The average dealership uses 18 software systems to run the store. That’s three times as many as just a few years ago. The problem is, more integrations doesn’t mean more flexibility. Most integrations come with fees, both expressed and hidden, and restrictions that back dealers into an expensive corner. Learn more about our integrations.
Automotive dealerships do more than sell fast, shiny cars to eager customers. When it comes to adopting technologies to improve workflows, reach new customers, and do just about anything and everything, dealers are pretty “tech savvy.” But, at what point are your systems and programmable platforms doing less to help, and more to hinder, your business?
It turns out, dealers’ are using nearly 7 software technologies to run their businesses. When it comes to the technology within your auto dealership—who’s really in control? Before you add another system to the mix, consider the following tips:
First, who owns the management of your technology systems?
Does your dealership have an IT Operations team? Are you paying a staff member to monitor a server on your premises, or does all of your important information and data (you know, like customer credit cards, contact information, forms for financing, etc.) get stored in the cloud? Would you like to take on this responsibility—because it is a full-time job—or would you like to continue to focus on meeting the needs of your customers?
Second, are there any expensive technologies you’re currently paying for that aren’t being used?
Ask yourself if you’re paying for specific licenses or user-access fees for roles and positions within the dealership that no longer exist. Or, are there any that could be easily outsourced? Did you have to sign an expensive contract for a service that is currently collecting dust? If so, you might not need another tool.
Third, do any of your systems have impossible learning curves?
If this is the case, consider this: it’s probably costing you more than you think. Hard-to-learn tools and systems drive away potential candidates and keep current employees from reaching their full potential.
Fourth, have you read the fine print on your contracts?
If you need a complicated turnover plan to shift roles, logins, legacy contract information, and more to the next-in-line, you might be in for a surprise. Not everyone can access a system that was purchased by a previous team member without complications.
The biggest lesson frequent technology adoption should teach everyone is that teamwork is key to driving higher ROI. To learn more, and discover greater insights—in detail—get your copy of the guide, The Auto Dealers’ Technology ROI Guide.
The business of selling cars is complex. Technology solutions were supposed to streamline and simplify the process so your team could focus on what you do best: serve your customers. But, as dealerships began adopting technology at a rapid pace, their investments haven’t always served them back.
According to our research, dealerships now run on average of 6.8 technology systems just to make it through the day. At this rate, it’s important to take a minute and ensure that the technology you’ve invested in is returning the favor. Watch the video below to get an end-to-end view of Dealertrack DMS and the goal of a dealer management system right-sized for your dealership.
Then, dive into the actual study, the Dealers’ Digital Ecosystem, and determine whether or not your technology is helping, or hindering, your goals.
Switching your Dealer Management System (DMS) is the first step toward updating your technology strategy. Adding intuitive and easy-to-integrate solutions that better fit your overall business objectives will enable your team to fully focus on what’s most important—customer interactions. There’s just one problem: How will your staff react?
Disrupting the status quo can be difficult. A technology change impacts everyone at the dealership, so it’s important to remember there may be employee concerns around the switch and how it will affect their day-to-day work. That’s why it’s crucial to get leadership on board with the change first.
According to a Prosci study of 575 change leaders, 84 percent of participants rated manager and supervisor involvement in change initiatives as “extremely important” or “very important” to the success of a project. Managers and supervisors are critical to the outcome of a change initiative because of the unique relationship they have with the organization’s staff members, effectively positioning them as an influential force during a time of transition.
So, how exactly do you get your leadership team’s buy-in? It’s important to listen to them and include them in the change management discussion. Providing this open conversation and truly hearing their ideas will help get them on board with the transition. They know the details of how they get their jobs done. You want them to feel comfortable that they will also be able to do their jobs in the new system.
This is essential, as you will need to look to management to help relay the key change messaging to the rest of the staff, act as an advocate for their departments and manage any resistance. Having your management team be part of the messaging distribution will enable them to take greater ownership in the decision to adopt a new system, ultimately helping them to more confidently communicate the ‘why’ of the transition to their respective teams.
Management can also provide invaluable insight into each department and its inner-workings. A service manager or sales manager, for example, might have a valid concern that you need to share with your chosen DMS vendor so that it can be addressed as part of the switch. A smooth transition can only occur once any and all concerns or problems are out on the table.
Even with a leadership team that is on board with the switch, there can still be risks in trickle-down communication. If you can, take the reigns and control the narrative being passed around from employee to employee by communicating directly with the entire staff upfront. Share your vision of how this new technology will help boost the dealership’s bottom line and increase efficiency for everyone and every department. Once the pace has been set, you can train management on how to continue driving the messaging moving forward.
