Tag: DMS

Want Higher Profits? Don’t Overlook Your DMS.

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Dealers purchase technology to increase their profitability. That makes sense. After all, you wouldn’t invest in new digital steps if they cost more money than they were worth. And, if you’re like a lot of dealers in the last year, you’ve added at least one new technology to your business. According to the 2020 Digitization End-to-End Study from Cox Automotive, 69% of franchise dealers did just that. And it seems to be paying off. Overall buyer satisfaction rates hit an all-time high of 72% recently. Yet, dealers tend to overlook the major role their DMS technology plays in driving profit and saving money. The reason? It’s not always obvious…at first.

Profit Driver vs. Utility

According to Randy Wilson, director of Performance Management at Dealertrack, “A DMS is required to function.” Simply put, most dealers tend to view the Dealer Management System as a utility—not a profit driver. “But,” he emphasizes, “it’s critical to the profitability of today’s new digitized landscape. Your DMS holds much of the data required to run payroll, for example.” You may not have considered your DMS as much more than a utility running in the background for the past twelve months. But, while you were working on navigating the changes needed to adapt to a more digitized landscape, your DMS was likely feeding each new system the data needed to fully function. Businesses have been busy scaling up technology like never before in the wake of lockdowns, furloughs, and new social norms. In the same 2020 Cox Automotive Study referenced above, 84% of franchise dealers expected to increase online sales in 2021. With so much rich data being delivered to all the major departments of your business, a DMS that could leverage the right data, at the right time, would set up any dealer for success. (And a failure to do so would lead to the opposite.)

More Than Money

You may have spent the last year increasing your digital reach to find the right customer and match them with the right car. But, having the wrong technology can cost you more than just money. Many departments within your dealership operate almost independently from each other. Escaping the siloed nature of our industry may not be possible, but one thing is certain: everyone is impacted by the DMS. Buyers may have changed the way they interact with your dealership, but speed and efficiency are still king. The ability to deliver a superior experience whether in-person, online, or a hybrid of the two will rely heavily on your team’s operational efficiency. Stubborn and complicated interfaces, workflows that create manual re-entry of data, and systems that don’t communicate across departments can hinder your success. All data begins and ends with your DMS. A failure to optimize can cost you in team performance, turnover, and time.

Sneaky Fees Hurt Where it Counts

Technology can connect your business to more data, more customers, and more profit potential. But at the end of the billing cycle, the growth you had expected may come up short. Was it margin compression or something more sinister? Sneaky fees may be hiding in plain sight—and they’re easy to miss. With the average dealership transaction requiring up to 7 technology systems to complete, integration fees could be driving up the cost of doing business. When your DMS provider treats each third-party vendor you work with like a sales opportunity, they’re able to charge exorbitant fees against you. And it adds up to the tune of about $42,000 every year! That’s according to a Cox Auto Community Poll from 2017, which means, those fees are likely higher now. New restrictions on first-party data are going to up the ante on your DMS provider’s data access fees. This means that the true cost of DMS technology depends on how open and transparent your DMS partner chooses to be.

Ultimately, the technology driving your dealership should deliver better business decisions. It should reduce backlogs of old data, manual re-entry, and clumsy reporting that hinders your operations. And, it shouldn’t charge exorbitant or hidden fees. Finding the right partner is more important than ever. Your profitability depends on it.

Looking for an end-to-end software solution that streamlines operations and drives profitability? Speak with the team at Dealertrack DMS at Dealertrack.com/DMS.

 

A version of this article originally appeared on Wards Auto here.

A DMS Designed to Work Well With Others

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Technology driving franchise dealerships is more connected, more powerful, and faster than ever. As you strive to meet the needs of your customers (two out of three buyers surveyed by Cox Automotive want to complete 100% of the car buying process online¹), digital retailing has likely become your new go-to strategy. And with that new digital strategy, you’re likely rolling out new tools and tech. So, what do you do when your Dealer Management System (DMS) doesn’t work well with your new technology suite? When it comes to working well with others—having a DMS that is compatible by design is paramount. That’s what our dealer partners are saying.

