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Generational Transition: Dealership Businesses Can Expect a Wave of Tech Changes
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In the US alone, the Baby Boomer generation owns more than 12 million businesses. Over the next two decades, 70% of these businesses are expected to be sold or passed onto new owners, opening the floodgates for a generational transition of business leaders. These new, often younger, business owners are sure to shake things up, especially when it comes to technology.
While the “Silver Tsunami” of retiring entrepreneurs is happening all over the world and across every industry, dealerships need to understand how the future of dealership businesses is changing in real time. Whether you’re the owner of a dealership looking to retire or someone who is ready to establish themselves as a leader in the space, modernizing dealership businesses has to be a top priority.
When talking about the future of dealership businesses, technology advancements are the focal point. It’s true that cutting-edge technologies and innovative software platforms can make a dealership’s operations streamlined and more efficient, but the real push for these changes is coming from the market itself.
Farmers, construction workers, and transportation engineers all rely on customized equipment and machinery to deliver the right end results to customers. But what happens when that machinery breaks down? Gone are the days when construction workers would delay a project because of issues with spare parts management. Instead, they want problematic parts replaced before the piece of machinery shows any sign of distress.
So, how can technology adoption in dealerships help aid in the generational transition that’s taking place before our eyes? Let’s find out.
The Next Generation? More Like the “Tech” Generation
As the next generation of dealership owners take over, they’re bringing with them a level of technological literacy that has not yet been seen. Today’s entrepreneurs grew up attending classes online, communicating digitally, and regularly trying out different applications on their mobile phones. They’re ready to do the same thing in the businesses that they lead.
These leaders, unlike the generation of leaders before them, are comfortable using tools and technologies to get the job done. They know that today’s business landscape demands a tech-savvy approach, and they’re committed to advancing the dealership industry with the right tools. If you’re a leader yourself, you might be paving the way for the generational transition in dealership businesses if:
- You aren’t afraid to work from anywhere. Being able to lead your dealership from your phone shouldn’t phase you.
- Industry advancements excite you instead of discouraging you. Some leaders may look at new technology as a threat, but the next generation sees it as a leg up.
- Customers can give you feedback and depend on you to make changes where needed.
- You’re ready to stop doing everything manually and prioritize the automation of tedious tasks to save time.
- You want your teams to get more work done without actually working harder. You need the right tools for this!
Entrepreneurs who are comfortable with the digital approach to doing business are doing more than changing processes and implementing technology; they’re changing organizational culture, and even more broadly, the dealership industry as a whole. With them comes a fresh wave of bold business strategies that inspire their employees to step outside the box, continuously improve, and address problems with digital solutions.
With new technologies and innovative dealership strategies appearing left and right, dealership owners must adapt quickly and adjust how they meet their customers’ needs. Technology is the answer to many of our industry’s challenges, but without the generational transition, dealership business leaders may fail to meet this moment. Luckily, there are plenty of innovators ready to take charge.
Digital Tools are Transforming Dealerships
Digital transformation in dealership businesses doesn’t happen in a vacuum. It’s not just one or two new tools that are coming onto the scene at any given time, it’s an endless stream of new software solutions that permeate every aspect of doing business.
CRM Systems
Customer Relationship Management (CRM) systems have been around for decades, but in the last few years, they’ve gotten quite the upgrade. Now, the right CRM can give deep insights into customer touchpoints, provide recommendations for cross-selling and up-selling, and even connect with other business systems to break down organizational silos.
Online Sales Platforms
In just a few clicks, dealership customers can use online sales platforms to place orders, track their replacement parts, and communicate with customer service. These platforms make it easy to automate key sales reports for internal purposes while improving the customer experience on that side of the house.
Internet of Things
For leaders on the hunt for innovative dealership strategies, the Internet of Things should be at the top of the list. By integrating sensors and trackers into the equipment manufacturing process, dealerships enable IoT insights. For instance, the IoT can alert a dealership to an underperforming part before that part stops working completely. This gives dealers the chance to fix the problem before it’s even noticed.
Aftersales Platforms
The importance of aftersales can’t be overlooked. With a platform like ClearOps, dealers can better anticipate product demand, simplify inventory management, and stay connected to OEMs, distributors, and more. ClearOps is proven to increase fill rates, reduce repair time, and boost part sales.
Supply Chain Software
With hyperconnected supply chains, the job of dealers doesn’t end when a customer receives the part they ordered; that’s just the beginning. From there, dealerships must build relationships with the customer, meet their service needs, and continue supplying necessary machinery or components. With supply chain software, keeping up with all the moving parts is much more manageable.
Smart Forecasting
Being able to predict demand – or lack thereof – is something business leaders have been chasing for centuries. But the good news is that thanks to smart forecasting tools, we’re better at it than ever before. By relying on Artificial Intelligence and Machine Learning, forecasting tools are able to proactively provide business insights instead of always looking back at what happened months prior.
Warranty Automation
When machinery is under warranty, dealerships are tasked with replacing parts as needed. Instead of overextending your service technicians, use warranty automation tools to process claims, automatically distribute parts, and coordinate any service touchpoints required.
Chatbot Features
Most people aren’t strangers to chatbots. We’ve all experienced the convenience that chatbots provide. Instead of waiting for business hours to call a service hotline with long wait times, customers can use chatbots to resolve equipment issues, get in touch with the right point of contact, and even file warranty claims.
