Category: Trends & Insights

A Truly Versatile DMS Connects All Your Systems

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The General Managers and Dealer Principals that I speak to are always brainstorming new ways to improve their business. And I mean always. It’s like they can’t turn it off. I’ve been in their shoes, too, with plenty of years as a General Manager, myself. I get it. In retail automotive, there’s simply no time to sit back and watch your business run, thinking, “Things are just fine the way they are.” When things are up—your competition down the street is doing better. When sales are down, maybe inventory is low, you focus on acquisitions and leads. And, always, you’re looking at data to run numbers from each department. When it comes down to it, running a dealership demands that all systems are working in sync.

I know for a fact that the right DMS technology can help your business thrive—earning you more money and helping your whole team to do their jobs more freely. When it comes down to it, the right DMS technology is a game-changer.

Flexible Technology Connects and Improves

Your dealership deserves technology that doesn’t compromise when it comes to the important factors. Yet, a lot of the General Managers I meet are usually settling in several key areas when it comes down to it. They sacrifice on integrations, but they end up saving on cost. Or they find a great DMS that works with their CRM, but it’s cumbersome and doesn’t have flexible workflows. “Well, you can’t win them all,” is basically the sentiment. And that’s how it often goes. A truly versatile DMS should empower and improve the way your dealership performs by connecting your technology. Flexible integration with all of your dealership technology breaks down the silos that create cumbersome workflows and drive up fees from your providers.

Long Term Contracts and Hidden Fees

When it comes to your technology provider, one major red flag is an insistence on signing lengthy contracts that ensure your partnership long into the future. You don’t know what the next two years will look like—just look at the last two! When a vendor no longer has a need to earn your trust every month, you’re in a bad position. Does your business have plans to expand? What happens when you outgrow your current provider? Whom do you contact when you discover you’re paying more than you expected due to costly integration fees? In one study, an average dealer could expect to spend $42,000 a year on integration fees.

Easy to Learn is Easy to Use

More of the buying process has moved online. But the idea that buyers are forgoing any interaction with your sales team is sort of a misunderstanding. While it’s true that heavy digital users have reduced their time at the dealership by up to 40 minutes, in one report, they still visit. Some interactions will be 100% virtual. Others will take place in the showroom or the service center. Optimizing efficiency is key. And the way to do that is by streamlining your workflows, reducing the friction points your staff encounters when switching from disparate software systems that enable transactions and when pulling valuable data. When your team has access to technology that puts data right at their fingertips—and doesn’t slow them down—they thrive. And so do you. Your DMS technology shouldn’t take weeks and weeks to master. In fact, the sooner your team can reach productivity, the better they’ll feel about their roles.

It’s been quite a whirlwind year for dealers that I’ve talked to. Inventory levels have yet to recover. The sales process continues to move to a more digitized model. And service optimization is making it easier than ever to connect consumers and your service lane. Buyer satisfaction rates are up, year-over-year, to 72%. But bad habits are often formed in good times. And, without a partner in your corner, things like inflation, rising interest rates, and the cost of doing business are going to catch up.

Your dealership deserves technology that doesn’t compromise when it comes to the important factors. Ready to learn more? Don’t wait:. Visit Dealertrack.com today.

 

About the Author | Randy Wilson

With over thirty years of experience in the retail automotive industry, Randy Wilson brings exceptional wisdom to his role as Director of Performance Management to the Dealertrack DMS team. By leading a team of Performance Managers who have all previously held high-level dealership responsibilities in their careers, he is committed to driving rapid transformation and building measurable growth for our partners. Randy joined Cox Automotive in 2012 and works tirelessly to bring real-world experience into the development of technologies that enhance the day-to-day performance and efficiencies of every aspect of the business. In his spare time, he can be found sporting his Cheesehead gear and spending any spare moment boating and fishing on the ocean. He and his wife have four children together and five grandkids.

