Can integrated CRM systems replace the DMS?

[Guest Poster]

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.

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.

 

[john.quinn]

Wow.  Gulp.   Very, very interesting Brian -- thanks!!! 

 

[crmninja]

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.

 

[Jeff Kershner]

I wouldn't view this post as an advertisement because 2 CRM companies were used as examples. Of course there are several CRM providers in our industry. eLead being one of those. I've been a supporter of eLead over the years and continue to be. 
 
The question here is - are we evolving to a point where the DMS is second thought to the CRM? 
 
Can integrated CRM systems replace the DMS?
 
We're not there yet. Not even close. Unless you've used a DMS in a dealership, you maybe be ignorant to all the departments the DMS touches. 
 
CRM is not an accounting tool, it's not a parts tool. It's rare to find a dealer that has completly replaced their service scheduling and reports with a service outside of the DMS.
 
Articles that talk about CRM replacing the DMS are usually written from the sales and marketing perspective and forget about all the other departments in the dealership using the DMS. 
 
Today's CRM services/software are merely scrapping the surface of what the DMS provides for the dealership - antiquated and as bad as we think they are.
 
Would you agree or am I missing something?
 
 

 

[BrianPasch (blog)]

@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. 

 

[MichaelGlynn]

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 

 

[Jeff Kershner]

testing,

 

[tomwhitejr (blog)]

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...
 

 

[lahru]

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.

 

[Lesterjack1941]

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.