We spoke with hundreds of dealers at the recent NADA Convention & Expo in Orlando. One of the recurring conversations at our booth was that many dealers are overwhelmed by all the technology available. From CRMs to reputation management to implementing new technologies in the service drive, how do you know where to begin? What’s most important? What’s really going to add to your bottom line and what’s going to be a waste of money?

I read a book many years ago that provided what is one of the best answers I’ve ever heard to these questions. In Jim Collins’ “Good to Great…Why Some Companies Make the Leap and Others Don’t,” he outlines a simple rule for companies regarding technology.

Technology should not be purchased as a solution to something that doesn’t exist. Technology should only be purchased if it will help you improve a process that is already currently in place.

Take CRMs for example. Years ago salespeople used pen and paper as a CRM. They wrote down customers’ names and addresses and notes, they sent out follow up letters, they sent out vehicle purchase anniversary cards and they called customers. Today of course the tools are different; you can swipe a drivers’ license and send out a text or e-mail. But the point is, a CRM isn’t going to do that for you. If your salespeople aren’t currently following process, you could potentially waste thousands of dollars a month on a CRM that isn’t going to help you. Same with a brand new website guaranteed to double your leads: ask yourself how well are you converting your current leads?

Another big theme at NADA was technology in the service drive. There’s a huge demand from dealers for features like mobile solutions and auto dispatch that can improve efficiencies & boost profits. Yet many service departments are not following basic processes that will help customer retention. Here’s one example:

When was the last time you went to a dentist? The day before your appointment you probably received a phone call or e-mail reminder from the dentist. Then, when your cleaning was finished and you went to check out, the assistant said something like, “you’re due back in six months, would you like to schedule your appointment now?”

I would venture to guess that most service departments, despite being eager to implement new technologies, are not doing these two basic customer retention techniques on a consistent basis: appointment reminders and scheduling the next appointment before a customer leaves—yet these two techniques don’t require any technology at all!

So when you are considering which of the new technologies to purchase and implement in your dealership, ask yourself these questions: what are we currently doing? Why isn’t it effective? Is it a process problem, a people problem or a technology problem? If you are 100% certain that your processes are in place, your people are doing what they’re supposed to be doing, and a new technology will make it easier for them and improve results, then by all means, go ahead and buy.

How do you make decisions on whether to purchase new technologies? What was the most interesting or exciting new technology you saw at NADA?

Auto/Mate Dealership Systems is conducting a survey about CRM and desking solutions. We want to know what the most important features are and what matters most to users when considering purchasing a new solution. We would greatly appreciate your time and help with this survey, which is only three questions and should take approximately three to five minutes of your time! In two weeks, we will choose one random entry from our survey respondents and award that winner a $200 Visa gift card!

Here is a link to the survey: http://www.surveymonkey.com/s/SD6N8W5

Thanks for your time and participation!

Most dealers I speak with typically think that ALL profit is good profit. How can any profit be bad? But I believe there is such a thing as bad profit, and if a company continues to focus on growing its business generated on bad profit, ultimately it will hurt that company more than help.

So what is good profit? Any profit generated from selling a product or service, with a reasonable profit margin built into the pricing. Good profits do not cause distrust on the part of the customer.

As to bad profits, you cannot spot them by reading a financial statement. Bad profits are a lot like the Netflix debacle. The results produced look great in the short term from a financial perspective. Revenue increases, dollars drop to the bottom line. However the long term detrimental affects far out weigh the short term gains. Customers leave to find a better less costly supplier.

So how do you identify a bad profit? Typically, bad profits are generated by taking advantage of the customer or his/her situation.

Let me give an example: airlines that charge baggage fees and now carry-on fees. Yes, this generates a lot of profit for these airlines. But I argue that it’s bad profit, because it drives consumers to choose another airline first, if at all possible. For instance, Southwest Airlines does not charge any baggage or carry-on fees. If a consumer has a choice between flying Southwest and an airline that charges $25 for each bag (each way), and the cost of the flights are approximately the same, and the schedule for both flights is acceptable, which airline do you think they’ll choose? Southwest, of course. And because of this, Southwest gets more customers and generates more good profit. So in the short term the airlines that charge for baggage do make profit off the customer but what does it do to that customer relationship over the long term. Customers hate it and in the future will fly someone else if they can.

