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Apr 24, 2012

Brian
You raise some very interesting points some of which are valid and some of which are a little off base. Also you seem to have a myopic view of the DMS market.

I agree with your assessment... "They depend on the functionality that the software brings but they hate long-term contracts and the cost associated with the technology." of which I assume you are talking about ADP and R&R. If you view the market as ADP and R&R (myopic) then you are spot on BUT this is not what is actually happening in the DMS market today. Non-legacy DMS vendors are, on a daily basis, talking market share from both R&R and ADP owing to the validity of your statement. You wrote in your response to one of the posters "There is an underlying opportunity that smart companies see; tap into the high dissatisfaction with current DMS pricing, functionality, and data integration. " This is EXACTLY what is happening now. My company, Auto/Mate, along with the likes of Dealer Track, AutoSoft and ACS to name just a few are capitalizing on the archaic technologies and business strategies that make up ADP and R&R.

You have to ask yourself why are there multiple silos of data being kept by the dealer. Data from their 3rd party desking solution and data from their 3rd party CRM solution and data from their DMS solution (read ADP / R&R). Well the main reason is that intrinsically no matter what ADP and R&R say, they believe the DMS system that the dealer pays for is theirs and not the dealers. Both ADP and R&R have had a history of making it difficult for the dealer and 3rd party vendors (CRM / Desking / etc) to access their databases hence the term "hostile interface". In current years they have softened their stance in that they now have "certification programs" which are still costly to 3rd party vendors. The new DMS companies like Auto/Mate and Dealer Track have open API's that allow bi-direction integration to a single data silo that is housed on the DMS. Auto/Mate Open/Mate API even allows realtime updating of any 3rd party vendors system data.

There will always be dealer who wants one stop shopping..all products from one vendor. As one dealer I spoke with said "I just want one throat to choke" . But the truth of the matter is that dealers want to be able to choose. To choose the best CRM and the best desking and the best web appointment system, and the best etc., and to have these seamlessly integrate with the DMS system that houses the data. This is what products like Open/Mate are all about.

As the President and CEO of a DMS company I believe in giving my dealers what they want and what I am hearing is flexibility to choose and to know that even though I may not purchase the CRM product from my DMS vendor that my DMS vendor has my back as to ensuring that 3rd party product I purchase will work in the environment of my DMS.

You are probably correct. As Bob Dylan wrote "The times they are a changing" and the DMS vendor who doesn't understand that will most certainly die....

Apr 23, 2012

@Lesterjack1941 Thank you for your passionate reply to my post.

Seven years ago, the thought of an integrated website platform replacing over a dozen stand alone marketing tools, would probably get the same response from newsletter companies, mail houses, video marketers, inventory management tool providers, and service schedulers. (That's why I loved the VinSolutions checklist!)

VinSolutions, Dealer.com, Dominion Dealer Solutions, and ADP/Cobalt are expanding their suite of single login software with integrated data collection and analytics. This is proof that the single silo data solutions are heading for consolidation. The backend tools continue to grow to meet the expanding data management needs of dealers.

Keeping track of the entire customer record and leveraging all data connection points is critical for effective customer management and retention. Fixed Ops customer data has been an orphan for integrated marketing. VinSolutions recently added Service scheduling and data marketing to their website platform.

Parts? Today most dealers are forced to use TradeMotion websites to sell parts which are ugly, cumbersome, and they suck at search optimization. I don't know why there is not a better alternative on the market. I do know that products are coming that will make their crappy websites obsolete.

So, where does the line stop for software development? It doesn't.

Ask a dealer how they are marketing their parts customers? Ask them if they are using their parts purchasing history to create more revenue? What happens when service and parts transactions are part of the rich CRM database and integrated marketing tools.

Yes, today DMS software seems like it's indispensable but so did VisiCalc and WordPerfect to early PC users. The change that I wrote about will not happen overnight. What we see today is a poor excuse not to connect the dots.

There is an underlying opportunity that smart companies see; tap into the high dissatisfaction with current DMS pricing, functionality, and data integration.

