When is Technology No Longer Optional? - AutoSuccessOnline

When is Technology No Longer Optional?

Let’s face it, customers can be fickle. A big part of business evolution involves leveraging technology in all departments. Technology can help managers make decisions quicker and more effectively, which should lead to higher profitability and higher CSI. The key is knowing where you have to spend just to stay in the game and where you should spend to win the game.

There was a time not that long ago, when you had to ask if a bank had an ATM or if you could bank online. Today the ability to do those two things is standard and most customers would be shocked if a bank did not offer them. The reason for this change is pretty simple: survival. 

Let’s face it, customers can be fickle and since the cost of switching banks, car dealers, etc. is so low that to retain customers businesses need to evolve. A big part of the current evolution involves leveraging technology in all parts of the business from fixed operations, to marketing, to the service bay and beyond. Technology can help managers make decisions quicker and more effectively, which should lead to higher profitability and higher CSI. The key is knowing where you have to spend just to stay in the game and where you should spend to win the game.

“Nice to Have” vs. “Have to Have” Technology

When deciding on investing in technology you should ask yourself if this is a “nice to have” technology or a “have to have” technology. Also, keep in mind how you categorize technology changes over time. In the mid-1990s when the internet started to emerge, a website was a “nice to have.” Today, if a dealership does not have a website they may as well close their doors. People look online first, browse inventory, make service appointments, etc. all through your website. Today, a website is clearly a “have to have” technology.

Investing in have-to-have technologies is often an easy choice. Besides the website mentioned earlier, have-to-have technologies include a dealer management system (DMS), a multi-lined switched phone system, an integrated merchant account system for charging customers, etc. These technology needs are obvious. They are items you budget for each year and you make sure are kept current and competitive as the technology changes. Periodic upgrades are made when you realize your dealership is falling behind your competition.

The trickier decisions arise when looking at nice-to-have technologies. These technologies are what can differentiate you from your competitors and deliver superior performance in terms of generating additional revenue, driving down costs or delivering higher customer satisfaction.

Competitive Technology — Getting the Highest Return

Businesses often invest in technology that they really do not fully understand, and given the rapid change in technology, this is understandable. Car dealerships sell and service vehicles and are in the business of satisfying the consumer. They should not have to be experts in technology as well. However, the dealership has to decide where to invest. In the end, they hold the purse strings, but they usually rely on the vendor to sell them what’s “best” and often fly a bit on blind faith. Unfortunately, this trust is often misplaced given a recent study estimated that approximately 70% of money spent on technology fell “short of expectations and returns on investment (ROI)”1 Given the tighter margins in the car business than in past years, making spending mistakes like these can negatively impact long-term dealership profitability. 

To help avoid these spending mistakes it’s a good idea to look around the dealership to see if there are any easy wins in terms of technology spending. This low hanging fruit often provides the highest return. 

For example, in our industry we provide technology that streamlines a customer-facing interaction when a loaner is required. In many dealerships we visit, the loaner car process still involves a time-intensive process that utilizes paper forms. This leads to longer than usual customer waits times during service appointments, which can negatively impact a dealer’s CSI. It also means critical data that is required to eliminate potential liability for the dealership may be skipped or incorrect. 

There are other dealership processes that are still largely paper based as well. Eliminating this paper streamlines customer interactions and, just as importantly, creates data for tracking and measuring employee and asset performance as well as allows for more effective interaction with your customer. 

Technology that eliminates paper is almost always a good investment and an example of low hanging fruit that presents low risk and high return. Of course, not everyone may agree with this. I once put this question to one of my dealers and pressed him for a benefit of using a paper form. He thought for a minute and then said straight faced, “Well, I get to use a pen.” It’s tough to argue with that, however, I’ll always pick technology over a paper-based process and so should you. After all, you can always still use your pen on thank you cards for all your satisfied customers.

Click here to view more solutions from Laura Tierney and ARSLoaner.

You May Also Like

The Modern Dealership & the Blended Buyer

It is essential to reflect on the connection between your online and in-store sales processes.

If you asked your parents, or even your grandparents, about what they thought life would be like in 2023, what would they say? Could they have predicted the rise of the internet, the invention of smart lights or the widespread obsession with cat videos?

In a world filled with uber-fast wifi, same-day delivery, smart assistants and electric vehicles, it’s hard to imagine what could come next. The past few decades have birthed technological advancements that have impacted every aspect of our lives, from ordering groceries to buying a car.

All the Buzz from Texas

Another NADA show is in the books and, like most of the people I spoke with, I’m energized about what I saw for the future of our industry.

3 Ways Conversational AI Yields More Satisfied Employees

Implementing conversational AI software in your store — in sales or service — is truly putting your employees first.

How Call Management Can Alleviate the Labor Shortage

When dealerships are understaffed, efforts must go toward prioritizing the customer experience. Call management is critical to this strategy, so knowing what to track allows for quick fixes and a better customer experience.

Are You a Life Learner?

Everyone has a lesson to teach us, whether they intend to or not. It’s up to us to pull out the best lessons from these interactions.

Other Posts

Setting the Stage to Influence

Remember not only to practice the message that might address the customer’s concerns, but also how to best set the stage for your message to be heard.

Selling the Convenience of EVs

After outlining the benefits of EV ownership, your customer should be less conflicted than they were when walking into your dealership.

Say Yes to the Plan, or Plan to Fail

The most successful dealers are partnering with specialized companies, and this doesn’t have to take as much of your time as you think. 

Take Control of Your Lead Management & Follow Up

Learn how Mac Haik Chevrolet has taken control of lead management and follow up, greatly improving their business.