Category: Trends & Insights

THE DMS DILEMMA: IS THE GRASS REALLY GREENER?

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If you find yourself fantasizing about a new DMS, but dread the thought of switching, you’re not alone.

We surveyed hundreds of dealers to better understand perceptions of their current DMS provider and considerations around switching.¹ Many respondents are dissatisfied with their current DMS, but hesitate to disrupt an established relationship. However, respondents who have switched are happier with their new provider. See what we learned in the infographic below.

 

  1. Surveys conducted by FARM in 2016 and 2017, on behalf of Dealertrack.
  2. Quotes compiled from anonymous survey responses. Edited for content.

Technology Transitions: 5 Steps For Success

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Technology is an important investment for dealerships. In nearly every aspect of buying, selling, merchandising, and financing auto sales, tech touch-points can either help, or hinder, the process. So when it comes to making a change to even one of the tools that impacts these workflows, it pays to be prepared. Automotive industry expert John Grace has worked with Dealership Principal Owners (DPOs) and General Managers (GMs) for nearly 20 years, finding key insights and practical process solutions. Here is a preview of his findings; watch the full recorded presentation online.

Step 1: Strategy

If your dealership is considering a switch, the fact is: you’re ready. But, no great success has ever happened by accident. You might be ready to let go of your old, outdated technology, but having a game-plan—with a full audit of who will be involved, what systems are impacted, and an idea of how long the transition will take—is the first step. The solution to step one is simple, though. Find a trusted partner who has been down this path before, is willing to understand your goals, and can work with your business needs.

Step 2: Teamwork Makes The Dreamwork

When it comes to a successful transition, if you don’t have support from the top stakeholders, you might want to reconsider your next move. Support has to come from the top-down. Without the guidance and support of leadership, your technology transition will sputter out. Need more time to process a change or onboard the team? That’s where leadership comes in. Having a problem with a vendor who hasn’t fulfilled their end of a contract? Bingo: leadership. Need to convince your staff that the change will work out, despite their understandable worries and fears? Leadership must be willing to address this.

Step 3: Choose Wisely

Now that you’ve made the decision to upgrade, and leadership has your back, it’s time to pull the plug on your old vendor and sign on the dotted line with a partner, not just a provider, who meets your criteria. And—this is key—be willing to ask for what you deserve. Make a list of the shortcomings from your past relationship, and be unwilling to accommodate. This is your chance to be picky, so involve your staff, your operations team, and ask other dealerships for anecdotal feedback, too.

Step 4: Build Implementation Partnerships

The most important part of a technology switch happens during implementation. This process will set the tone of your entire experience going forward, from adoption to mastery. So, be certain to find a partner with verifiable experience, and make certain they have a solid strategy for setting your dealership up for success. Remember: the relationship doesn’t end once you’ve signed a contract.

Step 5: Never. Stop. Learning.

Your business is constantly growing, and key roles will change. Discover what kind of ongoing learning, development, and training options are available for your team. Is there an online support and community to share ideas and master best-practices? How responsive is the customer support should you encounter a problem? Is this partner involved in the community, building a better future for the automotive industry?

Your technology needs are more than a necessity at your dealership. Technology drives your business forward, builds trust with your buyers, and has the potential to forge new, lasting partnerships. Successful planning, strategy, support, and implementation go a long way toward a positive transition that will bring positive results to your team, your buyers, and your bottom line. To watch John’s full presentation and learn more, go here.

Decluttering Your Dealership’s Systems: Get More From Technology

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Change is progress. But, change is scary. This statement is true, yes, but there’s another side to it. When your automotive dealership is busy staying, well, busy, it’s hard to pave the path toward progress. Finding the right solution for better work-processes, enhancing productivity, reaching more customers, faster—these are all significant challenges. Often, dealers find themselves burdened with old, outdated technology systems longer than intended because it’s difficult to know where to begin. Here are two key factors to help your dealership get more from technology.