All it will take will be companies that unlock the value of dealership data and integrate that data into a comprehensive marketing platform, and things will change. The separate data silos will become one and the potential of fully leveraged dealership data will finally be a reality.

Finally, thank you for pointing out that I never worked at a dealership. That is actually where my clients find great value. I bring a new set of eyes to budgets, processes, and strategy that are often needed to pull dealers ahead of their competition. It's a great collaboration actually, because both parties learn from each other to yield amazing ROI.

Apr 23, 2012

I am completely amazed that a man who has never worked on the floor, knew what bell to bell meant or had any understanding of what it takes to operate a car store gets so much attention here. Clearly Mr. Pasch has never used a DMS nor understands how it provides dealers with what is needed on a day to day basis. CRM has its place regarding sales and service but don't think that it can ever replace the accounting functions and fixed ops requirements of a dealerships. I have been in the CRM space for a number of years and don't know of one company that can adequately provide the dealer the ability to open a repair order, maintain a parts inventory, calculate a month end financial statement and so much more. Perhaps you Mr. Pasch should stay in the area of your expertise and not delve into areas you know nothing about.

lahru · Apr 22, 2012

DRM or CRM? I see it as all of the entries into either system are customers and the position they occupy in the cycle of ownership, and their postion in this cycle certainly require differing datapoints. Allowing each department to analyze and use this data to maximize customer satisfaction and profitablity should be the same, be it for the parts, service or vehicle sales customer. As to the accounting and inventory management, the data required for these functions can be a ancillary set of data that gets managed right along with the customers and employees. In the end I believe that there similar practices that can be used for every type of customer, parts vs service, they just require differing labels to identify thier position in the cyle. IE, prospecting for service and parts customers should be the same as vehicle sales. In the end it's all sales and customer satifaction brings them back.

Apr 20, 2012

Great article Brian... I would echo Jeff in that DMS is WAY more involved than anything any CRM provider is currently addressing. From the Parts Department (think depreciation, inventory, Fast Moving Parts, shrinkage, obsolescence, parts matrix and markup calculations, and billing/invoicing/accounting etc.). Or Service Department (think dispatching, Open RO reports, Scheduling, ELR, Margin Calculations, and billing/invoicing/accounting etc,) Let's not forget the Accounting Department (think payroll, A/R, A/P, Financial Statements, Cash Flow Statements, DOC sheets, and the list goes on and on). Finally you have the Manufacturers who require their specific Financial Statements submitted electronically in a specific way...

While I foresee the lines between CRM and DMS blurring in the coming years, we have a LONG WAY to go before someone pulls it all together. From what I'm seeing on the DMS side of things, these companies are FINALLY realizing the importance of CRM and are taking steps to bring this into their fold. I still gotta think we see a DMS company figure out CRM before a CRM company figures out DMS. I'm not saying this is right or something I personally support - just more the reality IMHO.

I would like nothing more than to see a CRM company conquer the blue bloods of the DMS systems, opening up competition and thus driving down costs to the Dealers. DMS is a significant investment and is severely over-priced. Until another alternative arrives, we are stuck with the two different components of our businesses.

Just my two cents...

Apr 20, 2012

Brian - great article! If a DMS system is a "Dealership Management System" but your CRM grows to handle desking, F&I contracting, and menu driven service selling and dealers simply stop using those features in their DMS systems - at that point we will need some new names for our software because the "CRM" will truly be the sales & management system, and the "DMS" will be nothing more than an accounting core that offers open integration. Thought provoking discussion, thanks. 1mglynn

Apr 20, 2012

@crmninja Obviously you don't know me or my values well enough so see that your statement is far off base. I didn't write this post to promote any one company or product. This is a discussion on the future of CRM and the software integration movement that will consolidate our industry tools.

Apr 20, 2012

Is this a blog post or advertisement. Remember the top crm company that does everything full circle is elead. They have the full circle thing down to a science hence most of the top groups and stores in the U.S. use them. Next time Brian research and try not to just write an ad for a company that your buddy's with. They can afford advertising.

john.quinn · Apr 20, 2012

Wow. Gulp.

