Potential PitFalls Of Hiring A New Director of Technology

Veterans of the automotive industry have witnessed first-hand the successes and failures that changes in leadership teams can bring to a dealership. Changing key leadership positions in any company comes with inherent risk. Risk is amplified when changing leadership in the IT and Internet Operations for a dealership because it is often a specialty role that the dealer principal and General Manager cannot execute themselves.

I came from an Information Technology (IT) background having been a commercial software developer, network engineer, telecommunications analyst, and Wall Street technology manager in previous careers. I have had the benefit of seeing the business world from the technology side, sales side, and now from the perspective of a business owner.

I have come to realize that my passion as a technologist, back in the day, was not always aligned with the priorities of the business. So this article is both a confession of failed enthusiasm and a warning not to repeat my mistakes.

Technologists need to be mentored by the Dealer Principal to “get” the dealership knowledge they need to make better technology decisions. 

Throwing The Baby Out

It is not uncommon that when a new Internet Director or IT Manager is hired that the baby gets thrown out with the bath water. Decisions made by their predecessor can be quickly discounted resulting in calculated contracts and severed business relationships in the first three months of employment.  This is often allowed by the Dealer Principal because they don’t want to make the new hire feel that they don’t trust their decisions.

Have you ever seen this happen at your dealership, automotive group, or at a previous business? When I worked on Wall Street this was common practice that I found myself falling into the same trap. I never wanted to get blamed for a vendor decision that I did not make.

In the automotive industry I have seen new hires cancel vendor services in the guise of “saving money” or “simplifying” the marketing budget. While these statements could all be true, in many cases, the new hire is using their power to clean house and start with a clean slate.

I have seen website vendors being switched out on a whim without any data to backup the dealers decision. Where was the plan to measure the improvements from a new vendor platform? I have seen Autotrader.com and Cars.com cancelled because the new hire felt that SEO or SEM could generate more traffic to their vehicle listing pages. Believe me, after years of testing, both of these companies should be in the marketing budget of car dealers.

A Knee Jerk Reaction

I’m writing today to challenge this knee jerk reaction when new leadership is hired at the dealership. I want Dealer Principals and General Managers to realize why they need to moderate the decisions and changes by new hires that could very well hurt the dealership in the long term. Repeat after me: Supervise all vendor changes / decisions made in the first 180 days of a new hire.

Understand that a new IT hire wants to show their value. Often their passion is combined with a need to demonstrate how their ideas can make a ”big” impact on sales and profits. However, new IT hires quickly realize that they are living in a world where frontline sales professionals get most of the praise and attention. This increases their desire to stand out and get attention. This is part of the danger, and I speak from personal experience.

It is critical that new Internet/IT Directors understand their place in the organization.  Understand that they need to be recognized for their behind the scenes work and feel valued. Often the biggest boost in sales will come from basic blocking and tackling; it’s not very sexy.  Remind new hires that basic blocking and tackling is very valuable. Without minimizing the opportunities that new ideas can bring to the table, I would encourage the first few months of work be focused on fully merchandising the existing dealership website, increasing CRM utilization, and improving phone processes. Working with the tools that you already have.

These three tasks will yield more sales and better customer satisfaction than most “new” ideas that can be brought to the table. I have seen appointment rates double in 90 days, from a focus on how phone calls are answered. I have witnessed unit sales double by inspecting CRM processes and customer communications. The top 10 website platforms are all search and consumer friendly, but if a dealership fails to fully leverage all the basic merchandising features, who is to blame?

Technologists like myself enjoy discussions regarding “A/B Testing”, Video Pre-Roll, Analytics and Measurement, Attribution, and Personalization. All of these topics are opportunities to increase consumer engagement but these good ideas must be placed in some order of prioritization. Technologists may have a hard time prioritizing their work in light of what is best for dealership profits.

Supervise and Engage

A word of advice for dealers going through a change in Internet/IT leadership: don’t rush to change. Dealer Principals and General Managers should be involved in the discussion and decisions on changes of website vendors, CRM software, and advertising partners. Don’t assume that your new hire understands how to prioritize the work that will generate the most value to the dealership.

Ask your new hire to create a list of their Top 10 initiatives for the next 90 days and review it with them. Use this list to keep your internal technologist on track for success. If the Top 10 list contains to many fringe ideas, it is time to reset expectations and make sure that everyone is on the same page.

For new hires, I would also suggest that they invest time in meeting with their existing vendor partners before any service is cancelled. This will allow them to understand exactly what their vendors have been doing and how communications have been in the past. Don’t be surprised in vendors bring up some dysfunction in the relationship so seek to find ways to improve the engagement without starting afresh.

If you have lived through these types of changes, what additional advice would you give dealers when they seek to make a change in the Internet/Technology Director role at the dealership?  Share your comments below.

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Brian Pasch,CEO
PCG Consulting