Category: Trends & Insights

4 Key Steps to Upgrade Your Dealer Management System (DMS) Successfully

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Transitioning your Dealer Management System (DMS) is crucial for staying ahead. Many dealership owners delay this upgrade due to fears of change and disruption among staff. But switching your DMS doesn’t have to be overwhelming. To help guide you through this transition, we tapped into insights from Susan Moll, Vice President of Client Implementation at Cox Automotive.

Dealer principals and general managers often postpone this move until it’s absolutely necessary. Susan Moll explains that many dealerships have stuck with the same system for years, leading to outdated customer lists and records that need sorting through. In a recent interview with the team at Jim Browne Auto Group, Moll reassured that transitioning to a new dealer management system doesn’t have to be intimidating.

Here are Susan’s four essential keys to a successful DMS switch:

Step 1: Planning Is Key

Before diving in, collaborate with your management team and future partner to outline a clear roadmap for implementing the new technology. During this planning phase, identify the key stakeholders who will be involved and determine their roles and responsibilities. Establish a timeline detailing how and when the transition will occur – typically taking around 90 days from start to finish. This timeline should include specific milestones and checkpoints to ensure the project stays on track. Additionally, incorporate planning and training sessions for your team to ensure they are well-prepared and confident in using the new technology. Regular updates and open communication channels are crucial to address any issues and make necessary adjustments throughout the process.

Step 2: Engage Your Team Champions

Successful dealer management system transitions rely on dedicated team members throughout each department who are eager to learn and drive change forward. Identify these champions early in the process and provide them with the necessary resources and incentives as you roll out the new technology. These team champions will play a vital role in facilitating learning and training initiatives by acting as liaisons between management and staff. Their enthusiasm and commitment can help motivate their colleagues and ensure a smoother, more efficient transition. Additionally, consider offering regular feedback sessions and training updates to keep them engaged and informed throughout the implementation process.

Step 3: Foster Open Communication

Develop your change-management skills as they are crucial during significant technological shifts like adopting a new Document Management System (DMS). Aligning organizational goals with core values is a great starting point. It’s essential to maintain an open-door policy for employees to voice their frustrations, concerns, and suggestions. Ensure there are transparent and regular communication channels from leadership down to every team member. This can include town hall meetings, regular updates via email, or even dedicated time for one-on-one discussions. Moll emphasizes that successful implementations begin with top-level support, which sets the tone for the entire organization and promotes a culture of openness and adaptability.

Step 4: Familiarize Yourself with the New Technology

Getting acquainted with the new dealer management system requires time and practice. Your team will access training sessions within a “sandbox” environment to get hands-on experience with the system. These sessions are designed to simulate real-world scenarios, allowing team members to explore various functionalities without risk. Although Dealertrack is rated as the #1 user-friendly DMS, it will differ from your current tool, presenting new features and workflows that you will need to understand thoroughly. Taking the time to master these differences will ensure a smooth transition and maximize the benefits of the new system.

Ready yourself for a smooth transition between DMS solutions by covering these fundamentals. Effective preparation ensures your staff is well-equipped once you make the switch.

Looking for more insights? Dive into our tips below to seamlessly embrace your new dealer management system solution today!

 

Top 5 Profit Drivers for Today’s Digital Dealer

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At a time when more of the shopping, buying, and relationship building is taking place online, dealers are taking stock of their digital technology portfolio. Cox Automotive forecasts that half of all car buyers will engage with at least one digital tool during the purchase process—which could mean more profitability for your car dealership business. Paired with award-winning support and data continuity, backed by the security of an experienced partner, dealers are setting the stage for success with the following list of profitability drivers:

1. Performance Management

There are few experiences worse than signing a contract and watching a vendor disappear before the ink has had a chance to dry. A true dealership partner should be available when you need them (and often before) to see your business succeed. They should set performance benchmarks and goals — and then hold your team to them.

 

2. Five-Star Support

When you’re working with a trusted partner, having a good support system there when you actually do need it to minimize interruptions should go without saying. However, you should say it, and demand it, before you sign a contract. Take a look at the average response rates and customer satisfaction scores of any potential vendor you’re considering. Emergencies happen; what can you expect when things go south?

 

3. Easy-to-Use Technology

Complicated interfaces, multiple logins, a lack of available training resources, and redundant data entry are like the four horsemen of the apocalypse to your retention strategy. If you want to improve the morale of your staff, invest in technology that is easy to use and helps your people focus on building better customer relationships.

