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Erik Nachbahr, CISSP

Erik Nachbahr, CISSP President

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How to Buy a Phone System

The process of purchasing a phone system is not to be taken lightly. Phone calls into dealerships outnumber Internet leads by four to one, and many studies show that dealers are not able to handle both the volume and routing of incoming calls in a way that meets customer expectations.

When you're buying a new phone system your top three goals are:

1) Understand what capabilities your dealership needs

2) Research which phone systems will meet these capabilities

3) Choose a phone system that will scale and support your dealership as needs change in the future

The right system, configured expertly, can assist with answering more calls and getting customers connected with an appropriate agent. That's why many dealerships are opting for IP phone systems, and specifically Unified Communications Platforms (UCPs). UCPs leverage several other tools to turn a phone system into a two-way communications platform that offers dealers the following advantages:

-Allows remote and mobile workers to access features no matter where they are, including voice mail, instant messaging and single-reach numbers

-Supports multimedia communications on a variety of devices

-Better customer experience

-Scalable for future expansion and multiple stores

-Supports call routing for BDCs and call centers

-Increases business productivity

The biggest problem that dealers run into with IP phones is dropped calls and poor call quality. This happens for one of two reasons: the dealer's IT infrastructure is incapable of supporting the phone system, or the phone system vendor relies on the public Internet to send and receive voice calls once they are converted into data packets.

 

Cloud-Hosted or Self-Hosted?

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Some phone system vendors offer cloud-hosted (aka public-hosted) solutions.  Think of cloud-hosted phone systems as similar to Skype. Would you use Skype as a videoconferencing solution for your business? Most businesses would not. Skype sends video packets over the public Internet and the service is notorious for poor video quality and dropped connections. The same thing happens to your phone calls when they travel over the public Internet.

With a self-hosted VoIP phone system, the box of hardware is on-site at your dealership or data center. The box connects to your phones through a private, digital circuit provided by a telephone carrier.

Although a self-hosted system requires purchasing the equipment up front, it is far more reliable than a hosted solution. Additionally, you own the equipment so the longer-term cost of ownership is the same, if not less, than paying ongoing subscription fees for a public-hosted solution.

When a phone system vendor approaches you, there is one essential question you need to ask: Does any of this system run over the public Internet?

If the answer is yes, run the other way.

IT Infrastructure

Purchasing an IP phone system may require that you upgrade your IT infrastructure so it can support all the additional data flowing through your network. Be sure to have your phone system vendor assess the current state of your Internet connections, routers and switches to see if they will support their systems' requirements.

 

Experience Counts

Find a vendor with experience servicing auto dealerships. Here's why experience matters. Recently a dealer signed on with a phone system vendor. During installation the vendor used some of the on-site equipment that belonged to the dealer's DMS provider. Unbeknown to the phone vendor, the dealer was in the process of switching DMS providers. Soon the phone equipment was shut off along with the rest of the DMS, and the phone system went completely down.

Auto dealerships are unique business eco-systems. Your partnerships and the way you use phones is different from other businesses. When you are vetting potential vendors, ask if they have other dealership clients. If they don't, keep looking.

 

Consolidate Carriers

If you are part of an auto group that has more than one location, you have extra negotiating power. I often see situations where individual stores have their own carrier and negotiate their own deals.

Multiple store groups should all use the same telephone carrier. Carriers will give substantial discounts for larger organizations.

 

Sign 36-Month Contracts: Never Five Years!

Many dealers agree to sign a five-year contract with their phone carrier, believing it will save them money. But locking yourself in gives you less flexibility in negotiating changes. After three years your carrier has recouped its initial costs. Their costs drop dramatically, but your costs suddenly skyrocket.

In my experience it's better to sign a 36-month contract. Don't automatically renew with the same carrier! Bid your business out to competition.

Your phone system is your dealership's primary communications tool. When it's time to buy a new system take the time to become informed, do your research and vet several vendors. Your customers will thank you.

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