Article

DMS 2014+

Consumer demand will force DMS technology to accommodate a fully online sales process.

April 2014, Auto Dealer Today - Feature

by Brian Reed

Whether you’re looking to upgrade your dealer management system or considering a new provider, you must look at your current system’s functionality, support and cost, then compare it to the other systems on the market. Relative to functionality, your analysis is typically based on your sales process, and that’s where most dealers stop. Very few ask themselves how well their DMS would support a sales process that would allow car buyers to shop, buy, finance and add protection products online.

You can’t pick up this magazine or any other automotive trade publication without finding stories about online sales. And there’s no ignoring the fact that OEMs and even some dealers are experimenting with new processes and platforms. Yes, you will hear chatter from within and outside our industry claiming that consumers will always come into the dealership to buy cars. I agree that very few people would be willing to buy any vehicle without kicking the tires. Most customers still want to see it, smell it and drive it.

For that reason and others, some dealers believe a fully online sales transaction will never happen. Only time will tell how far the trend will advance, but what if a customer actually did want to complete the entire process online? Are you ready? Does the functionality of any DMS support a digital transaction? Can it do so in an efficient and effective manner?

The answer is somewhat murky. I can tell you that, for most systems, complete online sales would require a fair amount of manual integration. One would have to develop systematic logic that would drive actions by the DMS rather than the commands you and your staff are entering today. Meanwhile, our industry sees the Internet and the DMS as two separate and distinct systems, each with a separate purpose. Let’s take a look into the future and ask what the DMS of the future — we’ll call it “DMS 2014+” — will be asked to do.

Functionality and Documentation
One vision for the future is this: The Internet is nothing more than an extension of your DMS — a user interface, if you will. DMS 2014+ is powered by a number of engines that can perform various functions based on requests made from a web page. Your online payment calculator, for example, is the same calculator used by the DMS. That means transactional documents can be prepared for each customer online, the same way you prepare them in the store today.

Here, we must challenge the definition of “online sales.” Much of what is written on the topic today includes a photo of a guy sitting at his kitchen table with a laptop. That’s a fitting premise for online shopping, but it’s too narrow for online sales, which can originate at home or on the show floor. Let’s say the online buyer of the future finds her vehicle on your website and visits your dealership for a test drive. If she had simply walked in, she would then be thrown back into the traditional sales process; instead, assuming the test drive went well, she and her sales consultant walk over to a computer to finalize the transaction.

So could a customer finalize a transaction entirely online at a dealership today? Not likely. Dealer management systems are set up to allow the dealer, rather than the customer, to control the transaction. Dealership personnel sell vehicles and serve as the manual integration point into the DMS, where they structure the deal and then generate the documents. There are several reasons why this is a time-consuming process. With the right systems and logic, DMS 2014+ would make it as easy as pushing a button.

F&I Products
The selling of F&I products has long been a sacred cow in the dealership sales process. The finance office is one of your most profitable departments, and no one wants to jeopardize their F&I profits. Imagine an online sales process in which F&I is not sacrificed but brought forward. Product information could be presented in a consistent manner online as the consumer progresses through the selling and transacting process.

There could be logic based on the customer, the car, and the financing in which products are offered to customers and at dealer-defined profit margins. CarMax employs a transparent, self-selection-based process and they do pretty well in F&I. They also maintain high CSI scores. If you have ever bought a computer from Dell, you know their checkout process includes opportunities to read or watch videos about aftermarket-type products and add them to your purchase.

All the paperwork associated with a car sale — outside of some specific state registration forms — could be prepared online for the customer to review and electronically sign. That technology already exists, but it has yet to revolutionize your sales process. Part of the reason is the outdated technology that drives most dealer management systems.

DMS 2014+ would merge the demands of today’s consumer with the latest dealer technology. The result would be a customer-friendly process that works within constraints set by the dealer. It would also allow the customer or the dealer to push a button to prepare an electronic deal and execute the transaction. That is where the market should be headed.

Consumers demand transparency. By failing to update technology and processes, we risk becoming irrelevant to them. Wherever they choose to initiate and complete their transaction, and whether or not they feel compelled to kick the tires first, the DMS of the future will have to support a rapidly evolving sales process.

Brian Reed is the president and CEO of Intersection Technologies Inc. and F&I Express. He is a 30-year industry veteran and an expert in dealership technology.
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