In a dealership, an example of “good profit” would be the profit generated from a car sale or a typical service job such as replacing brake pads. As customers arrive at your dealership, you may be offering items such as free high-speed Internet access in your service waiting area or even free car washes. When I managed a large dealership, we had an automated car wash and every service customer received a free car wash for their vehicle.  While it’s true that providing Internet access and car washes have a cost associated with them, and it would be easy to justify to yourself why you should charge for them (“we have costs so we need to pass them on to the customers”) chances are you would never think of passing those costs to your customers. Imagine if you charged your service customers $4.95 for Internet access, or added $3 to every RO for a car wash. This would be bad profit, because it would be highly likely that those customers would soon be looking for a dealership that was more customer friendly.

The concept of good profit and bad profit should apply to your vendors, too. Do you have a vendor that “nickels and dimes” your dealership for every added service? Do you have contracts with vendors that you find allows the vendor to take advantage of you? Some dealership management system vendors will charge for things that the dealer believes should be free. That is exactly what I am talking about….an example of a bad profit.

When it’s time to choose any type of vendor, consider the company’s business practices to get a feel for how much good profit vs. bad profit they generate. And as you consider any new sources of profit for your own dealership, steer clear of “bad profit” revenue streams. Long term, bad profit has a detrimental impact on your brand.

About a month ago I was woken up one night at 1 am with a phone call that nobody wants to get. I was told the sprinkler system in our office building had activated and a minor ‘flood’ was in progress. I asked if there was a fire, but the answer was no. No fire. For some reason the sprinkler system just decided to short-circuit and go off.

I immediately headed towards our office, but before I even got there our disaster recovery plan went into effect. Despite the fact that our building had been deluged with four inches of water, by 6 am, when our customers first began arriving at their dealerships and sitting down to their computers, we were fully operational. Our employees were not physically in their offices, back-up servers were functioning and everyone worked either from some of the dry offices or from home that day. Customers, and even our salespeople who called in from various parts of the country, had no idea that a disaster had just occurred.

Like many people, I thought this would never happen to our company. You hear about it happening to others, but to us? Never. Yeah, right!

So I highly recommend that if you don’t have a disaster recovery plan in place, you should put this on the top of your priority list. I am so grateful that we did. Since we just experienced this, I thought I would share a few tips:

1. First, understand the difference between a disaster recovery plan and having an insurance policy. Insurance policies for fire, tornadoes and floods are meant for after the fact. Once the damage is done, insurance policies are great for helping you get everything back to the way it was. But all that takes time. A disaster recovery plan is designed to keep your business running in the midst of a disaster. That is, when disaster strikes, how do you stay operational so you don’t suffer loss of business or create problems for your customers?

2. Most businesses these days are tied to the Internet, the data on their servers and to their telephone system. Physical damage to a place of business can be repaired, but lost data cannot be retrieved. If your customers can’t get through to you with questions or to make or re-schedule an appointment, or place an order, those opportunities may never be recovered. So have a back-up plan. We have servers in our building, but we also have duplicate servers running in the cloud. Our employees have IP phones they can use to connect with our computer system so they can work from home.

3. Have a disaster recovery plan for every scenario. We had one for floods, fire, and in case we couldn’t get into our building. If your power goes out, a plan might be as simple as having a generator that runs temporarily until your power comes back on. So what is the plan for that? Do you have a generator? Who is responsible for starting it and ensuring that once installed, it stays functional? (i.e. maybe once a month it needs to be started and you should have enough fuel on hand for a day or two)

4. If your dealership has a disaster recovery plan, everyone on your staff should know what their responsibilities are. Who calls emergency services? Who is responsible for evacuating the building if necessary, and making sure everyone is out? Who is responsible for flipping the PBX to a back up PBX? Who activates the back-up servers? The person responsible for calling the power company should have that number programmed into their cell phone. So when disaster occurs, it’s not a fire drill. Everybody knows exactly what they have to do and what protocols are being followed; as opposed to asking, what do we do now? Who’s in charge of what?

5. In case of physical damage, i.e. an extensive storm or fire, I recommend having a back-up PBX in another location. The phone tends to be the life blood of most companies. A lot of companies have a reciprocity arrangement; Company A installs a back-up PBX at Company B’s location, and in exchange, Company B has their back-up PBX system at Company A’s location. Obviously these two companies should not be neighbors; preferably they should be in different areas of the country. Try approaching a company that you have a great relationship with; whether it’s another dealership or a vendor. Another good way is to contract with a Virtual PBX company. This is where your PBX is actually in the cloud. No hardware to maintain. You pay a small monthly fee to have it available then when you need it you pay the usage.