 

4. Digital Signing and eSignature Templates

Maximize time savings for both your employees and your customers with the flexibility of technology that allows for digital signatures and digital document signing. Go one step further with technology that allows your team to save their most frequently used documents so they can quickly and easily pull these up for eSigning whenever they need to finalize a deal.

 

5. Save Costs and Speed Up Cashflow with eContracting

Dealertrack data shows that the average time in transit for paper contracts is five days. In the meantime, holding costs accumulate and cash flow is halted. When you switch to digital contracting, your dealership saves on physical labor and hardware costs such as printers, paper, shipping, and related materials. Plus, you could realize funding as quickly as the same day you submit your deal documents.

Your brick-and-mortar business isn’t going anywhere. But the digitization of the industry is bringing the consumer to you in new and exciting ways. Prepare for car dealership profitability with the precision tools, processes, and the right mindset to achieve success.

 

Set your dealership up for success today. Ask our team of experts for advice—learn more.

Drive Efficiency with Simple Dealership Best Practices

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In the quest to stay compliant, competitive, and profitable, dealerships are investing heavily in technology to increase efficiency. But technology alone won’t build a more efficient business. Your managers, frontline employees, sales staff, and back office rely on workflows, data, and training to make their day-to-day work faster and easier. Consumer buying habits continue to impact how technology aids every touchpoint along the way. Building an efficient dealership takes the right technology, tools, and people processes to thrive. Not to worry, though. Taking a multi-faceted approach doesn’t mean your tactics need a major readjustment. As you continue to grow, you can leverage the following dealership best practices to drive efficiency.

Harness Rapid Connectivity with Integrations

There’s nothing less efficient than the frustrating pause, stop, start of technology that doesn’t connect. When your data flows seamlessly between your CRM and your DMS—and then into the F&I process—you not only save time and become a more efficient auto dealership, but you also keep your staff from jumping ship. The efficiency that comes from being able to push critical, secure information from one (previously siloed) step of the buying process also has an additional perk: a happier customer. This is important because the 2022 Cox Automotive Car Buyer Journey Study revealed buyers are more frustrated with the amount of time required to complete this process than in the previous year!

Use Technology to Cut Out Manual Processes and Workflows

You’ve probably heard this before, but it’s worth repeating that manual data entry is a time-suck. It’s not just inefficient, though. Faster deals lead to happy customers, while fewer paper forms reduce errors. So where should you start? Integrations between your DMS and F&I software help dealers save time by reducing the amount of information their staff needs to key in, ensuring their credit applications and contracts are accurate, and speeding up the contracting stage. (Dealertrack DMS integrated with Dealertrack F&I ensures up to 75% of data fields are pre-filled in credit applications.) These steps save you and your customers time at the point of sale, but there are other ways to reduce pesky manual tasks that chip away at efficiency.

Leverage Partners to Roll Out New Technology

Last, but definitely not least, when introducing technology to your team, you should do everything you can to reduce the overall loss of productivity caused by stress, anxiety, and frustration your staff endures. But you should never take this on alone. Having a trusted partner in your corner who advocates for change, ensures all team members are secure in their knowledge of the technology, and builds dealership operational processes that help you succeed is worth its weight in gold.

The automotive industry is complex—but building dealership best practices like the above into your technology investment strategy doesn’t need to be. You should look for vendor partners who can step up to the challenge with a proven track record for success. After all, your people, processes, and customers depend on it.

Find a technology partner backed by experience and a proven track record to bring efficiency and ease into your everyday business. Learn More.

Improve Your Dealership’s Digital DNA

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This might be a familiar scene in your dealership: your customers have just test-driven their dream car, checked all the cool features, and are living on cloud 9. Then, out come the piles of paperwork with the long-winded contract review and tedious signing process, which ruins the vibe and the positive feeling they had about your dealership. However, you can keep their excitement and your dealership CSI scores going strong by speeding up the process with the right digital solutions.

With digital contracting, electronic signature, and remote signing, you can say goodbye to paper contracts and let your customers sign on the dotted line without the paper shuffle, and from the comfort of their couch. All this saves time upfront since customers can fill out fields, sign once, and then simply tap after that, and later on because it reduces the risk of errors.

GO DIGITAL TO SAVE TIME AND MONEY

Digital retailing and online credit applications let your customers build and customize their dream ride and their deal terms, and apply for financing from your website, while digital menu technology helps buyers select aftermarket and F&I options with ease.

Digital service invoices make life easier for you and your customers since they can be sent via email or text and customers can see exactly what they’re paying for. And everyone loves the convenience of online payments, whether it’s for parts and service, F&I products, down payments, or vehicle purchases.

