Category: DMS

Communicating Helps Soften Change

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Successfully integrating new technology at a dealership is a daunting task. It’s more than just adopting new software. It involves operational changes, contemplation of compatibility issues, and buy-in from the entire dealership team. Although changing technologies can be challenging, proper communication can help soften the sting of change.

Communication with Leadership

As with any major decision, it can be difficult to get everyone on the same page with new technology. That’s because even if every member of the leadership team has the same end goal in mind, the steps each department must take to get there sometimes involve competing interests and viewpoints. The key to getting leadership on board is to explain how new technology will benefit each department and employee. And once there’s buy-in from leadership, the process of taking the message and benefits of change to the rest of the organization becomes much easier. Share your vision with leadership and be upfront about the realities and challenges of change. Then, invite managers to help employees understand the vision, again highlighting ways that new tech will make their jobs easier and more efficient.

Communication with Employees

Integrating new technology can be especially jarring for employees, whose lives will change as a result of having to learn new processes and programs to complete their jobs. And that means emotions are involved, creating a natural tendency toward pushback. But with leadership on board, it’s easier to get buy-in from every employee. Remember, these are the people who implement your operational processes and will be most affected on a day-to-day basis by a change in technology. You want to make your employees’ work lives happier and more enjoyable, while at the same time improving efficiency across the board. It’s your job, along with your leadership team, to convince them that a change in technology is for the better. Because when your employees are on board, your dealership is in a position to take full advantage of new technology.

Communication with Vendor

Finding a tech partner that’s willing to facilitate communication among staff members can be invaluable. Before implementation, work with your tech provider to discuss requirements unique to your dealership. Then ask your provider to tailor training and communication with staff accordingly. During implementation, your tech provider should be on-site to provide support and help to ensure that there are no interruptions in operations. And after going live, communication with your tech provider’s performance managers and ongoing support team will ensure that you stay focused on meeting your business milestones.

Implementing new dealership technology is no easy task. But proper communication between leadership, employees, and technology vendor can ensure that all parties move forward together for the betterment of your business. If you’d like to learn more about ways to communicate as a part of change management, download our free guide, Real-World Advice for a (Practically) Painless DMS Transition.

The Future: Open, Integrated Systems

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The Internet of Things is here. Consumers are starting to expect that their refrigerator can talk to the stove and their GPS knows where to take them based on calendar appointments. These innovations require software services and devices to communicate with different systems. With open systems comes efficiencies, convenience, and ultimately a better customer experience for all of us. That same logic applies to the technology stack in a dealership. The modern dealership needs all their software solutions—more than 8 per dealership on average—to communicate with each other without the need for custom code, integration fees, or downtime.

Open Platforms Comes to Automotive Retail

What does that mean for car dealerships and their technology stack? It means that a more effective and expansive way of selling and servicing cars starts with sharing secure data, accessible between key partners—all via an open platform.

Indeed, a perfect example is the experience at Big Two Automotive Group. Fed up with their DMS provider’s lack of service and capabilities, they switched to Dealertrack DMS and soon discovered that the power and immediacy of an open and modular platform was required to keep their operation thriving.

Overall, the Group moved toward an open and accessible platform to run their operation due to several key benefits, including:

  • Quick access to relevant data: The ability to apply data in real time made decisions more fluid and efficient, meeting customer expectations and helping to create a more productive and nimble environment. For example, data such as customer information, vehicles, and VINs, employees, parts inventory and transactions (ROs, deals, parts tickets, etc.) can help to do one very important thing: use data to better meet the needs of customers and create process efficiencies.
  • Common system versions for all employees: Having all employees—from sales to service and accounting—on the same version helps to ensure accuracy, reduce confusion and the cost of miss-timed upgrades.
  • Availability for all important vendors and services: The concept of dealer control and open access to ALL vendors creates efficiencies across the entire group. This is perhaps the most challenging aspect to open and accessible platforms: it must be secure enough to protect the dealership, yet open to all third-party sources of information and service. It’s also an area in which dealers are often taken advantage of, by vendors seeking to charge them for the use of their own data. It’s vital that dealers retain control of their own data!
  • Convenience of integration points that matter: Integrated data across vendors and store systems helps to eliminate manual data entry – such as name and address – as well as provide timely and proactive reminders about service and more. Of course, remember too that the point of integrated systems is to work with humans to provide better-than service through technology. In fact, a recent study by Price Waterhouse Cooper found that the majority of consumer wanted integrated and automated technology to improve the human customer service experience – not replace it.