Very, very interesting Brian -- thanks!!!

Apr 20, 2012

Some dealers have a love/hate relationship with the Dealer Management System (DMS). They depend on the functionality that the software brings but they hate long-term contracts and the cost associated with the technology. Placing a value on DMS is not the point of this article. I would like to focus on the death of DMS systems, as we know them today.

Rarely do I see online forums discussing the latest updates or features in DMS software. This may just be a reflection on the “boring” nature of DMS software or the lack of real updates from DMS vendors. What I do see are article about the new features added to popular CRM systems.

Screen-Shot-2012-04-19-at-10.44.24-PM-300x207.png

Customer Relationship Management (CRM) software was originally a way to track leads and customers in a database. Early CRM software made it easier to create follow-up systems via phone or email. The CRM software had a defined role.

Today, when you look at automotive CRM software, the scope of features and functionality are significantly larger than the original definition. CRM software is becoming the operational “dashboard” for the dealership. Automotive CRM software is integrating data from dealer websites, Adwords, Analytics, inventory, merchandising, leads, phone systems, mailing houses, and the list goes on.

I found a marketing flyer produced by VinSolutions about 2 years ago. This excellent marketing tool asked dealers to write down the costs associated for software products and tools used at dealerships. At the bottom of his long list, the dealer was asked to total up all those costs. The punch line was that the VinSolutions website technology and CRM replaced all those individual expenses. It made an impact on me and I’m sure on dealers as well.

That was two years ago! Since then VinSolutions has added dozens of new features to their integrated marketing platform, which stirs up some questions for us to discuss on DealerRefresh:

Is the new breed of CRM products designed to eventually replace the DMS?
Will the best integrated website and CRM companies get dealers stay glued to their integrated tools and reports?
Will DMS become a secondary player; a plugin to the integrated marketing platform’s dashboard?

VinSolutions is not the only company that has and will redefine the term CRM and integrated marketing tools.

I have had the pleasure to see the new Dealer.com CRM software, which will be introduced to the marketplace later this year. The CRM software tools and dashboards, which integrate seamlessly into their single login platform, were honestly breathtaking. There is a tsunami of change coming to the automotive industry for companies that have integrated, end-to-end software solutions.

Dealer.com's CRM will give their dealers unprecedented access to data, which will allow their teams to run more efficiently. The ability for dealership employees to work anywhere, access data on any device, and be held accountable for business processes and workflows is without peer. Dealer.com has a wide range of products on their single integrated platform. CRM was the only glaring hole in their product strategy and now it has been expertly filled.

The product roadmap, although not shared with me, was obvious to me. Create an indispensable, robust software platform that gives dealers valuable insights into all areas of their business. It is clear that if accounting is on their feature list, DMS as we know it, may become history.

The companies that can provide an integrated platform will, over time, squeeze out single solution companies and our industry will take a major step forward in productivity and profitability.

Are the CRM products, produced by VinSolutions or Dealer.com, really just CRM? Absolutely not, they are and will increasingly become the primary dashboard for dealership operations.

A few months back I wrote an article that the new Autotrader.com companies just needed to purchase a DMS vendor. Now, I am ready to take that statement back. Why purchase a software company that has a limited, decreasing role when VinSolutions’ own marketing platform can be expanded.

As I look at things from this perspective, will the ADP/Cobalt technology marriage also produce a very strong, integrated software platform where the lines that were once CRM and DMS are blurred? Will VinSolutions’, Dealer.com’s, and ADP/Cobalt’s integrated marketing platforms shrink the automotive website marketplace from 50+ vendors down to a few dozen?

Time will only tell but the role, function, and future of integrated marketing platforms based around intelligent CRM software looks like DMS killers.

