Today, Steven Szakaly, Chief Economist of NADA, and Mark Scarpelli, NADA Chairman, conducted a briefing based on the first six months of U.S. auto sales in 2017. They re-affirmed NADA’s positive prediction for 17.1MM in new vehicle sales in 2017 and 16.8MM next year. They pointed out that while sales are a bit softer than the previous two years, those years were back-to-back record years and the “softening” is still clearly within a favorable trendline.

NADA also ardently disagrees with the doom and gloom predictions that some are making. The briefing included the following points of emphasis:

• Positive employment growth and low unemployment levels are helping the economy continue to grow. History has shown that people with improved financial positions tend to prioritize vehicle buying in their spending.
• People clearly still value owning their own vehicle. Despite the hype in the marketplace, ride sharing and other alternative modes of transportation are having very negligible impact on vehicle sales.
• Despite the steep drop in demand for sedans, consumers have simply shifted to buying more SUVs and light duty trucks.
• It’s still a good time for consumers to shop for vehicles. Pricing remained flat in the second quarter. OEMs and dealerships are acting aggressively to capture their share of the SUV/light truck market. And buyers who still desire a sedan can take advantage of the tremendous incentives that are still being offered.
• Consumers will benefit from the tremendous mix of makes and models available to them. As Mark Scarpelli of NADA points out, “We know from empirical research that intra-brand competition lowers prices for consumers, and as a dealer, I can tell you that these competitive forces are present in abundance on the ground.”
• Loan financing has been extended to six years. Many consumers will find this extension attractive during the initial sales process, but they should understand that it will be pushing their net equity position into the fourth year instead of the third.

It should also be noted that last month, GM lowered its forecast for sales from 17.55MM to the low 17MM range for 2017, keeping in line with NADA’s forecast.

Given the state of the industry, dealer principals need to be asking themselves, “Am I positioned properly?” Expect competition to be fierce. Be prepared.

Do all your employees bring their A-game every day? Do you have the right mix of new and used vehicles on your lot? Are you properly staffed? Are your people properly trained? Assume that you will be operating in one of the most competitive stretches in consumer buying history.

Be proactive. Get ready. Beat the competition and boost your bottom line. Lean on your technology—especially your dealer management system—to save time and increase profits.

As technology becomes more widely accessible and easier to use, consumers are becoming more comfortable with the concept of “The Internet of Things1” (IoT). This concept refers to how everyday objects can send data and information via the Internet (wireless) to external sources. Then, the recipients (people or systems) of this data can use the information to understand how a product or service is performing and identify actions that need to be triggered. The information is also stored and can be analyzed for product and process improvements.

One of the earliest uses of IoT was for inventory management. In 1982, Carnegie Mellon University modified a Coke machine to report back inventory levels.2 It also provided other insights such as how long it took for newly stocked items to become cold. People quickly recognized the value of such real-time information and how it could be used to create a competitive advantage.

Since then, IoT has grown to include energy management, healthcare monitoring and intervention, emergency alerts, building and home automation, and much, much more. The vehicles your dealership sells today are becoming major IoT devices. And many (though not all) consumers are eating up the benefits.

So, the question is, can your dealership employees explain the “connected car” to potential vehicle buyers? Do they have the knowledge and insights to make IoT a deal closer? If the answer is no, you might want to train your staff in the following 3 areas.

How the Connected Car Helps the Driver and Passengers Stay Safe
Safety is a big benefit of a connected car. Given that safety is often a key factor for buyers, your teams should really understand this aspect. Consumers will appreciate functionality such as pre-collision systems, road hazard detection, lane departure alerts, blind-spot warnings, automatic high beams, and pilot assist. Just as important are any hands-free features for phone and text.

How the Connected Car Can Make Life Easier
People are always looking for ways to make their lives easier. Make sure you’re able to explain to them how a connected car can help accomplish just that. For example, you could point out that since you can start, stop, lock, and unlock your vehicle all from your phone, keys aren’t needed and you don’t have to worry about losing them. You can also upload directions from your phone directly into the vehicle’s navigation system. Some vehicles will even upload your daily calendar and program the navigation system to take you from appointment to appointment. And don’t forget to mention built-in Wi-Fi, the GPS locator, or the self-parking feature if available.