Big Two Automotive Group discovered that closed systems and restrictive policies were about as effective and convenient as roll-up windows on cars. Indeed, most retail operations are now realizing the same thing: closed systems symbolize the status quo and a static and frozen picture of automotive retail—not the evolving and growing reality of the business.

Learn more about open and integrated DMS systems in this blog post, Demand More from your DMS: Open Integration.

 

Invest in New Technology with a Purpose

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Today’s consumers are always on the lookout for the latest and greatest. When something feels old or outdated, it’s quickly replaced with something else that’s new and exciting. This is especially true with technology. But, as dealerships search to find advantages in a competitive marketplace, it’s important to incorporate new technology with a purpose, and not just for the sake of getting something new.

Keep Strategy in Mind

Too many dealerships make strategic decisions based on the limits of their technology. This is a backward approach to business that allows technology to dictate everything from operations to hiring new employees. Every decision you make, including the decision to implement new technology, should be made with your business’ core strategy in mind. To define your strategy, ask how your dealership is different than your competitors. It might be based on size, amount of inventory, or quality of customer service. Whatever makes your dealership unique, find ways to leverage your advantages and use technology as a tool to accomplish your goals.

Ensure a Smooth Tech Transition

Even when a tech upgrade is obviously needed, dealerships should take steps to ensure a smooth transition. These steps include:

  • Getting leadership on board
  • Researching and choosing the right vendor
  • Building implementation partnerships
  • Managing continuous learning

There are emotions involved in change management. And, getting leadership on board and choosing the right vendor the first time will help you get buy-in from every employee. It’s important to share your vision of how new technology will benefit the business. Then, start researching vendors with your long-term goals in mind. Find a provider that’s willing to help you get the most out of your tech investment. Partnering with a team you can trust—one that’s committed to the ongoing support of its product—will help your dealership reach its goals.

Pull the Plug on Outdated Tech

If new technology will help your dealership get better at what it does best, it’s time to embrace change. Incorporating new technology with a purpose, and not just for the sake of getting something new, can help your dealership find a real, lasting solution that will propel your business forward.

If you’re ready to learn more about ensuring a smooth technology transition at your dealership, check out our guide, Pointers For A (Practically) Painless DMS Transition.

An easy-to-use DMS can do more for employee retention than a company party

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You know the drill: morale is languishing. It may be because sales are down, or a top producer just left. A change in the dealership’s workflow may have been the culprit, such as a required new compliance or accounting step.

Or perhaps the GM just gave everyone a good old-fashioned lecture over missed numbers and runaway expenses. Point is, lots of things go wrong when it comes to dealership employee retention. It’s a problem that’s not going away; it’s getting worse. According to a recent Cox Automotive Staffing Study, up to 41 percent of the typical dealership’s new sales hires will leave before a year is up. The reasons include poor hiring and recruiting practices, a lack of proper training, and little to no career development.

It also includes bad, slow, and outdated technology.

According to a recent study by Sharp, the typical employee wastes 21 days a year waiting for technology to do its job. That’s enough wasted time to make the most patient person grind their teeth. It’s so bad that 32 percent of employees surveyed have pretended that the technology was broken – just so they didn’t have to use it. What’s more, 41 percent said they prefer to use their personal tech, because it’s better than what their company offers.

The result isn’t pretty: lack of productivity, loss of good employees, and frustration all around. For automotive retail, that’s a prescription for failure: the highest producers in an average store are the ones who need systems to work quickly and reliably. That doesn’t mean they have to be new – or the latest thing on the market. They need to simply get the job done right. That’s an important consideration when the time comes to consider an upgrade to your management system.

