The dealer management system (DMS) touches every aspect of a dealership’s business. It can collect, store, manage and interpret data across a dealership group’s many rooftops. It is the gatekeeper to not only customer data, but also a dealership’s finances, inventory, sales and employment records. In large part, the DMS determines a dealership’s overall efficiency and productivity levels.
So, if the DMS is the grease that keeps a dealership’s operations running smoothly, why are so many groups holding onto their legacy technology systems?
Three words: fear of change.
Unfortunately, this fear is weighing dealerships down in status quo, holding them back from implementing the technology they need to meet today’s high customer expectations. With easy, one-click ordering on Amazon and ride-hailing apps like Uber and Lyft, consumers have come to expect and even demand a parallel experience across industries and brands. However, hanging onto legacy technology is hindering the productivity and efficiency that is essential to delivering this seamless, technology-enabled customer experience. In fact, a mere 46 percent of consumers are currently satisfied with how long the dealership process takes, according to Cox Automotive’s 2018 Car Buyer Journey Study.
Legacy technology isn’t just impacting dealerships externally, however. According to a recent study by Harvard Business Review Analytic Services, “51 percent of survey respondents say that outdated or inadequate office technology is impeding their organization’s ability to retain employees with high-value skills and experience. And 58 percent say the state of a company’s technology is factoring into decisions by job candidates about where they want to work.” Furthermore, companies that are highly connected tend to grow faster, with 40 percent of that group reporting a 10 percent increase in revenue over the past two years compared to only 29 percent of companies that are considered poorly connected.
With so much hinging on a DMS that is effectively humming to the tune of a dealership’s operations, complacency is no longer an option. It’s time for dealerships to take action and overcome this fear of change by first implementing a strategy that is specific to their market. To succeed long term, dealerships must find the right technology and vendor to support their strategy and propel it forward rather than pin it down.
When developing a strategy, dealership managers need to focus on what their business needs are and where they as a leader of that dealership want to take the business in the future. For example, there may be a significant demographic shift in a dealership’s market. Say you’re seeing an increasingly younger demographic moving into focus. You, as the dealership manager, decide that you want to do a better job of serving this changing consumer population.
To broaden your appeal to this demographic, you need to be able to hire the right talent and have a technology partner whose software is easy to use. Training new hires on a 30-year-old technology system simply won’t fit the bill, as a direct link can be seen between what your strategy might be and how ease-of-use and ease-of-learning impacts your ability to fulfill that strategy.
Dealers willing to make the bold move are seeing a difference. “When Van Horn made the decision to switch DMS providers, it was important for us to be able to streamline processes across our 13 rooftops without having to sign into a long-term contract,” said Jennica Krebsbach, comptroller at Van Horn Auto Group. “With access to modern, easy-to-use technology, we saw an immediate improvement in our overall efficiency. The new DMS helped us cut down on time and costs associated with hiring two full-time employees. Plus, our new provider offered 30-day team support prior to DMS implementation, helping secure 100 percent employee buy-in across departments.”
Trevor Gile, manager of Motorcars Honda, shared a similar sentiment. Under the legacy DMS, “You needed a secret decoder ring to figure out how the system worked, and a huge book to figure out the screen, and a secret handshake. Whereas, we recently hired a new chief operating officer from Colorado, and all we had to do is send him the log-in and password for our DMS. By the time he came out here a week or so later, he was able to know as much or more about the system as any employee. He hit the ground running and already has been the biggest-impact new employee we’ve ever had.”
What is made clear through these examples is that technology that supports a dealership’s business and hiring strategies is crucial to long-term success and profitability. More dealerships need to break out of status quo and lean into technology that will deliver the efficiency and productivity that is fundamental to delivering on customer expectations and simplifying operations.
Don’t miss John’s upcoming session at DD25 on Wednesday, October 17, 2018: 1:20 PM – 2:10 PM! Learn the recommended process for a technology transition and understand the myths and facts around changing your DMS.
This is part two in a five-part series by John Grace on overcoming complacency and fear of change at the dealership.
