CDK Global

What Dealers Say About the EV Transition

thomasd — Mon, 06 May 2024 18:12:04 +0000

What Dealers Say About the EV Transition thomasd Mon, 05/06/2024 - 13:12

As the electric vehicle revolution propels forward, dealers across the country are coming to terms with learning, selling and servicing a new class of vehicles that many consumers have never driven and show little interest in.

CDK has covered the state of the EV landscape from the EV shopper, the ownership experience and the impact on dealership service in three studies over the past year.

Our fourth and final installment in this series focuses on feedback dealer leadership from every corner of the country whether they’re rural, suburban or urban to understand their perspective as EV sales have begun to stagnate. They share how optimistic they are about the future, the impact on their bottom line and how fast they’re moving to fully support EV sales and service.

The Dealers Face the EV Transition white paper also looks at all these findings through the lens of geography. That’s because where a store sits can dramatically impact the EV equation. The attitudes found along the Pacific don’t mirror those around the Great Lakes or the Gulf Coast and this research uncovers where there may be more optimism than expected.

Download the Dealers Face the EV Transition white paper

CDK Global

Three Dealership Accounting Woes and Fixes

gaillardc — Mon, 06 May 2024 13:00:15 +0000

Three Dealership Accounting Woes and Fixes gaillardc Mon, 05/06/2024 - 08:00

Nothing can steer your auto dealership off course faster than poor accounting practices. And it’s not just about the importance of accurate numbers to chart a course to survival and success.

It’s harder than ever to find qualified hires capable of handling today’s accounting software and reporting requirements. Then there’s the growing complexity of managing costs, accounts payable, accounts receivable, P&Ls and balance sheets.

Finally, skyrocketing rates of cyberattacks against financial data can’t be ignored. It’s never been more important to protect your dealership and your customers from data thieves.

The good news is that dealership accounting woes can be fixed. With the helping hand of new technologies and strategic tactics, dealers can shore up their accounting practices to drive growth, profitability and security.

Woe: Lack of Experienced Dealership Accountants

A significant problem facing many car dealerships is hiring experienced Accountants. And it’s not just the automotive industry. A lack of accounting professionals is a real problem across the board.

Significantly fewer students are selecting accounting as a major. The CPA Journal reports a 7% decrease from 2021 to 2022 in the number of candidates taking the CPA exam. At the same time, an eye-popping 75% of the CPA workforce across the country hit the retirement age in 2020.

With the droves of baby boomers leaving the profession and fewer graduates to take their places, it’s likely that many dealerships won’t be able to find and hire experienced accounting professionals, let alone someone with dealership experience.

Fix: Look to Technology Rather Than People

With the right technology solutions in place, a lack of experience doesn’t have to be a deal breaker. New solutions with advanced technology routinely hit the market to help those in accounting roles keep accurate books and stay on top of reporting. The near-term future of dealership accounting software will be characterized by solutions that are easy to learn, user-friendly, scalable and secure.

Tools powered by AI are also emerging to remove the burden of the more time-consuming tasks, like reconciliations and ledger work, so staff can focus on value-add activities like financial analysis and planning the future and not calculating the past. This makes the role more appealing for job seekers and also increases operational efficiency.

Woe: Rising Cybersecurity Attacks on Accounting and Financial Data

Nobody questions how the internet and advanced software programs have improved efficiency and accuracy in accounting, but technology advances put data on the radar for cybercriminals.

A 2023 Deloitte Center for Controllership poll found nearly 35% of executives said their organization’s accounting and financial data was targeted by cybercriminals within the past 12 months. And almost half of those polled expect the number and size of attacks to increase.

Fix: Carefully Vet Accounting Solutions for Cybersecurity Features

Not every accounting solution is created equal when it comes to cybersecurity. A careful vetting of accounting software needs to consider validation rules, security practices, data controls, document management and strong audit trails.

Also, consider looking for software that enables accounting data to comply with the SAS 70 Type II auditing standard and SOC 2 security standards. These standards developed by the American Institute of Certified Public Accountants are designed to provide a level of rigor that ensures financial data remains secure.

Woe: Growing Complexity of Accounting Reporting

Reporting always makes the list when it comes to accounting woes. It’s a hefty task for a team to regularly navigate the myriad number of reports required to maximize profits, minimize risk and keep OEMs and lenders happy. Accounting staff also must keep up with ever-changing government and OEM regulations that require new reporting.

