Article

CRM in the Dealership: Is it Hype or Help?

August 2006, Auto Dealer Today - WebXclusive

by Terran Lamp - Also by this author

Have you ever stopped to think about how well you know your customers? Sure, they come and go. Some of them just window shopping (or Internet browsing), while others stay for a while then leave just before you close the deal. You know the drill, they come in, they really don’t say much and before you start a conversation they have given you that dreaded “stay away” look. Or what about the customer who just wants to know how much they are going to pay, are you willing to help them or not? Then there are those who actually ask for your opinion and are delighted when you provide them with professional, friendly service.

Do you REALLY know everyone who walks through your dealership doors? What about those who never physically visit your dealership, all their hard work, searching and purchase decisions are done over the Internet? They research, click and sometimes even buy without taking one step through your doors. Knowing your customer is not only about calling them by name, giving them a cup of freshly brewed coffee, or sending e-mails on occasion, it is understanding how you can manage their entire auto buying experience. Learning about the buyer is about bringing each and every prospect to a purchase. It means developing effective lead management, showroom control and tracking your customers to customize your efforts to their needs. It involves managing a customer’s expectations and creating a relationship either from the showroom floor or the Internet Web site. From the moment they think about purchasing a car until 200,000 miles later when they are ready for their next purchase your dealership needs to be prepared and ready to take action.

Customer Relationship Management (CRM) is not just a term used in marketing class, done correctly it can give your dealership an edge above your competitors. What exactly is CRM? If you ask 5 different people you will probably get 10 different answers. CRMGuru.com defines CRM as a business strategy to select and manage the most valuable customer relationships. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales and service processes. CRM applications can enable effective customer relationship management, provided that an enterprise has the right leadership, strategy and culture.
 
Definethat.com explains CRM as a business strategy built around the concept of being customer-centric. The main goals are to optimize revenue through improved customer satisfaction via improved interactions at each customer touch point. This can be accomplished by a better understanding of customers based on their purchasing patterns and demographics, and better information empowerment at all customer touch points, whether with employees or other media interfaces. Your dealership may have its’ own definition, but essentially Customer Relationship Management allows you to gain an understanding of your customers so that you can nurture the relationship, learn information and present your products and services accordingly. More information and better understanding can lead to increased customer interaction and increased sales!
 
In the future dealerships will spend billions of dollars on CRM solutions. Dealers will look to services or software to help run their business more efficiently and manage customer relationships. Why is CRM so important? Why should your dealership be involved in CRM? Because the power is now in the hands of the customer! Meeting the customers needs, following their buying preferences, and tracking their full-service experience is vital. Successful CRM can lead to increased revenue, increase customer satisfaction and decreased administrative cost. What can you do to implement CRM into your dealership? CRM Today describes useful principles and pitfalls to avoid which can turn your CRM paranoia into your dealership profit.
 
Three abiding principles to make CRM a success:
  1. The CEO/Dealership Management Team should be involved and completely dedicated. Management’s communication of the process and the objectives are imperative or the project is a failure before it begins.
  2. CRM should be treated as a business project. What are the key objectives? When will success be measured? How much will CRM implementation cost? Be prepared to clearly define the “who”, “what”, “when” and “where” before starting the task of putting CRM into place.
  3. Think big but act small. Be customer, not organization focused. Effort should be placed on what the dealership needs to do to support the customer. How can the dealership manage every interaction it has with the customer.

Pitfalls to Avoid

  1. Lack of top management support
  2. Unclear scope and definition
  3. Poorly Mapped and documented processes and systems
  4. Inaccurate and unclean data
  5. Absence of baseline measures of performance
  6. Unstructured project management methodology
  7. Inadequate resources, skills and accountabilities
  8. Poor communication of the project

One very important point of implementation is that CRM in your dealership will not magically solve all your problems. While CRM does have the ability to increase productivity, decrease cost and decrease time to close, the dealership must still answer some important questions before implementation can begin.

  1. Are your people following your current sales process?
  2. Are you providing your people with an effective sales process?
  3. Does the new process make sense?
  4. Do you have the right people and skill sets?
  5. Are you teaching and reinforcing the correct behaviors?
Successful implementation can only be as good as the people and the processes it is following!
 
These simple applications can produce positive CRM results whether your dealership is primarily focused on getting customers through to your dealership showroom or to your dealer Web site. Technological advances have made it possible for Internet dealers to implement hugely successful CRM solutions. Today’s market is changing and large portions of the buying public are online users, therefore these steps need to be followed if you are an online dealer as well. “It is important to do things on your Web site that set you apart from your competition”, says Tom Harsha of Internet Solutions Group. Customer service, personal interaction and tracking are just as vital to the Internet user as to the traditional showroom buyer. Although the method of purchase is different, the process and the experience still remain the same. The customer still has the purchasing power and the dealer still must be able to ascertain the needs and exceed expectations. Lead management, proactive follow-up and personal interaction need to be part of the online CRM plan. The principles and pitfalls that come with CRM of a brick and mortar store relate similarly to Internet practices.
 
So, is CRM just a cool buzzword, or is there some bite behind the bark? Although it won’t solve every problem, a properly executed CRM strategy will help your dealership to better understand your customers and build a potentially profitable relationship. A successful CRM project can be the catalyst that sets your dealership apart from its competitor. It can improve marketing effectiveness and be a cost-efficient form of communication. CRM is not to be taken lightly; it needs to be planned and executed properly from the beginning. Every person involved needs to be trained properly on the programs, procedures and processes. Communication is key! As a result, your customers will receive consistent and superior service from every department in the dealership and throughout their automobile purchasing experience.
 
Starting a CRM program in your dealership is a big decision. At first it may seem to be costly and time consuming, but eventually you should find that the long-term benefits outweigh the short-term learning curve. Cost can vary depending on unique product selection and services. Most services have optional products that may or may not be necessary for your dealership. Implementing CRM will also take initial training to engage everyone and develop a cohesive understanding of the process. When choosing which products and services to use, answer some simple questions. Why is CRM being introduced? What is our current process of customer management? What is working for our dealership and what is not? What financial resources can we dedicate to this project? It would also be helpful to designate a strong project manager to coordinate a sound business plan to structure all your resources, cost and returns. Set up a Customer Relationship Management road map that will deliver some quick wins and good long-term investments. Make your goals achievable and measurable.
 
In the end, the relationships you will develop with customers are priceless. These are the friendships and business partnerships that will produce results for years to come. How you manage these relationships is critical to your success. Caring for a customer relationship it like caring for your car; if you don’t pay attention, it won’t last long!
 
Vol 2, Issue 3

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