We spoke with hundreds of dealers at the recent NADA Convention & Expo in Orlando. One of the recurring conversations at our booth was that many dealers are overwhelmed by all the technology available. From CRMs to reputation management to implementing new technologies in the service drive, how do you know where to begin? What’s most important? What’s really going to add to your bottom line and what’s going to be a waste of money?

I read a book many years ago that provided what is one of the best answers I’ve ever heard to these questions. In Jim Collins’ “Good to Great…Why Some Companies Make the Leap and Others Don’t,” he outlines a simple rule for companies regarding technology.

Technology should not be purchased as a solution to something that doesn’t exist. Technology should only be purchased if it will help you improve a process that is already currently in place.

Take CRMs for example. Years ago salespeople used pen and paper as a CRM. They wrote down customers’ names and addresses and notes, they sent out follow up letters, they sent out vehicle purchase anniversary cards and they called customers. Today of course the tools are different; you can swipe a drivers’ license and send out a text or e-mail. But the point is, a CRM isn’t going to do that for you. If your salespeople aren’t currently following process, you could potentially waste thousands of dollars a month on a CRM that isn’t going to help you. Same with a brand new website guaranteed to double your leads: ask yourself how well are you converting your current leads?

Another big theme at NADA was technology in the service drive. There’s a huge demand from dealers for features like mobile solutions and auto dispatch that can improve efficiencies & boost profits. Yet many service departments are not following basic processes that will help customer retention. Here’s one example:

When was the last time you went to a dentist? The day before your appointment you probably received a phone call or e-mail reminder from the dentist. Then, when your cleaning was finished and you went to check out, the assistant said something like, “you’re due back in six months, would you like to schedule your appointment now?”

I would venture to guess that most service departments, despite being eager to implement new technologies, are not doing these two basic customer retention techniques on a consistent basis: appointment reminders and scheduling the next appointment before a customer leaves—yet these two techniques don’t require any technology at all!

So when you are considering which of the new technologies to purchase and implement in your dealership, ask yourself these questions: what are we currently doing? Why isn’t it effective? Is it a process problem, a people problem or a technology problem? If you are 100% certain that your processes are in place, your people are doing what they’re supposed to be doing, and a new technology will make it easier for them and improve results, then by all means, go ahead and buy.

How do you make decisions on whether to purchase new technologies? What was the most interesting or exciting new technology you saw at NADA?