CRM Keeping and Growing the Dealership Customer Base

Today, it is highly doubtful that you will find a dealership that is not using some form of customer relationship management (CRM). Some efforts may be as simple as recording contact information and products and services purchased, while others may keep detailed records of every client contact and send out automated email and voice messages. No matter what form it takes, some type of customer relationship management is a necessity for dealerships to retain and grow their business. In fact, a recent study from the University of Marylands Robert H. Smith School of Business, conducted with CRM provider Autobytel, found that dealerships using a customer management system perform 23 percent better than the competition.

There are a number of providers in the automotive space who offer well-designed and effective CRM systems, such as Reynolds & Reynolds, ADP, Autobase, DealerUps and CallCommand. So whats puzzling is why so many CRM systems are under-utilized or fail altogether. Why do so many systems not live up to the hype? Is this a function of overly complicated technology, a vendor issue, a dealership issue, or a combination of any or all of these?

A properly used CRM system will increase a dealerships success, so were not debating the merit of the CRM system itself. Rather, looking at what steps and actions are necessary to realize success and make the technology work for you. The goal is to design an effective implementation strategy and ongoing business processes that will maximize functionality and increase customer loyalty, targeted communications, service bay appointments and, ultimately, your bottom line. How do dealers set themselves up for success when using CRM?

In exploring the above question well isolate some common dealer misconceptions and missteps that hamper the effectiveness of a CRM system, as well as speak to dealers who are doing it right to get some tips and hints for making your CRM system work for you. Well also look at the effect of the Web in maintaining and growing relationships, as well as address the future of CRM.

This technology is not working!

Placing the blame for an under-utilized or failed CRM system solely on the technology is a mistake. According to Jill Gehrhardt, solutions executive for CRM at Reynolds & Reynolds, The key to a successful CRM implementation lies in standardizing dealership processes and attaining a top-down commitment. In CRM, the process, driven by dealership management and solid implementation, is often more important than the software tool. Herein lies the key of a successful system: Getting solid buy-in from dealership management, changing dealership processes so that every user is trained before implementation, and selecting a senior person to monitor and report on user activity. The reasoning is clear- to create and mine a functional database, employees have to be trained to use it properly and the dealer has to be committed to reinforcing the trained behaviors that are necessary to be successful. The system can store, search, and mine data according to commands, but it cannot retrieve the necessary information from customers to populate its fields.

Simply having the CRM technology in place at a dealership will not make a significant difference in performance. As Todd Smith, vice president of sales for DealerUps notes, Dealers usually purchase a CRM system because they feel theyre missing sales opportunities because they are not following up effectively or consistently with customers, but these are not technology problems, these are poor business processes within the dealership. They want a CRM system to solve these problems, but usually it only serves to magnify these poor processes. Clearly, change has to begin within the dealership by changing the way business is conducted, and only then will a CRM system work effectively.

Committing from the top down and changing processes

Management buy-in is an essential first-step to having a successful CRM system. From there, much of your success will depend on business and sales processes that reinforce the system. Changing the sales process or the service process in a dealership is not as simple as calling everyone together and announcing now its going to be different and then handing out new customer contact rules. Many members of the sales team may be veteran sellers with their own routines and ways of doing things, or maybe a sales force is made up of computer novices who are overwhelmed by the thought of entering contact information, not to mention details about lifestyle, communication preference, and more. The sales team, and the entire dealership, needs to be trained on the new system and the new way of operating, before implementation. According to Iain Smith, vice president of CRM Solutions for ADP, In the automotive business, good training in advance of installation is really a secret to success. It is critical for the senior executive in charge of CRM and the process champion (the title ADP assigns to the dealership employee who is in charge of ensuring all employees are trained and following processes) to attend off-site training and be committed to working through the learning curve.

Good training can then be reinforced by constant and definitive sales processes. Many dealerships may insist that they have hard-line processes that every member of the sales team follows, but when it comes right down to it, every person is selling in their own way. Sales processes need to be documented in writing and strictly enforced so that every person is entering the same customer information on a consistent basis.

We heard from some dealers that one way to keep the sales team on track is to offer incentives to those who use the system, and use it correctly. Incentives could include gift cards or gift certificates for those employees who consistently use the system, or even bigger competitions where employees who enter the most data within a certain time period are eligible to win trips or cash incentives.

Integration with the DMS is key

Youve got your team on board and a CRM vendor in place. Now its time to address the second key concept: integration. Many CRM systems fail because theyre added to an existing DMS, meaning that sales and service are working within two systems and neither one contains complete information. Entering data twice is inefficient, mistake-prone, and frustrating. The goal with integration is to seamlessly incorporate systems so they interact with each other. As Al Babbington, CEO of CallCommand notes, The greater the integration the less labor-intensive the dealerships ongoing communication with customers will be. This means you may have to buckle-down for a bumpy ride in the short term as you prepare for your vendor to come in and revamp your system. However, in the long run, your payback will be increased customer communications, loyalty, and dealership growth.

