Reynolds working to be better team player

Leaders of dealership management system giant Reynolds and Reynolds Co. say they know the company's reputation needs improvement.

Under new leadership since last fall, Dayton, Ohio-based Reynolds is mounting an effort to overhaul its business and reverse the perception that it's an inflexible and difficult partner. Company leaders are banking on a series of changes, from simplifying contracts to getting dealers faster responses to questions and concerns, to improve relationships with current customers and win over prospective ones.

The overhaul has Reynolds intending to part ways with practices of the past as it aims to aggressively expand its business by retaining and adding more dealership customers, company executives told Automotive News. The strategy, still in development, began after then-COO Tommy Barras was promoted to CEO in November , who had been indicted on federal tax fraud charges.

"Frankly, today our business reputation just isn't in sync with the quality of our products and services, and we recognize that we need to do better and that we will do better," said Kasi Edwards, Reynolds' senior vice president of marketing.

"Are the business practices that have served us well in the past still the right approach?" Edwards said. "That's really the kind of fundamental question on the table."

Company leaders say they recognize the need for more flexibility in interactions with dealerships, including when negotiating DMS deals and drafting less-complicated contracts. Chris Walsh, executive vice president of sales and marketing, said Reynolds' approach to third-party vendor data access, for instance, is part of a review of policies and programs. In the past, the company has charged fees to integrate third-party dealership software vendors that access data stored in the DMS. That approach has led to a debate over who ultimately controls a dealership's data, with some dealers seeking changes in state laws.

Dave Bates, previously Reynolds' vice president of customer support, has moved into the new role of chief customer ambassador. The company said establishing the new position is more proactive than reactive — executives want to get dealers' feedback on potential changes and bring those ideas back to the leadership team.

Some dealers with recent interactions with Reynolds say they are optimistic but want action to back up the new promises.

Newton Motor Group, with four dealerships in Tennessee and a newly acquired store in Alabama, in February completed its third contract renewal with Reynolds.

Reynolds previously was not willing to budge when Newton sought to adjust its contract, said Mike Abbondanza, co-owner of the group. The hard-line stance sent Newton in search of quotes from competitors, and it was preparing its stores to switch DMS providers, he said.

"We were totally adamant that we were leaving Reynolds," Abbondanza said of the latest negotiation. "We told them that from the get-go: 'Bring the cancellation paperwork with you when you bring your proposal.' "

Instead, he said, Reynolds came to the table vowing to do what it took to earn Newton's business. Abbondanza said the bills ended up about 40 percent less.

"We went in ready for a fight, and it wasn't a fight," he said. "Which is shocking, if you know anything about Reynolds."

The shift marks a departure from the centralized leadership style that privately held Reynolds employed for years under Brockman, company leaders acknowledged.

Brockman stepped down as chairman and CEO after federal prosecutors charged him with tax evasion, wire fraud and other crimes. In the transition to Barras' leadership, the company established a committee of senior executives that now makes decisions collectively with the CEO, Walsh said.

The decentralized approach is in part intended to empower dealership-facing employees to handle retailers' concerns faster, without having to run them up the chain of command, he said.

Dealers and consultants have described the company's approach as rigid under Brockman, whose Universal Computer Systems merged with Reynolds in 2006.

Mark Boniol, owner of Mark Dodge-Chrysler-Jeep in Lake Charles, La., said he has been with Reynolds for 30 years and thinks it provides the best software. But he said the company culture seemed to change after the merger, with a more one-sided relationship and extra fees.

"They're really good at what they do," he said, "but they were becoming very difficult to deal with on every level."

Boniol said his store recently piloted Reynolds' newer docuPAD Remote tool, a remote e-contracting product. He said he is hopeful after that experience that the company's changing culture will offer dealers better partnerships.

"We do need better relationships," Boniol said. "I think they recognize they're in a very competitive environment."

Comprehensive market share data on the DMS sector is not publicly available, and Reynolds does not disclose financial or dealership customer data. Company leaders declined to share details of its current market share.

But Reynolds is clearly facing pressure in the marketplace. It had long been the No. 2 DMS provider behind publicly traded CDK Global Inc. in terms of dealership customers, though it's not clear whether that remains the case. Court filings from 2017 in a federal antitrust lawsuit against CDK and Reynolds indicated that Reynolds had lost some market share. Cox Automotive has said it believes its Dealertrack DMS platform is close to overtaking Reynolds. And new competitors have entered the market.

One goal of Reynolds improving dealer relationships is to increase its customer base, Walsh said, though he added that the company does not have a specific market share target.

"We want to keep more of our own customers, and we want to go get more of other people's customers," Walsh said.

Edwards said the company has "seen more dealers coming back to Reynolds, frankly, than we've seen in many years." She declined to elaborate on numbers, but company executives said that shift dates back to February.

Abbondanza said he would not call himself an enthusiastic fan, but he said the company has a path — if it follows through.

"Dealers just aren't shoe-ins anymore," he said. "In order for them to keep a dealer, they're going to have to do whatever it takes to make deals happen."