Understanding the importance of getting buy-in and involvement from management, one of our dealer partners created a video series detailing the reasons for making the switch and the benefits to the dealership. The videos were shown to management and employees at each of the dealership’s rooftops and went as far as to detail how work life would improve with a new DMS system in place. The videos were received positively and helped secure both leadership and employee buy-in, enabling a smoother transition process overall.
Another dealership shared a written narrative around why they were making the switch. This was a dealership that had been on the prior DMS for 30+ years. But the written word spoke to both their storied past and their exciting future. That future, the owner believed, was only going to happen with a new, modern and flexible DMS.
Let’s face it, change can be scary. That’s why it’s imperative that you disseminate change messaging early on. This is a task no one can carry on their own. Having your full management team on board will be essential. Work with your team and new DMS provider to address fear of change head on and explain why the switch is necessary to ensure 100 percent employee buy-in.
A version of this article originally appeared on DigitalDealer here.
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.
Turnover in the automotive industry is not only a huge problem—it’s a growing problem. According to a study conducted in 2016, turnover increased in 2016 by 3%, reaching 43% annually for dealerships. That means most dealerships lost around 23 employees every year. And turnover is expensive. The cost of replacing a single lost employee can reach $45,000 each year. This type of issue should be top-of-mind for every single General Manager (GM) and Dealer Principal Owner (DPO) working today. To combat this issue, Dealertrack DMS hosted a live session with industry expert John Grace and Tom Stocco, Chief Financial Officer at Van Horn Automotive Group—a 16-store dealership group with a great retention track record—for advice.
Improve Training with Better Technology Tools
Van Horn Auto Group doesn’t cut corners when it comes to training and part of that commitment includes investing in easy-to-use technology. The investment goes further as the dealership employs two,full-time learning professionals and trainers who travel from store to store to ensure proper onboarding and continued education efforts are aligned with the company’s objectives.
“When people feel empowered that they can affect change and reach their goals, I think that has such a positive effect on culture overall.” – Tom Stocco, Chief Financial Officer at Van Horn Automotive Group
Empowerment is the Key to Great Culture
“Culture” can be accused of being a buzzword if you don’t take it seriously. For Van Horn, allowing each department the autonomy to set their own goals, meeting as a team, and sharing wins and losses, together, helps drive the overall culture across multiple stores. According to Tom Stocco, “When people feel empowered that they can affect change and reach their goals, I think that has such a positive effect on culture overall.”
Adjust Your Hiring Techniques
No one gets hiring right, every time. But, patience is key. You’ve spent time and money on building your dealership’s culture, so don’t rush it. Be sure to tell the story of your dealership to each and every candidate who walks into your door. And, when you do, be open and transparent about it. Otherwise you won’t find the right fit.
Tie Your Hiring Strategy to Business Strategy
If you’re willing to invest in your employees, it will benefit your dealership in the long run. Van Horn hires employees with the expectation that they’ll stick around, and they’re willing to incentivize them as such. The dealership will help cover half the fees of a college tuition for employees going to school. This type of long-term investment keeps Van Horn’s turnover low, helps improve the career trajectory of their team, and goes a long way towards the strategic improvement of their hiring plan.
Think Differently
Van Horn’s management training includes two-day courses that include hiring best-practices and compliance strategies. But beyond that, Van Horn also takes its managers through training to grow and develop as better and stronger leaders. The investment is aimed to help each manager discover how to better motivate their teams and discover ways to improve each staff member’s career in the automotive industry. It’s this “next level” of leadership training that strategically impacts the tenure of employees.
The people side of the automotive business faces the challenges of hiring and retaining talent greater than many other industries. But, DPOs and GMs have faced many challenges before. It will be the creative innovators whose dedication to the development of their employees and the transparency of their business who come out on top.
See the entire interview between John Grace and Tom Stocco of Van Horn Auto Group here.
For the past 20 years, Driver’s Village has relied on Dealertrack DMS to facilitate their growth, adapting to the changing workforce and building a more intuitive tech platform.
Looking for a technology solution that was in touch with their dealership needs, Bob Smith Toyota partnered with Dealertrack DMS.
25 years and 23 locations later, Allen Samuels continues to choose Dealertrack DMS for their growing dealer group.
Dealertrack DMS’s point and click solution helps Island Automotive Group's staff get the job done quickly.
Because of a seamless installation, Straub Automotive had one location operational in minimal time.
