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.
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:
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 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.
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.
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.
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.
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.
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.
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.
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.
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:
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:
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.
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.
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:
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.
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:
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:
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?
In the whitepaper you’ll learn: