Tag: Profitability

Build Your Service Experience and Maximize Every RO

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With fewer cars coming off the factory line and inventory shortages continuing to impact dealers, more car owners are keeping their cars longer. While this trend is less than ideal for new car sales, it presents a real opportunity for your service department to boost dollars per RO and increase profits. Garry Shirley, Performance Manager at Dealertrack DMS, recently sat down with a diverse panel of dealers to discuss a shift in focus toward fixed ops. (Watch the discussion here.)

Building Rapport with Service Departments

Improving the service experience and maximizing every RO is every dealership’s North Star. But Gary Shirley wanted to find out how thriving dealers were actually making it happen. The Dealer Principals and Managers who participated in our panel shared real-life tips and strategies that delivered measurable results for both their bottom line and customer satisfaction. Key to their success was investing in new ways to offer a more personalized approach to service by utilizing every customer’s service history data. Additionally, using both photo and video communication in the service process kept customers engaged and increased the “trust factor” between parties.

Watch the discussion here and check out the new resource center for more tips and insights on improving the service experience and capturing more revenue in your service lane.

Sustaining Profitability Through Operations and Sales

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Between ongoing talent and inventory shortages, operating a dealership has arguably never been more challenging, and it doesn’t seem to be getting any easier anytime soon. With more competition for cars and qualified employees, dealerships have to do more to sustain profitability by improving operations.

Garry Shirley, Performance Manager at Dealertrack DMS, recently sat down with a panel of dealers to discuss key ways to improve operations and stay competitive in a changing automotive industry. (Watch the discussion here.)

Tips for Optimizing Operations

While sustaining profitability is an ongoing effort for business owners, no matter the current challenges, recent challenges in the automotive industry have put considerable stress on retaining talent and hiring for key positions in the service lane. Another topic trending for General Managers is the ongoing inventory shortage. How do dealers keep their sales team operating at peak performance when inventory remains low? In discussions with high-performing franchise dealerships, Gary found it often comes down to uncovering the right metrics and utilizing reporting in order to stay competitive.

Even the basic building blocks of a dealership require attention to make sure they’re operating smoothly. See how thriving dealers are keeping their sales and operations sharp in order to sustain profitability.

Watch the discussion here and check out the new resource center for more tips and insights on staying profitable in today’s competitive market.

 

 

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.

 

 

 

 

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.

 

 

 

 

 

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

Data and the Disconnected Dealership

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Does your DMS provider enable the free exchange of your dealership’s data?

More and more of your business relies on the accurate exchange of data. As customers shop for cars online, they freely share their information with the dealerships they do business with. This includes sharing personal information like addresses and contact information, as well as more sensitive financial information contained on credit applications. Customers exchange this information for a more convenient and seamless car buying experience, but with the caveat that your dealership will keep it protected. And according to our study, 86% of thriving dealers agree that having accurate and complete customer data is a top priority.

If the technology driving your operations doesn’t deliver the data you need to connect people, cars, and services in a fast, secure, and accurate capacity—you need to take a serious look at the risk you’re facing

Your Right to Your Data

Under the guise of protecting customer privacy, some DMS providers believe that dealerships don’t have the right to share information between their own systems. Simply put, the debate between data security and data access isn’t an either/or scenario. Your dealership doesn’t have to choose one or the other. It can have both. Especially as the industry shifts to incorporate more digital technology (in an effort to enable a more seamless online buying experience for your customers), sharing dealership data between dealership systems is critical to business continuity.

When your DMS provider gives you free and unfettered access to your data, you can work with both customers and vendors to facilitate shared data processing, storage, and analysis, without having to navigate multiple systems just to complete a simple task. It boosts efficiency for you and saves time for your customers during the car buying process. It also allows your dealership to advance into a new age of automotive retail with data that will become increasingly important to your business’ success.

Your Right to Cost Transparency

Now that you know you shouldn’t have to choose between your data and your customers’ security, you should also know that enabling these two compatible dealership components shouldn’t be a financial burden to you. The costs associated with data integration and data security, storage, and analysis should be fully disclosed upfront by your DMS provider and justified by the value they add to you and your customers.

Your dealership’s access to your own data is self-evident. Knowing how much you’re paying for data integration should be self-evident too. Those costs should never limit or financially encumber your business. Your systems should be easy to work with. They should help you avoid the tedium of inputting customer data into multiple systems. And your tech provider should be able to clearly explain each cost with full transparency.

As your dealership continues to incorporate more digital elements and your customers continue to trust their information with you online, make sure that you have a tech provider that can prioritize both sides of the same customer data coin to give you and your customers a better car buying/sales experience.

