Technology has revolutionized the auto industry, especially on the sales end with websites like TrueCar and CarFax. The vehicles themselves now come equipped with GPS, backup cameras, Wi-Fi, parallel parking capabilities, and self-driving cars are in the near future. Cars have so much technology packed in them that many auto dealerships now have an auto technologist on staff just to demo all the gadgets on board to the new owners.
The vehicles aren’t the only thing on the lot powered by technology, the entire auto dealership is now a technology powerhouse. Why have so many auto dealers invested in technology? Easy, to drive profits! Technology can track customers’ contact info and their lifecycle along with preferences, expedite writing service tickets, and make car buying not only easier, but faster. All these things do two things, improve the customer experience, and reduce labor for the auto dealership. A win all around, especially for the CFO!
5 Ways Auto Dealerships Drive Profits Up with Technology
- Dealer Management Software (DMS) – A DMS can tie the entire dealership together into one shared database that stores everything from customer information, vehicle inventory, parts inventory, financial reporting, and provide KPIs (Key Performance Indicators) in every department. [Learn more about the Pros & Cons of DMS.]
- Monitors to Share Metrics – Many auto dealerships showcase their team’s real-time metrics on monitors (in the back of the house) to provide transparency and competition amongst the sales and service teams.
- Tablets Across the Lot – Tech-savvy dealerships use tablets on the lot to confirm vehicle pricing, inventory, and to keep the customer engaged. In the service department, service ticket writers can write up and submit a ticket on a tablet while inspecting the vehicle. Both of these examples provide a more efficient solution for the dealership, and more importantly, provide a better customer experience.
- Centralized Data Across Multiple Locations – With tablets running a DMS, auto dealerships gain real-time insight, which allow departments from different locations, such as body shops, to reduce their inventory or to move tickets to highly-specialized technicians with the right tools, which may be at a different dealership.
- Tapping into Customer Lifecycle – With the data in place, auto dealerships can reach out to customers as their lease or loan comes to an end to continue to build on that relationship. Also, dealers can track maintenance on vehicles and provide a more accurate price on trade-ins.
3 Pieces of Infrastructure These Technologies Require
- Redundant Internet – When you utilize a cloud-based dealer management software, you need a secondary internet connection in case your primary connection goes out temporarily. (Redundant internet is a best practice even if you’re not using data offsite.) You can balance your internet bandwidth with the second connection, provide customers a separate wireless connection (to keep them off your primary network), or use the secondary connection for more frequent backups. [Learn more about backup frequency.]
- Wireless Access Points – Most auto dealerships are vast in size and a typical wireless router will not reach from end to end, so you need multiple access points across the dealership for tablets and other mobile devices to get on the Wi-Fi efficiently.
- Robust Firewalls – Every company with access to the internet needs a firewall because it is the businesses’ first line of defense from a cyber attack. Because of the personal information stored by dealerships and a large number of credit cards run daily, auto dealerships are a prime target for hackers.
A good IT firm will typically suggest a Firewall-as-a-Service solution to most auto dealerships because it provides two firewalls for the price of one, without any capital investment. (Basically, you rent one firewall and you get a second unlicensed unit for redundancy. If the first firewall goes down, the second unit takes over and becomes licensed instantaneously.) This rental solution ensures your firewall isn’t a single point of failure and you stay online. Otherwise, you may have no internet for a few hours (or days) while you wait for an IT guy to come from across town to install a new firewall that he hopefully has on hand.
Biggest Mistake Auto Dealerships Make with Technology
The number one mistake auto dealerships make with technology, especially during an acquisition, is keeping older machines to save a few thousand dollars. This short term savings costs much more in the long run (sometimes in just a few months) because the old machines are slower, prone to more errors and likely to break, and could have viruses stored on them. All this means higher IT support bills and the need to change the machines out anyway, now with rush fees.
A good IT firm will suggest to “rip & replace” the old infrastructure including workstations, tablets, wireless access points, and other networking equipment like the firewall. Once the new equipment is in place, your employees can work at an optimal level and your IT firm can set up a life cycle management program to ensure your equipment is always in good working condition without impacting your profit every few years when everything needs to be replaced again.