It doesn’t help that some software makes it difficult to pull specific reports, create customized views, add and delete columns … and the list goes on.

Fix: Leverage Reporting Capabilities Within Your Dealership Software

While CDK is moving beyond the DMS to the Dealership Xperience Foundations Suite, your software — whether the Foundations Suite or traditional DMS — should do the heavy lifting when it comes to reporting. The right solution will make it easy to configure and schedule the reports a dealership needs, in the required format, to control and analyze the business in real time. In addition, CDK’s new Intelligence Suite takes your dealership reporting to the next level.

It’s worthwhile to take a deep dive into your DMS reporting capabilities — or lean on the solution vendor — to make sure best practices, tips and tricks, and shortcuts are all being utilized. Many solutions can streamline reporting for accounting professionals, if they know where to look.

With too few qualified hires on the market and growing demand for accurate accounting, reporting and data security, dealerships need to leverage technology and new tactics to shore up accounting practices, balance the books, streamline reporting and protect their data.

CDK Global

Product/Topics

Back Office

The Power of Video: Earn Customer Trust and Service Business

gaillardc — Mon, 29 Apr 2024 19:20:05 +0000

The Power of Video: Earn Customer Trust and Service Business gaillardc Mon, 04/29/2024 - 14:20

When you spend your days servicing and repairing vehicles, it’s easy to forget that most people know very little about the cars they rely on to get them where they need to go every day. No wonder there’s a lot of confusion — and often suspicion — when a customer in for an oil change is presented with a list of additional recommended services. The customer is certainly going to demand an explanation, and that’s where many franchised Service departments are falling behind.

In CDK’s recent study, Service Shopper 3.0, of 2,000 service shoppers, dealers lagged behind independent shops and chains when it came to making repairs understandable and describing service needs. So, what can dealers do to better explain what needs to be done and get more customer approvals? Talk less and show more with videos from certified technicians.

Video Fixes the Communication Chain

It’s hard enough for customers to understand what repairs and services are needed, but it becomes more difficult when the path from Service Technician to customer is a multistep process with diminishing returns.

Typically, the technician completes a multipoint inspection, highlights recommended repairs, explains these recommendations to the customer; often the customer will then try to explain them to a second decision-maker or trusted confidante, confusion occurs and recommendations for needed repairs are lost. The customer is dissatisfied with the lack of transparency and the Service department loses revenue.

Add video and the dynamic changes completely. The technician’s message — including a personalized walk-through of needed work with a full explanation — can be sent directly to every member of the communication chain. And with no confusion, no loss of information, and much greater potential for higher repair orders.

Video Is a Game Changer

Service videos have the potential to change the customer experience for the better and boost a shop’s bottom line. For example, the service center at Jaguar Land Rover of Cincinnati uses tech videos with every customer. In one year, the department saw a three- to five-hour gain in ROs, a 30% increase in gross profit, and a 20% increase in their Customer Satisfaction Index.

According to General Manager Rich Allen, “It changed the face of our business in terms of customer transparency and trust. It’s the closest thing to having a customer walk out into your bay and showing them what needs to be done. It gives value to the money they’re spending and gives them a reason to say ‘yes’ to a repair or service.”

Transparency and Understanding

Video vastly improves transparency and understanding. Customers can watch multiple times to fully absorb the message, share them with a trusted advisor, and refer to specific aspects when asking questions.

Without video, customers can’t see what needs to be repaired, must speak to an intermediary rather than hear directly from a technician, and may struggle to recall details accurately when discussing with a partner or friend. This sinks the customer experience, RO dollars and CSI.

Fast Response Times and Busy Bays

Customers are happier when they can watch videos on their own terms and understand exactly what needs to be done, which means they can respond faster. This is good news for service centers because they’re selling a highly perishable item: time. The key to operating more profitably is to keep the bays busy and reduce the downtime of approval waiting.

The old adage “a picture is worth a thousand words” certainly applies when a customer is trying to understand what their vehicle needs. Use video to clear up confusion and drive a better service experience. The payoff will be happier customers, higher CSI and more approved service recommendations.

