
  metric each consignor should measure with the
  auction
• Examples include Paint Body reconditioning,
  Mechanical costs, Detail.

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Metrics by Segment Sample Worksheet
Each segment should define metrics that are
particular to that segment.
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Conclusions/Implementation Plan

• Performance Measurements better defines what Task
  Force addressed
• Core set of metrics will facilitate consistency
  across consignors, making it easier for auctions
  to routinely satisfy similar needs
• Approach provides for each consignor to add their
  own particular measurements so their business
  needs are met while keeping incremental efforts
  by auctions to a manageable level
• Recommend that NAAA support performance
  measurements and, since our study revealed most
  consignors were already using most of these
  metrics under various names, adoption by most
  consignors should be relatively seamless
• Auction industry should facilitate implementation
  by sharing these core measurements with current
  and new customers alike and adopt these core
  metrics with each consignor standardized
  development of required information should be
  undertaken by the auction industry
• Auction industry should also work with each
  consignor to ensure value-added efforts at
  auction are also measured these are expected to
  have a level of consistency but be driven by the
  consignors specific needs.