As the fable goes, a frog put in a cool pot of water that is slowly heated will happily hang out until its eventually cooked. The gradually changing temperature fools it into thinking conditions are not changing. When it comes to your DMS provider, you cannot be complacent like the frog.

There are many great DMS. providers out there who deserve your loyalty, but the DMS space continues to generate headlines with more acquisitions and consolidations coming left and right. You’ll remember DealerSocket bought Auto/Mate last year, only to be acquired by Solera this year. That was the second acquisition for Auto/Mate in just two years.

nd they’re not just buying each other. Many are snapping up third-party providers too. Back in 2018, CDK dropped over 100 members of its support staff to, as its managing director stated, “align itself with a growth strategy,” then announced it was acquiring Elead.

This past spring, CDK bought Roadster and R&R bought Gubagoo, to offer digital retailing tools to existing customers. The cynic in me has to wonder if in the future these big guys will require their dealer clients to use the platforms they now own.

With so much movement in the space, it’s prudent to keep a keen eye on your DMS vendor. After all, although vendors talk about putting customers first and wanting to be your “partner,” they are businesses with balance sheets to monitor, and in many cases, shareholders to please.

Don’t get me wrong; change via acquisition or consolidation is not always bad; these can lead to increased functionality or value. What is bad is when it catches you off-guard and a provider you considered a “friend” gradually introduces new ways of doing business that don’t work for your dealership.

As with any relationship, you should be cautiously aware of warning signs. Even if everything is great today, be vigilant of your DMS changing in the following ways:

Now for the good stuff. There are plenty of vendors in the market who exhibit integrity and best practices that put dealers first, even if these vendors are interested in being acquired.

A DMS provider to stick with may exhibit these signs:

As the DMS space continues to generate headlines, it’s smart to remember the fable of the frog and stay vigilant. Change can be good, but only if you’re aware of it and on-board. Otherwise, you may end up with a solution that is no longer a best-fit for your dealership.