TO LEARN MORE ABOUT HOW THE RIGHT DMS TECHNOLOGY AND PARTNER CAN HELP YOUR DEALERSHIP EVOLVE TO MEET THE DIGITAL DEMANDS OF TODAY’S CUSTOMERS, GET YOUR COPY OF THE DEALER’S GUIDE FOR MAXIMIZING PROFITABILITY.

 

 

The High Cost of Poor Integration

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Your customers see your dealership as one, holistic entity. They can service their cars, shop online or in person, and finance purchases through your operation. But, in reality, your dealership is composed of multiple (sometimes siloed) departments, with various tools and technologies, working together to make the magic happen. In some cases, employees get really good at checking off tasks and performing processes that keep the lights on, without seeing the bigger picture. Between your different departments and technologies, it takes teamwork to do the job right. And one weak link has the potential to throw off your entire operation.

High Costs and Higher Risk

According to one study, the average dealership uses almost seven systems to complete a single transaction. That means that data must travel across multiple departments, offers have to be desked, and trust between your client and your business is tested up to seven different times. It also means that you rely on your technology to cooperate seven different times. It’s a tall task and one that you may take for granted. Your DMS is the source of truth for the data within your dealership. And the vendors and OEMs that you partner with rely upon it. They also tend to charge sneaky, hidden fees to access that data, and hide those fees within the costs you pay to work with your chosen vendor. (Want to see how much you’re spending on integration fees? Try our integration fee calculator here.)


The Importance of Integration

As more of your business takes place online, integrating your operations becomes more important than ever. These integrations allow you to track shoppers online and implement a cohesive retail experience across platforms. They streamline interfaces and facilitate the flow of data freely between systems, which reduces human error and costs while increasing profits. As these integrations become increasingly important, you should be able to choose the providers that are best for your dealership, and you should be able to do it affordably.

Having secure, real-time, bidirectional technology integrations enable a seamless online to in-store buying experience for your customers and allow you to work with the providers and technologies you want—those technologies that facilitate a better overall customer experience. This gives you maximum flexibility to give your customers the kind of smooth, seamless car buying experience they want, without any technology hiccups in between.

As your dealership continues to venture into the new age of online to in-store retail, your operations will become even more complex and the need for smart technology integrations will become even more essential. It’s going to take teamwork to succeed, and it’s only fair that you should be able to choose the technologies that are right for your team.

TO LEARN MORE ABOUT HOW THE RIGHT DMS TECHNOLOGY AND PARTNER CAN HELP YOUR DEALERSHIP EVOLVE TO MEET THE DIGITAL DEMANDS OF TODAY’S CUSTOMERS, GET YOUR COPY OF THE DEALER’S GUIDE FOR MAXIMIZING PROFITABILITY.

Connect the Dots with Integrated DMS Technology

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The new age of online automotive sales has arrived. And as you work to bring your dealership up to speed with the digital shopping preferences of today’s customers, it’s important to consider your technology. Specifically, whether your technology facilitates the kind of connected online shopping experience your customers expect. Because, for all your hard work and effort to implement the right processes and drive better innovation, if your technology can’t connect the dots, you’ll come up short.

The Customer is Always Right

Consumer interest in finalizing a deal online has risen 73% in the past year alone, according to a Cox Automotive Report. In addition, 56% of customers want to start negotiating on their terms, preferably online, and 75% want to complete credit and financing paperwork online, according to an Autotrader study. Does your dealership’s DMS technology enable you to cater to these customer preferences and move at least part of the car buying experience online?

“The ability to deliver a superior, personalized experience is now
within reach.” – Lori Whitman, Senior Vice President of Dealer Software, Cox Automotive, The Dealer’s Guide for Maximizing Profitability

The Next Gen Benefits of Connected Technology

As your dealership transitions to incorporate more elements of an online sales experience, put your technology in the proper perspective. Instead of thinking of your DMS as just another expense, think of it as an invaluable asset, enabling you to sell more cars, drive profits, and facilitate the kind of buying experience your customers expect.

Your online customers don’t want to put up with a clunky, disconnected shopping experience. From start to finish, they want a buying experience that weaves every step of the process into one connected whole. The good news is, with integrated technology, it’s entirely possible to optimize efficiency. As Lori Whitman, SVP of Dealer Software at Cox Automotive explains, “The ability to deliver a superior, personalized experience is now within reach.” Technology designed to bypass workarounds and intuitively share information across platforms, from interest to point-of-sale, is changing the way dealership operations function. And your Dealer Management System—the source of truth for data continuity at your dealership—is making it happen by integrating with your other technologies and facilitating an intuitive, customer-focused car selling experience.

