Posted on February 7, 2022 by Travis Peterson
Thankfully NADA is back in person this year, and that gives all dealers a great opportunity to meet face-to-face with their vendors. Many traditional best practices have taken a back seat to widespread worries over inventory and hiring – like vendor management.
Yet, regularly reviewing what you’re paying for and what you’re getting in return could uncover duplicate services or lackluster results that once resolved could save thousands of dollars every year.
You can bet your vendors are eager to meet with you at NADA, so now is the time to prepare while keeping vendor management at the forefront.
Best Practices before NADA
- Get started by compiling a comprehensive list of all your vendors – from lead providers to your CRM, websites, and pretty much anything else you’re paying for. Pull a report from your check register or run a DMS vendor report.
- Find and review contracts and create a spreadsheet with contract renewal dates. Many dealers are moving contracts to a third-party document management platform, which makes a lot of sense. Instead of digging through paper files, it only takes a few keystrokes to create spending reports and stay on top of auto-renewals.
- Look for extraneous vendors and duplicate services. You may be paying for a service that your OEM provides for free. Or paying two companies for the same marketing services.
- Audit every vendor for ROI, using your own statistics. Don’t blindly trust what a vendor tells you about its performance.
- Contact vendors you want to meet with at NADA (they’ve likely already reached out to set-up meetings), and schedule a time to meet.
- Research alternative vendors if a particular service or product doesn’t seem to be delivering for you. Contact these vendors and schedule a quick meeting and/or demo.
- Create a list of questions and/or concerns you want to make sure to discuss.
Best Practices during NADA
- Arrive at vendor booths armed with your list of questions and KPIs.
- Be prepared to voice your experience, whether good or bad, and give vendors a chance to correct problems. Obviously, improvement will not happen on the show floor, but it sets the stage for vendors to improve quality moving forward. You don’t want to go through lots of vendor churn, so it’s important to save relationships when you can.
- Don’t be afraid to ask the tough questions, such as: What are you doing to advocate for great customer service? Or, what is your procedure in the event of a ransomware attack? Or, what happens to our data if we switch DMS providers? Your vendor may not have all the answers right away, but after the show they will certainly follow-up. Those who don’t may be signaling your business is not that important to them, and so you’d be better off researching competitors.
- Finally, be prepared in the event you decide to terminate a vendor. While this is not likely to happen on the show floor, a clean exit strategy can prevent potential problems down the road. Consider a termination checklist that details what you expect from the vendor, such as returning all collected data and relinquishing access to software systems. A termination process will smooth vendor transitions.
Vendor management is arguably more important than ever as dealerships seek to do more with less. It’s easy to forget with so much change and disruption in our industry, but a hard look at your vendors can save you money and get you better performance. A return to an in-person NADA show is a great opportunity to meet face-to-face and ensure your current partners are your best option moving forward. Start preparing today!