Come Together, Right Now

“We are finally gonna go mobile!” For Tom Wood Auto Group, going mobile was the next logical step to delivering better service options, even before the events of 2020 struck. “With the new Dealertrack DMS system and the integration of xtime, our appointments, our walkarounds—all those systems—are right here,” explains Bill Demaree, Director of Fixed Operations for the auto group. Since the average dealer uses around seven different technology systems each time they make a sale², driving up the hidden cost of integration fees, Dealertrack’s open-source technology is uniquely designed to reduce fees and hidden costs that third parties tack on. And, since it’s backed by Cox Automotive, Dealertrack DMS already works with the family of Cox products that Tom Wood Auto Group uses. As Chad Kirchhoff, Director of Operations for the auto group explained, “What I like best is, it integrates with all the other Cox Automotive products that we use. We have Dealer.com, we have VinSolutions, we have vAuto…now they integrate seamlessly behind the scenes so we won’t have the ‘back and forth’ between the DMS and a third party system.” As the demand for more digital technology increases, a DMS that works well with others is highly suited for the job.

New Technology, Familiar Challenges

The process for selling and servicing cars may look different than a year ago, but your operation still faces the same challenges like hiring hard-to-fill roles and managing month-end. Dealertrack DMS now partners with best-in-class technology leaders to deliver integrated solutions. By seamlessly unlocking the data within your dealership, these offerings are able to provide powerful insights and address real challenges like turnover. For one dealer, Budd Baer Auto Group, connecting their DMS to Integrated Payroll, turned a mostly manual month-end payroll process into a point-and-click operation. “If I had to guess, we won back three to four labor days in a month,” explains Bryan Baer, General Manager.

A DMS, by design, simply must get along with your dealership. As the primary technology that fuels your operations, business ledger, service department, and more, a DMS touches multiple teams and departments creating either roadblocks or efficient workflows that result in accountable time- and cost-savings. Don’t just take our word for it, though…

The technology at the center of your business can deliver the unexpected. See what people are saying.

Sources:
¹2020 Cox Automotive Dealer Sentiment Survey
²2017 Cox Automotive Community Poll (small base)

A version of this article originally appeared on Wards Auto here.

Does Your DMS Pass The Profitability Test?

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Does your DMS pass the Profitability Test? It’s time to find out. In a year when people spent less time at your dealership, customer satisfaction also reached an all-time high according to Cox Automotive research. While the reasons for staying home were beyond your control, the ability to deliver top-notch service was in your court. But there’s more to it…

If you have big profit goals for next year, you need to consider the role your DMS partner plays in your success.

It’s time to take stock in your dealership’s biggest, and most critical, digital asset—your DMS. The Dealer Management System is the source of truth for data. All systems pull data from it, and all data points back to the DMS. While many dealers tend to overlook their DMS as merely a utility, it’s actually a critical profit driver. Put your DMS to the test—The Profitability Test—below. If your DMS fails to meet the following six criteria in our list, you should ask yourself, “Why not?”

1. Performance Management

Does your DMS partner show up for you and your team each time you implement new technology? Before your dealership ventures any further into the hybrid online/in-store territory, or adopts any more technology your staff will need to learn, make certain you have a trusted partner who knows a thing or two about working in automotive. If your DMS provider has left your lot before the ink has dried on your contract, you may want to reconsider your relationship. Highly skilled Performance Managers take on change management for your teams. Plus, they help you achieve business objectives and ensure profitability long-term.

 

2. State-of-the-Art Support

Does your DMS partner show up when things go wrong? Implementing new technology can be scary. If something ever goes wrong, how confident are you that your DMS provider is available to help? Questions, concerns, and fixes that can be overcome through a variety of channels—such as online community forums, chat, and transparent service tickets—keep business running. Beyond the generic ‘bump in the road,’ working with peer groups to discover how best to solve key customer issues, work with OEMs, and overcome obstacles that may improve your staff’s workflows allows new and veteran employees to contribute their knowledge to the greater good.

3. Retaining Top Talent

Does your DMS provide better workflows that improve the way your team functions? The war for talent in our industry is ongoing. Make sure your DMS technology isn’t slowing down your team’s ability to fulfill their assigned roles. The ability to access better customer info ultimately results in a better customer experience. And, removing complicated interfaces, multiple logins, and redundant data entry, allows your staff to thrive in an environment where they can provide better service.

4. Optimize Efficiency

Does your DMS make your dealership processes more efficient? Your DMS isn’t just another expense. It should be an invaluable asset, enabling you to sell more cars, drive profits, and facilitate the kind of buying experience your customers expect. With the right DMS technology, your dealership can facilitate an intuitive, customer-focused car selling experience in a new age of online sales. By integrating intuitively with other dealership technologies (with information that’s shared between platforms), your DMS can give customers a more complete shopping experience, while also eliminating the extra time and hassle involved in trying to coordinate disparate, disconnected systems.