Is the system easy to use, and learn? It’s critical that all employees can jump into a system without issue and use it efficiently day after day. The entire point of technology is to create efficiencies of process…so it simply must be easy to use.

Ask your team these three questions to better understand pain points caused by technology – and how to solve them:

  1. Does it come highly rated? Don’t just count on what the salesperson says. Ask peers and colleagues if they’ve used a system being considered and how it went. Ask about the onboarding and launch process – that’s another potential roadblock when it comes to employee retention.
  2. Does the system feel like home? Make sure the interface is a common representation of best-in-class user experience – the kind people are used to interacting with at home, and on their mobile devices. That helps promote a feeling of comfort and confidence among employees.
  3. Will it improve and iterate? Software development never stays still – there’s always a better way to get the job done. Make sure your system includes continuous upgrades that focus on helping you increase productivity.

Ultimately, the system that’s best for your dealership is the one that improves efficiencies in the day-to-day process of doing business. That helps build profit and reduce expenses, an objective that starts with an easy-to-use system that helps employees reach their potential – and not the front door.

To learn more about how other dealerships are creating efficiencies through technology, check out Goode Motor Auto Group’s story.

Why Using an Efficient DMS is so Important

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In a world of modern metrics, efficiency is everything. Finding advantages where they were previously lacking and implementing those advantages before they become the norm is standard in pro sports, business, and most definitely auto sales. So, how can your dealership implement its own version of Moneyball? The best place to start is with your DMS.

 

Efficiency of Integration

Just as sports teams scout other organizations and bring in talent to farm within their own systems, a modern DMS is more efficient when it works to include other resources outside your dealership. When a new, innovative software solution pops up, you want your DMS to be able to integrate with it and take advantage of all it has to offer at no additional cost to you. A DMS platform with open architecture gives you the freedom to choose what’s best for your business and allows you to maintain efficiencies in an ever-changing industry.

Efficiency of Data

The days of outworking your competition through grit and sheer determination are gone. Now, it’s all about working smarter, not harder. Instead of logging long hours, cozying up to the warmth of the computer screen at the dealership, your DMS should give you access to your information anytime, anywhere, from any device. Rather than waiting for information to come to you through the intermittent data dumps, your DMS should update in real-time, on-demand, and on your terms.

Efficiency of Employees

When was the last time you made a hiring decision knowing that your DMS was difficult to operate? If you’re worried about bringing on new talent, fearing they won’t be able to operate within the specific, restrictive confines of your current technology, the problem isn’t with them, it’s with your DMS. Don’t put outdated technology above the skills and potential of your employees. Give them the ability to grow within their roles, and flourish in a system built around their individual strengths, without having to worry about the burden of your DMS holding them back.

Efficiency of Outlook

Billy Beane, the father of Moneyball himself, taught the modern sports world to look at information differently. Instead of looking at somewhat outdated and less reliable stats like batting average and RBI to evaluate players, Beane used on-base percentage and slugging percentage to predict future success. This was a revelation at the time and gave the Oakland A’s a distinct advantage in scouting players.

As in sports, your dealership relies on specific indicators to forecast success. And, a modern DMS teaches you to look at your information differently. Rather than relying on the number of cars sold to predict success, for example, your DMS should help you track the efficiency of your service lanes, your sales team, and your turnaround time, and show you ways to make improvements.

In the ultra-competitive game of auto sales, it’s no longer just about your work ethic. Finding ways to sell smarter and cutting costs through improved efficiency is the new way of doing business.

 

If you’re interested in learning more about how a modern DMS can improve efficiency at your dealership, download the DMS for the Digital Age guide.

How to Maintain Bottom Line in a Slowing Industry

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The ups and downs of the auto industry are a rollercoaster of emotions, business flow, and balance sheets. From year to year, and even month to month, your financials can fluctuate depending on a number of different factors. And, the hard times aren’t always easy to predict. Especially during downturns, it’s important to have the ability to preserve your profits and weather the storms of a slowing industry. Here are a few ways technology can boost your business, in good times and bad.