   

So what’s your disaster recovery plan? Have you ever suffered a disaster and how did it affect your business? What recommendations would you add to these?

To be a successful dealer these days, there’s no getting around the fact that you have to create an excellent shopping experience for the customer. Online user reviews and increased pricing transparency mean that customers can be choosy when they are deciding from which dealership to purchase their new vehicle.

There are many ways to create a welcoming environment in your dealership, but all the best practices in the world won’t do a lick of good if your front-line employees fail to execute them. Do your employees lack motivation and do only the bare minimum to get by? Are they disingenuous, rude or defensive to customers?

The fact is, if your employees don’t really care about you or whether your dealership is successful, they won’t really care about creating a good customer experience.

So what can be done? Well, first of all, don’t always blame your employees. The problem could possibly be with the work environment at your dealership. Now, most dealers who became successful in their own right are very self-motivated, and/or motivated by money. So they tend to think that other people should be like that. But let’s face it, most people aren’t like that, or they’d all be incredibly successful (and leaving you to start their own dealerships). Therefore, dealers are left with two choices:

1. Retain the status quo; i.e. constantly fire and hire new people (this gets old), or continue to complain about how it’s so hard to find good employees.

   

2. Create a workplace that will attract and retain the best employees.

Here are three tips on how you can create a great workplace:

1. Management Training. In most of the dealerships I have been in, people were promoted into manager’s positions that had little on no managerial experience. Typically the person who steps into the Sales Managers role was the person who was a good salesperson, could “work the deal” and knew how to close. All great qualities but these do not make him or her a great manager. (Question to ponder: How many great baseball players also became great managers?) All their management training was obtained by watching their former sales manager (and who knows what bad managerial traits that person had). They say “lead by example” but what if it was a bad example? All managers should go through some type of supervisory training in addition to training on coaching and reviewing employees.

2. Evaluate Pay Plans. In many dealerships the lack of professional management skills is compensated for by the creation of pay plans that are meant to be “self managing”. Typically dealership pay plans follow the pattern of “If you don’t sell something you don’t make any money, therefore I assume that you will work hard to sell something”.  The typical sales manager or service manager may say “Why do I need to do a performance appraisal on a person when he knows he isn’t making any money so therefore he knows he isn’t performing?” Now I am not against “pay for performance” pay plans but in many cases you have young sales people who are thrown to the wolves, as it were, and based upon the typical pay plan, are making minimum wage. How long do you think you will keep that employee? In most organizations that have salespeople (defined as anyone selling a product or service i.e. read Service Writer, Parts Counter, Vehicle Sales) the salesperson compensation is typically based upon a salary (that is somewhat livable) and commission. To make big money you have to sell but if you fall short you are not wondering where your next meal is coming from. And if you fall short your manager is coaching you to better performance.

3. Make Your Employees Feel Valued. People want to feel part of something. Is your dealership engaged in local community events, like Little League or charities? Encouraging employees to participate in community events helps them to feel good about what they do. Also, little unexpected perks or rewards (or even a pat on the back!) for a job well done can go a long way in helping employees feel appreciated.

By the way the answer to the question of baseball managers is…hardly any. Being great at something does not typically transfer to being able to coach someone to greatness.

I’d love additional input from dealers and employees. What have you done to attract and retain top talent? What do you think makes a great workplace?

In this series of blogs, I am addressing common processes within a dealership that have a significant impact on the bottom line. My last blog addressed how to speed up car deliveries, and in this one, I’d like to examine the sometimes contentious relationships between service and parts, and how to possibly fix it.

I’ve written before how the service department is the parts departments best customer; but I still hear anecdotes about how technicians feel like they are, as the old saying goes, treated like “red headed step childen”  This makes no sense to me as the sooner the service techs get their parts, the sooner they get their jobs done, move to the next one and the more gross is generated. Every minute spent waiting for a part translates into a minute of lost gross for the dealership and lost income for the technician. Putting a process in place to improve the efficiency of parts delivery to the technician will result in more profits for the dealer in both service and parts.

In my travels I have seen many examples of solutions dealerships have tried to use to increase the efficiency of the parts delivery process with some of these being:

1. Intercom System. With an intercom, the technician buzzes the parts department to order a part, and then gets buzzed back when the part is ready. But what if the parts department employee doesn’t answer the intercom? How does the technician know how long it’s going to take?
2. Parts Runner. We deliver parts to our wholesale customers; why not our best customer? Hiring a parts runner can save the service technician from having to wait in line at the parts counter. But does the improved efficiency translate into enough gross to cover the cost of the runner?
3. DMS. Some DMS systems include an online repair order function. This allows the technician to send a parts request right from his computer screen. The request prints out on the parts department printer, including all the information about the RO.