Implementing these enhancements into your dealership’s digital DNA significantly improves dealership customer experience, streamlines operations, and boosts efficiency, providing your business with a surefire way to thrive in today’s competitive market.

Learn how Dealertrack’s solutions can deliver the exceptional dealership experiences your customers have come to expect.

Do you Have What it Takes to be a Forward-Thinking Dealer?

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Forward-Thinkers Know How to Increase Dealership Efficiency 

Modern dealerships work hard to stay competitive. Driving efficiency in your auto dealership is a long game, however, and many business owners struggle to embrace the right mix of new technology without sacrificing profitability. So, what are the tactics that set forward-thinking dealers apart? What makes them so rare—accounting for only 33% of total dealerships?

Watch this video to discover how forward-thinking dealers earn 64% higher net profit (vs. static dealers), but also increase dealership efficiency and deliver the ultimate customer experience.

Adopt the mindset and tactics that bring major operational gains. Get your copy of The Forward-Thinking Dealership ebook.
Get it Now

 

Source: 2022 Cox Automotive Forward-Thinking Dealership Study

Move your Automotive Dealership Ahead with Tactics from Forward-Thinking Dealers

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Don’t settle for good enough. Become a Forward-thinking Dealership.

Automotive dealers are doing everything they can to avoid becoming static and outdated. The rapid onset of digitization and technology has greatly improved the customer experience, but even modern dealers rely on manual processes to some degree. Those who’ve ditched the old ways are now selling more, reaching higher net profits, and seeing major gains—and there’s research to back it up. The good news for everyone is that these forward-thinking dealers aren’t just opting in for the latest and greatest technologies to achieve these goals. You can adopt the same future-forward operational strategies to overcome whatever challenges arise tomorrow. Don’t settle for ‘good enough.’ Discover what it means to be a forward-thinking dealership.

Future-forward Operational Leaders

Every dealership has strengths. And every dealership has opportunities. In a study of more than 500 dealers, Cox Automotive was able to categorize dealerships into three groups based on their resilience toward overcoming operational challenges, as well as the mindset and strategies that result in growth. They are defined as follows:

 

  • Static Dealers—Stuck with limited digital technology and manual approach to operations.
  • Modern Dealers—Updated digital technology, yet still sidelined with old processes and mindsets.
  • Forward-Thinking Dealers—Advanced digital technology with integrated software, automation, and data throughout the dealership.

87% INCREASE IN SALES PROFIT FOR FORWARD-THINKING DEALERSHIPS IN THE PAST 12 MONTHS

Performance vs. Technology

A technology investment alone won’t take your business from one category into the next. Adoption, mastery, and performance of any new skill will help you move the needle. So, what sets a forward-thinking dealership apart from the rest? It comes down to mindset. The top-performing dealerships in this study were shown to be more open to new ways of working, while simultaneously embracing data to create one connected workflow across their automotive dealership. Just as the healthcare, education, and online retailing industries have adapted over the course of time, so too, have forward-thinking dealers.

The Tactics of Forward-Thinking Dealers

Dealers who invest in technology, training, and innovative thinking can expect to see improvements in operations. Forward-thinking dealers, like the ones in this study, used specific tactics in their approach to key areas beyond just operations. It’s important to know which tactics are most successful in specific functional areas of the business to boost profitability. According to the study, service, back-office operations, sales, front-office operations, and inventory management each have specific, targeted tactics that drive success.

64% HIGHER NET PROFIT AMONG FORWARD-THINKING DEALERS VS. STATIC DEALERS

Adopting a new mindset and implementing the tactics of forward-thinking dealers can result in major gains. Remaining static is a choice. Learn where to focus on your specific business by diving into the details.

Start seeing business results today. Get your copy of the Forward-Thinking Dealership and discover the specific tactics that drive success.

 

It’s Time to Raise Your Document Storage Standards

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Dealerships manage thousands of documents over the course of a single calendar year, not to mention the many historical documents they’re required to keep. According to an annual report from NADA, a single vehicle purchase can involve more than 40 separate documents. And that adds up. Dealerships combined to sell nearly 14 million light-duty vehicles in 2022. (That’s a lot of documents, to say the least.)

Document management is a necessary part of doing business, but storing and retrieving these documents has always been a chore. It’s a time-consuming, manual process that leads to security issues, repeat work, and lost or duplicate documents.

As consumers opt for more digital purchase experiences and compliance requirements continue to impact the industry, dealers need to raise their document management standards to ensure security and stay compliant.

Document Centralization

Managing documents is more difficult when they’re stored in multiple places. Important assets are handled by multiple people and/or entities, and when it comes time to retrieve them, dealerships have to deal with a variety of storage vendors. Even digital documents are commonly stored within each individual dealership software solution, leading to uniformity issues and compliance concerns.