Seven Ways to Optimize Your Back Office

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“The right controller can mean the difference between dealers that thrive and those that are struggling to survive.” – Karli DeVall, CFO, Tim Dahle Nissan

 

Your dealership’s back office is easy to overlook when things are going well. But behind the scenes, accounting managers and controllers work hard to keep the lights on and the budgets balanced. Identifying a rock star controller—and elevating potential leaders—can empower your accounting team to improve profits and elevate your entire dealership’s operations. Here are seven quick ideas to build up your accounting team for the optimal back office.

1. Prioritize Training

Give your team a structured onboarding program and ongoing training opportunities to keep them engaged. When your accounting team and controllers are well-trained and have a clear path to high performance, they can see their role in the dealership plan and contribute to the bigger profitability picture.

 

2. Improve Communications

Give your accounting team the tools they need to communicate more efficiently with each other and with your technology. Better communication can empower your team to boost efficiency and evolve with time and new technologies.

 

3. Adopt Paperless Processes

Provide your team with the infrastructure to adopt paperless processes and digital document scanning. Going paperless improves communication between your teams and departments, and creates efficiencies throughout the dealership.

 

 

 

4. Unlock the Data in Your DMS

Your accounting team has access to troves of data, but they need a way to filter it down to metrics that matter. Empower your team with technology that makes month-end reporting accurate and timely, while also helping them to meet monthly sales and performance objectives and trends.

 

5. Invest in Automated Technology

Embrace digital technologies that eliminate manual processes. When your accounting team is free to work without restrictions that slow their progress—and ultimately reduce the risk of error—they flourish and thrive! New reporting tools that streamline reports and manually compile data with fully automated General Ledger mapping, like Critical Analytics, are designed to increase efficiency and free your accounting team from the burden of manually compiled spreadsheets from multiple locations that add hours to your team’s workload.

 

6. Help Your Team Embrace Change

Change can be difficult for accounting team members. But truly great leaders can help them to see their vital role in how technology is implemented and used at the dealership level. When they’re better able to embrace technology, the entire dealership stands to benefit by becoming more efficient and more profitable.

 

6. Identify Accounting Team Superstars!

Identify true leaders among your accounting team—those who use and embrace technology. Empower them to take the lead when it comes to training new hires, being an ambassador, and rolling out new technology. Find ways to connect your leaders and super users together to unlock the true potential of your team and technology.

To learn more quick ways to build up your accounting team and thrive as a dealership, visit the Controllers’ Hub.

 

 

 

 

Information is Good. Knowledge is Critical.

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Working in retail automotive, we hear a lot about data. It’s practically everywhere—troves of it. In fact, most dealer management systems are filled with all the data we could ever need. And if we had time, we could dive in, all day long, and consume it.

It sounds like a joke, but when it comes right down to it, a lot of us simply throw our hands up. Instead, franchise dealerships operate month-to-month—most of the time looking back at past performance. How did we do? Where did we fall short? Were we close to hitting our goals? Just imagine if we could flip that. Harnessing predictions, unlocking data’s true potential, and influencing key-decision-making would make it possible to act fast, and take swift action based on data, not just our gut feelings. The events of 2020 and 2021 taught many dealers a lot of valuable lessons about the ability to pivot and adapt to change. But if we can’t leverage data—without always being reactionary—the true cost to our business will always be realized in hindsight.

Actionable Insights We Can Use

As a Performance Manager, I have the privilege of spending time working one-on-one with franchise dealers, helping them get the most out of their technology. Whether we’re standing up a new Dealer Management System, working out a new integration, or updating processes, there’s almost always a rough spot or two to work out. But there’s never a lack of data to sort out. One of the more rewarding parts of the job is seeing the “lights turn on” for those new hires and team leaders who’ve tapped into their DMS and found data and analytics that deliver action-based insights. And that’s kind of the whole point. If your reports aren’t easily digestible, organized by role, and flexible enough that senior leaders have access across departments, then they probably won’t see much use.

