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The Shortcomings of Dealer Management Software

pete c - Friday, February 23, 2018
Dealer management software is a must-have, but it isn’t a silver bullet. Here is one dealership owner’s struggle with using DMS by itself. In a recent speech addressing the Automotive News Retail Forum in Chicago, Don Flow, CEO of the Flow Automotive Companies challenged dealers to seize the opportunities that are right in front of them while embracing the possibilities that the future holds. He also suggested they face the brutal reality that new vehicle margins are gone and will never return.

Accepting that reality, dealers are forced to look elsewhere, like to F&I, as a source of gross profit. This was the case for Rob Stanley, President of the David Stanley Auto Group, the fastest growing dealer group in Oklahoma. As part of a strategy to increase back-end profit, Mr. Stanley implemented an aggressive bonus program tied to F&I product penetration. The initial results were positive--especially in the warranty category.

Another change was to partner with VisionAST, a new player in the exploding DMS sales performance management category that Stanley’s son had learned about at the FCA Future Dealer Academy. After hearing from a New York dealer how the platform and its sales tracking tools improved sales performance, Stanley was eager to see how it could help him. During the integration phase of the SalesVision platform some interesting numbers appeared in the platform’s F&I Summary. The number of warranties sold and the dollar profit from warrantees sold were the same number. VisionAST’s Matthew Murphy shared the data with Rob Stanley.

“Matthew was able to bring to my attention, that our F&I managers were selling aftermarket products for a $1 profit,” Stanley said. “This was causing us, as a group, to overpay our management staff on their tiered pay plans”.

Stanley was able to put an end to the practice that was “clearly not in the spirit of the initiative” allowing him to avoid confrontation of a more serious nature had the practice been allowed to go on for an extended period of time. The savings in real dollars and personnel issues were significant.

“We would not have seen this in a timely manner using our dealer management software alone. [Because of VisionAST] we were able to take immediate action and drive accountability, results, and plug any potential profit leaks in our stores,” said Stanley.

Stanley can now receive sales analytics reports directly on his phone and tablet on a daily or weekly basis. “Having multiple stores, I can’t be in on every conversation that takes place in my stores. VisionAST allows me to be everywhere, from one location. I can go from rooftop to rooftop and see what is happening, in real time.”

Stanley continued, “The solution allows us to drive performance and profits in an easy-to-use format”. In a challenging retail environment, I think Don Flow would agree, it doesn’t get much better than that.