In most of these cases the dealership assumed that the parts delivery had gotten better because they had installed this “more efficient” process and possibly that the techs were not complaining as much. But did they really increase the efficiency of the parts delivery?

The first step in creating a process to increase the efficiency of parts delivery is to understand where your current process stands. That is to say, how fast are you currently delivering the parts to the techs? I will go out on a limb and make the statement that there are probably only a few delaerships in the entire country that know exactly how fast parts are delivered to the techs. You need to start with this metric to know if your process improvements are working.  As Yogi Berra once said “If you don’t know where you are going you may wind up someplace else.”

In a dealerhip I ran, the tech / parts interface got so bad that there were fist fights on the side counter! Techs complaining that the parts guys were favoring other techs and that they were being made to wait for their parts. What to do? The tact I took was to create a team comprised of both parts counter people and service technicians. The team met, I told them to  leave their egos at the door and listen to what the technicians need to do their jobs quicker (remember they are the customer). What I heard was not suprising; the technicians complained that they have to wait too long for parts, that the parts department never notified them when the parts were ready to be picked up, and if they called the parts department on the phone nobody answered. The parts employees responded that they were busy and they were doing the best they could.

As a team we came up with a very low tech solution that allowed us to measure how long it was taking to get the parts delivered to the techs in general and in fact could even measure it right down to a specific tech. Once we had that metric we then embarked on a process improvement program that was measurable, so we could tell if in fact we were getting better.

The low tech solution was a simple parts request system. A package of parts request slips was placed next to a time clock at the back or side counter. The technician wrote a request on the slip, then punched it with the time clock, then clipped it onto a piece of plywood where all the parts requests are placed in sequence at the parts side counter. As a service technician, if I saw five requests in front of mine, I knew that it will take awhile before my part was ready, so I could see the dispatcher for other work. Meanwhile, when the parts counter person filled the parts request, he would punch it with the time clock. When the technician received the part, the paper was punched again. At the end of the day, all the times are entered into a spreadsheet. This method is a little laborious, but gave my parts and service managers the information they need to know in order to track improvements.

So I ask you…Do you know how long it take technicians to receive their parts? What processes have you tried to speed delivery from parts to service?  What would you recommend?

The title of this blog is a famous quote by C.P. Snow. It reminds me of a seminar I attended at Digital Dealer, in which I laughed at a scene that was shown from the TV show “Men of a Certain Age.” A 20-something kid comes in to a dealership with his smartphone and mobile app, knows the vehicle he wants, knows exactly what he wants to pay for it and knows what the competitor down the street is selling it for.

With information from his smartphone, the 20-something thwarts every step of the sales process. The Internet Manager calls in the General Manager who eventually calls in the dealer himself, a former Los Angeles Laker. The kid is unimpressed, quoting the dealer’s stats from his smartphone, “you only played one season and made four points.”

It made me wonder, how has technology changed the traditional 10-step process for selling cars? Here are the 10 steps that most salespeople have been taught:

1. Meet and Greet: Salesperson introduces himself or herself to the customer.

2. Discovery: Salesperson asks the customer questions to try and understand what they want.

3. Choose a Vehicle: Salesperson selects a vehicle or two to show based on the customer’s criteria.

4. Why Buy Today: Salesperson gives a number of reasons why the customer should buy today, i.e. special financing, other interested buyers, incentives, etc.

5. Walkaround: Salesperson shows the customer all of the features and benefits of the vehicles.

6. Test Drive: Salesperson takes the customer for a test drive, focusing on the areas or options that are important to them.

7. Negotiation: Salesperson draws customer into a discussion about pricing, trade approsal, payments, etc. which leads to a negotiation.

8. Closing: Salesperson employs their favorite or appropriate closing technique to get the customer to sit down and sign the contract.

9. Delivery: Salesperson completes paperwork and ensures car is ready for delivery.

10. Follow Up: Salesperson follows up with the customer, ensuring they are happy and satisfied so they will return and buy more cars and refer their family and friends.

Today, many customers show up knowing the exact vehicle they want to test drive (eliminating steps #2 and #3), they know if there are any specials or incentives (eliminating # 4), have comparison reports concerning the vehicle they are interested in vs. the competitive models (making #5 somewhat redundant). They have checked the Internet and have found the invoice price on your vehicle and researched what their vehicle is worth to a dealer on trade in  (making #7 a major challenge).