KPIs that Drive Productivity

Everyone who has worked in a dealership has been frustrated by underperformance. Yet, the push to “just do better” or “increase production” rarely does the trick. Upping the hours your service team works doesn’t result in higher profitability. It usually results in burnout, overworked staff, and a net loss. Data from your DMS—when paired with Critical Analytics—works like a high-powered calculator. With detailed dashboards and reporting modules, our partners get drill-down KPIs into the daily performance output of team members across the dealership. This is the kind of data that you can use to take small steps, day-by-day, month-by-month, to improve by setting benchmarks and goals that result in sustainable productivity. So you can ditch the guesswork and help your employees, all the while avoiding burnout.

The Future is Data-driven

Data is not a temporary technical advantage. It does more. And we’ve yet to unlock its potential within the dealership. Right now, we’re at the tip of the iceberg of how data analytics can improve our industry. When it comes to understanding where our revenue comes from (or why it’s suddenly going to crash), we need to use data to look six months or further into the future of our business projections. Critical Analytics within the DMS provides monthly predictive dealership pacing, based on how you’ve performed so far. So, for example, when those cars come back onto your lot to sell, you can be prepared. But, our team is still thinking bigger. Imagine harvesting DMS, CRM, F&I Data all together to look even further. There’s more to the picture that we’re not seeing. The insights are there.

Data from your DMS matters more than ever. Automotive technology is more integrated, more interconnected, and more powerful than it’s ever been. If we can make the mindset shift from hindsight to foresight, our ability to drive change before a disaster will be unmatched.

Ready to learn more? Schedule a demo with your Performance Manager to uncover the data within your DMS using Critical Analytics today.

About the Author

Tom Tellepsen | Dealertrack DMS Performance Manager

 

Tom Tellepsen is a Performance Manager at Dealertrack DMS with over 18 years of experience helping franchise automotive partners reach their goals by optimizing budgets, building better operational procedures, and obtaining the right mix of tech and talent. Prior to joining Dealertrack, Tom worked as a General Manager and General Sales Manager in some of Virginia’s leading franchise dealerships.

How to Thrive Against Top Dealership Challenges

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Do you have what it takes to thrive against the competition? With threats against your bottom line, people poaching your top talent, and inventory dwindling every time you take count, it might feel like the challenges facing your dealership just keep adding up! Discover the Top Seven Challenges dealers are facing and How to Survive Them. Here are just a few…

Supply Chain Shortages

It’s no secret that inventory is taking a hit from industry-wide supply chain shortages. But the real “kicker” is how it’s impacting buyer habits. Up to 48% of potential buyers are hanging onto their vehicles longer and longer and postponing their next purchase due to low vehicle inventory.

Consumer Data Challenges

You use data to uncover shoppers most likely to buy. Yet, outdated CRM data might just be your worst enemy to date. Find out how thriving dealers are utilizing the right data to match deal-to-buyer and win against their competitors.

Changing Buyer Habits

Two out of three buyers surveyed in our study are likely to buy their next car 100% online. The future of digitization in retail automotive is here. How prepared is your dealership, and your staff, to meet the needs of these new buyers?

Discover the Seven Tips for Surviving and Thriving—Learn How.

Flexibility, Dedication, Commitment from your DMS Partner

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Are you in complete control of your dealership’s destiny? Or, are you being held hostage by a DMS that wants to run your business a different way?

When your systems are connected and coordinated, and your central technology aligns with your dealership’s unique goals, you have the freedom to decide how best to run your business. You can maximize efficiency, reduce unnecessary costs, and improve profitability.

With Dealertrack DMS—the only dealer management system specifically built to enable reliable, affordable connectivity with your other dealership technologies—you control your own destiny. You don’t have to rely on a rigid DMS system that dictates how you do business. You run your dealership, your way.

  • Reliable, affordable connectivity with best-in-class solutions
  • An experienced partner committed to your success
  • 2020 and 2021 Dealers’ Choice Award for best DMS

Watch the video below to see how you can find efficiency gains and reduce risks, inefficiencies, and bottlenecks with a connected and coordinated dealer management system.

Yes, You Still Have Inventory Issues

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Inventory acquisition challenges were a huge headache last year. And, as luck would have it, they are a pain in the neck this year. Unfortunately, this industry-wide problem is still having a profound impact on profitability. And while some dealers are choosing to “wait it out,” smart dealers are finding strategic ways to succeed now. We’ve pooled the data from the past eighteen months that looked at best practices from thriving dealerships and practical solutions for inventory challenges. The resulting five operations strategies will help you and your entire operation overcome your inventory obstacles and supply chain challenges before it’s too late.

Operational Strategy 1 – Aim for Departmental Cooperation

Your target? Tear down the traditional silos creating division, confusion, and disconnection! Your best tools for this strategy are going to be communication and data to spot opportunities, target trade-ins, and acquire vehicles. Ask yourself, are you potentially missing opportunities because you’re not collaborating across teams? 33% of thriving dealerships use cross-departmental data to spot opportunities.

Operational Strategy 2 – Adjust Your Processes

It’s time to make a plan. Inventory acquisition goals need to be tied to details about pay structure and approaching customers. Rethink your current pay structure and set new, and exciting, goals around bonuses to help drive acquisitions for all team members who play a role in the process.

According to research from Cox Automotive, 50% of thriving dealers utilize activity tracking for customer web and search history.

Operational Strategy 3 – Create Useful Reports and Measure Analytics

The information you’re tracking can help your dealership succeed. According to research from Cox Automotive, 50% of thriving dealers utilize activity tracking for customer web and search history. Don’t just rely on your gut—use data to determine which used vehicles are in high demand. Then, share the data with your team to be on the lookout for these cars when they come across your service lane.

Operational Strategy 4 – Time to Team Up!

In addition to the very frustrating and very real issue of inventory shortages plaguing your business, you still have to deal with…well, your business. Retail automotive often faces more than one challenge at a time (like keeping your top talent and fighting the data war). So, your best bet is to partner with a provider who has your back. If you’re going to improve your numbers, make sure you’re working with an expert who can help you optimize your reporting and get to know your technology inside and out.

Operational Strategy 5 – Think Big(ger)

A simple shift in approach may not hit the mark. To overcome the challenge of inventory shortages, you’ll need to get your marketing, sales, service, and operations in sync. Cox Automotive delivers first-party transactional data from Autotrader and Kelley Blue Book allowing you to connect workflows across all departments. This dealership-wide approach ensures your entire business is protected from this—and the next—challenge.

To learn more about these strategies and other tips for acquiring inventory, check out our guide, “Operational Solutions for Inventory Challenges.”

 

 

 

Run Your Business Your Way with a Flexible DMS Partner

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by Randy Wilson, Director of Performance Management

The past few years have only accelerated forecasted disruptions in automotive retailing. Today, you’re being tasked with driving success in the face of tight inventory and increased competition. Tomorrow, it could be—and will inevitably be—another challenge. It’s the nature of our rapidly transforming industry. Day-in, day-out, though, your primary goal is to maximize your efficiency in sales, marketing, fixed ops, inventory management, accounting, and operations in ways that give you an edge. If there is a connection failure with even one area it’ll cause your dealership process to fail and waste your team’s time. Even worse? It all lands on your customer’s lap in the form of slow processes and a poor experience. All that work your team put in to build a top-notch experience and win-over new customers will have been for naught.

An often invisible pain point, right under your nose, could be the very system you rely on to drive your entire business operation—your DMS. If your dealership runs on a rigid system designed to grow the bottom line of the vendor, not dealership, you could be headed for trouble when the next ‘disruption’ impacts our industry. No doubt you know the best way to run your business. But are your vendors giving you the flexibility to run your business your way? A flexible DMS isn’t just a nice-to-have. It can make or break your dealership’s operations. Failing to partner with the DMS provider that best aligns with your unique goals exposes you to unnecessary costs, risks of operational inefficiencies, and bottlenecks, not to mention hidden fees, integration costs and endless contract terms.

