By Chloe Hahn, director of marketing and sales at Dynamsoft
It is arguable car dealerships are behind the times when it comes to technology adoption. When it comes to most consumers, frustrations are largest with the finance department, particularly during the sales process. But what can the finance department do better and where do the frustrations stem from?
Frustrations with the finance department as part of the sales process is substantial. According to research done by Cox Automotive, buyers spend three hours at a dealership on average when purchasing, of which half is spent on paperwork or negotiating. Finance is the process most people felt took longer than they expected.
According to FICO, consumers getting their financing done at a dealership instead of an external source is trending down. Also, according to 2018 research by the National Automobile Dealers Association, dealers have just a 2.2% profit margin before gains from their finance departments.
According to other Cox Automotive research, only around 5% of customers report having digitally reviewed and signed documents and contracts at a dealership. But this 5% clearly means digitizing the finance process is possible. In addition to improving customer satisfaction, there are also cost-saving reasons to do so.
Tasking a Team
Dealerships commonly use external IT sources to help manage their technology. So, a dealership manager seeking to digitize their finance department will likely start with vetting their existing IT team. They will want to validate if they can implement an effective digital document management system.
Many dealerships will opt to build their own solution, to be able to customize it to their liking. To condense build time, developers can use software development kits, or SDK, for key components like document scanning, barcode technology and more. These pre-built features or capabilities can be dropped in with an SDK and can reduce months of work to just days.
To plan a proper implementation, it is a good idea to involve anyone who is part of the finance process, from a secretary to the finance manager, and on to the dealership manager. With an all-hands-on-deck approach, essential features and capabilities will more easily be uncovered.
Basic Document Management Features
Going 100% paperless remains a pipe dream in most cases. So, having a proper balance of documents that originate digitally and converting paper documents into digital files will likely be important. For documents that originate digitally, digital signature capabilities are a core part of the finance process. Dealerships will want to consider the options of customers to sign with a finger, mouse or pen.
Also, any digital document management solution should have scan and capture capabilities. Users will need to be able to edit captured documents. This can include basic image editing like rotating, cropping, and contrast and brightness corrections.
Ancillary Technologies in Barcodes and OCR
Other complementary technologies that are likely important to consider include using barcodes and optical character recognition (OCR). These technologies of convenience can often significantly reduce time spent on specific workflows. And the larger the operation, the more impactful their benefits can become.
Barcode and Scan Options
There are many barcode symbols and scenarios to consider. You might want to affix a barcode on a physical customer file to scan it and conveniently call up data related to it. Or you might want to also be able to scan a VIN, for it to become more integrated with the finance and sales process.
Dealerships might be able to take automation a step further. When they capture an image of the customer’s driver’s license, for example, they can apply OCR technology to extract essential information: full name, address, the license number and so on. This can be used to auto populate information in financial forms.
Car dealerships can significantly improve customer satisfaction rates by improving the finance department process. By modernizing it, they can also help more easily increase productivity, ensure better regulatory compliance and generally streamline operations.
With margins ever-thinning, taking steps to keep customers using dealer financing is vital. And as more and more customers expect digital experiences, the paperwork process in the finance department requires change now more than ever. Car dealerships falling behind in customer satisfaction from their customer-facing finance departments might do well to consider such options.
Chloe Hahn is the director of marketing and sales at Dynamsoft, a software company focusing on image processing solutions. She leads all digital initiatives, including market positioning, pricing strategy and more. Chloe also develops the company’s strategic sales plans.