When it comes to document storage, the best practice is to have one centralized location for every single document. This simplifies organization, ensures uniformity, and improves document search and retrieval. A centralized storage solution also integrates across the entire dealership, so dealers can keep every document uniform and indexed as part of the same deal workflow.

Document Automation

Manually managing documents is time-consuming and cumbersome. Physical documents can literally and figuratively fall through the cracks and storing them can be a huge expense. According to NADA, dealerships spend $20 in labor just to file a document, and $100 to $200 more if that document was misfiled or has to be reproduced. Instead of relying on multiple, non-integrated processes to store documents, dealers should look to implement automated document capture.

When a dealership produces a document, it’s automatically captured and stored as a natural part of a deal workflow. Automated document management also ensures that every type of document—whether it’s a deal document, a financial report, or just an image from the service lane—is always indexed to the same customer profile for easy retrieval.

Document Security

The security of consumer information is paramount. Protecting consumer information has been underscored by recent federal regulations, forcing dealers to implement additional security plans and protocols in order to become compliant. As deals become more digital and instances of fraud more frequent, dealerships need to double down on their document security efforts.

In addition to these more practical benefits, automating document management into a single dealership storage repository ensures compliance. It gives dealers the ability to manage documents in a secure location while keeping track of retention on a customer-by-customer and case-by-case basis. This also allows dealers to safely and securely retrieve and view documents until individual retention policies expire.

Document management is becoming a big deal in the auto industry. As dealerships evolve into a new digital age and document security becomes even more paramount, it’s time for dealers to raise their document management standards, collectively and individually. Automating and centralizing document storage increases efficiency and ease of access, while also ensuring security and compliance.

READY TO MOVE YOUR BUSINESS BEYOND BUSY WORK? KEEP YOUR MOST IMPORTANT INITIATIVES FRONT AND CENTER WITH NEW SOLUTIONS FROM DEALERTRACK. LEARN MORE.

 

Modern Payment Solutions Bring More Than Modern Convenience

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It’s no secret that today’s consumers love convenience. They appreciate it as part of the shopping and buying experience and practically demand that it be part of the actual purchase and payment process. While modern payment solutions historically offered businesses a competitive advantage, these innovations are no longer negotiable. They’re now an expected functionality and directly impact the profitability of your dealership.

Convenience to Consumers

While the rest of the retail world has already adopted innovations that make it easier for consumers to pay, the auto industry is lagging. Many dealers still force consumers into antiquated payment processing methods that involve extra paperwork and require the consumer to be present.

Whether paying for parts, service, F&I products, or just making a down payment on a new or used vehicle purchase, today’s consumers want better options. They want dealers to send digital service invoices via text or email, so they can see exactly what they’re paying for. They want the option to pay for these services remotely or finance them over time with just a few taps on their phone—without having to go through a time-consuming approval process.

When consumers are present for a transaction, they want fast, easy point-of-sale payment options and contactless payment methods. Basically, anything that makes paying easier for consumers just makes good business sense for dealers. Besides, modern consumers won’t have it any other way.

Convenience to Dealerships

Consumers aren’t the only ones to benefit from more modern payment methods. Above and beyond the benefits that come with giving consumers the payment options they expect, dealers benefit by digitizing invoices and processing payments electronically. Specifically, modern payment solutions save work, save time, and save money.

  • Save Work: A dealership’s back-office staff spends hours upon hours processing and delivering accounts receivable statements. By incorporating modern payment solutions, dealers can deliver digital accounts receivable statements, eliminating manual accounting practices along with sending and receiving payments through the mail.

 

  • Save Time: With modern payment solutions, dealers can send payment requests via email or text and receive payments electronically, speeding up the time it takes to process and receive payments which reduces dealership costs.

 

  • Save Money: By streamlining invoice and payment processing (and delivering the flexible payment options consumers expect), dealerships eliminate inefficiencies and pave the way for more profitable transactions.

Convenient payment options are an expected part of your business in the minds of consumers and an essential part of your dealership’s profitability. By updating your payment processes to incorporate more modern solutions, you can digitize and optimize your back-office work, while taking full advantage of the many benefits (to you and modern consumers) that convenient payment solutions afford.

READY TO MOVE YOUR BUSINESS BEYOND BUSY WORK? KEEP YOUR MOST IMPORTANT INITIATIVES FRONT AND CENTER WITH NEW SOLUTIONS FROM DEALERTRACK. LEARN MORE.