 

Empower Your Employees

 

Increasing sales and decreasing expenses is the goal of every auto dealer, but sometimes it’s easier said than done. When times are hard, it’s natural to look for quick and easy ways out of trouble. And, for many dealerships, that means staff cuts that end up being the wrong answer in the long-term, and difficult for everyone involved. Rather than give in to knee-jerk reactions, embrace the potential of your employees by empowering them with the latest and greatest technology. Give them a DMS that’s intuitive and easy to use, to the point that it stays out of their way and lets them do what they do best – sell cars.

 

Your DMS should be a key selling point in attracting, training, and retaining top talent. You shouldn’t have to base your hiring decision on whether or not someone can operate your DMS. Properly empowered with the right technology, your workers can help you avoid the lengthy dips in business performance by increasing efficiency and avoiding many of the problems that come with outdated technology.

 

Prioritize Performance Management

 

Does your DMS come equipped with a team of industry experts, ready and willing to help your business at your beck and call? Many dealerships resort to hiring expensive third-party productivity consultants that explore every nook and cranny of your operations, searching for ways to improve efficiency. But, the very best DMS providers already offer this. They balance cutting-edge technology with personalized attention to help you achieve your business goals and increase your bottom line. Take advantage of performance managers’ expertise to get the most out of your DMS, eliminate unnecessary practices, and give you a leg-up on your competition.

 

Do More with Your DMS

 

If your DMS is a relic of ancient history, and your bottom line is suffering as a result, it’s time to move into the modern age of dealer management. Your DMS should do more than track costs and inventory. It should be easy to use and come equipped with a team of experts to help you take your business to the next level. In addition, your DMS should help increase sales by:

 

  • Giving your employees the tools to seamlessly upsell additional items at checkout.
  • Leveraging your customer contacts to increase traffic to your service lanes.
  • Creating a highly-customized mailing and digital contact list to send out reminders and special offers.
  • Increasing focus on digital sales and streamlining the online to the in-store customer experience.

 

If you’re ready to learn more about ways to boost your bottom line during tough times, request a demo today. 

 

How to Bring your DMS into your Dealership Strategy

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A business strategy is a company’s high-level plan for executing on its vision. Many businesses, including most automotive dealerships, know what they want to achieve, but don’t have a plan for how to get there. A vision and a plan must come together to form a business strategy. Running a dealerships means you need to consider which tools your team will use in their businesses and how they will use them. And in today’s automotive retail environment, no tool has the ability to influence strategy more than the DMS. Here are three ways that you can leverage your DMS in the development and execution of a strategy.

Become Better, Faster, Stronger

Most dealership strategies call for the company to improve, enhance, or add a certain skill. Whatever that skill may be—customer service, transaction time, F&I sales, inventory turn time, or something else—your DMS is probably connected to it. That’s why it’s so crucial to utilize a modern DMS that promotes efficiency through better workflows and intuitive, easy-to-use interfaces. The right DMS can help your dealership get better, faster, or stronger at whatever it is you’re trying to improve.  As an added benefit, intuitive, easy-to-use systems enable dealerships to easily hire and retain the right people to execute on their strategies.

Gain the Freedom to Choose your Own Path

Your dealer management system functions as a technology hub and a central point of access for all other dealership technologies. Because it controls the flow of data between your dealership and its tools, it is a crucial component of your dealership strategy. In order to execute on your unique strategy, you need the freedom to choose your own tools. Many DMS platforms restrict third-party integrations and limit the number of vendors that you can work with. Restrictive platforms limit a dealership’s strategic options and make it difficult to achieve meaningful differentiation. Open platforms, on the other hand, let dealerships decide which third-party software systems best fit their strategic objectives.

Tracking, Reporting, and Metrics

In order to be successful, a dealership strategy must include a plan for tracking and reporting on metrics. Generally, a good strategy will require a company to set benchmarks and goals for improvements. Dealer management systems can provide both of these functions, allowing a dealership to track progress and adjust tactics accordingly. However, not all DMS platforms are created equal—modern systems provide real-time data allowing you to make better, faster business decisions.