Your DMS technology, working together with your other systems, should support an omnichannel sales experience that keeps track of customer information over time and between systems. The best part: this connected technology not only benefits the customer, but it also improves your dealership’s efficiency and profitability.

Move on From Disconnected Tech

If your DMS doesn’t integrate with your other technologies, or requires expensive workarounds that ultimately feel mismatched, out of place, and even conflicting, your technology probably isn’t the right fit for the next generation of digital customers and online sales.

As your dealership moves into the new age of automotive retail, continue to evaluate how your technology can either help or hinder your customers’ specific shopping experiences and your dealership in general.

To learn more about how the right DMS technology and partner can help your dealership evolve to meet the digital demands of today’s customers, get your copy of The Dealer’s Guide for Maximizing Profitability.

 

Could your DMS technology be due for service?

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Vehicle owners understand the need for scheduled maintenance and regular check-ups. And most of them appreciate the emails they receive from your service department reminding them that it’s time for a visit. Just like a car, your DMS is a complicated piece of technology. And maintaining efficiency is crucial to the overall health of your dealership. That’s why occasional DMS check-ups are an essential part of running a successful dealership. In today’s digital world, those check-ups are more important than ever. But how do you know when you’re due for a quick evaluation? Well, consider this your friendly reminder! Take a look at the following signs to decide whether or not your DMS is doing all it can to keep your dealership running strong.

Your Vendor is Absent

A great DMS vendor brings more to the table than great technology. In fact, having a partner you can trust is just as important as having a capable dealer management system. To be a good partner, a DMS vendor needs to offer efficient, easy-to-access technical support. And in today’s work-from-anywhere world, product and technical support need to be easily accessible omnichannel offerings. For example, you should have access to peer-to-peer forums where you can search for answers and learn from other dealers and veteran employees.

A great DMS partner goes well beyond traditional tech support by providing an experienced Performance Manager. Performance Managers are both product and industry experts. They understand your business and can proactively provide suggestions for applying the power of the DMS to your specific challenges and opportunities. They also offer personalized training and feedback on utilization that goes well beyond troubleshooting and product assistance.

Your Technologies Feel Disconnected

Car buying behaviors continue to shift, with shoppers wanting to complete more of the process online. In this new era of automotive sales, your tools and technologies have to work together. Specifically, those technologies need to reliably and securely share information with each other—a process that starts and ends with your dealer management system. You can’t afford to have disconnected data silos any longer. Your DMS needs to facilitate secure, bidirectional, real-time third-party integrations that protect customer privacy while giving unfettered access to your other systems. When your technologies connect, your dealership benefits from streamlined processes and your customers enjoy smoother experiences.

Your Customers Are Frustrated

Of course, all of the technical capabilities and connections in the world don’t matter if your dealership can’t keep its customers happy, and dissatisfied shoppers are the number one sign of a DMS that isn’t delivering. By increasing efficiencies, a great DMS facilitates better buying experiences from start to finish. As the source of truth for all data, the right DMS can share a shopper’s individual information across systems so that salespeople can personalize the buying experience.

Your DMS can be a powerful tool for driving change and promoting profit within your dealership. But to run a finely tuned business, you need to frequently evaluate the strengths of your technologies. Like regularly scheduled vehicle maintenance, occasional DMS check-ups can help diagnose problems and identify solutions for becoming more effective. After considering vendor availability, ease of integration, and customer satisfaction, you may find that your DMS doesn’t work anymore or that it needs a tune-up.

If you have big profitability goals this year, your DMS technology is likely due for a check-up. Consider our six-part Digital DMS Check-up Process. Get Yours Free Today!

How Next-Gen Technology Drives Staffing Success

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Your dealership’s technology plays a significant role in your day-to-day business—sometimes in ways that aren’t immediately apparent. The right tools can improve how efficiently your data travels between systems, speeding up transactions for clients, and delivering exceptional service. And, while it may be difficult to quantify—at first—more efficient technology improves the lives of everyone who interacts with your dealership. Most notably, your current and future staff. When it comes down to it, the technology driving your dealership can literally drive away the talent you need to deliver the best customer experience. While the right DMS can help you attract and retain top talent, the wrong technology can deter both talent and customers from coming to your dealership.

