Inside Look at a Dealer-Management System Conversion: How 1 Dealership Did It

Picking the right dealer-management system can keep a dealer awake at night. Select the wrong one and it can affect employee morale along with putting a hurt on the bottom line.

Matt Dagenais, one of three brothers (Tim and Paul are the others) who run the Riverside Auto Group in Escanaba, MI, shares his insight and experience following a recent conversion the group decided to do.

Ten years ago, Riverside's four stores were operating on one Reynolds and Reynolds' box when it bought another store with a Reynolds' box. According to Dagenais, the group ended up having to run two separate boxes because it couldn't convince Reynolds to do a combination deal.

Six months later, Riverside acquired a dealership on ADP. Riverside approached Reynolds again about setting up all of the stores on one box. The cost proved to be prohibitive, so for the next few years, Riverside operated with two Reynolds' systems and one ADP system.

The group negotiated for about two years with the two DMS firm, Dagenais says. “Our process included hard negotiating back and forth with ADP and Reynolds.

“Because we were running each box efficiently and effectively, we thought we had a good advantage negotiating compared with most dealers, because we had both systems.”

Late in the negotiating process, Riverside brought Arkona into the mix. Arkona had not yet been acquired by DealerTrack at the time.

“I tried to buy them the previous go-round about 10 years before, when they weren't this far East; their farthest client was in Wisconsin,” Dagenais says. “They just flat out said they couldn't support us at the level we were at.”

The second time, Arkona impressed Riverside's managers with an online demonstration of its functionality.

Managers liked the drill-down functions that allow them to look for data without having to pull up another application to find more detail.

Price became an issue, Dagenais says. “I had beaten up Reynolds pretty hard, and beaten up ADP pretty hard, over the course of nearly two years. Arkona came in with lower negotiating rates. So that piqued our interest.”

Arkona, though, was an unknown in the industry. Riverside reviewed their quarterly earnings and financial records trying to determine its viability and future.

“We took a gamble, and went forward with it,” Dagenais says. The first install was in April of 2004.

Riverside planned a staggered install process for its six stores. There was an issue between the first and second install. Dagenais says a chat with Arkona threatening to stop the process fixed the problem.

Installations at the other four stores finished ahead of schedule. Riverside trained all of its employees on the Arkona system before making the switch.

Riverside recently acquired a Ford dealership and converted its system to Arkona.

It was quiet prior to the purchase, Dagenais says. He talked with Arkona four weeks before the deal was done and managed to get everything in place to do the conversion within two weeks. “And then we sat back and waited,” Dagenais says.

The fact that Dagenais was on good terms with the owner and was allowed access to the system before papers were signed helped.

The install happened without an Arkona rep onsite, the first time the firm did that, Dagenais says.

“We hit the ground running, our systems were in place and our hardware was in place,” he says.

Riverside had employees in the new dealership shadow employees in the other six stores, so they could learn the new system.

The goal is for each store to run the same way on the same processes.

“The advantage we have with a cookie-cutter application is that any one of us (three brothers) can walk into any of our dealerships to a job station and hit the ground running,” Dagenais says.