CDK Global

Product/Topics

Fixed Operations

Everything You Need to Know About the CDK Dealership Xperience

gaillardc — Fri, 19 Apr 2024 21:13:58 +0000

Everything You Need to Know About the CDK Dealership Xperience gaillardc Fri, 04/19/2024 - 16:13

Margin compression and changing customer expectations have auto dealers working hard to find new process efficiencies to boost profits and customer satisfaction. However, despite a somewhat strong current industry focus on customer experience and satisfaction, the most recent CDK Friction Points study found 41% of Sales, F&I and Business Development Center Managers say lack of system integrations make it hard to do their jobs efficiently and deliver the faster, easier buying experience today’s customers expect.

Too many bolt-on solutions have been a problem in our industry for years. As technology has advanced, the traditional DMS just can’t keep up.

So, what do car dealers do? Buy more solutions from more vendors and piecemeal them around the DMS. But these solutions often don’t talk to each other, which leads to broken workflows, frustrated consumers and costs dealerships tens of thousands of dollars a month.

It’s time for a whole-new way to work. That’s why CDK created the CDK Dealership Xperience. Simply put, the CDK Dealership Xperience is a new category of software that unifies workflows across the dealership so that you’re running your operations better while also delivering optimal customer experiences.

Learn about the Dealership Xperience, its benefits and how you can use it for your auto dealership.

What’s the Dealership Xperience?

Introduced in August 2023, the Dealership Xperience drives digital transformation for auto dealers. It’s a single, unified platform for all the departments in a dealership. Instead of jumping from system to system with different logins, the platform seamlessly connects dealer and customer experiences to increase efficiency and improve the customer journey. To date, more than 750 dealers across the country have signed up for the proven, built-in functionality of unified workflows under a single experience. Dealers who use the Dealership Xperience observe:

Improved employee efficiency across departments
Higher employee and customer satisfaction
A shorter deal process for dealers and consumers

Why You Need the Dealership Xperience

Digital transformation has long been present in other industries — from financial services to health care to manufacturing. Each industry has examined the experiences of their end-users, reviewed their own processes, and implemented the right technologies to better deliver what their customers need. It’s time for the retail automotive industry to follow suit.

Rapidly changing consumer expectations for faster and easier car-buying and service experiences demand dealers adapt to survive and thrive. You must fundamentally change and simplify how your dealerships operate. And you can’t do that with the standard combination of a DMS and bolt-on solutions.

See how this new platform that integrates workflows across all areas of the dealership delivers what you and your customers need:

1. Shorten Your Deal Process

Time and time again we hear that consumers want to spend less time finalizing deals in the dealership. Yet, time remains a big problem. In a recent survey, CDK asked 1,200 new car buyers about their purchase experiences. Forty-six percent of buyers said they spent over two hours at the dealership. And as time ticks away, so does customer satisfaction.

The more time a car purchase takes to complete, the lower a dealer’s NPS. When a deal took one to two hours, 55% of buyers would recommend the dealership with an NPS of +46. When time in the store stretched to four hours, only 43% would recommend the store and the NPS dropped steeply to +31.

A unified platform helps cut the time it takes to finalize deals. It eliminates re-keying information into multiple systems and logging in and out of different interfaces.

It also addresses what’s commonly a big roadblock in the process: the F&I office. CDK found that 61% of F&I Managers use more than four systems to complete their jobs. That’s more than any other part of variable operations.

It makes sense to have digital retailing, e-signing and a desking solution all integrated within one platform so selling and buying cars is easier and faster. That translates to happier customers and a higher NPS.

2. Work More Efficiently

In an industry historically plagued by legacy systems and bolt-on solutions, too many dealerships use multiple technology vendors and platforms to sell cars. This sinks efficiency and productivity and draws out the car-buying process — sending the customer experience into a downward spiral.

Technology can often become a roadblock instead of an advantage when it comes to the day-to-day operations of a dealership. CDK found that among Sales Managers, 28% say lack of full integrations between digital retail tools, the CRM and the DMS negatively affects performance. That number jumps to 37% for F&I Managers.

If you replace disparate systems with a unified platform, it'll allow employees to work more efficiently so they can keep deals moving while shortening time spent on the deal.

3. Enhance Accounting Workflows

Accounting for a car dealership isn’t easy. There are a lot of moving parts and it’s hard work — especially for smaller dealerships that have Accounting departments made up of only a few employees. Yet, it’s imperative that your dealership keep impeccable records. You can’t manage and grow your business without accurate and timely financial reporting.

