In the last issue, we discussed the options available for connectivity to menu systems. It is clear that the safest route is to connect to all menus. Unfortunately, this is also the most technically challenging and complex solution to deliver; it requires a standard interface that all menu systems deliver to in order to avoid serious challenges when updates are required.

Menu dilemma or not, there remains some questions on what functionality should be left to the menu systems and the functionality that should be available on a provider’s website. One thing is clear: every business needs its own website at the very least as a marketing channel; however, what additional functionality should it deliver?

Most dealers use menus, but they are not used all the time. In addition, menus deliver varying degrees of connectivity and functionality, and this will continue for some time to come.

With this in mind, providers need to deliver a site that has all the functionality needed to enable a dealer to sell and consummate a sale as accurately and completely as possible. Also note that functionality must not be standalone, and should always be driven through the administration system. Allowing any functionality to remain apart from the administration system will not only create further challenges but will severely limit the functionality that can be offered. Below is my suggestion on this functionality:

• DMS integration: I am not convinced that this is the holy grail, but one thing I do know for sure – you need to get rid of the excuse. It costs, and that cost is generally difficult to justify at low volumes, but you simply have to be able to say that your site has DMS integration.
• Quick quote: Make it easy for the F&I Manager to get a quote for a customer. It should have a minimal entry requirement and a preset on dealer markup that is invisible to the customer in case the dealer wants to show the screen. Of course, products presented should only be those that are valid for the vehicle being sold.
• Collect customer information and create a printable contract: The sooner the need to deliver physical contracts is eliminated the better. If the contract is always available electronically then at least you eliminate the need for a rush delivery to close a deal. Of course, with this data going to and from the provider administration system, this means that you automatically have every transaction on record.
• Cancellations: An online cancellation quote will eliminate many phone calls. Also allow the cancellation to actually be confirmed on line.

You have enabled the F&I manager to do a quick quote, collect the customer information and print a contract. In doing so, the data should flow to the provider administration system in a pending status, waiting for the signed contract to be received with the payment.

If a menu system is connected to you in the manner discussed previously, you will be in the same position. I would regard the functionality described below as phase two of the process. The signed contracts are now in the back office waiting to be remitted to the provider.

• Remittance: Don’t ask the back office to reenter the contracts. They are already in the system so present the contracts list and allow the dealer back office to make the necessary selection for remittance.
• Void: Allow the ability to void contracts. Without this, the remittance will become and remain cumbersome to use and manage for both you and the dealer. It will also eliminate a lot of phone calls. The void and cancellations should net off on the remittance so that the payment is fully reconciled.
• Reporting: Comprehensive reporting at dealer and dealer group level is essential. Combine this reporting with transaction information extracted from the DMS for a reporting capability that will give a general manger all that is needed to run the business. Not so easy, I realize, but certainly worth striving for.

When the remittance is finalized and printed, it should be held as pending in the provider administration system. When payment is received with the remittance and signed contracts, the provider should be able to retrieve the remittance, confirm the total against payment and activate all contracts with the touch of a button. Contract entry or even confirmation of individual amounts becomes entirely unnecessary.

Given that all transactions are being done online, it may be that as opposed to waiting for a dealer to submit the contracts with payment, the provider could invoice and/or actually withdraw the funds for contracts on a bi-weekly or monthly basis. This is clearly a tough sell to dealers at this stage, but the process sets up the possibility, even if it is only instituted with a few dealers.

There are still a few nice to haves:

• First notice of loss, full claim entry: With a VSC, allow the dealer to enter the first notice of loss. Have this hit a monitored queue and call the dealer to finalize the repair. This results in excellent service and significant data entry saving. In time, with those dealers who fit the profile, a provider could enter the entire claim. With more structured programs such as prepaid maintenance, the dealer should be able to enter the claim and no human intervention at all should be required on the provider side.
• Agent reporting: Reports on daily contracts printed gives your sales team the information they need to have the right conversations in your dealerships. Eliminate the mid-month fob-off from the F&I manager that things are going well, only to have him proved overly expectant when the month end numbers are finally through. Make sure that these reports also tell the agent how much money they have made that month.

A provider website is not simply a marketing tool. It is a destination for the dealer where a deal can be closed, a contract printed and a remittance completed. It is the source from which the provider, the dealer and the agent can get the reporting they need. The menu systems are providing the sales channel but a supplement channel with complementary functionality is essential if a provider wants to deliver the kind of service dealers need to sell more product and run an efficient business.

Very few providers can say that their rates are available electronically through every menu system on the market. In fact, to my knowledge, the answer is none.

How often have you heard that the only thing stopping the signing of a new dealer group is the ability to get your rates on their menu system? It always seems so convenient. The salesperson is off the hook, and now it is technology’s fault.