Apr 28, 2012

YourSocialFans.com can help you attract thousands of followers that you can keep informed about any of your product or service offerings instantly. By bringing you a targeted crowd of buyers all you need to do is give them an offer they can’t refuse! Branding is also another successful tool Twitter can provide for your business. As more and more people become followers of your page it builds trust in them and they are more likely to buy from you than your competitor, because they have been following the brand and it’s a brand they trust.

Apr 20, 2012

Otherwise, it's a great infographic

Apr 20, 2012

Worth noting is the fact that this says "Each email address gets three permission-based email marketing messages a day." You can go ahead and throw some of these stats out the window because I haven't met a single dealer that uses a permission based signup system.

Apr 28, 2012

YourSocialFans.com can help you attract thousands of followers that you can keep informed about any of your product or service offerings instantly. By bringing you a targeted crowd of buyers all you need to do is give them an offer they can’t refuse! Branding is also another successful tool Twitter can provide for your business. As more and more people become followers of your page it builds trust in them and they are more likely to buy from you than your competitor, because they have been following the brand and it’s a brand they trust.

Apr 27, 2012

I believe that the post has perfect collection of words and a well research.

Apr 16, 2012

Kevin........you should have been a journalist. You do the best job of anyone with the photos and your overview. Digital Dealer should pay you for your work. Thanks for sitting in on my session. I appreciate your efforts.

Phil Sura

Alex Jefferson · Apr 13, 2012

Awesome write up once again Kevin! Don't be so good thought...You are really making it easy for people to skip Digital Dealer all together.
@ Brian Pasch - See you at boot camp Amigo.

Apr 13, 2012

Great summary Kevin! Although i wasn't there, I know everyone from UnityWorks Media had a great time. Thanks for the panel highlight and talk to you soon!

Apr 13, 2012

Kevin – nice talking to you this morning. As I said, we're glad you had a good show as did we albeit with a slightly different strategy this show! Please tell our customers to call to us if they have any questions!

Apr 13, 2012

Kevin, great update. The amount of work you put into the articles is remarkable. Thanks for everything!

Apr 12, 2012

Good summary, as always, Kevin... amazes me how thorough you are and how much information you gather. As one of the "no new content" folks you are probably referring to, that was expressed to me rather by a few dealers. I think there is always content - how can there not be when so many people who have so much automotive expertise in one place? For me, it lacked a little "punch" maybe for all the reasons you mention in the outset about attendance but sometimes the industry has more announce and show off than at other times. In any case it was a good show and looking forward to Vegas. Thanks again for the detailed write-up... plus @Joe Webb said the beer is on him... so that's something

Apr 12, 2012

Good summary, as always, Kevin... amazes me how thorough you are and how much information you gather. As one of the "no new content" folks you are probably referring to, that was expressed to me rather by a few dealers. I think there is always content - how can there not be when so many people who have so much automotive expertise in one place? For me, it lacked a little "punch" maybe for all the reasons you mention in the outset about attendance but sometimes the industry has more announce and show off than at other times. In any case it was a good show and looking forward to Vegas. Thanks again for the detailed write-up... plus @Joe Webb said the beer is on him... so that's something

Apr 12, 2012

Impressive, write-up, Kevin! For anyone not able to attend #DD12, you provided great key take-aways that should be considered actionable - by researching or acting upon - by any dealer.

From a marketer/ vendor/ consumer perspective - the best approach to any goal is, borrowing from Steven Covey, "keeping the end in mind". Know the dealership goals (leadership team), know your audience (data) then develop a strategy accordingly (prioritizing digital ad spend). Incorporate media and solutions to help accomplish the goals. Monitor and measure along the way. And keep your finger on the pulse on industry happenings/technologies (creating your own mentoring group to collaborate and brainstorm is THE best way to get insight to what works and what doesn't. Again, great summary, Kevin!

Apr 11, 2012

Great summary Kevin. Wish I were there.

Apr 11, 2012

Kevin
Thank you for the update. I wish I was there! Alex Jefferson is looking more handsome each year. I hope that you can join us for the 2012 Automotive Boot Camp, May 15-17th, in Las Vegas. I'll secure you a press pass so you can attend!!

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