Retain Talent for Customer Continuity

Despite the increasing popularity of digital car buying tools and the prevalence of online car shopping, your customers still want a personalized car buying experience. In fact, up to 80% of consumers are more likely to do business with a company that offers a personalized experience, according to one study1. They just want it on their terms and in their own time. And most eventually want to actually see the car they’re buying and meet the dealer they’re doing business with in person.

The fact that your customers want to complete much of the car buying process on their computers can, however, make it difficult for your team to personalize their experience. This difficulty is compounded by the fact that the automotive sales industry has one of the highest turnover rates in any industry, which has the potential to frustrate customers looking for a cohesive online to in-store buying experience.

Today’s workforce values technology. When they work with technology that facilitates next-gen tools attracts, it gives them reasons to stay at your come to and stay at your dealership, resulting in more continuity for your customers. This cuts down on hiring and turnover costs and makes your customers’ transition between online and in-store shopping much smoother.

“If we don’t invest in technology, the market passes us by. It’s critical that our staff has the tools that they need to help answer client questions. That’s where the technology comes in. Dealertrack provides us a very easy-to-use, simple solution.” – Jeanne Brewer, General Manager Acura of Glendale

A Next-Gen DMS Empowers the Next-Gen Sales Team

The right DMS (and the right DMS partner) also gives your dealership access to real-time data, without restraints, enabling better sharing of information, better customer hand-off between incoming and outgoing employees (when turnover does happen), and a better understanding of your business for everyone involved. All of these benefits ultimately get passed along to your customers and to your dealership’s bottom line.

And a failure to take your dealership’s DMS technology into consideration—the single source of truth for all of your data and day-to-day operations—can cost you both staff and sales. As Jeanne Brewer, General Manager Acura of explains, “If we don’t invest in technology, the market passes us by. It’s critical that our staff has the tools that they need to help answer client questions. That’s where the technology comes in. Dealertrack provides us a very easy-to-use, simple solution.”

Your dealership’s technology really does play a significant role in your day-to-day business, especially as you transition to incorporate more digital tools. Whether part of the onlineor in-store buying experiences (and especially the exchange in between), the right (and wrong) DMS technology can help or hinder your talent retention, your customer’s experience, and your business’s bottom line.

To learn more about how your DMS technology play a role in retaining top talent, check out The Dealer’s Guide For Maximizing Profitability.

 

1Epsilon Marketing, “The power of me: The impact of personalization on marketing performance,” 2018

Support for the Road Ahead

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The industry-wide move toward offering a hybrid online/in-store car buying experience has been a resounding success. New- and used-vehicle buyers are reporting that the process takes less time and is more efficient than before, and customer satisfaction is at an all-time high. But that doesn’t mean change isn’t still scary.

As with anything new, you’re bound to have questions. Bumps in the road, growing pains, and (just maybe) brief moments of existential dread and panic tend to happen whenever you flip the switch.

We’ve all been there. That’s why having a partner that prioritizes innovative customer support and industry-leading client services is so pivotal. When you’re on the road to something bigger, you shouldn’t have to go there alone.

A Net(work) Benefit to Every Dealer

Automotive sales is a competitive, cutthroat industry, but when it comes to navigating the complexities of technology and transitioning to new sales processes, working together benefits every dealer individually (and the industry as a whole).

Partnering with a DMS provider that brings dealers together through a dedicated platform to freely express their needs and learn together any time of day or night, opens a door to a whole new level of transparency, community, and industry progress.

As your dealership adapts to the changing automotive sales landscape, take advantage of every resource available to you (including those in previously unlikely places) to find new ways to leverage your technology and make online car buying more seamless and profitable.

Learning, Together

Does your DMS provider give you the answers you need to improve your customers’ buying experience? Or, are you on your own to figure it out? Do you dread reaching out via phone call to customer support, when it would be easier to power through and find a workaround on your own?

Having a partner in your corner means knowing your vendor has your back in the event that something goes awry. It also means that your skills and expertise are valuable to your fellow peers. Your business is part of the reason that the entire automotive industry continually improves for buyers. And we’re leveling up, together. This is a major leap forward in automotive retail. It’s one that requires coordination, transparency, and total investment from your technology partners. With a community forum, live case updates, and online training and courses, DMS360 offers dealership staff an online resource that they can personally interact with, contribute to, and incorporate into their learning programs.

Seek out a DMS provider that helps you learn from what other dealers have already gone through. After all, time is money, and a true technology partner can help you leverage every resource available to get your dealership’s new digital processes up in running as quickly as possible.

Learn how next-level support leads to profitability for dealers by downloading The Dealer’s Guide for Maximizing Profitability.