The Internet boom and what it means for CRM

Good integration is essential for a dealership to stay abreast of consumers in the current Web-driven environment. To illustrate the point, consider this example: A dealership has a comprehensive and easy-to-use Website that includes, among other tools, current pricing for all vehicles on the lot. A consumer visits the Website to price a vehicle, and his contact information is stored by the CRM system. The next day, the same consumer visits the showroom, to price the same vehicle. This visit is logged in the DMS system by the salesperson, but because the DMS and the CRM dont talk to each other, the dealership has no way of knowing that the consumer is shopping them on the showroom floor. Good integration ensures that all systems are connected and the dealership knows the customers needs and sales history.

More than just helping the dealer keep abreast of consumers actions, CRM is essential for a dealership to effectively communicate with todays Internet-savvy public, who want information to be delivered on-demand and in an easy-to-read format that is targeted to meet their needs.

The road ahead

The service bay is a great opportunity for dealers to utilize a CRM system, but most dont use it&hellip-yet. Why is the service bay essential? Lets say youve sold a customer a vehicle-he or she may be in the market for another vehicle in three or four years, but theyre in need of vehicle service at least once a year, making them an optimal target for incentive programs and service specials. Successful loyalty programs involve all aspects of a dealership and help shape the dealer and consumer relationship, says Steve Comes, vice president of sales and marketing for MediaTrac.By starting a relationship at the buying process and carrying that relationship through to the service level, customers have the opportunity to experience the dealerships value in a variety of ways and build a relationship with longevity. This is a huge untapped market of current customers who can become loyal visitors to your dealership.

The key to making your service bay work for you is to initiate customer communications that are timely, relevant, and delivered through the communication channel that your customer prefers. One vendor at the forefront of this trend is CIMA (Customer Interactive Management Applications) Systems. CIMA automatically captures any vehicle, parts, and customer data from the dealerships management system and sends out unlimited, two-way marketing and advertising campaigns to any customer based on this data. Moreover, all communication to each customer is based on that customers preferred method of contact: direct mail, telephone, email, or text message. The system then generates market penetration, marketing ROI and CSI reports based on the data in the dealers system.

Turlock dealer group in Northern California has been on the CIMA system for a year, using it for such things as: sending service reminders the day before appointments, notifying customers that special parts have arrived, and conducting special offer campaigns. Jim Welle, parts and services director for Turlock, is impressed with the system’s effect on his service bay, We saw an immediate decrease in number of no-shows for service appointments, and weve found that most folks appreciate that youre calling them and reminding them its time for a service. The CIMA system can also be used by the sales team to send out special marketing campaigns, or even be programmed to send out Happy Birthday eCards or greetings on the first anniversary of a vehicle purchase. But what Welle is most impressed with is the effect CIMA has had on his budget, or should I say, has not had. In our industry everybody gets into the service reminder business with mail pieces that can cost anywhere from 56 cents to $1.25 per piece. With a database of 10,000 names, I cant afford that. CIMA does a lot more than just remind you of service, and it does everything for about one cent per name. Theres no comparison in terms of bang for your buck.

Another development in the world of CRM systems may be informal user groups where dealers using the same CRM vendor and system can get together and use their collective power to make the systems more functional and more able to meet their needs. Jeff Kershner, popular creator of the automotive blog, Dealerrefresh.com, and Internet sales manager for Mercedes-Benz of Hagerstown, has recently put together an exclusive Website for Mercedes-Benz BDC managers called MercedesCRM.com. The Website is a place for Mercedes-Benz BDC managers to go and voice opinions and share comments about the Mercedes Qualified CRM vendors that Mercedes-Benz USA allows their dealers to use, with the goal of using the power of the group to get CRM features enhanced or changed.

No matter how you look at it, you need some way of managing your customer relationships and contacts to keep and grow your current customer base. If youre currently frustrated with your CRM system, take a look at your current business processes and expectations. Are you looking to technology to help your sales team better follow up with leads and customers? Or are you expecting your system to magically increase your bottom line? If so, its time to check how your dealership does business and implement concrete business practices that will make your CRM system a success, not the other way around. Once youve accomplished this admittedly time-consuming step, watch your CRM success take off, eventually incorporating your service bay and positively impacting your bottom line.

source: Dealer Marketing Magazine, by Sara Maudlin

Tags: CIMA Systems, communications, CRM, effectiveness