The Dealership Xperience includes enhanced accounting workflows to simplify complex tasks. These workflows include vendor management, payment register, accounts payable invoicing, on-demand payments, and purchase orders. With one platform, your Accounting team can streamline processes, reduce manual errors, and enhance efficiency. This, in turn, allows them to focus on value-add activities, like financial analysis and strategic decision making, to strengthen your overall operations.

4. Cut Costs

If you add more technology in order to enhance existing solutions with bolt-on capabilities, it’ll send costs skyrocketing. One recent DealerTech Nerd report, focusing on the DMS market, found the average monthly expense of a DMS with 10 to 15 additional bolt-ons runs to nearly $30,000 a month.

In addition, when employees are forced to swivel from task to task and log in and out of systems, you can add the cost of wasted time to every transaction.

When you use the Dealership Xperience, you cut the cost of multiple vendors and wasted time as one platform from one service provider houses all the capabilities you need to run your business.

5. Reduce Employee Turnover

Evidence points to unproductive work environments as one cause of employee frustration. And frustrated employees typically don’t stick around for long. While being fed up with systems and processes that make it hard to do the job is just one factor in why employees quit, it certainly contributes to the massive turnover in the industry. A recent NADA Workforce Study found dealerships had to replace a third of their employees in 2022.

You can improve processes by streamlining systems on one platform that’ll lead to happier employees and reduce talent attrition. This is crucial as the cost of employee turnover is incredibly high, and it impacts operational costs, revenue, productivity, company culture and the customer experience.

Dealership Xperience Features

Core to the platform is the Foundations Suite. This suite extends your dealership’s ability to operate your entire business on one platform while increasing control over the customer’s digital retail journey from start to finish.

It includes CDK’s most popular technology found in the DMS as well as highly sought features for service and modern retail.

The Foundation Suite helps you:

Win in the back office with powerful accounting capabilities
Increase consumer engagement with seamless online to in-store workflows
Simplify desking to keep deals moving
Capture digital signatures to speed up buying
Manage forms and documents digitally
Offer online service scheduling

Tailored Solution Suites

When you want to arm your teams with even more transformational technology, you can add on three tailored solutions suites. These suites can expand your business potential, accelerate performance and further enhance the customer experience.

The Modern Retail Suite

Consumers today expect easier and more convenient transactions. They want to be able to shop from anywhere, jump back and forth from online to in store, and have all that activity follow them into the dealership so they never have to repeat steps.

Evidence points to the fact that dealers still need to work on capturing and keeping the buyer’s journey updated before and after they enter the dealership. In a recent CDK study, F&I at the Dealership, half of all buyers (52%) said they had to complete paperwork at the dealership that they’d already completed online.

The Modern Retail Suite connects the consumer-to-dealer buying journey into a single, unified transaction for a more satisfying experience across the board — and more revenue for you.

The Modern Retail Suite helps you:

Buy and sell more simply with intuitive workflows
Empower buyers to transact however and wherever they wish
Keep data flowing with an integrated back-end system
Grow relationships with fully integrated, easy-to-use CRM tools
Speed up trades with a remote trade-in appraisal process

The Fixed Operations Suite

Fixed ops is your best bet for a steady revenue stream no matter what the market is doing. That’s why it’s so important to laser-in on creating great customer experiences. A smooth repair process leads to higher customer satisfaction, repeat business and more referrals to friends and family.

Family and friends factor in to where people shop and buy. Among Generation Z, for example, one International Council of Shopping Centers report found that 56% cite family and friends as the most significant influence over their buying decisions.

The Fixed Operations Suite helps you connect more closely with your customers and boost revenue with integrated workflows, enhanced communication features, and transparent pricing solutions.

The Fixed Operations Suite helps you:

Sell more service with service recommendation videos
Send instant real-time updates
Maintain pricing consistency from check-in to check-out
Anticipate potential vehicle service opportunities with artificial-intelligence-driven Predictive Service

AI and the Intelligence Suite

For years, CDK customers have leveraged AI-powered features to better engage with customers and enhance business operations. For example, predictive modeling gives visibility into a customer’s propensity to buy, and machine learning helps Service departments anticipate potential repair needs based on a customer’s vehicle and driving patterns.

Now, we’re introducing even more powerful tools in the Intelligence Suite. Infused with advanced analytics, AI and machine learning, these tools will help you access personalized and configurable enterprise reporting to turn data into profitable business decisions.

We know there’s a lot of hype around AI and new entrants are debuting solutions every day. Only CDK has decades of experience and intellectual property to apply across every part of your dealership so you can instantly benefit from our collective experience to drive your business forward.

