EVOLVING CUSTOMER EXPECTATIONS ARE RESULTING IN NEW LEVELS OF SOPHISTICATION AND INTEGRATION WHEN IT COMES TO DEALERSHIP OPERATIONS SYSTEMS
It’s the essence of what a dealership is, yet, like everything else, the dealer management system as we know it is changing, evolving into something entirely different, so much so that the term DMS is really no longer apt. Instead the term Retail Management System (RMS) is what more accurately defines it. To find out what this means, as well as gain an insight into new developments happening in this space, Canadian auto dealer met with Ron Lamb, President of Reynolds and Reynolds.
HE: What do you think has driven this fundamental change in terms of consumer expectations when it comes to services and the impact it’s been having on dealers?
RL: You have to really go back to the previous decade. The industry was selling around 1.7 million vehicles a year. Then the Great Recession of 2008-09 came along. Dealers hunkered down and many went into survival mode. Many stores were closed or cut their operations back and at the OEM level we saw the bailout and restructuring of Detroit automakers Chrysler and General Motors. At the same time, we also saw a rapid shift with the introduction of the iPhone and the growth of social media, which changed the way people communicated.
HE: From your perspective, what was the impact of this on dealers, in terms of their operations and DMS?
RL: Back when I first started in the business, the DMS was focused primarily on three things — accounting, parts and payroll. Today, it’s a new world. We’ve seen what happens outside the four walls of a dealership, what happens with all aspects of customer relationship management (CRM), it’s no longer really a DMS. Instead, it’s a Retail Management System, built architecturally as a single entity, designed to provide a complete consumer driven, focused and engaged experience, unlike anything we’ve ever seen before.
HE: At present, many dealers appear to be struggling when it comes to third-party add ons to their core DMS. What are some of the problems you see?
RL: There are a lot of dealers who have a core DMS, with satellite systems that bolt into it with some type of integration. Sometimes it’s one-way, sometimes it’s a push, sometimes it is bi-directional. The issue is communication between the add-on application and the DMS or other parts of the business. Dealers have told us that if they are using a service system from a different company and they change an address in it, that service system doesn’t always update the CRM tool on the other side of the world, so a dealership can be sending service appointment information to a customer’s old address, for a car they may no longer own or sending recommendations for a vehicle or service that isn’t even part of that particular dealer’s franchise network. It’s a big problem and part of the reason why in general, the automotive retail industry currently isn’t setting the benchmark in terms of the customer experience.
HE: How is Reynolds and Reynolds changing the game?
RL: We essentially went in and re-defined the entire landscape, building an integrated Retail Management System from the ground up using our ERA-IGNITE platform. Our North Star, which we began thinking about five or six years ago was the future — what will a dealership be like 10 years from now? How will it operate? Here’s one example: One of the key things we saw is that a main form of communication between dealer and customer will still be by phone. So one of the primary investments we made was to build a PBX (private branch exchange) as part of the RMS from the ground up. All connections to every customer are automatically integrated, recorded, tracked and connected, straight to your desktop screen or mobile phone. We’ve also developed an integrated RFID (radio frequency identification system) so a consumer can find out if their car is ready via text, while triggers on the lot inform dealership staff so they are ready and waiting to receive the customer as soon as they arrive.
HE: What is the key message you want to convey to dealers about the new retail management system and the features it offers?
RL: Essentially to lay the foundation, to put the ERA-IGNITE platform in. Once dealers are able to do that they will be able to adopt features on a modular basis (you don’t have to acquire the entire system all at once) depending on the needs of the business. Then over time, as you digest more and continue to invest more, you’re able to have a seamless process for both the dealership and the customer — one that will only get better in terms of improving how the dealership operates and the experience it delivers for its customers.