Advanced dealers understand their success relies on efficiency gains from connected and coordinated systems. These systems enable reliable, affordable connectivity with best-in-class solutions across sales, marketing, fixed ops, inventory management, accounting, and more. Let’s break down what you should be looking for (and expect) from your DMS and how the whole is greater than the sum of its parts.

 

Platform Flexibility

In an age of online retail, third-party integrations are more important than ever in dealership software. You know it, and your software providers know it. Third-party integrations let you streamline interfaces and enable the flow of data freely between systems, which reduces human error and costs and increases profits. Integrations also let you track your buyers online and build a better shopping experience across platforms.

Real-time, bidirectional technology integrations enable a seamless online-to-in-store buying experience and allow you to work with who you want. In other words: you can select the software you want. You can continue to use the CRM you prefer because it connects to the DMS you select, for example. You don’t have a vendor telling you that you ‘have to’ use their preferred provider. You can set up a workflow for your employees that makes sense, without frustrating interruptions, and create a smooth customer experience as well.

Opentrack, our third-party certification program, ensures you can integrate seamlessly with nearly 200 world-class automotive partners without heavy penalty. This flexibility keeps you in control of your data and your destiny. By being able to customize your DMS to best meet your needs, you can run your business the way see fit.

Simplified Accounting and Reporting

There’s now a way to maintain greater control with modern accounting, payment, and reconciliation processes that deliver actionable business insights that drive informed decisions and growth. Our payment solutions, for example, are powered by an integration with Global Payments for streamlined payment and accounting processes for you and your customers with features like digital A/R statements and service invoices, flexible payment options, card-present transaction solutions, automatic GL writeback, and more.

Simplification should also extend to your payroll and HR functions. Powered by a real-time integration with Netchex, our solution simplifies HR and payroll needs, including processing and administration, and HR and human capital management, reducing costly errors and freeing your team to focus on more meaningful HR activities. The solution also features two new reports supporting end-of-month accruals and technician productivity.

Coordinated Business Office

While satisfaction with interactions with finance has increased, your shoppers are probably still frustrated with the length of time it takes to complete the buying process. Integrations with new Bureau and DMS providers and workflow enhancements mean you can close deals anytime, anywhere with ease through automation and digital signing tools that will help maximize profits and delight customers.

Efficient Fixed Operations

Your car dealership is likely several businesses under the same umbrella. And when siloed? Your business will struggle. Even though parts and service departments are the lifeblood of dealerships, they generate just a fraction of the industry focus given to new or used car sales. That’s troubling because parts and service departments deliver a consistent volume of business and profit, year after year. Just imagine what your parts and service could do with a little more attention. Our approach is to help you standardize and modernize parts and service procurement processes; streamline functions and systems; and use strategic integrations to automate tasks, speed up workflows and reduce the risk of error.

New to our DMS solution are four important enhancements that can really bolster your efficiency:
  • The Parts Management Toolkit streamlines and digitizes parts ordering and management processes.
  • The Inventory Aging Tool automatically identifies obsolete and at-risk inventory and eliminates the need for multiple reports or large dumps of DMS data.
  • Parts Order Reconciliation reduces stock ordering time by up to 40% with centralized and simplified interface.
  • Parts Order Templates ensure data accuracy and reduce the time it takes to order parts by up to 70%.
Experienced, Hands-On Support

In the new age of online and in-store sales, a DMS that offers outstanding customer support and trusted partnerships matters just as much as, if not more than the technology itself. A DMS that comes ready equipped with a Performance Manager — an experienced industry expert, who understands how to leverage technology to interpret data and make tough decisions — can help you achieve their business objectives and ensure profitability and growth.