 

5. Prioritize Integrations

Does your DMS allow you to work with third-party vendors without overcharging fees? Real time, bidirectional technology integrations enable a seamless online to in-store buying experience and allow you to work with the providers and technologies you want. And with the average dealership using seven different technology systems to complete a transaction, make sure your DMS technology isn’t charging hidden integration fees.

6. Your Right to Access Your Data

Does your DMS provide access to your critical data and insights when and where you need them? Data optimization is a critical component of your business. Without it, your ability to create a streamlined and efficient online (or in-person) experience suffers. Consumer data should always be secure, no matter where it is stored. But, your dealership should have the right to full ownership and access of the data. And costs associated with the data should be 100 transparent.

Ready to dive deeper into the why’s and how’s of DMS profitability? Download your own copy of The Dealer’s Guide for Maximizing Profitability with the Right DMS Partner, today. You’ll uncover insights from critical research conducted that shows how real dealers, like you, are optimizing efficiencies and leveraging their DMS partners to make more money.

 

 

 

Your DMS is a Profit-driver. Not a Utility.

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I’ve had the privilege to listen to Dealer Advisory Boards and other groups who share their feedback on the technology used to run their business in my career, and often, it’s not always good. It’s not always bad, however. In the last year, despite an economic downturn, the car buying process has largely improved. With the rapid rise of online shopping, buyer satisfaction rates are up, year-over-year, to 72%. That’s remarkable.

It’s exciting when new technology helps your customers find what they’re looking for faster. Everyone is happier. Business gets better. But, without a partner in your corner, reaching profitability becomes a constant struggle. Dealers often view their DMS as a utility. I’m here to tell you that your DMS, in most cases, is an untapped resource. With the rapid rise of digital technology, process, and data, having the right DMS partner is a crucial component of maximizing your profit potential.

No Slowing Down

For the most part, dealers don’t see their Dealer Management technology as a profit-driver. A DMS is required to function. Your DMS holds much of the data required to run payroll, for example. But it’s critical to the profitability of today’s new digitized landscape. For one thing, dealers are scaling up their technology like never before, and they’re not slowing down. According to a report, 84% of franchise dealers expect to increase sales in 2021. With so much rich data being delivered to all the major departments of your business, a DMS that could leverage the right data, at the right time, would set up any dealer for success. (And a failure to do so would lead to the opposite.)

A DMS Partner (Not a Vendor)

If you happened to catch Tracy Fred, Vice President of Dealer Sales and Service Solutions for Cox Automotive in this recent interview, she put it bluntly. “With the convergence of technology, processes and data, dealers are left to figure it out on their own in most cases. It’s difficult to do that in a silo,” she said. I agree.

The more data that flows through your auto group, the better. Right? Not necessarily. Better insights into the data you collect, combined with newer processes to improve the way your team operates are key. But, there’s still a piece missing. As Tracy Fred points out, “You need people who can help you connect those three things. That’s why Dealertrack has a team of Performance Managers.” That’s where my team comes in.

With a minimum of ten years of dealer management experience, a Performance Manager is a dedicated resource who ensures that our partners are leveraging the software we supply to its fullest potential. Training, reporting, goal-setting and analytics are also part of the role. It’s not a sales position, it’s a business partner who ensures your dealership performs with the tools we provide.

Efficiency is Key

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.

Change Management Partners

New technology and software can be disruptive to your staff’s workflows upon installation. In fact, Change Management is one of the top fears holding dealers back when considering a technology switch. The dealer principal owners I’ve worked with almost always have a few key “champions” within their auto group willing to embrace new technology…and also one or two detractors who are less than excited. When choosing a new technology vendor, it’s important to find a partner willing to take some of that burden off of your plate. Again, the Performance Managers can help get every staff member on-track, from each location, so that each of your locations is functioning on the same level upon launch.

Ongoing Support

Signing a new partner and launching a new DMS is a big endeavor. But, dealership staff tends to turnover frequently. So what are dealers supposed to do each time they bring new hires onboard and their vendors are long gone? In general, dealers do a good job of hiring the right staff. Your sales managers and service pros already know how to do their jobs (or you wouldn’t have hired them). But if your technology stands in the way of letting them get to work, then it’s on us to bring them up-to-speed. If you don’t have a partner who is staffed and dedicated to training your team—and fast—then you might want to reconsider your contract. Technology changes constantly, and it’s on us to ensure our dealer partners are getting the most out of their tools.

Finally, Is Your Tech Helping or Hindering Sales?

Ultimately, the technology driving your data should deliver better business decisions. It should reduce backlogs of old data, manual re-entry, and clumsy reporting that hinders your operations. And, it should drive profitability. If it isn’t helping you make more money, it’s helping you lose money. Having a business partner with real dealership experience, who can hold your team to critical reporting and key metrics that deliver results, while keeping your staff up-to-speed is more than just a utility. It’s a partnership.

