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If you’re heading out to this year’s NADA Convention and Expo, make sure you take the following six steps before you pull the trigger on a new software tool for the dealership.

January 2014, F&I and Showroom - Feature

by David Keller, CPA, CFE - Also by this author

It seems like only yesterday when the industry descended on Orlando, Fla., for the National Automobile Dealers Association’s annual convention. But here we are again, preparing our feet and our agenda for this year’s event in New Orleans.

Dealers attend the NADA Convention and Expo for many reasons. There is training available for every department, vendors lining the aisleways, and parties and meetings to attend. There’s so much going on that it’s almost impossible to accomplish everything you set out to do. So, to help you make the most of your visit, I thought I’d run through a few steps you need to take before setting foot on the expo floor.

Step 1: Create a Priority List
Before you can figure out what you need and who can help, you need to take a hard look at your dealership and list out your priorities for the coming year. Once you have your list and have prioritized it, you can start making a list of the classes and meetings you need to attend, as well as the vendors you need to visit.

Step 2: Determine What You Can Afford
Almost anything you buy at the convention is going to require some upfront money and maybe ongoing monthly maintenance. So your task is to not only figure out if you can afford the initial cash investment, but where that money is going to come from. If the product or service your considering requires monthly maintenance, then you need to figure out if you can afford a new expense on top of the ones you already have.

Step 3: Conduct ROI Analysis
It’s also a good idea to complete an ROI analysis on whatever new tool or technology you are considering. As I mentioned previously, most solutions will require an upfront cost. Hopefully, the solution your targeting will either save you more money than you spend or make you more money than you spend.

What you need to determine is the break-even point for whatever solution you’re considering. So if there is a monthly maintenance fee involved with the purchase, what is the contract term they want you to sign and agree to? Is the monthly maintenance a flat amount each month? Or does it change based on the number of users or how much you use it? And you thought it was going to be easy.

Anytime you spend money, you need to be able to justify it and make sure it makes sense for your business. And that goes for that reasonably priced, lead-tracking tool you previously purchased. If your operation isn’t seeing the results you expected because it’s too cumbersome to use, costing you sales as a result, was it really the best deal for your dealership or group? I doubt it was.

Step 4: Create a Vendor List
Start by reading reviews of products or tools you are considering. Then narrow down your vendor list to two or three providers, ones you think can satisfy the majority of your needs at a price you can afford.

Maybe you are just trying to replace or update a piece of service equipment. If that’s the case, do you want to stay with the same vendor? Did the equipment work as long as you expected? Did it perform all the tasks required? Was it expensive to maintain? Did it lack some obvious features you really needed? Are there features you can add as options that will really enhance the productivity of your technicians, as well as help you realize a return on your investment quicker?

Step 5: Get Opinions
Have you asked other dealers what they think of the product you’re considering? Make sure you really check them out and talk to multiple people at the stores. Ask them how long they used it, what they paid for it, whether anyone is still using it, and would they buy it again. If the answer to the latter question is “Yes,” ask if they would change or add anything to the product.

Step 6: Involve All Users
Make sure you get your managers and the actual employees who will be using the product involved in the selection process, and have them review and rate the features, available options and the ease of use through product demos. This will provide you with a different perspective on the tool you’re considering. It may even cause you to reconsider a brand you previously ruled out.

Step 7: Check for Savings
If you are replacing or adding a piece of equipment, check with your tax accountant to see if the purchase will qualify for any specific income tax savings through an available accelerated write-off. Bottom line, you need to do your homework before stepping foot on the expo floor at this year’s convention, especially since many vendors will offer convention discounts if you purchase their solution at the show. All you have to do is follow the steps I laid out. Just remember to bring comfortable walking shoes. Good luck and shop well! I will see you there.

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