Working together with DMS support teams, our Performance Managers can offer a personal point of contact to deliver training, feedback on areas of opportunity, and tips and tricks that go well beyond traditional tech support. Our Performance Managers average 10+ years of dealership experience and come standard with every Dealertrack DMS partnership.

Named Dealers’ Choice for Best DMS in 2020 and 2021, Dealertrack DMS is backed by Cox Automotive, giving you the security of an experienced partner that understands your business challenges, is dedicated to your success, and is motivated to earn your business every day.

It’s the flexible solution that lets you, not the DMS provider, dictate how best to run your business.

About the Author | Randy Wilson

With over thirty years of experience in the retail automotive industry, Randy Wilson brings exceptional wisdom to his role as Director of Performance Management to the Dealertrack DMS team. By leading a team of Performance Managers who have all previously held high-level dealership responsibilities in their careers, he is committed to driving rapid transformation and building measurable growth for our partners. Randy joined Cox Automotive in 2012 and works tirelessly to bring real-world experience into the development of technologies that enhance the day-to-day performance and efficiencies of every aspect of the business. In his spare time, he can be found sporting his Cheesehead gear and spending any spare moment boating and fishing on the ocean. He and his wife have four children together and five grandkids.

Keep Track of Dealership Performance with a Flexible DMS Partner

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It’s the beginning of a brand new year—and that means many of you are likely in goal-setting mode. With a challenging 2020 and 2021 behind you, how are you planning on achieving profit growth? Inventory shortages are here to stay. And dealers still face staffing and hiring challenges as recent reports show that we’re roughly 3.6 million jobs below February 2020’s numbers.* If you’re not utilizing your dealer management system to track your business’s performance—and to identify actual steps for improvement—I can help. In fact, your DMS is where you should start before you go too much farther. Here’s how to utilize the DMS to track, optimize, and improve the performance of your dealership.

The Dealer Management System and Data

The DMS running your business is like a giant calculator working behind the scenes, generating data, and keeping track of your business’s performance. And once you learn how to tap into that data and uncover its potential, you can unlock the hidden potential of the DMS that allows you to make the decisions that steer your dealership toward profitability.

Small Steps Add Up, Big Time

When it comes to goal-setting, again, the start of the year tends to be primed for big goals like “increase profitability.” The problem with a broad, or even vague goal, like “make more money than last year,” is that businesses often make bold changes (see: unsustainable) to attain them. There are actually very small steps that you can make, on a day-to-day basis that empower your managers, service staff, and the entire organization to improve performance.

Know Your Numbers

It all begins with knowing your numbers, what they mean, and discovering ways to improve them. When I work with my dealer partners, I always take a look at a dealer’s Gross as a Percentage of Sales. Your Gross Profit as a Percentage of Sales is one key metric that will help you understand how you’re performing. Take a look at the graphic below:

 

Simply put, Gross Percentage reflects how much money is retained on a dollar sold. For example, a dealer with a 65% Gross Percentage, earns $65 of Gross Profit on a $100 sale. If you could improve that metric to say 70%, you’d keep an extra $5 per $100 sold. (Do the math on how many dollars in sales you do, in any given time period, and it starts to add up fast!) Easy right? Well…maybe not easy. But, it’s well worth the effort.

Now You Know. Here’s How to Improve.

So let’s look at some ways to improve Gross as a Percentage of Sales. Starting with the report pictured above, and following the five basic steps outlined below, your DMS has the data you need to set actionable goals.

  1. Know your current Gross Percentage – Dealertrack DMS users can find this data easily in your Dealertrack DMS DOC’s or Labor Profit Analysis. (Ask your Performance Manager to help you if you’re lost.)
  2. Set a realistic and attainable goal – Process and profitability improvement is not a quick and constant fix. It requires attention and effort, so aim for modest initial improvements and continually move the bar.
  3. Communicate often – Help your team understand why you’re trying to improve, what the goals are, and what the overall benefit will be. This can help generate buy-in and improve effort from all team members.
  4. Track and measure performance – Identify low Gross Percentage RO’s through consistent reviews of Labor Profit Analysis in the DMS. Don’t wait until the end of your quarterly business review to find out you have an underperforming department or team member.
  5. Analyze performance to improve – Understand the root cause of low performance and develop strategies around them. Do you have a lack of skills training that could help a team member improve performance?