The Intelligence Suite helps you:

Prepare for the future with predictive forecasts and competitive benchmarks
Deliver better customer experiences with a virtual phone and text assistant that works 24/7
Set goals for hundreds of key performance indicators and automatically track progress
Pull targeted reports to make profitable decisions across departments

Final Thoughts: Transform Your Business With the Dealership Xperience

Technology has transformed the automotive retail industry and now it’s time to take another big step forward. The Dealership Xperience eliminates all those bolt-ons that slow down processes so you can increase operational efficiency and customer satisfaction.

This new category of software bridges the deep functionality needed to bring the customer and dealership employee experiences together to change and simplify how your dealership operates. No more frustrated buyers. No more swiveling from solution to solution. Put simply, it’s transformational functionality to help your business reach its pinnacle of success.

CDK Global

Dealership Sales Staffing Dips but Sales Don’t Have To

gaillardc — Tue, 26 Mar 2024 13:05:11 +0000

Dealership Sales Staffing Dips but Sales Don’t Have To gaillardc Tue, 03/26/2024 - 08:05

The heady days of low inventory and high profit margins have eased into a more normal buyer’s market. As the market comes back down to earth, so have dealership sales and revenue. That’s making dealerships rethink Sales staffing levels.

In the CDK Friction Points 2024 Study, Sales Representative headcount is much closer to pre-pandemic levels, with dealerships shedding an average of two Sales employees from the previous year. That’s a full headcount less than before the pandemic.

In a more competitive buyer’s market, you may expect to see dealerships staffing up, not down. After all, more Sales staff should, in theory, be able to work more deals and close more sales.

Yet, evidence points to dealerships managing headcount more aggressively in part due to the economy, but also because process improvements and new technologies help with efficiency and productivity so fewer staff can do more in less time. CDK found that last year, three out of 10, 30%, of dealerships planned to reduce staffing due to efficiency gains. That number dropped to 15% in this year’s study.

It’s also worth noting that reductions may be driven by employee turnover. Drastically low turnover rates were a hallmark of the past couple of years as Sales staff pay soared due to high demand resulting in pricing power and a seller’s market for dealerships. Now that the market has shifted, pay has come back down to earth and Sales professionals are tasked with actually selling again, it’s likely some will opt to look for a job elsewhere.

Dealership Technology Enables Efficient Sales Staff

Slimmed-down Sales staff armed with the right technology and training can achieve robust sales, even in a more competitive market. CDK found that far more dealers are jump-starting efforts by bringing their digital retailing tools directly into the showroom and not just relegating them to their website only.

More than a third, 36%, now say they’re using these tools for deal presentations, up from 30% last year. This strategy enables Sales to incorporate shopper preferences once they’re in the showroom, which is key to moving customers more quickly to a sale. Customers reward dealers with higher satisfaction and NPS scores the faster a deal is completed. And more satisfied customers become repeat customers who are also more likely to refer a dealership to family and friends.

The shift in perception of digital retail tools as lead generators to deal generators also enables Sales to better engage with customers online and work multiple deals at once to dramatically improve efficiency. Data from CDK’s Digital Retailing tool indicates this approach makes Sales 70% more efficient and able to sell 17 cars per person per month on average — compared to the industry average of 10.

Sales Training Refresh

There are also big benefits to focusing on Sales training. Especially in light of the fact that sales skills may have atrophied over the past couple of years when staff were essentially only taking orders from eager buyers. Another swath of employees may have never sold in a more difficult market.

Now that inventory has rebounded, Sales can spend less time trying to find vehicles to sell and more time following up on leads. Renewed training on lead response times, equity mining and ways to optimize the customer experience, both online and onsite, are areas of focus that can pay big dividends.

No matter how you look at it, every part of the car-buying process relies on people. Technology can certainly make slimmed-down Sales staff more efficient, but they need the right training and support to succeed in today’s buyer’s market.

CDK Global

Product/Topics

Front Office

Effective Automotive Email Marketing Requires a CRM

gaillardc — Mon, 25 Mar 2024 13:00:00 +0000

Effective Automotive Email Marketing Requires a CRM gaillardc Mon, 03/25/2024 - 08:00

Time and time again email proves to be an unsung hero in marketing. It’s flexible, cost-effective and boasts consistently high ROI. When done correctly, the return can be as high as $36 for every dollar invested. However, success depends on leveraging the right tech tools.