These technologies are just a few of the ones that have propelled the digital transformation in dealership businesses – there are many, many more. By investing in a few of the tools above, dealerships will start to notice key benefits:
- Better customer satisfaction
- Higher fill rates
- Reduced repair time
- Enhanced Customer Lifetime Value
- Customer retention rates
- Greater Employee productivity
- Improved workplace satisfaction and company culture
Staying Competitive in Today’s Market
Dealerships have a lot to keep up with in today’s market, and technology has a lot to do with it. Sure, technology streamlines processes and changes industry dynamics, but it also comes with a learning curve. That learning curve exists on the customer side and the dealer side, as both parties redefine what their working relationship will look like.
For dealers, meeting customer expectations is the driving force behind the digital transformation happening within the industry’s generational transition. In order to keep up with what customers expect, dealers need to have a plan for the following:
- Focus on Service: Stellar service is a key differentiator between “good” dealers and “great” dealers. Low wait times, automated scheduling, and quality service are table stakes in this space.
- Aftersales Prioritization: The aftermarket business is intricate and complex, but it’s more valuable than most dealers realize. Spare parts management helps retain customers, drive revenue, and reduce downtime.
- OEM Connectivity: The ecosystem of OEMs, dealers, customers, and stakeholders isn’t easy to manage, but with the right tools (like ClearOps), the hyperconnected supply chain is much more approachable.
- Technology Use: Technology use is the core fabric of the generational transition in dealership businesses. Everything from financial management systems to inventory tracking software plays a big role in the overall efficiency of dealers.
- Proactive Maintenance: It used to be that equipment would stop working and a technician would go out to replace the faulty part. Today, customers expect the technician to replace faulty parts before downtime occurs. Proactive maintenance does the heavy lifting when it comes to separating yourself from the competition.
To stay ahead of the market, dealers must understand the two-way relationship between customers and technology. Sometimes, customers demand a new offering that results in new tech. Other times, technology opens up customers’ minds to new possibilities. We may not know exactly what the future of dealership businesses will look like, but we do know that the answers can be found by understanding customers, technology, and their relationship to one another.
Taking on Digital Challenges with Confidence
Technology adoption in dealerships is no easy feat. It comes with plenty of trials and tribulations, and sometimes, dealership owners may feel like it’s better to go back to the status quo. If you find yourself faced with one of the following tech-related challenges, try our suggestion instead of backing down.
Access to Capital
As exciting as it is to have a shiny new “toy,” advanced technologies can come with some sticker shock. For many business leaders open to digital transformation, funding is one of the biggest barriers to entry. These tools are costly and new, making it hard to know if investing in them is worthwhile. Instead of throwing in the towel, try:
- Our Solution: Instead of trying to overhaul your entire tech stack or invest in a bunch of new tools at once, work with your team to figure out which technology is best for your business strategy. You might want a CRM, inventory management system, and aftersales platform, but maybe investing in just one is best (for the moment!).
Adoption Reluctance
Let’s face it – no one likes to change how they’re doing things. The slow adopters can be both internal stakeholders and external ones, like customers or vendors. If staff and customers are unwilling to adjust their processes to align with new tools, your investment could be lost.
- Our Solution: Involve employees and customers early! If you’re implementing a new service management platform, let your customers know that it’s coming, train them on it properly, and stay patient as they get familiar. For your service technicians, coordinate educational sessions and open the floor to suggestions. How can the tool be better used? In what ways can we apply it that we may not have thought of? Those who are closest to the customers almost always have the best perspective.
Integration Issues
How does your new aftersales platform play with your other business systems? If you’re having problems with data not transferring properly or systems not staying updated, modernizing your dealership business might be slower than you’d like. Instead, like the next generation of dealership owners, try this:
- Our Solution: Work directly with the vendors who designed and created the platforms you’re having issues with. If ClearOps wasn’t working properly, our entire team would want you to reach out so that we can rectify the situation. Every SaaS provider feels the same way.
Readying for Tomorrow
The dealership space is changing, are you going to advance with it or get left behind? As an industry, we’ve reached the point of no return; you either embrace the generational transition and the technology that comes with it, or you give up market share to dealers that will. To cultivate an organization that embraces digital transformation at every level, be sure to:
- Involve your staff in the process. A lot of changes will fall on them and how they do their jobs day-to-day, but championing their decision-making power is the best thing you can do.
- Hold regular training sessions on new technologies that are available, as well as training sessions on any changes or updates to in-use software.
- Create a rewards system for employees who are coming up with new, innovative ways to use the tools they have at their fingertips.
- Emphasize a culture of learning and create a psychologically safe environment. People can’t innovate if they don’t feel comfortable enough to take risks!
Ushering in the New Generation
It’ll take a few years to complete the generational transition in the dealership business, but once it’s done, the tech-savvy dealership owners are going to be on top. In an era of digital native entrepreneurs, opening or taking over a dealership isn’t just about part quality and OEM relationships – it’s about technology.
Whether it’s warranty automation, proactive service capabilities, or IoT features, customers are ready for an even more streamlined experience that only technology can provide. Although customers are excited, that doesn’t mean that your organization’s digital transformation journey won’t face resistance.
You might have a hard time securing funding for new tools, or struggle to generate momentum and excitement, but no problem is without a solution. To stay competitive, you have to stay relevant, and to stay relevant, you need technology. As dealers get more willing to prioritize digital tools, we’re seeing a generational transition happen before our eyes. It’s time to find your momentum and join the movement.
Which piece of tech are you investing in first?
Download The Free OEM How-To Guide “Boosting aftermarket performance in a decentralized dealer network”
In the whitepaper you’ll learn:
- Why winning in the aftermarket is a crucial pillar, not just a nice-to-have
- The untapped potential of parts planning among numerous OEMs
- The tangible benefits of enhancing aftersales through a unified downstream supply chain
- A case study: How AGCO supercharged their customer fill rates by a whopping 43% by transitioning from a blind spot in supply chain visibility to an interconnected dealer ecosystem
William Barkawi
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