Focus on the Future of Automation

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Most dealerships I talk to are hyper-focused on building a better business for their employees and customers. The most successful automotive groups I work with are always one or two moves ahead. They’re putting in the work to make sure the tools and technology are streamlining workflows so they can focus less on the busy work and focus more on their customers and staff. It’s not always easy. But the tools and capabilities exist to ensure the success of your business—and with the right partner at your side, you can most certainly get there. If you’ve partnered with a DMS who has your best interests at heart, they can help you get there. Here are some of the key areas of focus—in my experience—that will ensure the overall success of your dealership.

Focus On Delivering a Better Payment Process

Simply put, you need to take a hard look at the number of slow, manual processes taking place at every transaction, payment process, and accounting capability within your business. And then modernize it. Conveniences like point-of-sale and contactless payment in our day-to-day life are normal and expected everywhere else—why shouldn’t they be expected within your service lane? If you can both improve cash flow to your dealership via email billing services and get paid faster, why wouldn’t you? I would take this concept one step further (if you’re not convinced) and explain that automation and digitization of payment processes not only will reduce human error, but also creates digital receipts for all your transactions. Everything a dealer can do to protect themselves and improve accuracy is a major win in my book.

Focus on Digital Documentation

As we’ve seen over the past several years in the automotive industry, compliance and security rules are becoming stricter. In my opinion, this trend will continue to the benefit of both the dealer and the consumer. Protecting yourself as a business is going to require you to become more and more diligent as contracts and transactions are digitized. The good news is that, with the right DMS partner, you should have the ability to sync back your data every time you engage with your customers. Whether you’re capturing signatures automatically within the DMS or auto-filling form during the financing process, you’re not only offering more convenience for your buyer, but you’re also creating a (digital) paper trail that helps protect both parties. A secure document management solution will streamline your workflows and simplify your back-office operations. Compliance and fraud risk are real issues that are, unfortunately, a matter of when, not if, they will occur for most dealerships.

Focus on the Data That Matters Most

The daily data battle has long been an issue for dealers. I don’t need to remind you that your DMS is a gold mine of information that can help you make informed business decisions now and in the long run. But knowing which reports to run and where to begin to optimize efficiency without wasting your time can save countless hours. First, if you’re not partnered with a business consultant who has your best interest at heart, I feel for you. A Performance Manager with years of real dealership management experience can hold your team to task on things such as data extraction, KPI tracking, and goal setting. Are you tracking your Effective Labor Rate in the Service Department? How are you managing your contracts in transit in the business office? Are you using Dealertrack Digital Contracting to improve your cash flow? While everyone likes to review information differently, your DMS has the data, and your Performance Manager can help you manage it.

Focus on People Power

In my experience, staff turnover continues to be one of the biggest challenges for dealers, whether times are “challenging” or not. In fact, last time we checked, a dealership will need to rehire and retrain over 80% of its sales team every year. Your back-office team has a difficult job. Hiring and onboarding are only part of their role. If you’re considering optimizing any one key area of your dealership this year, it needs to be your HR and Payroll. Tax laws, compliance rules, and payments get beyond complex the more your business grows. As you add rooftops and expand your business, your needs will grow—and change—consistently. Your investment in this area will pay off immensely if you can integrate the technology you use into your people solutions as you make onboarding more professional.

Technology is never a “set-it-and-forget-it” process. Fortunately, the technology capabilities exist, today, to adapt. My team is constantly learning how to empower our dealer partners and set your dealership up for continued success. If you’re interested in learning how to optimize and streamline, your Dealer Management System for the future, reach out today.

Ready to move your business beyond busy work? Keep your most important initiatives front and center with new solutions from Dealertrack. Learn More.

 

About the Author | Jade Mitchell, Sr. Manager of Client Performance Management

Jade Mitchell is a Sr. Manager of Client Performance Management who works with dealerships to maximize DMS utilization, as well as drive processes and profit improvement. Jade believes that the Automotive Industry is a game of inches in today’s world, so taking a deep dive with our dealers into their financials and processes by using the data that the DMS provides can make a huge impact on their success. Jade came to Cox Automotive in 2019 after working in automotive dealerships for over two decades. He started washing and detailing vehicles when he was only 13 years old which led to him becoming a finance manager at a very young age and spending the next decade in management. In addition to his passion for the Automotive Industry, Jade runs his nonprofit organization: Stay Positive Stay Aggressive Inc, which he established in 2013 to assist local families struggling with medical bills due to life-threatening illnesses. Recently, Jade and his wife Aubrey welcomed their first child into the world so between Dealertrack and daddy duty he is truly working 24/7 these days.