To improve Gross Percentage, you must find ways to improve the gap between cost and sales. In an already highly competitive market, this may mean improved dispatching processes, eliminating single line RO’s, managing discounts, or other techniques catered to your needs. The key to any of them is focus. Stay focused on the objective, give it the attention it deserves, and watch your numbers soar!

Run Your Dealership Your Way

Ultimately, the way you run your dealership business is, well, your business. And the technology providers you choose to partner with should be just that: partners. If you don’t have a flexible partner in your corner helping you unlock the data you need to further your goals, it may be time to find a new one. As a Dealertrack DMS Performance Manager, it’s my goal (and my job) to ensure you and your entire team are optimizing the technology driving your dealership. If you’re heading to Las Vegas for this year’s NADA Show, my team of dedicated industry professionals will be on hand to showcase all the ways our DMS, backed by Cox Automotive, can help.

Are you going to NADA Show 2022? Our team has several new enhancements and integrations designed to streamline Sales, Marketing, Service, and Accounting—don’t hesitate to book your demo today.

About the Author | Michael Panozzo

Michael Panozzo is a Senior Dealertrack DMS Performance Manager who works with dealerships to maximize DMS utilization and drive process and profit improvement. Michael came to Cox Automotive in 2016 after a 15-year career working in and managing auto dealerships where he honed his skills in operational excellence.

 

 

 

 

 

Source:
*Hireology Report: December BLS Jobs Report: Prioritize HR Investments

Tips for an Ongoing Inventory Crisis Plan

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Sometimes, a threat emerges that takes everyone by surprise. You may have handled the past two years very well—and high customer sentiment is proof—but an ongoing inventory crisis is testing dealers like never before. So, what do you do when your lot is looking bare, your inventory is lean, and you can’t sell your way out? With car volumes at 43% below 2020 levels, it’s time to formulate a plan.

Tip 1: Use Data to Make Inventory Decisions

You’ve been in business long enough to understand the value of data when making important decisions. Data can help you know where to look for cars, which models to go after, and how to price used inventory. The data that your dealership already has on its previous sales and on shopper interest—search volumes on your own website, for example—will teach you which used cars are most popular and which could be most profitable.

Tip 2: Source inventory From Everywhere

Armed with the knowledge of which cars are in demand, you can use your database and your customer records to find current owners of those cars who might be motivated to sell. Specifically, look at upcoming lease expirations and reach out early to begin discussing trade-in options. You can also find inventory by mining recent digital retailing leads with trade-ins attached. Finally, look through your database of existing customers for repair-weary owners who might be ready to sell—those who have recently made service appointments or declined service recommendations, for example.

Tip 3: Rethink Your Marketing

During periods of lean inventory, many dealers decide to cut back on advertising or cut it out altogether. While it might be tempting to try and save some marketing money while you have fewer cars to sell, the strategy generally backfires. In fact, companies that cut their advertising during the pandemic saw a 7% drop in leads while those that continued saw a 2% increase. Instead of eliminating your ads, focus on adjusting the message to focus on vehicles with more availability. You can also pivot your promotions to cover used inventory, vehicle service, and “we’ll buy your vehicle” campaigns.

By now, you’ve learned to deal with just about every challenge this industry could possibly throw your way. The current inventory shortage, brought about by global supply chain disruptions, is also nothing you can’t handle. By following these tips, and by getting a little bit creative, you can develop a cross-departmental strategy that keeps your profits high even as inventory is low.

 

To learn more dealership survival tips, including more information about how top dealers are thriving in today’s environment, download our eBook, A Dealer’s Guide to Dealing with (Almost) Everything.