In the retail automotive industry, the most crucial tool is one dealers know well and that’s the Customer Relationship Management (CRM) system. The CRM is the single most important solution a dealership has for effective customer engagement because it incorporates information unique to each individual. When it comes to email marketing that drives results, automotive CRM software is at the center of it all, housing all customer data and informing how, when and why to communicate with customers.

Target Emails to Boost Results

The first step to leveraging all that data in your CRM for effective email marketing is to create targeted lists. Use the information in your CRM to segment customers into marketing lists that pertain to unique characteristics, like where they are in the buying process, if they’re coming up on lease end, etc.

Today’s customers want to feel valued and known on a personal level, so matching email messaging to customers’ needs lifts open rates and engagement. Segmented emails drive 30% more opens and 50% more click-thrus than unsegmented ones. The difference is those response rates are worth taking the time to personalize your lists and email messages.

Customize and Create in Minutes

A degree in graphic design used to be required to create and build professional, eye-catching emails. Not anymore. Utilize a template builder solution like the one in the CDK Modern Retail CRM to design and customize messages for specific audiences. It’ll allow for more personalized engagement, and you can do it all within a few minutes. Templates can also be saved within the CRM for easy redeployment and editing.

Maintain Vital Follow-Up

The Rule of 7 in email marketing refers to the concept that people need to see the same message at least seven times before they act. This highlights the importance of email follow-up to achieve the best results. A highly capable CRM can make a valuable impact by automating follow-up processes to maintain the consistent customer contact required to motivate customers to act.

Track Marketing Metrics

To gauge the success of email marketing efforts, track the metrics that matter for your dealership. What matters will depend on your goals, but common metrics to track include click-thru rate, conversion rate, bounce rate and ROI. The CRM should provide dashboards and reports for at-a-glance insight into what campaigns are working so you can do more of what’s making you money and less of what isn’t.

Keep the CRM Clean

It’s worth noting that any CRM is only as good as the data it houses. Inaccurate or outdated information can lead to marketing inefficiencies, revenue loss and irrelevant or repetitive emails that reflect poorly on the dealership. Data accuracy is vital to create targeted campaign audiences and personalized follow-up.

Train and manage your staff to always update customer records and include notes, such as where the customer is in the buying journey, that can lead to future sales. Also, lean on the CRM provider to help identify and eliminate duplicate, invalid and incomplete data.

Email is an unsung hero in marketing, but it won’t work for automotive dealerships without a highly capable CRM. The right CRM will help you organize customer data and build end-to-end email campaigns to drive long-lasting connections and generate more profit.

Learn more about CDK CRM

CDK Global

Product/Topics

Front Office

EV Owners Speak Out in New Study

thomasd — Wed, 20 Mar 2024 13:15:31 +0000

EV Owners Speak Out in New Study thomasd Wed, 03/20/2024 - 08:15

As car shoppers and dealers adjust to the electric vehicle phenomenon, they’re looking for answers to questions about the inevitable road to an all-electric future. Commercial charging stations are popping up at banks, parking garages and along highways to meet the increasing number of EVs on the road but despite the progress questions remain.

Some roadblocks, whether the range or the not-so-affordable price tags, have impacted recent consumer demand and seemingly endless headlines.

So, who exactly is the owner already behind the EV wheel?

CDK wants to understand who’s decided to trade in their gas station loyalty card for a home charger and why. In The EV Ownership Lifestyle white paper, we uncover data related to everything from home charging, service and the all-important road trip, among other topics.

Does generation, education level and income impact EV purchasing decisions and trends? How important is word of mouth? Are dealer sales teams helping or hindering the EV transition?

Read on to find out what survey respondents told us. We made sure to talk to owners of the most popular EVs on the road, Tesla, and those who have chosen another EV brand to see if there are differences even among EV owners.

Download the EV Ownership Lifestyle white paper

Read More EV Research
EV Service: Today and Tomorrow
EV Confusion Carries On

CDK Global

Type

White Paper

Market Your Trained Technicians to Earn Service Business

gaillardc — Thu, 07 Mar 2024 14:00:00 +0000

Market Your Trained Technicians to Earn Service Business gaillardc Thu, 03/07/2024 - 08:00

Despite swirling economic head winds, fixed operations remains a bright spot for franchised dealers. It’s the steady stalwart relied upon as a profit center during the variables that impact sales. And franchised service centers have distinct advantages that independent shops can’t beat.