Dealerships become successful by developing and executing on effective business strategies. Those strategies involve both a vision for success and a plan for achieving it. Because they touch almost every aspect of a dealership, DMS platforms can play a key role in the development and execution of dealership strategies. As you develop, refine, and execute on your strategy, be sure to evaluate your DMS and its ability to help you achieve success.

To learn more about how your DMS can better fit your dealership strategy, download our guide, “Was your DMS built for the digital age?”

Was your DMS built for the Digital Age?

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Every home has a drawer filled with old technology—remote controls, flip phones, charging cords, solar calculators, and compact discs. These items were built for another age and are no longer suited to provide any real benefit, but still we hold onto them. Is your dealership doing the same thing with its DMS technology? Most dealerships have used the same DMS for decades, even though it was built for a previous era of car buying. The truth is, modern DMS platforms offer very real benefits over older, legacy systems, including the following five hallmarks of a modern DMS.

Hallmark # 1: Cloud-Based Structure

These days, any piece of software not hosted in the cloud cannot be considered modern. The benefits of cloud-based platforms and SaaS delivery are clear. When your DMS is delivered through the cloud—and not hosted on a local server—you get automatic upgrades and the security of redundant data storage on remotely located servers.

Hallmark # 2: Open Third-Party Integration

Today, dealerships can’t rely on a single technology provider to meet all of the demands of modern business. DMS platforms that can’t connect to new, innovative software solutions are holding dealerships back. And, even when they allow integrations, legacy providers often charge high integration fees that hurt dealership profits. Modern DMS platforms, with their open architectures, let you choose the vendors that are best for your business and they work to limit data access fees.

Hallmark # 3: Data Visibility

Digital Age DMS platforms allow dealerships to access their data anytime, anywhere, and from any device. More importantly, they always provide real-time data and up-to-the-minute numbers. Legacy platforms, on the other hand, rely on intermittent batch updates, so it’s hard to be sure that the information you’re seeing is real.

Hallmark # 4: Ease of Use

The best part about modern technology is that it’s easy to use. Because modern DMS platforms have vastly improved their interfaces, navigation structures and workflows, they are easy to learn, easy to train, and easy to use. That means, you can make hiring and retention decisions based on what’s best for the business, not the limits of your DMS.

Hallmark # 5: Efficient Workflows:

One of the biggest problems with old systems is that they were built to align with outdated customer preferences and antiquated dealership processes. Modern DMS platforms align digital workflows with natural, real-word processes. By eliminating the need to jump between multiple screens, enter duplicate data, and dig for information, modern systems make your employees more efficient and your customers more satisfied.

Most DMS platforms were not built for the Digital Age and are not providing the capabilities necessary to satisfy today’s car buyers. But, instead of junking those legacy platforms, many dealerships simply patch up and work around their limitations. To keep up with the changing automotive industry, it’s important to evaluate your current DMS against the hallmarks of a modern system and to modernize when necessary.

To learn more about the five hallmarks of a modern DMS, download our guide, “Was your DMS built for the digital age?”

Margin Compression Solution: Cut Holding Costs

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In auto retail, time is money. The faster you sell cars, the faster you bring in money and more inventory. Rinse, repeat, and reap the rewards of your efficiency. In today’s margin compression environment, it’s more important than ever to find increases in other areas of your business. And, one of the best ways to combat shrinking profits is to cut holding costs by improving your inventory turnaround time.

 

Pass on Holding Costs

The effects of margin compression can be devastating. Not only are product costs rising at a rate that‘s outpacing the prices received from the sale of cars, but costs are increasing across the board, driving some dealerships out of business. And, it isn’t difficult to see why. On average, a dealership incurs a cost of $32 per day for every vehicle it has on the lot. So, if it takes 50 days to sell a vehicle, your dealership will spend $1,600 just to have a single car on your lot prior to sale. Now, multiply that by the number of cars in your inventory and you can see why so many are struggling.

Dennis McGinn, CEO for Rapid Recon, a reconditioning service software for dealerships, challenges dealerships to rethink the recon process to improve speeds. He says that most dealerships have a standard 10-day timeframe for reconditioning. However, if dealers can cut the reconditioning timeframe to 3-5 days through process improvements, reconditioning can become a competitive advantage for your dealership.

