The Menu Dilemma: Choosing the Best Strategy
This article was originally published by P&A Magazine in their February 2010 Issue. See the original article here.
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.