I would argue that today is a ”brave new world” and as such needs a new sales process that is “in step” with the new reality of the consumer. What do you think? Do we need to re-write the traditional 10-step sales process? What steps would you eliminate or add?

In the 2000 movie “Dude, Where’s My Car?” it was pretty amusing to watch Ashton Kutcher stumble around looking for his lost car. But if you’re a dealer and that’s your salesperson stumbling around on a lot while a customer is impatiently waiting, the inability to find a car is not so funny.

In this series of blogs I am addressing common processes within a dealership that present challenges that are not easily solved. Last month I talked about how important it is to track how long it takes to get trade-ins out to the front line.

In this blog I’d like to address the issue of finding cars. For many large dealerships, one of the hardest things to do is to find a car. How many times are your customers left standing while a salesperson goes off searching for a vehicle? This is not a great way to get the customer into a buying mood, let alone the fact that it’s a very unproductive way for your salespeople to be spending their time.

One dealer I know has locator beacons on every car. Another dealer bar-coded every car and every parking space. One of the largest Chrysler dealers in the country uses Radio Frequency Identifcation (RFID) tags on every car, then has employees drive around in golf carts reading the tags with a wireless device, which then updates the database with the location of the vehicle.

These are examples of some high-tech solutions available, but unfortunately they are also very expensive solutions. What if you don’t want to--or aren’t able to spend that kind of money? Can you think of any low-tech, or analog solutions?

When I was a general manager at a large, multi-line dealership, we had four lots for about 600 cars. Once a salesperson got into the right lot, usually they could find the vehicle pretty quickly. But knowing which lot a car was parked in was always a problem. It could take anywhere from 45 minutes to an hour to find a car.

Our solution was to color code the lots and then buy little round stickers of each color: red, blue, orange, yellow. Then, whenever somebody parked a car, they would take note of the lot color and put the appropriate colored sticker on the key box in the key machine. Knowing which lot the car was parked in dramatically cut down the time necessary to find the vehicles, in a very low-cost manner.

Before you decide on an expensive technology solution, have you considered if there’s a low-cost, analog solution? I always suggest getting several employees together on a cross-functional team to brainstorm ways to solve a problem. Cutting down the time involved with finding a car is critical if you’re trying to increase efficiencies in the sales process and keep your customers happy.

What about your dealership? Do you have a process in place that enables salespeople to find cars easily? What has worked and what hasn’t?

The future of the retail automotive industry has arrived. Going forward, only the most efficient dealerships will survive. What do I mean by efficient? Well, first cutting fat (unnecessary spending), and second becoming lean, and by that I mean making your dealership extremely efficient.

I know what you’re thinking. All analysts point to improving auto sales in 2012. Most dealers just spent the last several years cutting unnecessary expenses and streamlining operations. And therein lies the problem. Now that the good times are back, it’s easy to ease up on spending restrictions and let an old adage seep back into the lexicon: gross hides all problems.

But the difference in 2012 is this: gross can’t hide all problems anymore. Although sales volumes are increasing, margins are decreasing. Technology is making the sales process and pricing ever more transparent to the consumer. In order to survive, dealers must offer competitive pricing, driving overall prices down.

For dealerships with efficient processes, this is not a problem—or at least, not as much of a problem as it is for others. If a dealership has a relatively low overhead, it will still be profitable in a highly competitive environment. If overhead is relatively high, however, a dealership will reach a point where it can’t offer the lowest priced vehicle because it doesn’t have efficient processes in place.

Critical Performance Indicator #1: Trade-Ins

I’ve always said that if you can’t do something with pencil and paper, you can’t do it with a computer. When I was General Manager of a large multi-line dealership, one of the most difficult-to-track processes was getting a used car up to the front line.

Whether a dealer takes a vehicle in on trade or buys one at an auction, all the statistics say that the longer that car sits, the less gross you’re going to get for it. So one critical performance indicator for efficiency within a dealership is how quickly a car gets to the front line.

You would think that most dealers know exactly how this process happens and how long it takes; but if you ask dealers, many aren’t quite sure. They may think and say that it only takes a few days when in reality, it might be taking up to a week or more. Considering every day the car sits results in less gross, you would think there would be a very specific process and monitoring thereof to ensure that every vehicle gets out on the lot within the days specified by the dealer. Here’s where technologically may or may not help. Your dealership management system (DMS) software may offer a way to track this, but if nobody’s tracking it, what’s the point? The best solution might be to use a very non-technological marker and write in large letters on the windshield the date and time that car came onto the lot. Then while that car is sitting there in service, the date and time are a beacon, advertising to everyone how long it’s been there. The very last thing the service department does before putting the car out onto the lot is to wash the windshield. Afterwards, they mark it down on paper or enter the information into a spreadsheet, and voila! An easy and accurate way to track how long it takes to get a vehicle out on the lot. You can even get more detailed and start to track the gross per vehicle per number days it took to get to the front line.

