First off, I must admit this article is purely speculation based on rumors – it is about the future, and not set in stone.
Two things have come up this week, which are major concerns for me. One deals with the two big DMS providers: Reynolds & Reynolds and ADP. The second is something I heard about Toyota. We all know privacy laws have become more stringent than ever and continually evolve to encapsulate wider venues almost daily. It was simply a matter of time before the DMS providers had to jump on the privacy band-wagon by creating their own set of requirements. This should be nothing new for a Reynolds & Reynolds dealer. Mostly this will affect third-party vendors. As an ADP dealer I am beginning to become familiar with their upcoming process. It seems as though they are offering vendors two steps: 1) The vendor has to purchase an API to gain DMS access (about $80,000) and 2) become certified through ADP (about an 18 month process…currently). Fortunately, dealers will be able to send out some information to vendors, but the more DMS information a vendor interacts with the harder it will be for that organization. I foresee the next few years being difficult in working with DMS information and vendors. We will have a short list of approved vendors to choose from.
To further shorten that list is the second part: our manufacturers. This part fully comes from the rumor-mill, but I heard Toyota is considering a new mandate. The mandate will require dealers to only use approved CRM/ILM vendors. This will be more stringent than what Honda currently does. Honda only wants to monitor certain areas of how Internet leads are handled, so they require a dealer to use a pre-approved list of vendors or offer dealers to pull leads through their own Honda Interactive Network. From what I heard about Toyota, they are considering only passing leads to dealers who use one of their pre-approved CRM/ILM vendors, and not offering any other alternatives to access Toyota leads. Speculation on the rumor vine, also states Toyota will take things even further by requiring the whole dealership use one of these vendors. Toyota is interested in not only how Internet leads are handled, but showroom traffic as well. Typically Toyota sets the franchise premises, so it is only a matter of time before other OEM’s move in the same direction.
If speculation becomes fact, this could mean dealers have an extremely short list of vendors to choose from. And dealer groups could be even more limited as one manufacturer requires a particular CRM/ILM that another manufacturer may not.
Can you see what a mess all of this could put all of us in?
P.S. One more time, this is purely speculation from the rumor-mill. I mention it on DealerRefresh to give everyone a heads-up on a potentially difficult future.