Discover more insights and recent trends in Randy’s upcoming webinar, 6 Ways Your DMS Can Maximize Your Profit Potential. Registration is open now—Sign Up Today.

 

Digital Technology Ushers in New Level of Partnerships

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According to buyer sentiment, digital adoption in the auto industry is here to stay. It’s not just that dealers have adapted to new norms and implemented new digitization tactics. Although, they are. (And at record pace!) According to the 2020 Digitization End-to-End Retail Study from Cox Automotive, 69% of franchise dealers now boast at least one new digital step to their buying process such as test drive home delivery, purchased home delivery, and online credit apps. It’s also due to overall record buyer satisfaction rates—72% at recent count.

With so many changes taking place, who can dealers turn to for guidance and accountability? For the following dealerships, finding the right Dealer Management System to drive better efficiency across the entire organization was the first step. The second, was finding a true partner—not just a vendor—they could trust.

A Vital Business Partner

For Downtown Auto Group, finding the right Dealer Management System (DMS) was a process that spanned over 18 years. In most cases, what felt like the right solution ended up being more of a burden. However, Dealer Principal Matt Garner, calls their current DMS a “no brainer.” Garner specifically selected it for its intuitive nature and simple integration with other systems. But, more than anything else, Garner and the team benefit from the expertise of their Performance Manager.

“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,” explains Garner. With Performance Management, Garner has a dedicated industry veteran available to help his dealership capitalize on new growth opportunities. And with the roll out of new digital technologies, the auto group also has a resource to ensure everyone gets the most from their technology.

Read their story here.

“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

A Partnership Built on Respect

For the service center at Lawton Kia, finding the right provider to meet the needs of their state-of-the-art facility would require more than just top-tier technology. The dealer group prides itself on delivering no-nonsense experience. And that’s exactly what they were looking for from their next DMS partner. Lawton Kia soon discovered that the right DMS was more than just an expense—it was a profit-driver. “We love having our Dealertrack DMS Performance Manager. He brings a lot of value to the table—from real-world experience and his ability to think outside the box, to helping us with campaigns, finding gains, and reviewing analytics,” explains Service Manager Frank Seitz. “He helps us strategize how to capitalize on more opportunities and bring us more profit.”

Read their story here. 

The right partner should do more for your dealership than hand over a contract. With Performance Management, data-driven insights, and streamlined workflows that integrate with technology at your dealership, finding the right DMS partner can optimize your entire business. Learn more.

Measure What Matters: Tracking Employee Statistics

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You probably know how many cars are on your lot right now (or at least a good idea, we hope). Your accounting manager tracks payroll down to the minute. And you use smart data to gain insights into profitability from dashboards and reports. But, you still have a problem—a people problem. With an average dealership turnover rate of 46% for employees and 80% for salespeople, the industry needs to get better at tracking employee statistics.

Calculating the True Cost of Turnover

Your managers know turnover hurts. The best way to combat this key issue and win back the losses to your budget is to formulate a smart strategy. Calculating the true cost of employee turnover requires measuring more than just lost wages. Here are several key metrics to monitor:

  • Unemployment Compensation and Exit Interview Fees – If your dealership expects to spend money paying furlough fees, unemployment, and other costs, these should be included in your metrics.
  • Replacement Costs to Advertise Open Positions – Pre-employment screening and money lost during downtown are often hard to estimate. Yet, dealers have reported spending up to $10,000 on resources like advertising, interviewing, and recruitment.
  • Training New Labor – Your dealership may require service technicians to obtain costly certifications setting you back thousands of dollars like the ones offered by the National Institute for Automotive Service Excellence.
  • The Productivity Gap – It may feel impossible to measure a loss to your team’s productivity or morale. However, studies show employees reach full productivity after three years on the job.

It’s Not All Doom And Gloom

Your dealership has already been through a lot this past year. With rapid adoption of digital tools, shifting buyer habits, and an uncertain economic market, you’ve made fast-changes to keep up. Change is a constant in your line of work. And, almost any issue is solvable—as long as you measure it.

93% of employees polled believe their workplace would be better if the had access to better technology.