Break Free From Old Hardware

Modern dealerships must meet today’s consumers where, when, and how they want to shop. According to the Cox Automotive 2018 Car Buyer Journey Study, your next potential customer has likely spent up to 60% of the buying process online before they ever walk into the dealership. For automotive retailers, using cloud-based technology platforms is a more flexible, more convenient solution. And as your dealership footprint grows, and businesses acquire more than one location, connectivity and access to information—anytime, anywhere—is key.

“We didn’t realize how important [a cloud-based platform] was until we acquired our [second] store…which allowed us to manage both operations from one location.” – Kevin Cook, General Manager Straub Automotive

Provider vs. Partner

Successful dealerships know that signing a contract at the end of the day with your buyers is really just the beginning of a long-lasting relationship. At least it should be. And it’s the same with your vendors. If you’re not entering into a long-standing partnership with your Dealer Management System (DMS) vendor after you sign a contract, you’re not getting your money’s worth. 60% of car buyers are, according to a Cox Automotive Service Industry Study, willing to drive farther just to get better service for their car. But, you shouldn’t have to go out of your way to find the help and support you need.

When making the switch to new, upgraded technology, look for a partner who offers ongoing analysis of your dealership’s performance and delivers key-insights from top professionals.

“We needed a partner who would really be there for us. Someone who would pick up the phone when we call, and also give us a system that works around what we do and not the way they think it should be done.” – Mike Tourtillott, General Manager Sisbarro Dealerships

It’s time to let the status-quo go and move onto a partner fully vested in your success. Clearing out the clutter of your previous technology and outdated system is the first step.

Ready to pave the way toward progress? Get the guide: Dealer’s Dilemma: Letting Go of Old Technology.

 

Bonus Benefits of a Tech Change

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Just like spring-cleaning, decluttering your dealership’s systems paves the way for progress.

Updating your automotive dealership’s technology is a lot like spring cleaning. Once you’ve made the mental decision to let go of the old, legacy systems holding you and your business back, you’re free to update your data, your systems, and your processes. It’s a lot like cleaning out the garage! Here are additional benefits your dealership will experience once you upgrade your technology:

#1 – Working Smarter Pays Off

How you work is as important as how hard you work. And your team works hard. Legacy platforms may be hindering the productivity of even the most efficient team members. Upgrading to a software system with an easy-to-use interface frees your staff to focus on more important responsibilities like customer service. And that adds up over time. According to the Cox Automotive 2018 Service Industry Study, around 70% of consumers who purchased or leased from a dealer didn’t return to that same dealership that same year.

#2 – Stop The Integration Fee Madness

Technology has a tricky side-effect: you purchase a system built to run one part of your business, which requires a second tool (with added fees) to connect to your data, which then requires a complex system to set up your reporting and tracking, etc. According to independent research, dealerships are using seven different systems to close a sale. With monthly fees averaging $500 each, dealers are spending $3,500 each month, or $42,000 a year, to access their own data. Dealertrack DMS offers open integration. Your blood pressure can lower, you can breathe a sigh of relief…ahhhhhhh.

Letting go of old, outdated technology feels hard. But making the switch is a decision that comes with added bonuses that impact your entire dealership from your budget to your team’s productivity.

To see more benefits of moving on, and to hear how the switch made business better for real-life dealerships (like you), get the guide: Dealer’s Dilemma: Letting Go of Old Technology

DMS: First Among Auto Dealership Systems

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The automotive retail market is more competitive now than ever, and car dealers need every advantage.

Almost all franchise dealerships say their dealership-management system is the most important system they use, according to a Dealertrack whitepaper.

Yet, it also seems to cause the highest levels of dissatisfaction. Training, open integration and cost control are central challenges. So, why don’t dealerships just find a new DMS provider that can meet their needs and offer an open, modern and easy-to-use system?

With fears about losing access to their data, costly integration fees and getting locked into another long-term contract, many dealers admit the DMS is the most difficult system to switch.

