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Revving the Tech-ometer

By Keith Crerar, Executive VP, TradeRev

Keith Crerar, Executive VP, TradeRev

Technology is significantly changing the way dealers approach vehicle acquisition, inventory, remarketing and sales. New apps and tools that are designed to build and optimize efficiencies, create new channels of business, foster connectivity, streamline operations and enhance productivity are debuting seemingly every month. The opportunities are endless, but so are the potential challenges if the technology isn't properly vetted or is implemented without proper preparation and training.

"Before purchasing or implementing anything, vet the technology thoroughly"

Dealers and other decision-makers who want to harness the power of new tech tools to improve their own business would be wise to ask thoughtful questions about whether or not a specific technology investment will be worthwhile for their particular dealership or operation; and to take the time to familiarize themselves with accepted best practices for building out a technology implementation plan, and the potential pitfalls they should be watching out for during and after implementation.

Innovation nation

There are a number of new technologies and tech-driven services out there already disrupting the traditional retail model in the automotive industry. Many innovators are doing business in a way that would have seemed impossible just a few short years ago. While technology is playing an important role, it is ultimately just a delivery mechanism: the true innovation is the service itself. On the dealer side, sophisticated inventory tools can help you figure out what to buy based on past purchases, and can use predictive analytics and marketplace profiles to make detailed recommendations. 5G technology, the physical web and mobile beacons will continue to change the way people start to interact with non-digital objects in their lives. In conjunction with the rise of Big Data, dealers will have access to enormously valuable and highly customized information about who and where their customers are, what they want, and how they shop and drive. For their part, consumers will have instant access to detailed information about dealers and their products, from car history to dealer reputation and financing details.

Doing your homework

It may sound obvious, but it’s essential that dealers take the time to ask pointed questions about a potential new tech platform, and carefully consider whether or not a specific technology investment will deliver a positive impact on their business.

One of the best ways to do this is to take a step back and try and identify any weaknesses in their current business model. What problem are you trying to solve? Will this solution have a meaningful impact on that problem? Simply adding technology for the sake of technology can be an expensive and inefficient.

Before purchasing or implementing anything, vet the technology thoroughly. Determine if and how it works with your existing systems and procedures. If there are compatibility issues, how hard will you need work to resolve them? Is it user-friendly? The first inventory management systems that hit the market 12-15 years ago were so notoriously complex that only 10 percent of dealers could even use them successfully.

Don’t make assumptions. Determine how much downtime will be required to implement the system and train your employees. Think critically about costs and consequences. Will it impact customers? Your business? Your workflow? Dealers build a business on repeats and referrals, and a subpar experience because of a tech-driven hiccup or a poor customer interface is less than optimal. To that end, it pays to think like a user–and maybe even act like a user. Consider experiencing the technology for yourself as an end user by going into another dealership and experiencing it firsthand. It doesn’t matter if you have a great new app that allows customers to book their oil changes electronically. If the interface on the app is so clunky and frustrating, users might get frustrated and end up going to Jiffy Lube instead.

Priorities, pitfalls and best practices

Best practices for building out a technology implementation plan include the following:

Timing is everything

Pick the right season to roll out your new tech platform. Going live in the November/December slow season will help ensure that any issues will impact the fewest customers. The longer you can plan for your integration and rollout the better. Move slowly and deliberately, with flexible and forgiving timelines that give you the time to plan, train and learn. It may feel tedious, but it can pay off in the long run.

Integrate and educate

Make sure your integration plan includes employee education touch points that set the stage for long-term success. And make sure that everyone is involved. Folks in accounting may not be doing oil changes, but they will likely need to know what the new billing format looks like. Think critically about how new tech will impact different team members, and give them the exposure they need to become comfortable with the technology. This process also helps bring in different perspectives and new eyes to identify potential issues and opportunities.

Get it in writing

Determine a clearly defined technology vendor role for rollout and implementation, and get a commitment in writing. While you absolutely want your vendor around to help out with any glitches or issues, it also makes sense to keep your own options open down the road by signing the shortest contract possible.

Hit the ground running

The first 30 days are critical, and it needs to be all hands on deck. A sour view of the new technology from your employees can filter through to customers, so it’s important to keep every member of your team focused, and to stay positive, answer questions, and resolve issues as quickly as possible.

When evaluated and deployed correctly, new technologies can help make your business more efficient, more agile and more flexible, helping you to become more customer friendly while connecting with the influential Millennial demographic that will soon make up 40 percent of new car buyers. Far too many dealers don’t use them to their full capacity, and learning how to do so correctly is one of the wisest investments any dealer can make.