When it comes to fighting margin compression, efficiency is the name of the game. And, getting cars frontline ready more quickly means eliminating unnecessary steps between acquisition and sale, including the over-reconditioning of vehicles.  

 

Rethink Reconditioning

By eliminating inefficiencies in the reconditioning process, your dealership can increase gross profit per vehicle sold and turn an unwanted expense into an advantage over other dealerships in your market.

 

If you’d like to learn more about decreasing holding costs, and other ways to combat margin compression, download our free guide, 7 Solutions to Margin Compression, Strategies for Preserving Dealership Profit Margin.

How Dealertrack DMS is Investing in the People Behind the Buttons

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ORIGINAL ARTICLE WRITTEN BY PAUL WHITWORTH, SENIOR VICE PRESIDENT OF DEALER MANAGEMENT SYSTEMS AT DEALERTRACK

 

Today, the automotive industry has more pressure than ever to drive a seamless, technologically enhanced experience for consumers at all points of the car shopping, buying, and owning journey. To meet the needs of consumers, both dealers and technology providers have often found themselves investing in more buttons rather than the right ones. At Dealertrack DMS, we took a step back and asked ourselves: What is the right strategy for us? What is the best way to serve dealers? To answer these critical questions, we started to dig into the purpose of the DMS and how it was being utilized by dealers. After several working sessions, dozens of customer advisory board meetings, and too many data-deep-dives to count, we came to the conclusion that what dealers really want is a DMS that’s open, easy, and flexible to use. With this insight, we ultimately came away with the mission to focus more on the client experience and less on the buttons. Since that time, our dealers have driven every moment, every design, and every decision that we’ve made.

 

A Look Back at Our Latest Strides:

 

At NADA 2017, Dealertrack DMS unveiled its Performance Management offering, which provides dealers with an industry expert who, similar to a personal fitness trainer, helps dealers maximize the full potential of their DMS and develop both long and short-term objectives to achieve their business goals.

Additionally, in Fall 2017, the company announced DMS Edge, its first annual user event series that brings on-demand training and DMS best practices right to the dealer. DMS Edge reached 3,500 dealer participants in 2017. We also plan to continue our controllers conference as an annual event, where controllers from across the country can learn more about how Dealertrack DMS can help them run their dealership as well as have more peer-to-peer exchange around best practices.

Now, Dealertrack DMS is continuing to double down on its dealer-centric approach with the introduction of DMS 360. Set to debut at NADA 2018 later this month, DMS 360 is an all-encompassing self-service portal where dealers can get support and interact with one another and with Dealertrack DMS team members. At the core of DMS 360 is its peer-to-peer functionality. We’ve developed a virtual community where dealers can collaborate and engage with each other, such as ask questions and respond to other DMS users’ cases. DMS 360 also enables dealers to track and receive real-time support and better understand their DMS. Through DMS 360, dealers gain instant access to DMS help documentation and can search by topic any knowledge articles that exist in Dealertrack DMS’ Wiki or newly created articles that are added into DMS 360.

But our work to drive a dealer-centric business doesn’t stop at DMS 360. We are heavily invested in helping our clients get more out of their DMS and will be providing dealers with ongoing education through a series of online learning courses that we will be releasing this year. We also have a big project underway to share all best practices and processes we’ve learned over the years with dealers in what we are calling Books of Knowledge.

By focusing less on the buttons and more on the client experience, we’ve made it our mission to meet the needs of our clients and build a system that’s easy and flexible for our clients to use every day.

 

To learn more about DMS 360 and our dealer-centric approach visit us at Booth #2737C at NADA 2018, March 23-25.

 

 

Paul Whitworth, Senior Vice President of Dealer Management Systems at Dealertrack, has been at the forefront of automotive retail technology advancements his whole career. Paul graduated from the Massachusetts Institute of Technology and has held positions with J.D Power & Associates, Accenture, Hyundai Motor America, and Cox Automotive as well as leading several start-up companies.