The automotive retail market is more competitive now than ever, and dealers need every advantage to maintain their edge.

Customers are doing their research ahead of time. They are armed with information they can use in negotiating and choosing which dealership to work with. An outdated DMS won’t cut it.

Here’s why dealerships that aren’t thrilled with their current system should do something about it.

Partnership

A provider should be a partner, not just a software or technology vendor.

That partnership should be evident from the first point of contact, straight through to ongoing training, performance management and continued system operation.

When doing research or getting referrals from other dealers, ask how well the DMS team supports the dealership, both at the time of installation as well as down the line.

If dealer question whether they were sold a system and left to figure things out for themselves, they chose a vendor, not a partner.

Flexible Contract Terms

You shouldn’t have to be trapped in a contract that isn’t working for you. The average contract length of five years doesn’t work for all dealers. Contract terms can tie a dealer’s hands.

A DMS partner should always be on their toes, striving to keep the dealer’s business with great service, key functionality and continued innovation. Contracts are a way of life with many parts of business, but a DMS contract shouldn’t hold you back.

Cost

There’s nothing worse than thinking you know the price, and then getting nickel and dimed. Of course, these days it’s not actual nickels and dimes; it’s hundreds or thousands of dollars. With the average dealership using seven software systems to complete a sales transaction and with average monthly fees of $500 each, dealerships are spending approximately $3,500 a month, or $42,000 a year, to access their own data.

High add-on fees for integrations with other software systems should not be on the DMS partner’s cost menu. The price should be the price, with no surprises.

Experience

Some DMS providers are small start-ups, some large established companies. No matter what direction you go, the key is industry experience. Does the partner really understand what dealers want and need, and do they provide it? How do they treat clients? Do they approach challenges and address issues head-on, with an understanding of how the DMS fits into and supports the greater ecosystem?

Open Integration

A platform that offers open integration enables dealerships to easily connect their various solutions across vendors to create a more seamless workflow.

Through open integration, dealerships have the flexibility to choose the technology they want to use and don’t need to log into different systems to access it. Logging into one system is a big advantage, but even more important is having the data accessible across solutions.

Cloud-Based Platform

Key to selecting a DMS provider is finding one that can address current needs while also having the advanced technology available to evolve at the same pace as the industry. Cue the cloud technology.

With a cloud-based DMS platform, dealers get the most up-to-date version of software without having to maintain a server or do manual updates. Better yet, cloud technology can be accessed anywhere there is an internet connection, while also keeping customer information secure.

A DMS vendor can’t rest on laurels. Otherwise, it will go the way of the dinosaurs.

This article originally appeared on Wards Auto here.

 

Mandi Fang is vice president and general manager of Dealertrack DMS, a Cox Automotive brand. Before that, she spent two decades focused on developing auto retail products and building a performance-management model for dealers.

Three Success Factors for a Smooth DMS Install

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Changing technology at your automotive dealership has the potential to disrupt your day-to-day workflow, wreak havoc on morale, and halt sales with unknown amounts of “downtime.” In short, it’s not a light decision. But, finding the right Dealer Management System (DMS) is worth it in the long run. Fortunately, Dealertrack DMS installs 40 dealership’s a month with a trusted, professional team of experts. And we build on everything we do with feedback from our partners by establishing long-lasting relationships with the dealerships who grow with us. Just check out these success stories from three outstanding dealers and discover three success factors for a smooth installation at your dealership:

Standardizing Your Processes.

As dealerships grow and expand, acquisitions are common. Yet, bringing a new dealership into your business group often includes adopting old, legacy software systems, unique processes, and dramatically different management styles. When Goode Motor Group began growing rapidly, they needed to find a single, easy-to-use DMS provider they could rely on. With Dealertrack’s proven record for fast, easy transitions, staying on one DMS system company-wide, and across all locations, made analyzing data, training staff, and optimizing their growth plan much easier.

Read about Goode Motor Group’s success here.

Partners. Not Vendors.

