© 2023 Auto/Mate, Inc. All Rights Reserved.
By Mike Esposito, President & CEO
In the movie “Groundhog Day,” Bill Murray had to learn how to be a nice person and help other people (and genuinely mean it) before he won the girl and got his life on track. Only then could he escape the eternal blaring of the alarm clock that woke him up to re-live Groundhog Day, over and over and over…
Much like Bill Murray, many car dealers are also re-living Groundhog Day. Every day many dealers wake up determined to improve their bottom line. Cut costs. Increase profits. And if your dealership is still on a legacy Dealer Management System (DMS), you know that one of your highest overhead costs is the monthly bill from your DMS provider.
You know you should make a change. You’re tired of the high costs, complicated system, contracts that lock you in, proprietary hardware, and being nickel-and-dimed to death.
Yet when the contract renewal date with your DMS provider draws near, anxiety sets in. It’s easier to stay with the same system. If you do mention to your vendor that you want to switch, suddenly they change. They swear this time will be different. Lower prices. Better customer service. They’ll promise anything to make you stay, so long as you sign that five year renewal contract. You, as they say, “Drink the Kool-Aid” and stay with your current provider. Fast forward five years and you are going through the same routine again. “Need to get off my existing system, too expensive, poor support. Need to talk to other DMS vendors.” Welcome to Groundhog Day…
Five more years, day after day, with the same expensive DMS. Do you really want this endless drudgery? Or do you want to escape, once and for all, into a more profitable future? If so, learn these lessons to set you free.
Are you getting the most value for your dollar? To find out, audit your DMS providers’ bills for the last year. Know what each line item represents and make sure all charges are justified. Chances are, you’ll find mistakes and charges for items and services you haven’t used. Read your current DMS vendor’s contract. Are there stipulations as to automatic renewal of the contract, or prohibition of purchasing standard hardware and attaching it to the system? Call business people you know in other industries, such as lumber yards or hardware stores, and ask them if their computer system vendors require contracts and proprietary hardware. Then ask yourself, is this really the type of treatment you deserve from your vendor?
Inform your managers that you plan to switch DMS vendors and ask for their input and support. The earlier you involve them in the process of change, the more accepting (and less resentful) they’ll be later. Ask employees what features and functionality they use on a regular basis, and what they would change if they could.
What do you envision in a relationship with a DMS vendor? No long term contracts? Being able to purchase standard hardware? The ability to understand and predict your monthly support bills? Your wish list should include not only the features of the system you’ll need, but a list of how you, the paying customer, deserve to be treated by a vendor.
Notify your current DMS vendor you will not be renewing. Do not fear, your dealership owns its data, and with your authorization any reputable vendor will grant another vendor access to it. When your DMS vendor comes back with a counter-offer (and they most assuredly will), politely refuse. Remember you don’t want to relive Groundhog Day. After all, if they were so intent on giving you a great deal, why didn’t they lower pricing a year ago? Or two? Or Three?
Ask other dealers which DMS vendors they use. Do research on the NADA web site and find out who industry consultants recommend. Make a list of potential DMS vendors and ask for proposals. Ask questions and see if their systems’ features match the inventory of your needs and wants. Narrow the list down to the top three vendors, and invite them in for presentations.
Inevitably, some of your dealership processes are built into the way your current DMS operates. A new DMS will alter some of these processes, but instead of being resistant to change, learn to embrace it. One of the greatest advantages of installing a new DMS is that it provides an opportunity to clean out old, unwanted data and create new and more efficient processes.
Legacy DMS providers often provide bundled services, including networking and phone support. Most non-legacy DMS providers don’t offer these one-stop shopping options, so it will be necessary to find new third party vendors to handle these other services. The good news is, these bundled services are charged at a premium, so using new third party vendors will likely reduce costs.
With preparation, DMS data conversions are no longer the nightmare they used to be. The transition may not be easy, but in the past five years the process has become faster, smoother and more accurate. For more information on how to prepare for a DMS data conversion, refer to AutoMate’s eBook, “The Dealer’s 10-Step Guide for a Successful DMS Data Conversion.”
Imagine this: you open your monthly bill from your DMS vendor and see a monthly support charge that’s approximately 50% – 75% less than what you were previously paying. There are no hidden fees, no forced upgrades, no printing charges or long term contracts. You understand that your new vendor needs to “earn their stripes” every month or they will not keep your business. You can cancel at any time and this gives you peace of mind. You are also saving money because your new DMS works with off-the-shelf servers, printers and PC’s. Viewing and printing reports like the Daily DOC is so easy it can be done with a push of the button and exported into an Excel spreadsheet. After a few months of tweaking, the employees have gotten used to the new system and praise your decision (or at least don’t hate you for it). You have no regrets, and are happy that you permanently eliminated a substantial overhead cost.
Follow these simple steps and break free of reliving Groundhog Day every five years. As Bill Murray found out… it is a better, more rewarding life.