In a recent survey, CDK asked over 2,000 service shoppers where they turn most often for vehicle repairs and maintenance. Nearly half, 43%, picked a dealership as their first choice.

Why exactly did they choose a dealership over competitors? Two of the key reasons were knowledgeable service staff (47%) and certified parts (38%).

Only franchised dealers can promise factory-trained technicians and manufacturer parts. Dealerships that promote these advantages and deliver an exceptional customer experience will be on the road to more service business.

Accelerate Marketing Activities

Competitive advantages deserve to be marketed far and wide. Focus on your website, lead-generating activities, and customer communications.

First, make sure you have a webpage dedicated to your Service department that’s easily found on your homepage. On the Service page, emphasize your factory-trained technicians and OEM-supplied parts. Make it personal by highlighting employees. Imagine a Master Service Technician who’s been with you for years. Hang their photo alongside their qualifications and include a few fun facts.

Second, plug your technicians and expertise in all lead-generating emails and social media posts. Consider including a customer quote from a CSI survey that speaks to your specialized vehicle knowledge and/or specific OEM parts. In this age of online reviews and social influence, shoppers appreciate hearing from other customers.

Focus on the EV Advantage

As EVs become more commonplace, the advantages of dealership service centers will be even more pronounced. Automation, electrification and telematics are changing the skills technicians need. Dealerships can afford to hire and train technicians skilled in technical repairs. Emphasize the advanced technology in today’s cars and illustrate why your highly trained technicians are another reason to come to a dealership over the independent or chain shops.

Tackle the Customer Experience

Despite the advantages of training and technology, dealerships still need to consider the overall customer experience to develop loyal customers. CDK found that while shoppers appreciate specialized service they want it to be easier to do business with dealerships. What does that look like? Think of communication and convenience.

Customer updates on service progress are a particular area that can be improved. Technology, like mobile updates, make it easier to keep customers informed and can help improve the experience.

Experience convenience is another area of focus. Conveniences range from providing online scheduling tools to loaner cars to pickups and drop-offs. Logistics, like location, will affect what you can offer. A dealership downtown, for example, likely won’t have space for a fleet of loaner vehicles but can contract with rideshare companies to get customers where they need to go.

With the market normalizing and affordability concerns pushing customers to hold onto older vehicles longer, fixed operations continues to be a reliable profit center. Franchise service centers have the technical expertise and certified parts that independents just can’t compete against. Push these advantages along with an exceptional customer experience to come out on top in a crowded field.

CDK Global

Product/Topics

Fixed Operations

That’s a Wrap: Takeaways From NADA 2024

gaillardc — Mon, 19 Feb 2024 20:14:41 +0000

That’s a Wrap: Takeaways From NADA 2024 gaillardc Mon, 02/19/2024 - 14:14

The camaraderie and partnership that comes with being at NADA were in full effect at this year’s show in Las Vegas.

The excitement about what’s to come was felt at the CDK booth, where hundreds of visitors stopped by to learn about new capabilities and solutions that provide more efficient and connected buying and selling experiences. Before the doors closed, Jason Swiech, CDK’s lead product marketer for F&I, shared his thoughts on the show and what made it so unique.

This is your 12th NADA Show with CDK. What felt different about this year?

Over the last two years, I think dealers are feeling more positive about their businesses. They’re also seeing a change in how they’re dealing with car buyers, and they want to open their minds to other processes. In the past, they may have tried to just shoehorn a digital solution into their operations but now they’re taking complete ownership of the modern retail process. That’s where I think the positivity is coming from. When they come into our world and into our booth, they want to learn and be able to make a change in their own futures.

Why do you think visiting the CDK booth was a priority for hundreds of dealers?

Dealers make sure to stop by our booth and I think we’re the most crucial stop for them. There are very, very few players in the market who can actually deliver what’s needed to be done in the front office overall. Like I mentioned, they want to learn. So, they may see other ideas on the show floor and then they challenge us with what they may have heard or seen. But in the end, they want one solution, and they want us to be at the forefront as well.

You heard a lot of valuable feedback from dealers. What are the next steps for you and your team?

One of the biggest things we get out of NADA is that after we show our initiatives, what’s on our road map, what’s available now — available pilot programs, whatever it is — we leave NADA with a lot of follow-ups. Our focus becomes reconnecting with the dealers we met in Las Vegas and starting to have much more in-depth conversations. Here, we may only get 15 minutes, or if we’re lucky an hour, and while that sparks interest, dealers want to see more. I already have trips planned based on conversations we had here — Florida, Texas — to show more of our solutions and get direct feedback.

That feedback is invaluable. We take everything we hear from dealers whether it’s here or in their stores and share them with our product teams so they can evaluate them and often implement changes.

Were there CDK solutions that clearly resonated with dealers?

When it comes to F&I specifically, we’re getting a lot of interest in e-contracting and e-signing to make for a more seamless workflow in F&I. I had a half dozen meetings about these specifically on the first day of NADA. And these conversations, and conversations about the whole front office not just F&I, are really positive. Dealers aren’t just hearing the term modern retail blasted at them; they’re grasping the need for that workflow now.

Watch "The F&I Office and Trust at the Dealership" session from CDK Live at NADA 2024

CDK Global

Product/Topics

Front Office

Buyers Take the Wheel for Car Sales in 2024

gaillardc — Tue, 13 Feb 2024 14:00:28 +0000

Buyers Take the Wheel for Car Sales in 2024 gaillardc Tue, 02/13/2024 - 08:00

After three years of dramatic post-pandemic market swings, buyers in 2024 are poised to take back the wheel with plenty of inventory choices, slightly lower prices and a jump in automaker incentives. This buyer’s market has many hailing the return of normalcy.

Still, analysts predict slow growth for the industry in general, with many forecasting around 16 million new vehicle sales. That’s over a million fewer sales prior to the pandemic.

Although supply and demand are back in sync, several factors may have some buyers staying on the sidelines. Interest rates hovering around 7% combined with tighter auto lending mean new vehicles are out of reach for many. Slower overall economic growth also factors into fewer vehicle sales.

The good news is that used vehicle values continue to fall opening up possibilities for buyers pushed out of the new vehicle market. The Manheim Used Vehicle Value Index recorded a 7% year-over-year drop at the end of 2023. Compared to the peak of used values in December 2021, today’s used vehicle prices are down nearly 21%.

The Winding Road for Electric Vehicles (EVs)

Though there are reports of slowing EV sales nationwide, growth is still taking place and consumer options accelerate this year. Automakers plan to reveal 25 new models in 2024, with several brands launching their first EVs for U.S. consumers, including Acura, Jeep and Land Rover.

While analysts revised expectations for sales from roughly 17.5 million to 16.7 million EVs, this still represents a 20% increase from last year’s forecasted total.

Tesla remains the market leader but more options from the rest of the industry are an exciting development for dealers ready to jump into the EV pool. And automakers are helping to pave the way to more sales. General Motors recently announced it’ll furnish $7,500 in incentives for models that no longer qualify for federal tax credits. It remains to be seen if others will follow suit.

More Effort to Sell Vehicles

As we officially bid farewell to the seller’s market that defined the last several years, buyers will have more options when it comes to where they take their business. Especially in light of expectations that automakers will offer more incentives in 2024 to make their brands more affordable and attractive to buyers. In sum, dealers will have to exert more effort to attract and convert shoppers than in previous years. There are a few key actions dealers can take to post strong revenue in a buyer’s market.

Hone sales skills. For the past few years, customers have had little negotiating leverage. That changes in a buyer’s market. It’s time to hone sales skills that may have atrophied. Focus on lead response times, transparency in process and pricing, and ways to optimize the customer experience to prioritize a streamlined sales process that moves effortlessly from online to on site.
Shorten the sales process. Customer satisfaction soars when buyers are in and out of the dealership in two hours or less. The use of digital retail tools online and in-store, moving away from paper-based F&I processes, and picking up deals exactly where the customer left off all help to cut time at the dealership.
Step Up EV preparedness. If your dealership is revving up to sell EVs, a few key actions can help pave the way. These range from training initiatives to ensuring salespeople are well-versed on benefits, comparisons to gas-powered vehicles, and the ins and outs of federal tax credits to encyclopedic knowledge of your area’s charging options. EVs are new and unproven for many consumers so brand loyalty is low. Step up to the plate now and cultivate loyalties before your competitors.

2024 marks the return of a competitive auto retail market with the buyer back behind the wheel. Now’s the time to polish sales skills and hone the customer experience to increase sales, customer loyalty and retention down the road.

CDK Global

Product/Topics

Front Office