When it comes to something as significant as switching your dealership to a new DMS, your provider should be as invested as you are. When Crestmont Cadillac made the switch to Dealertrack from their former provider of 35 years, the anxiety about the change was understandable. Building trust is no easy factor, but having a project champion—someone who believes in the change and communicates the mission from the top of the organization, down—can make a big difference. On Dealertrack’s end, the installation team was committed to being on-site for five full weeks prior to the change to ensure that each team member had the training needed to feel confident and comfortable.

Watch Crestmont Cadillac’s story here.

Ongoing Support.

Upgrading your DMS system has many powerful benefits, including faster access to data, integrated and open systems, and an easy-to-use interface. While these were among the top reasons for Bob Smith Toyota to partner with Dealertrack, the ongoing customer support has been the most important factor in the partnership. Since technology is constantly changing—just like the automotive industry—having a partner available to guide new team members, enlist training services, and build best-practices for the dealership has been invaluable.

See why Bob Smith Toyota uses Dealertrack here.

Dealers have many factors to consider before, during, and after a DMS switch. But, finding a forward-thinking technology provider who helps your team build better processes, offers ongoing support, and becomes a trusted partner will enable a smoother transition from beginning to end.

It’s Time to Think About a Change

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Dealerships rely on a network of business operations running behind the scenes to make sure all of their information is easily available when needed. The DMS is a core component of this, along with other major IT systems playing key roles in dealer operations, including sales, F&I, digital marketing, registration and titling, inventory, back office functions — the list goes on. Without these technologies, dealers simply cannot focus on customer service and building a positive buying experience.

When the technology isn’t working for the dealership, it’s time to think about a change. That’s not an easy decision, especially when it comes to your DMS. A lot goes into choosing a provider and then transitioning to a new DMS. Here’s a roadmap of what to consider when choosing a DMS provider, and why they should treat you as a partner, not just another customer.

Flexible Technology

One of the first things to look at is the flexibility of your provider’s technology. Salespeople and management used to hover over their desktop computers to access all the details needed to run their operations. That data was stored on-site in big servers. If a staff member was off property, good luck getting the needed information.

Technology has changed 180 degrees. Today, we need data that’s accessible and secure from any location. It should be available on laptops, smartphones, and tablets.

That availability from any device and location is key. Given how rapidly technology is changing, you should be confident your provider is keeping up with technology. What works now may not work in five years, or it may just be clunky and no longer supported. That’s why many dealers using legacy systems are rethinking their choice in technology. If a provider isn’t forward-looking and introducing new functionality, how confident are you that they’ll adapt to changes in the future?

Real-Time Data

Real-time data means different things to different people. For some, it means hours. But what you really should expect is one to two minutes at the most. Imagine a customer walks into the service lane with an appointment. You want to update that appointment with new information as you check them in on your tablet. What if that update doesn’t get pushed through for another 15 minutes? How does this impact your productivity? What about the customer experience you provide? Your DMS provider should be enabling your strategy rather than holding you and your operational efficiency back.

Accessing Your Data

It’s commonly accepted the data in your DMS is your data. However, the devil is in the details. Not all providers make it easy to access that data. Think about putting your money in a safe at the bank. It’s your money, but you can’t get it unless the bank is open, and you’ve brought all the right information with you. Perhaps, you’ll be charged a fee every time you want to get into the safe. Unfortunately, some providers hold your data hostage when archiving it.

Before choosing a provider, find out about their data access policy. Who can access the data? Who authorizes the data? It’s critical you make sure data ownership is spelled out clearly in the contract. You should be able to get access to your data whenever you need to. End of story. Security is always an issue, and that data should be protected. But it should not be held hostage.

Open Integration

The system architecture should enable you to partner and work smoothly with other vendors and software solutions in order to fit your strategy and needs. Just as data shouldn’t be held hostage, your DMS provider should make it an easy process to integrate with these other solutions, no strings attached. Some providers require customers to jump through hoops, like charging inflammatory monthly fees that are great for the DMS provider, but if it’s not making things easier for the customer, then what’s the point?