Here are the often overlooked statistics you should be tracking:

  1. Employee Satisfaction and Happiness – A happy team works harder and sticks around longer. Measuring employee satisfaction is the first thing you and your managers should monitor to improve retention. Hindsight is 2020, but catching a problem before it occurs is even better!
  2. Voluntary Turnover Rate – Tracking how often your staff leaves for greener pastures over time will give you a benchmark to help establish a normal level of tenure at your dealership. It can also signal a problem (if this number suddenly jumps) that something isn’t going well.
  3. Involuntary Turnover Rate – Layoffs are extremely unfortunate. Your hiring brand suffers over time, and you could earn a reputation as a poor employer. Tracking this metric could indicate an HR issue, like a mismatch between skills and job description.
  4. Retention Rate by Department and Manager – There’s a saying that people don’t leave bad jobs, they leave bad managers. You may want to invest in manager training and development if you’re seeing this metric spike.
  5. Training Expenses per Employee – Could the wrong technology be impacting your turnover? 93% of employees polled believe their workplace would be better if the had access to better technology.

When you measure what matters, you arm yourself with the data to battle the problem. Your dealership can reduce turnover over time. This industry-wide issue has proven resilient over time. But, so has your dealership. Discover new research and key insights in the guide, 9 Ways to Reduce Turnover and Improve Retention: A Dealer Principal’s Guide to Hiring and Retaining Talent.

 

Ask the Experts: 5 Tips For Measuring Employee Satisfaction

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Dealership technology has come a long way. In the last year alone, rapid adoption of digital tools and technology has jettisoned the customer experience light years into the future. New tools now allow buyers to complete more of the buying process online. And connecting with your customer base is faster and more efficient than ever. According to the recent Cox Automotive Car Buyer Journey Study, buyer satisfaction is at an all-time high of 78%!

But what about employee satisfaction? Your team has shifted roles, adjusted to new working schedules and conditions, and mastered new tools and technology in order to improve the customer experience. When it comes to measuring the happiness of your employees, do you know where to begin?

You May Be Paying The Ultimate Price

Dealership turnover can put your business in an unfortunate position. According to a report, 93% of employees believe their workplace would be better if they had access to better technology. That’s good news for dealerships who’ve adopted newer, and easier-to-learn technology. But, with a turnover rate of up to 80% (seriously), many dealerships aren’t seeing the benefits of employees who reach their full potential. In one study, employees were found to be most productive after about three years on the job. That’s bad news, then, as the average dealership tenure is half of that.

 

Covering Your Assets – A Lesson From The Pros

We turned to the experts at Hireology, the hiring and HR experts, to discover the best tactics for measuring employee satisfaction at your dealership. They’ve helped hire 20% of dealership employees in 2020 and had several tips for measuring your team’s overall satisfaction. Here are their recommendations:

 

  • Employee Feedback: When it comes to ensuring your employees are content, feedback should be constantly requested and encouraged. Throughout onboarding, you can issue anonymous surveys that allow your new staff members to reflect on their experience and disclose information about their first few weeks with your company. This will help you address any inconsistencies or weaknesses in your process for your next class of new hires.
  • Check in: Feedback shouldn’t stop after onboarding. Managers should schedule regular check-ins with employees to ensure they are developing and growing with your dealership. Additionally, you can use semi-annual all-company surveys to gauge satisfaction as well. Following the results, talk with your leadership team about how to make improvements, and host a company-wide meeting that addresses the results and the forecast for the next few months or year to show employees that their voice matters.
  • Referrals: Referrals generate the best return on investment, reduce cost per hire, and improve employee retention and satisfaction. While having a great place to work is key in attracting referrals from your current staff, offering incentives, monetary or otherwise, is a great way to encourage your employees to submit referrals. With a referral program in place, you’ll be able to track how many staff members are taking part in submitting their friends and colleagues for open roles.
  • Turnover: Turnover is costly, and your dealership’s turnover rate is a huge indication of your employees’ happiness. Are you seeing employees leave in droves? Are you struggling to keep your staff around for longer than a year? This likely means your employees aren’t satisfied with their role, your dealership’s culture, or another internal issue that needs to be addressed if you want to keep your team intact.
  • Participation: You can’t simply offer team building activities or development opportunities and think your employees will be satisfied. You need to look at actual participation within your programs and activities to ensure you’re truly adding value to your staff’s engagement. Keep track of the adoption rates of your new and existing programs, and shift priorities to where you may see more involvement.

Measuring an investment like human capital may seem tricky at first. It’s easier to track feedback from machines. But your people are your best asset. Delivering the best customer experience simply can’t happen without keeping your top people happy, engaged, and working to their full potential.

Learn more about hiring and retention in today’s economy. Check out the guide, 9 Ways to Reduce Turnover And Improve Retention.
To learn more from the experts at Hireology, visit their website here.