A vehicle key management system represents an investment for a car dealership. Like any investment, there is a break-even point – and after that time, the investment pays off. How many months will it take to break even with a key control system? After that, how much money will the dealership likely save by having the system? And is it possible to measure the workplace improvements at a dealership that has an electronic key management system?
Calculate the Costs of Missing Keys
Key chaos at a dealership has several direct and measurable costs.
- Lost keys cost money to replace.
- Customers give up waiting for someone to find the keys, resulting in lost sales.
- Hourly employees waste time looking for keys, which wastes money and reduces efficiency.
To measure the cost of lost keys, estimate the number of keys that need to be replaced per month. Multiply this by the average replacement cost, including key, FOB, programming, and time.
Tracking how many customers walk out due to missing keys is more difficult. Salespeople don’t even want to THINK about the one that got away. When you spot this happening:
- Guesstimate the chances that this customer would have bought. A more precise measurement is the sale-to-demo ratio for this salesperson. (Note: An electronic key management system tracks each key a salesperson checks out. Calculating this ratio is not difficult if you have the data.)
- Figure an average amount of potential commission and dealership profit lost. If you know the numbers for this vehicle, use them. Multiply it by the sale-to-demo ratio to figure the loss.
- Track this for a month or several months to get a monthly average loss.
Hourly employees have better things to do than hunt for missing keys. Also, they interrupt other personnel when asking for the key. This makes other personnel less efficient too! Hourly employees could be doing something more productive with their time. Track this for a week. Figure the number of hours wasted looking for keys per month (multiply by 4.2). Multiply by their hourly wage, and that’s wasted money.
Calculate the Break-Even Point
You might be shocked at the total when you add up the costs. Add lost key costs, lost sales, and wasted hourly employee time. This is how much you are wasting on key chaos per month.
Now get a quote for a key management system. Take the total cost of the system, and divide by the amount wasted monthly. This is the break-even point.
If you decide to lease the system, you might break even before paying off the lease! This boosts your cash flow, which helps ameliorate costs associated with leasing.
Calculate the Return on Investment
After you break even, you are getting a return on your investment. The amount you save each month is money in your pocket. At Key Control Systems, our rugged units are designed to last up to 20 years.
But what about maintenance costs? We include a 10-year service agreement at no extra charge, and the parts are warrantied for two years. These systems are made by MorseWatchman, one of the oldest and most respected names in the key management industry, so they rarely break down. If something goes wrong, we will troubleshoot it over the phone. These devices are modular, and parts are easy to replace. If a part is needed, we can send a replacement part overnight. We will walk you through opening the device and replacing the parts yourself in minutes. The system is only down for a short time.
The system only needs one supply: SmartKeys. Each system comes with enough SmartKeys. If one of the SmartKeys gets lost or broken, you can replace it inexpensively.
Change in Attitude at the Dealership
One important savings from a key management system is impossible to measure. Dealership personnel are saved from having to worry about where the vehicle keys are. They can relax, knowing that everyone is accountable for the keys they check out. Attitude and trust improve significantly.
Key Control Systems specializes in electronic key management systems for automobile dealerships. Request a quote anytime.