As a dealer, you likely have a number of different tech providers (or vendors) that you work with to ensure operations run smoothly – all providing different types of technical services. There are automotive providers for marketing, finance, inventory, lead generation, print advertising, etc. The list goes on and on. You might not have digital tools for every aspect of your dealership, but you probably have vendors for some.

One thing that’s particularly common amongst dealerships is the use of month-to-month vendors. What this essentially means is that dealerships are signing up for tools and services that they can pay for on a monthly basis. If, for any reason, a dealership discovers that they don’t want to continue using a particular tool or service, they can cancel anytime. No questions asked. Many dealerships are given the opportunity to try out different vendors and experiment with different tools because of this. 

Nowadays though, dealerships are opting for a “new breed” of tech provider — one that allows them to work closely with account reps that can help them step-by-step with their new tools. Instead of opting for different vendors, dealerships are becoming more attracted to the concept of annual partnerships. Annual partnerships are simply where dealerships commit to a year or more of access to tools and services. However, instead of figuring it out on their own, dealers are assigned a knowledgeable account rep to help them every step of the way. Account reps will typically help you with setup and/or implementation, strategy and troubleshoot software issues — all things you wouldn’t normally get with a month-to-month contract. The ability to forge working relationships is what makes annual partnerships so unique.

Although month-to-month contracts are still popular among dealers, annual partnerships are quickly gaining traction. Here’s why annual partnerships have become more popular over the last year:

Assistance with Planning & Troubleshooting

As I mentioned before, when you sign up for an annual partnership, you’re typically assigned an account rep to help you throughout each and every aspect of implementation, planning and troubleshooting. What makes this so special is that, for dealers relying on month-to-month services and tools, they’re pretty much all on their own. Dealers that sign up for an annual partnership, on the other hand, have someone watching over them. They don’t have to go about anything on their own.

Let’s say you’ve just signed up for lead capture and engagement tool to integrate onto your dealership’s website. It’s a tool that basically has the same capabilities as Black Book, KBB, and Auto Trader. The difference is that tool is associated an annual partnership; which means there’s an account rep available to help with whatever it is your dealership needs. If you find that your dealership isn’t converting as quickly as expected, an account rep can make copy, design and software recommendations. Additionally, your account rep can troubleshoot issues you’re having; and help you install additional software. 

Access to Advanced Tools & Services

The 2nd reason why dealerships have been signing up for annual partnerships is to gain exclusive access to advanced tools and services that they wouldn’t otherwise get in a month-to-month agreement. Now, you might be asking “Why can’t I simply get these tools in a month-to-month agreement?” Well, the reason why annual partners typically get access to these tools is because they’re in it “for the long haul.” Advanced tools, analytics dashboards and services need to be created by talented developers and engineers — all of which cost money. After all, there’s a lot that goes into analyzing and dissecting consumer car buying behavior. And in order to truly reap the benefits of these tools and services, they need to be utilized over a certain period of time. This allows for proper data collection, bug fixes, and so on. It wouldn’t make much sense for a dealer to sign up for a tool, leverage every aspect of that service (which took a tremendous amount of time and effort to develop), and then cancel it a month later. It doesn’t make much logical sense, and it certainly doesn’t make financial sense.

Now, when I say “advanced tools and services,” it’s exactly what it sounds like. These tools have been developed to help your dealership function and run at its absolute best. They provider dealers with the opportunity to further dissect future opportunities and help with troubleshooting. But the best part, of course, is that since you have your own individual account rep, you can reach out to them for guidance and assistance with all the advanced features you come across — and it’s completely customized to your dealership’s specific goals. 

Cost Effective.

One thing that you might find particularly surprising is that annual partnerships are quite cost effective. Not only are dealerships that sign up for such a partnership often provided with a significant discount (if you commit to a year, they’ll knock 25% to 30% off monthly price), but the additional time you spend with your account rep means a better developed strategy or better system of doing things.

Let’s use dealership website builders as an example, shall we? Your dealership signs up for a website building (and hosting) service; and you’re assigned an account rep that provides tips and tricks for how to make your site more maneuverable. They tell you what tools to use; what features to use; and to some extent, what copy to use. It’s because of this extra work that your site ends up generating a lot more leads, and scheduled appointments. More leads and scheduled appointments = more sales. That said, the extra time and effort spent with an annual partnership means a greater return on investment. 

And another reason why annual partnerships are cost effective? It basically eliminates the need to hop from service to service. When you start and stop using month-to-month tools and services, you often experience a lot of downtime on your campaigns and initiatives. You spend more time researching what tools and services to use, but not enough time developing strategies and implementing structure into something that can be made better with time. The more downtime you have between different tools and services (give or take a week or month), the less money your dealership will ultimately make.

It's not about trying to lock a dealership into a product they're not going to want in a couple of months or doesn't work. It's about looking at one can be accomplished between a tech provider and dealer client when they commit to working together for a longer period than just month by month. After all, both business's are working to generate revenue by selling vehicles. 

Just to be clear, I’m not saying you absolutely should go with an annual partnership. Honestly, annual partnerships aren’t for everyone. Some dealerships might actually thrive using month-to-month products; and that’s perfectly okay. However, there’s no denying that the majority of dealerships out there have at least dabbled with or thought about going with a annual partnership. Frankly, the ones that did experienced outrageously great results. The point here is that even if things are going well, you might actually discover that your results can be even better. Annual partnerships have proven value amongst dealerships; so, you might want to reconsider that "no contracts" policy. You might be suprised how much better your technology performs we your not starting over every month. 

Are you currently working with a tech provider? What has your experience been like so far?