Technology, meanwhile, has limited resources and is trying to keep the rest of the sales force happy delivering on other crucial requirements. As a result, connectivity to another menu will not happen for another six to 12 months. Not to mention the fact that technology just delivered connectivity to a menu that the sales force said was vital – surely that is enough for now?

The truth is that with the exception of certain circumstances, a sales team needs to be able to close dealerships no matter what menu system they are using. Getting a dealer to adopt your products and change menus is, in most cases, simply asking too much.

Menu systems now deliver so much more than simple menus, so it is quite reasonable to expect a dealer to refuse to change. At the same time, two things are fairly certain: (1) menu systems are here to stay and (2) no one can predict which, if any, menu system will become the dominant player in the foreseeable future.

So, what menu strategy is best for a provider and how do you cope with the resulting technology demands?

Although not a strategy adopted by many providers, it is important to first discuss the merits of offering your own menu. Very few providers have been successful at getting dealers to use their own menus. In rare instances, their “own” menu is actually developed internally; however, in most circumstances, it is a third-party menu.

Developing your own should be considered very carefully. As Matt Nowicki, director of IT at IAS says, “It’s a lot of work! Our team started developing SmartMenu back in 2001, and we still work day in and day out on improving the program. Our department has an annual payroll of over $1 million and resides in a dedicated building. It’s a substantial investment for sure.”

Although this strategy can be very successful, a provider needs to go into it with open eyes. It requires very close relationships and understanding between dealers, the agents and the provider, and if the formula is not driven hard, it can be very unsuccessful.

The most common approach has been to link to menus that the market – the sales force actually – has requested. In some instances, providers have partnered with a menu system that they recommend to dealers without making its use a prerequisite for selling their products. It does, however provide more options and some credibility without putting extra demands on the sales process. Choosing a preferred menu provider requires some thought.

“From a sales and marketing perspective, P&A companies want to know that the system they are offering will be used in the field, it will integrate with their systems on the back-end to drive efficiency and that it will work once it is put into action,” says Jim Maxim of MaximTrak.

A word of caution: Because of the effort involved in getting the preferred menu properly linked, technology needs to focus on other issues once it is done, and the preferred menu becomes the only menu through which a dealer can get electronic rates. This means that a dealer is left with the choice of either using this menu to get integrated data or getting the rates through another process. The sales team soon finds that even though they are linked to a great menu, not being linked to all menu systems is still highly restrictive.

So, it is tough to argue against a strategy that will ultimately have you electronically linked to every menu on the market. The first problem, of course, is how to get there. The other problem is defining what this electronic connectivity should deliver.

Let’s continue to assume for a moment that we are only referring to rates and pricing information, and leave a discussion on the additional functionality that needs to be considered to the next issue.

Fortunately, it is not all bad news. All menu systems want to present provider rates electronically. To that end, most have developed interfaces that make it as easy as possible to do this.

Patrick DeMarco, president of Ristken Software Services, says, “We make it very easy for providers to connect with the Ristken Menu. We offer the ability to either host the rates within our system or connect directly to a web service that is created by us or the provider.”

In fact, most of the menu systems can justifiably make the same statement. Unfortunately, the challenge is usually not on the menu side but on the provider side.

Often, systems were not built to accommodate numerous menu systems accessing the rating engine online. This leads to just that decision posed by DeMarco. Should you allow each and every menu system to access your rates online, or should you provide your rates to each menu system? There are challenges and benefits to both:

Allow menu systems online access to provider rating engine

• You will only have to maintain one rate book knowing that all menus will be accessing the same data.
• You must consider whether you have the infrastructure to support the online traffic.
• You must determine whether you can uphold your organization’s security requirements?
• You must decide whether you feel comfortable having various systems accessing your administration system. Often a provider will house a separate instance of the rates for this very purpose. It solves the problem of testing multiple menus but it does require a process to ensure that all updates done on the administration system are also performed on the duplicate system.

Provide rates to be menu hosted

• You must institute a strong deployment plan so that every menu gets every rate update.
• Every menu system needs to be tested to ensure that the update was done on time and that it was done properly.
• You must determine whether the menu system can support different rates down to a dealer level. If so, do not underestimate the compounded challenges of deployment and testing. Often, because of deployment and testing requirements, this strategy limits the number of menu systems that are supported.

For some providers, the solution has been relatively easy. Using a third-party administration system allows the technologists to focus on technology and the providers to focus on their products. For example, F&I Administration Solutions has seven menu systems accessing the rating engine directly. Providers using the system know that only the current rates are being accessed by all dealers through menus.

In the next issue, we will discuss the extent of functionality that should reside in the menu and what should be provided through your own websites.