How the Connected Car Helps Drivers Stay on Top of Things
Today’s connected vehicle already gathers and analyzes vehicle data to predict if problems are arising and alert the owner if service maintenance is needed. Notifications can be sent via email, text, or smartphone app. Other types of notifications include alerts about road conditions, traffic, and weather. Some vehicles even allow parents to set controls that alert them if the car is being driven after curfew or outside a predefined geographic area.

Dealership employees who can talk-the-talk will no doubt make stronger connections with customers. The trick, of course, is focusing on the connected features that align with the vehicles you sell. Don’t be afraid to explain connected features on your website as well. The buying public is looking to understand this emerging and rapidly changing area and you can set yourself up as a subject-matter-expert by sharing what you know.

One word of warning, however: As mentioned earlier, not all vehicle buyers are enamored with the concept of a connected car. Some are bothered by the idea that Big Brother is watching. Others fear hacking and have privacy concerns. So just be sure you can address these concerns as well.

1 “A SIMPLE EXPLANATION OF ‘THE INTERNET OF THINGS’”
HTTPS://WWW.FORBES.COM/SITES/JACOBMORGAN/2014/05/13/SIMPLE-EXPLANATION-INTERNET-THINGS-THAT-ANYONE-CAN-UNDERSTAND/#1FDBDCB41D09

2 “THE ‘ONLY’ COKE MACHINE ON THE INTERNET.” CARNEGIE MELLON UNIVERSITY. NOVEMBER 2014.

So, how do you really feel about your dealer management system (DMS)? Is your customer support center available when you need them? Are you limited in your third-party options? Does your DMS improve the customer experience at your dealership? Does your DMS help you streamline your deals?

Autosoft recently conducted a Net Promoter Score (NPS) survey that revealed the current overall state of opinion regarding the DMS industry is low. Frustrations are reaching a boiling point.

We conducted the study after realizing we were receiving an unusually high number of DMS inquiries this year (especially from people currently using one of “the Big 2” providers). As we talked to inquirers about their frustrations with their current DMS, we heard, too often, that instead of helping a dealership achieve its goals, the DMS was simply getting in the way.

According to our study, on a scale of -100 to +100, the DMS industry’s overall NPS score came out to approximately -37, meaning there were far more detractors (unhappy customers who will speak unfavorably about the product or service) than promoters (loyal, enthusiastic customers who will repeat business and refer others).

This score for the DMS industry is comparable to consumers’ views of the airline industry, where consumers generally harbor low opinions of the airlines and feel their choices are too limited.

Luckily, when it comes to a DMS, you do have options.

Are you ready to re-evaluate your options? Are you one of the many already seeking a different solution?

In your search for a better dealer management system, here are some suggestions to consider:

1. Drill Deeply Into Customer Support

Most dealer management systems don’t really differ all that much in terms of functionality. Ultimately, all will get the job done. So, a different, and just as important, question to ask is, “Can I rely on this company for support when I need it?”

Some providers have outsourced their support call centers to other countries. Others have segmented their customer base by various criteria and only focus on a certain top percentage. Still, others have become so large, the company is simply spread too thin to properly assist customers.

If you are considering changing your DMS provider, be sure to get an intimate understanding of the support and service you can expect from a provider. Ask to meet the head of support and hear an explanation from their own lips. The way a provider structures and delivers support will tell you a lot about the provider themselves and how important you are to them as a customer.

2. Confirm You Have the Freedom to Choose Your Partners

A DMS system should give you the flexibility to choose the partners with whom you want to do business. Whether it’s CRM, marketing, F&I, vehicle inventory, or another area where you want to partner with a third-party vendor, you should have the freedom to do business with the partners that help you generate the best customer experience while maximizing profits.

Does the DMS provider permit you to choose? Do they force you to do business with only those companies in which they have a financial claim?

3. Use Independent Reviews

The automotive retail industry is still very much a “word of mouth” business. Many dealer principals rely on their 20 Group and trusted colleagues for benchmarking and advice. You should definitely continue to do that, but you will also want to seek out additional opinions from other sources.

