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Dealership Management Systems: Shaping Your Own “Mission Control Center”

January 1, 1970

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Do you sometimes think that various areas of your dealership aren’t communicating as well with each other as they should be? Or do you wish you had a more accurate picture of business segments as your management team makes day-to-day decisions?

It may be time to explore acquiring a new Dealer Management System (DMS). Here’s some guidance on where to start, which kinds of systems are available and how to avoid overspending.

Features That Make a Difference

Of course, you’ll want to select a system that offers the features and functionality your dealership needs. Forgo the unnecessary, expensive bells and whistles. Decide with your department managers which features are must-haves and which are nice-to-haves—or even don’t-really-needs.

Popular DMS features include real-time updated inventory information; integrated appointment management systems for sales and service; and e-commerce interface, online ordering and retailing. There are many other options.

Ask in each case, “Will this feature make our dealership more efficient while cutting costs and fostering increased sales?” Take customer relationship management (CRM) software, for instance. CRM, which can be provided as part of the DMS, can help you keep track of all your dealership’s interactions with customers. You can have a record of which vehicles customers looked at and test-drove, whether they came back for second and third visits and whether they ultimately made a purchase.

Such information can benefit your store in several ways. For starters, you can use it to improve training for salespeople who aren’t closing a high enough percentage of prospects. It also can help you target promotional offers to prospects more likely to buy certain types of vehicles.

Negotiating a Good Deal

Ultimately, you must identify your needs and align them with acceptable costs. How much you end up spending for your DMS will depend largely on how effectively you negotiate. Here are a few strategies for negotiating the best deal with a DMS vendor.

Don’t wait until the last minute to research your options. If you’re facing a hard deadline for choosing and implementing a system, you lose most (if not all) of your leverage. Start your DMS research and investigative process at least one year before your system needs to be installed and operational. Be prepared to switch vendors to get a better deal. To gain negotiating leverage when accepting a contract, convince your vendor that you’re seriously considering other alternatives and will switch if you don’t receive the absolute best deal they can offer.

Review the contract terms carefully. Take the time to read the fine print. The terminology and language in a DMS contract can sometimes be confusing—if you have any questions, don’t hesitate to ask the vendor for clarification or even consult an attorney.

Negotiate based on the total implementation cost. The software is just part of the overall DMS package. Other components include database configuration, hardware, maintenance, employee training and ongoing support. Before starting negotiations with the vendor, make sure the bottom-line price includes everything you’ll need to implement and use the system.

Training Helps Maximize Your ROI

To get the most out of your new DMS—and maximize your return on investment—your employees need to know how to fully use the system. DMS vendors offer varying levels of employee training and ongoing technical support.

In general, training isn’t included in the price for the DMS software itself. Instead, it’s usually listed as a separate item in the DMS contract. Training costs vary widely based on factors such as the level of training provided, how training is delivered (on-site or virtual), and the number of hours of training required. As with purchasing the system itself, your negotiating skills will be an important factor in determining training costs.

In the End

When choosing a new DMS system, include your department managers and employees at every level in the dealership to provide insight into the features that they need to do their jobs. Their input also will make the transition smoother if they feel they had some say in the decision.

© 2020

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

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