Flexible Contract Term

You should have the freedom to run your business the way you want without contractual constraints. Yet, with the average DMS contract length spanning five years, this is easier said than done. Delve into contract terms and length before signing on the dotted line. Flexibility to change providers is important if they can’t accommodate the elements vital to your business. Plus, when you aren’t locked into a contract, it’s your provider’s job every day to earn your business and help you succeed.

A Partner, Not a Vendor

Yes, your DMS will come from a vendor. But the smart vendors consider themselves partners. It shouldn’t be a one-and-done type of sale. If you succeed, they succeed. Each dealership has different needs, whether that’s staff members fearful that making a change will impact their sales, or someone who doesn’t want to send an email and wait back for a reply to a pressing question. A partnership values both parties. Mike Tourtillott, general manager of Sisbarro Dealerships says it well: “We needed a partner who would really be there for us. Someone who would pick up the phone when we call, and also give us a system that works around what we do and not the way they think it should be.”

Creating this partnership fueled by a DMS provider that is flexible and adaptable will be essential to the success of your dealership and the ease of the switch process. With this roadmap in place, you’ll be on your way to partnering with a DMS provider that’s willing to mold to your strategy rather than the other way around.

A version of this article originally appeared on Digital Dealer here.

About the author, John Grace

John Grace

John Grace is associate vice president of operations for Dealertrack DMS, Cox Automotive. Grace brings nearly 20 years of high-tech operations and support experience to this position. Grace joined Xtime in 2011 from Tastingroom.com where he was vice president of operations. Prior to Tastingroom.com he spent nearly eight years as a member of the executive staff of the Location Services Division of Autodesk. At Autodesk, he played a critical role in the growth and expansion of the division, delivering middleware and application solutions to wireless telecommunications companies. He was responsible for managing SaaS solutions, customer premises equipment, and customer support for domestic and international customers. Grace has extensive experience with pre-IPO start-ups, as well as more established companies in all phases of technical and business management.

Hiring for Outdated Tech is An Outdated Practice

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Automotive dealerships have a lot of complex, moving parts. Inventory management and sales, parts and services, operations and accounting—everything has to work together to make the business run efficiently and smoothly. And the key ingredient driving your business? The people.

But retaining the well-trained and highly skilled staff is becoming more and more difficult. With the average tenure of employees as low as only 18 months, General Managers (GMs) and Dealer Principal Owners (DPOs) are in a tough spot. Hiring and attracting new team members isn’t easy. And here’s the secret: when it comes to finding new staff, you’ve got to keep up with the changing pace of technology. Bottom line, if you’re trying to refill a role based on outdated technology skills, you’re playing a losing game.

Hiring the Millennial Generation
Anyone born between 1980-2000 (roughly) can be considered a Digital Native, that is, a person who grew up with technology from an early start. Unlike their predecessors, this generation never experienced an office culture without access to emails, digital retailing, online advertising, and similar shopping experiences. So what does hiring a digital native, or millennial, mean for your dealership?

  • First, even though millennials are tech savvy, don’t be surprised to discover they can become error-prone and less productive by a tendency to multi-task.
  • Second, the myth that this generation prefers to interact solely through text and online methods is just that—a myth. Many millennials thrive in group settings, sales roles, and person-to-person contact.

For DPOs and GMs, it’s clear that sticking a millennial in a role where they must learn outdated technology, memorize mindless codes, and multi-task with slow technology is certain death.

Don’t Forget Priority #1
Your dealership’s number one focus should always be on customer satisfaction. Loyalty, trust, retention are all fostered by building good relationships. For the owners at Heritage Ford, anything else was seen as a total distraction. When they began shopping for new Dealer Management Software (DMS) technology, they quickly realized the need for an easy-to-use system that allowed their focus to return to priority #1: the customer.