DrivingSales is one place to look for additional insight. They collect ratings from dealerships all across North America, and each rating is independently verified by the DrivingSales team.

These unfettered views can provide deep insights into what you can expect your experience with a particular provider to be like. These ratings are truly independent and not affected by sponsorships or advertising. Do your homework. Your fellow dealers won’t let you down.

4. Seek Out Measurable Value

Not only should a dealer management system NOT get in the way of doing business your way, but it should help you deliver tangible results.

When looking for a DMS ask questions like:

• How long does it take to desk a deal?
• How will this system help me deliver a complete sales experience in a short amount of time?
• How will it help me keep service techs in their bays and spinning wrenches?
• What will be the impact on the lines at the parts desk?
• What are all the ways this DMS will help my sales consultants save time?
• How easy is it for the dealer principal to understand the financial state of the dealership?

A good DMS will save you time and money, help you sell more cars, and help you create a better experience for your customers. Don’t settle for a standard DMS—especially if the standard doesn’t meet the mark.

Recently, I had the pleasure of teaming up with my daughter on her quest to buy her first new car. She’d just landed a full-time teaching gig in Virginia, so she could afford to trade in her used Chevy Aveo for something new. Like most young Millennials, she began the buying process online. She determined which brands, models, and packages she wanted to see and had a general understanding of what she could afford. After much research, we were off to the showrooms.

As someone who has been working in the dealer management system (DMS) business for over a year now, I was curious to see how the selling process has changed, and how technology now shapes the car buying experience.

I must say, I was a bit disappointed. For the most part, the experience was the same traditional process that I went through 30 years ago. At some dealerships, we were met by someone in the lot who listened to my daughter’s wishes and then took us inside to sit and wait while they looked up a few options they could show us and grabbed the driver’s license information. In other cases, the sales consultant left us hanging out in the lot while they went inside to check on the inventory. Only one salesperson took us immediately to the vehicles my daughter was interested in seeing.

In any case, once we were out in the lot, it became obvious that most of the sales consultants were determined that my daughter should take a test drive immediately, and they pushed hard for one. In several cases, the test drive wasn’t even for the exact car she wanted to see, but for one that was “close.” They did not seem to consider that my daughter had a lot of questions from her research or that she was interested in getting those answers first. But she did have questions and she did want answers. When my daughter started asking those questions, if she sensed that the sales consultant didn’t know the answers or was “just making it up,” her instinct was to move on the next store.

From my perspective, the lack of mobile technology to enhance the buying experience was very notable. Many DMS providers offer solid solutions for the Sales and F&I process. With those solutions available, a sales consultant should have been able to meet us in the lot, look up the exact inventory on the spot, and take us immediately to the vehicles we were interested in seeing.

Mobile technology should give salespeople the ability to scan the buyer’s driver’s license and potential trade vehicle VIN number without retreating inside. A salesperson should be able to begin gathering the information needed to move the experience along quickly and efficiently, all without leaving the customer’s side.

For Millennials, this type of streamlined, technology-driven, and personalized process is what satisfies their thirst for information, their desire to feel that they’re being heard, and their expectation that you respect their time. Once this process is achieved, completing sales should be a matter of matching buyers to the right vehicle and payment. And, once again, mobile technology can make that happen more easily and efficiently.

Imagine, during the test drive, being able to discuss different payment options and how they’d impact the monthly payment. Think about how you could be discussing how affordable a higher package could be when spread out over 48 or 60 months while your buyer is behind the wheel, falling in love with the vehicle.

And if interest seemed really high, picture how efficient it would be if you could communicate back to the store for help to begin the trade evaluation process, the search for the best financing, etc. As a result of a faster, more streamlined buying experience, your focus could more easily be on getting the buyer the greatest value rather than the lowest price. The overall result, then: a better buying experience for the customer and a better deal for the dealership.

In talking with other recent auto buyers, I’ve discovered that it seems many dealerships could benefit from an evolution in their selling practices to catch up with the changing industry. Better technology should play a big role in that. What do you think?

For more on how to better engage Millennials and the iGeneration, visit the Autosoft resource center at https://www.autosoftdms.com/resources/.