This is just one example of many processes that are an indicator of how efficient a dealership is. This blog will be the first of several in a series that address various processes within a dealership and how they can be improved, whether by technology or other means. I hope that readers will pitch in with their suggestions and experiences.

How long does it take for your dealership to get a trade-in out on the lot? How do you track this? How do you ensure it happens?

Exhibiting at the NADA 2012 Convention and Expo in Las Vegas was very interesting. One of the hottest topics was the “third party data access” controversy that has been unfolding over the last few months. From a DMS provider’s point of view, there are certainly ways that we can help dealers maintain control of their data, such as offering a free data protection service. But as I see the state of things right now, I’d be willing to bet that not a single dealer out there truly has control of their data.

To understand why not and what can be done about it, I’d like to clarify the four key issues involved:

1. Who Owns the Data? Not so long ago this was a controversial subject, as a few DMS providers believed they owned the dealership’s data. Fortunately every DMS provider and vendor have gotten religion on this issue and agree that dealers own their data and have the right to do with it as they please (which is why I am optimistic that this current controversy should eventually work out well for the dealers).

2. Who Controls the Data? Dealers are in full control of their data, as long as it’s in the DMS. When a dealer signs a contract with a third-party vendor, the DMS provider then has permission to grant access to that vendor. The only exception is if a DMS vendor requires certification from vendors, but that really isn’t a solution for protecting data because a certification only deals with a vendor’s ability to access the data, not what the vendor does with the data once they have it.

3. Who Grants Access to the Data? This is where things get a little murky. For instance, franchised dealers who are required to sign up for a parts program with their OEM must sign an agreement with the OEM. But the OEM is more than likely sub-contracting the access to a data aggregator. Are dealers privy to these agreements between OEMs and the third-party vendors they use? Are the OEM’s protecting the dealer’s data by including within their agreement with the aggregator that the aggregator will not sell, share or use the data for any purpose but the intended use?

4. What Happens to the Data Once it’s Pulled? Unfortunately, once data leaves a DMS in whatever format, the dealer is no longer in control of that data. In a recent article in Automotive News, the solution of storing the data requested by vendors on a different server then the one that houses the DMS, or on a separate disc, misses the point. If that vendor has a stipulation in their contract that they can resell, trade or share data with their affiliates, there’s still not a lot the dealer can do about it. Once that vendor has the data, in whatever format, they can still do whatever they please with it.

In conclusion, the way things stand right now, there’s not a single dealer who truly has control of their data. Fortunately, this situation can be corrected.

How To Fix It

My suggestion to dealers would be to start by reviewing all contracts with third-party vendors. Require the language to be very specific regarding the following:

- What type of data is pulled, how often and from which part of the system. This is where DMS providers can offer the most help, by performing monthly audits and providing dealers with the above information. That way the dealer can check and see if vendors are indeed pulling the agreed upon information.

- If possible remove all language that relates to sharing or re-selling information. However if doing so is required for the vendor to do their job, this won’t be an option. Instead, the dealer should know exactly what type of data is shared or sold, and to whom – listing the specific names of all the affiliates.

- The dealer should request to see the agreements between vendors and their affiliates, and demand the same type of language be in their agreements, so they know what the affiliates are doing with the data.

- Dealers have the right to full transparency in terms of what purpose(s) the data is being used for, from both their vendors and the vendors’ affiliates.

- Dealers should review all agreements with OEMs and ask them who is actually accessing the data, then ask to see the agreements between the OEM and any vendors they sub-contract the access to.

Of course you can see how daunting this process would be for both dealers and vendors. One vendor may have half a dozen affiliates, and some of those affiliates may have affiliates. There may actually be up to a dozen parties involved in a single process.

How do dealers know if and when they have regained control of their data? When they know exactly where every piece of data goes and how it’s being used, even as that data moves far downstream from the DMS where it originated.

Unfortunately there are no easy solutions to this controversy. But with diligence and time, dealers can regain control of their data to ensure it never benefits a competitor or is used in some other way that harms the dealer.