The solution? It’s simple.
Hiring and replacing lost employees can be extremely cost-prohibitive for dealers. For many, the amount of money it takes to replace lost team members can reach $45,000 per employee! Is outdated and old technology keeping the generation of automotive talent from joining your workforce? Would an easy-to-use, forward-thinking DMS allow more tech savvy, digital natives the chance to engage with your customers without the hindrance of learning your current, clunky tech?

Learn more about overcoming your Staffing Struggles here.

 

Statistically Speaking …You’ve Got Staffing Struggles

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Dealership Principal Owners (DPOs) and General Managers (GMs) are struggling with hiring, retaining, and even recruiting top talent in the automotive industry. If you think your dealership doesn’t have a problem, you need to take a closer look.

Let’s look at the facts:

  • In 2016, employee turnover at dealerships in the united states increased by 3% — from 40% to 43%.
  • In one year nearly one out of every two employees left dealerships for greener pastures.
  • According to the NADA dealership workforce study, turnover will cost the average dealership $7.5k in gross profit… per employee.
  • Across the industry, turnover is costing $8 billion a year!

Those numbers aren’t pretty, but there is hope. Watch the video above and visit our Staffing Struggles resource page to discover more.

The struggle is real—Learn More.

 

Technology Without Teamwork Hurts Where it Counts

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A lack of teamwork hurts where it counts. So, who’s counting? The average dealership invests significant dollars in technology every year. If you’re not sure if you’re overspending, chances are you haven’t fully calculated the return on investment (ROI) of your purchases. And many dealerships are simply doing their best to make informed decisions only to be left high and dry by vendors looking to turn a quick profit. Don’t get left high and dry – demand better support from:

Your Vendors

When it comes to selecting a vendor to power your dealership make sure you treat any contract or deal like a true business partnership. Before you sign anything, ask yourself the same questions you would if you were going into business together—because you are—and it could cost you time and money to start over if the partnership doesn’t work out. Does this vendor have a philosophy on doing business? Do they have a plan for success? And do you agree with it? How do they define success? If their definition of success is not about making your business look good, it’s time to move on.

Where it counts: Most dealerships use up to seven software systems to run their store. With seven integrations and average monthly fees of $500 each, dealers are spending $3,500 a month to access their own data. That’s $42,000 a year! (Click here to find out how much you’re paying.)

Your Team

We’re all in the same ship…but is everyone rowing in the same direction? Has everyone on your staff accepted your company’s mission, and are they optimistic about adopting and learning the new technology you’re installing? Could this become part of your career development trajectory to help your team grow into their roles?

Where it counts: It’s OK if your DMS is new to your team—not everyone has to be an expert right away. But your DMS should be easy enough to learn that it’s not driving away potential team members and job candidates. According to the 2018 NADA Dealership Workforce Study, the turnover rate for the automotive industry is 43%. Hiring and retaining team members is extremely costly. If your technology is driving away employees, you’ve got a technology problem and a money problem.

Your Resources

There’s nothing worse than signing a contract, walking away, and getting left high-and-dry without any support. You’ve already invested a lot of money into a new system, and now you’re supposed to become a subject matter expert and trainer to the rest of your dealership, too? Does your new partner offer a peer-to-peer community, training tools, and learning support? When does this start? Try to find a vendor who supports a culture of learning to the community before you even sign a deal, like the NADA Professional Series, or other industry conferences and expos. Your ongoing success depends on continued communication, support, and training from your vendors because technology continues to adapt and adjust every day.

Where it counts: In this Cox Automotive 2018 Service Industry Study, only 54% of new hires receive enough training prior to beginning work. Feeling undertrained can lead to higher turnover and abandonment of technology tools.

It doesn’t have to be this way. Technology tools, platforms, and systems are absolutely integral in today’s digitally connected auto dealerships. But, you can make an informed decision and partner with a provider who has your best interests at heart, provides better resources for continued use and development, and empowers your team to be their best.

Ready to improve the ROI of your technology? Get the Auto Dealers’ ROI Guide here.