Dealertrack: Drive to Success – Technology Use & Implementation


Technology to Drive Profits

You know the saying: A dollar saved is a dollar…

…and that’s one of the biggest impacts technology can make to your dealership’s profitability. Because it’s easier to save a dollar than earn a dollar, a sound technology investment makes sense from an efficiency perspective by cutting costs to accomplish simple tasks, improving the customer experience, and speeding up the process. That’s a key benefit because it helps to solve one of the biggest car buyer pain points: time spent doing paperwork.

Here, we’ll talk about what you should look for in a new technology stack and how that stack can improve operations.


Experts used to think of data in static terms. That’s because it was so hard to gather data. With modern technological advances, however, that’s no longer the case. If you’re still using static data then it’s time to make an investment that’ll pay you dividends later.

Your technology stack needs to be able to give you better data, faster. With today’s advances in technology, there’s no reason why you can’t get up-to-the-minute updates on dealership transactions, performance, and account balances If you’re thinking of updating your technology stack, make sure the update can reduce the month-end accounting process as well.

Real-time data and efficient processes allow you to make more accurate decisions based on what’s happening right now.


There’s going to be a bit of a learning curve when you first update your technology stack. And that curve is going to cause some setbacks and temporary pain points until your employees become proficient at using the new technology.

When you’re looking to update your technology, make sure that you and your employees get the support you need to make the update a success.

“Expect your partner to get you through your toughest technology times with continual training and support...Look for a long-term partner that’s investing in the future and thinking about how your dealership is going to grow.” - Paul Whitworth, Cox Automotive

You’ll want available training and support before, during, and after you update your dealership’s technology. A tech update won’t do a lot of good if you can’t take full advantage of it.


One thing customers want from a dealership is more face time. Sure, they shop online and want that integrated into their purchase journey, but they also want to spend time with the car dealer. Face time is always preferred to waiting in a lobby.

Your technology stack should be able to shorten the time customers are waiting so you can get more time with them in-person.

Your technology stack should make your Parts and Service departments an integrated and important part of your customer’s journey. If your current technology stack can’t make these departments more efficient, then it’s time to update. If the stack you’re looking at can’t do these things either, then you need to keep looking.


Technology improves sales. Case in point: utilizing mobile technology through the in-store experience ensures that customers feel more comfortable, and have a better experience. Just remember the golden rule: technology only works when people use it correctly, so train your sales and service teams to implement technology in their workflows.

Start with these articles for inspiration:


How to Switch Technology

Switching technology is a bit like taking a long walk through funhouse mirrors; things aren’t usually what they seem to be, and at a certain point everything just gets a little weird and discombobulating. The nightmare scenarios are endless: data might not transfer, employees could revolt… and the technology just flat out might not work.


You’ll inevitably experience some growing pains as you transition from one technology to another. But you can make the transition easier. Follow the steps outlined below to make the transition a little bit better.


An implementation partner is simply a group that can help walk you through the technological transition. If you’re implementing a new technology that transition should come with training sessions and data transfer assistance. You should not be expected to make the change by yourself. There should be a team ready and prepared to help you update and implement your new technology.


It’s not enough to do one training session with your employees. Job training is something that should happen over the course of your employee’s entire time with you. Refreshment training sessions, quizzes, and further development should all be a regular part of your business model.

Try and ask your employees about the pain points they experience with the new technology. What do they like about the new tech? Where does it fall short? Review your customer experience scores before and after you implemented a new technology. Did they improve?

A leading dealer in Wisconsin developed a training academy to ensure the long-term success of their employees.

The Van Horn Academy, a 6-week training program for employees, allows workers to learn company policies and procedures. And, in addition to learning the duties related to their specific roles, employees are cross-trained on various functions within the dealership. And on top of offering other impressive employee benefits, the company has turned to technology to continue its tradition of recruiting top talent. Learn more about Van Horn’s winning hiring strategy in our guide: 8 Ways to Reduce Turnover and Improve Retention.


Change is hard. Some of your employees might not understand why you’re implementing new technologies and may miss the way things used to be done.

The best thing you can do when implementing a new technology is to be transparent with your staff. Let them know what problems the new technology will solve, what the possible shortcomings are, and what you’re hoping to accomplish.


New technology can help drive profits and improve efficiency. Once acclimated, your employees will also appreciate an easier-to-use interface.

When making the switch, be transparent with your employees, make sure your vendors are collaborative, and maintain clear communication with the on-site implementation teams.



Measuring Success

Today’s technology-driven dealership environment can spawn KPIs like blades of grass, each representing increasingly narrow aspects to your business. But here’s the thing: most of those aren’t KPIs, but metrics, simple measurements that tell you if that narrow part of your operation is functioning within normal parameters.

“...Dealers who maintain at least 50 percent of their inventory under 30 days of age are best positioned to maximize their inventory turn, investment ROI and profitability.” - vAuto


A true Key Performance Indicator, or KPI, should be limited to a few specific metrics that offer an indication of overall success. The idea is that dealer managers can tell, at a glance, whether the store is reaching objectives in terms of measurement and defined success. While any KPI measured should be created with your unique selling and store culture in mind, here’s a look at how to measure the three universal KPIs of of your auto dealership:

1. Inventory age
Measuring your inventory age, and also your inventory turnover ratio, has changed. Every dealership pays attention to how long cars sit on the lot. From a 90-day, 60-day, or 45-day retail window, you have to keep track. And most dealerships do. But, moving your cars before they start to age is key.

2. Customer retention
Loyalty isn’t easy. Once earned, it still has to be nurtured. It can take years to win a customer, seconds to lose one. Dealerships can attempt any number of techniques to win and retain customers, but are you actually measuring your retention? And, is your entire business in-synch in the process? Are you working to build a long-term relationship beyond the point of sale with your F&I office and service department? According to CBT Automotive, what you need is an actual plan. While your buyers may be satisfied with your dealership’s customer service, 45% will ultimately go elsewhere when they need to service their vehicle. Offering pre-paid maintenance is one sure-fire way to build retention into your business model.

3. Sales efficiency and speed
Customer satisfaction and the amount of time spent within the dealership are closely intertwined. If you’re not keeping track of the time it takes to move people through your dealership, you are not measuring for success.The process of streamlining operations and boosting satisfaction can be tracked with the following metrics:

1. Negotiations: Can you dealership adopt a policy that increases transparency and facilitates trust by offering a one-price strategy?

2. Administrative tasks and wait time: Can your dealership automate any processes with “self-serve” options, or could a focus on better training improve this area?

3. Outdated technology and software environment: Would an audit of your current technology reveal inefficiencies like an old DMS system, or data that isn’t integrated?

“According to the 2014 IHS Automotive Buyer Influence Study, 55% of New car buyers and 57% of Used car buyers experienced frustration during the vehicle purchase process, largely due to the amount of time it took to negotiate a purchase price and complete the sales process.” - Autotrader


What areas within your dealership could be tracked, measured, and ultimately optimized? Are you also tracking the Inventory Turnover of your parts department?

Check out these helpful resources and build your KPI process today: