Recovering Dealers Rely on Info Tech

Many dealers are turning to information technology to further reduce costs and position themselves for an economic rebound after a couple of turbulent years for the auto industry.

They are turning to IT software and services to help them take advantage of social media, manage their online reputation and consolidate the mounting software they need for daily operations.

Dealers also are on the lookout for firms that can improve their ranking in search engine results and enable their website content, like inventory, for use on smart phones with Web-browsing capabilities.

“This whole social media and reputation-management thing is really going to be a big topic that dealers are looking for information and help with,” says Ralph Paglia, director-digital marketing at ADP Dealer Services. “It’s become so significant so fast, I think it’s caught most dealers off guard.”

Dealers are beginning to recognize the marketing and relationship-building opportunities in sites like Facebook, Twitter, Digg, Ning and MySpace. Vendors are offering a wide range of social media managed services and technology.

Managing the dealership’s reputation online goes hand-in-hand with social media. The process of consumers describing their experiences at a dealership is growing exponentially and is having a huge impact on where people buy cars, says Paglia, founder of the popular Automotive Digital Marketing networking site.

Some dealers say they can’t do anything about it, but vendors can help a dealer set up a system to alert them when the dealership’s name is used, place inventory on social media sites, induce loyal customers to post positive comments and even build a dealership’s own social network.

As dealers learn how to leverage social media to their advantage, some say proliferating software and services already are taxing their ability to effectively use multiple systems.

Alex Snyder, director of e-commerce at the Checkered Flag Automotive Group in Virginia Beach, VA, says dealers are looking for ways to consolidate software that they use to manage customer relationships, Internet leads, service customers, inventory and other operations.

“I think 2010 is the year of consolidation,” Snyder says. “Dealerships can’t handle all this stuff, and if they are handling it, they are only handling one piece well.”

ADP’s Ralph Paglia says dealers looking for help managing social media.

Checkered Flag, selling 11 brands including Honda, Toyota and Volkswagen, uses iMagicLab for customer-relationship management.

“Soon we’ll be able to do all our service writing inside our sales CRM, which will combine our marketing efforts into one database, which will be fantastic,” Snyder says.

One way to ease the burden of software and hardware is to outsource it to IT managed-services providers, says Robert Davis, a member of Dixon Hughes PLLC, a dealership accounting and consulting firm.

Dealers are beginning to express a need for IT-managed services, especially in dealerships with more than 150 employees using the systems, Davis says.

The managed-service provider does everything from configuring the dealership’s network to updating software to fixing printers. Dealerships with 150 or more users are saving IT costs “in the seven figure range” over a 5-year period with this outsource model, he says.

“Dealers are beginning to understand that smoothly-running IT systems are essential to today’s business model – controlling hardware and software, rather than it being something operating in a dark room somewhere,” Davis says.

Search-engine optimization, or SEO, was another buzzword on the exposition floor of the National Automobile Dealers Assn. convention in Orlando, FL, in February.

“SEO consultants are growing like beanstalks,” says Dean Evans, chief marketing officer at Dealer.com. “There’s a lot of SEO talk and discussion, both from a software standpoint and from the managed services standpoint.

“To do good SEO, you have to have a combination. It is humans working on a platform that is Google-certified to optimize and ensure your first-place ratings on the search engines.”

Optimizing a website so that it appears higher in search-engine rankings can drive more traffic to the site and save dealerships money by eliminating the need for some third-party lead providers and aggregators, adds Checkered Flag’s Snyder.

Some dealers are interested in 24/7 call centers, driven by auto makers demanding shorter response times to consumer leads, Evans says.

Live call centers “are going to go through the roof,” he says.

Dealers should not forget the technology that helped them enter the e-commerce arena.

Lead-management software is a must to manage Internet and other sales leads flowing into a dealership, says Susan Garontakos, Internet administrator at Al Serra Auto Plaza in Grand Blanc, MI.

“Lead management may be the most important tool a dealership can have because more customers today are going to the Internet to do their shopping before coming into the dealership,” she says.