 

 

5 Steps for Dealing with Lockdown Markets

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Necessity is the mother of innovation. It’s the proverbial catchphrase of progress, and in the past 18 months, it’s practically become the new motto of automotive sales. When dealers are put in difficult situations—pandemic-imposed lockdowns, for example—many are forced into survival mode. Yet, a revealing look back at the 2020-2021 year in automotive revealed something fascinating. Many of our thriving dealer partners who embraced the quick shift to digitization (up to 83%) said the changes made now were creating long-lasting, positive results. In other words, the change may have been swift, but there’s simply no going back.

Things may have settled a bit—for the time being—but there’s no telling what’s in store for the future. When the next big digital shift hits hard and fast, will you and your business be ready to lock down and make those difficult decisions once more? Based on the data and feedback from our thriving partners, here are five steps for dealing with the next lockdown market.

1. Go Digital

The move to digital shopping, servicing, and even inventory management is changing. Your dealership depends on data from your DMS to manage everything from payroll to parts inventory to Tech Time. Yet, for many franchise operations, these systems can be disconnected, with multiple data entry steps, slow upload processes, and manual re-entry. While switching over to a new system may seem overwhelming at first, leveraging the assistance of a reliable partner (not just a vendor) to ensure you’re connected goes a long way. Going digital is a no brainer, for your customers at least. But, going at it alone? That might be a bad move.

“A DMS is such a critical part of the dealership, and choosing Dealertrack DMS was a no brainer… But the number one thing for me, hands down, is the fact that Dealertrack DMS comes with a Performance Manager.” — Matt Garner Dealer Principal, Downtown Auto Group

2. Brand Your Digital Presence

As more and more dealerships adopt digital technology, implementing new technology tools alone isn’t enough. You have to find a way to differentiate your offerings from all the rest. Your dealership has its own reputation, identity, and brand. And you’ve worked hard to establish that identity. Therefore, your online presence should also encompass its own name, logo, and visual identity. Remember, your online presence should be grounded in your core brand. But allow your online presence to exist as its own entity by adding the word “Online” or “Direct” after your dealership’s name.

3. Have a Strong Online and Social Media Presence

Leverage your social and online presence to convey closures, updates to holiday hours, and safety regulations. Use your platform to share important information with your consumers, including (and perhaps most importantly) about how they can continue to do business with your dealership. Take time to make sure your Google information has up-to-date store hours and that everything a prospective customer could find online about you matches. Nothing is more frustrating than conflicting customer-facing information about how, when, and where they can contact your dealership.

4. Offer Convenience Services

Lockdowns don’t just impact car sales. The service side of your business needs to make big changes too. When consumers are concerned about health and safety, they place greater value on convenience services like service pick-up and drop-off, rideshare, and loaner vehicles. Think about services that increase value to the customer, and spread the word about your digital service offerings. On the car sales side of things, offer convenience solutions that are on par with your in-store offerings. Home deliveries, for example, should involve a delivery person that can give your customers the same superior vehicle handoff experience they get at the dealership.

5. Facilitate Remote and Online Services

Even during lockdowns, the hiring and onboarding process must go on. It’s possible, even probable, that this process will be accelerated during a lockdown market, which can present problems. With technology that enables you to complete more of the paperwork and onboarding process remotely, however, your employees can hit the ground running and be more productive right out of the gate. This concept also applies to your customers. A DMS that gives your customers more online options, including facilitating faster service pick up and drop off, better communication (texting the status of car while it’s being serviced), and a faster sales process, you can work around restrictions and still give customers the experiences they want.

The necessity of recent lockdowns, and the possibility of future ones, has paved the way for industry innovations that are here to stay. The future is now, and there’s no going back. Top dealers are taking advantage of the “new normal” to implement new technologies and practices that will shape the future of the industry, while seeing real benefits in present day.

 

To learn more dealership survival tips, including more information about how top dealers are thriving in today’s environment, download our eBook, A Dealer’s Guide to Dealing with (Almost) Everything.