7 Things to Consider When Choosing Technology for Your Dealership

Rapidly evolving technology has changed the way consumers interact with dealerships when buying a car and the fundamental way that dealerships run. In the “old days,” a customer would walk into a dealership with no idea how much a car should cost, and dealers would use a pen and paper for everything. Fast forward to the present and consumers are more educated than ever. And that old pen and paper? They’re on the way out. We live in a world, now, of digital disruption, and dealers need help from technology to exceed the expectations of today’s consumer.

Whether it be a DMS, a website, or a CRM, it’s a given that you’ll need to purchase technology for your dealership—and the task can be overwhelming. How do you know which option is the right fit? What if you choose wrong and then you’re stuck?

Don’t stress. Below are 7 things you should consider when choosing technology for your dealership that will have you well on the way to making the right decision.

1. Cost
When you are entering into a new contract, cost will likely be a primary decision factor. When shopping for a new technology, setting a budget should be a priority. Factors such as your current costs, the potential ROI of a new solution, and the estimated payback period should all be taken into consideration. Be realistic when you are creating your budget and expect that if you want cutting-edge technology, it will cost you more than a basic solution. When you’re looking at estimates, make sure you’re comparing apples to apples. A Ferrari doesn’t compare to a Mini Van. And don’t worry overmuch about an increased budget. When you improve technology, you can increase efficiencies and improve the customer experience, thus, increasing your profits.

2. Contract Length
The truly great technology companies don’t need to hold you hostage in a contract. They give you options when it comes to choosing your contract length, whether it be month-to-month, 1-year, or multi-year agreements. Be sure to ask about contract options as an initial question when you are starting a conversation with any technology provider. Weigh the benefits of month-to-month flexibility versus long-term savings by entering into a term contract—it’s nice when you have the choice. You should also be on the lookout for auto-renewal clauses in your contract. If there is one, make sure you add the renewal date to your calendar so you don’t unknowingly get trapped into another 5 years down the road.

3. Integrations
No matter what type of technology you’re shopping for, a flexible integration program will enable you to create your own technology strategy and will likely save you money. Be sure to make a list of your current technology solutions and find out whether the new and current solutions can integrate with each other.

4. Support
This is a biggie. A company that has thoughtful and timely customer service is an absolute must. First, look at the ways you can contact customer service. Phone, chat, and email should all be options. Not only will you need reliable support, you’ll likely need continued training as your dealership grows and changes. While it can be hard to truly know what level of training and support you’ll receive before you sign on the dotted line, you can do research by looking at online reviews, talking to other dealers who have used the service, or even asking for referrals before signing.

5. Business Fit & Innovation
You must consider whether the technology fits your needs, meets the needs of your customers, and enables you to grow and adapt to a changing industry. According to a study by AutoTrader, 72% of consumers would visit dealerships more often if the buying process were improved. Therefore, it is important to get an understanding of the company’s product roadmap. You want to be sure you are partnering with a company that is continually evolving and improving.

6. Platform
Is the technology you’re considering cloud-based or is it on-premise? “Cloud,” “Hosted,” and “SaaS” are all terms we hear a lot nowadays and there is a reason for that. Internet-based platforms are generally more cost effective, easier to implement, and more secure. For more on the pros and cons of could-based vs. on-premise solutions, download this whitepaper.

7. Implementation Process
What does the process look like? Is the technology easy to learn? How long will it take until it is operational? These are all questions you should ask before purchasing any technology solution. You should begin teeing up your staff for the upcoming changes and even let them be a part of the decision-making process if possible. Be sure to work in enough time to get through the implementation and training process and realize you may need to be flexible because there are a lot of factors that can affect the timing of any technology installation.

Implementing a new technology in your dealership is no easy task. Change can be hard for you and for your staff. But if you prepare yourself, do your research, and look at these 7 key areas when comparing potential technology partners, you’ll quickly be on the road to better technology and increased profits!

Author

Mark Begley

About Mark Begley