Defining What CRM is in Your Dealership
|Dealerships across the country are jumping on the Customer Relationship Management (CRM) bandwagon. Are you on it? If not, you are likely in the CRM minority because CRM is gaining momentum across the country.
According to a J.D. Power and Associates study, 86 percent of customers that purchased a new car were contacted by the dealership after delivery. Another study from J.D. Power and Associates reported 57 percent of service customers were contacted to see if the work was performed to satisfaction. These studies show that the majority of your competitors have some sort of CRM program in place. Do you?
A Daunting Task
Whether you are looking to implement CRM in your dealership, replace the program you currently have or add to an existing program, finding the CRM provider that fits your needs can be a daunting task. To understand just how daunting this task can be consider the recent NADA conference in Las Vegas. You couldn’t turn a corner in the exhibit hall without seeing or hearing the letters C-R-M. Sixty-nine different providers were listed as providing CRM services by NADA and attended the conference this year to showcase their products to attending dealers. During the 4-day event, a dealer had a total of 27 hours to scour the exhibit hall. The conference offered a great opportunity to visit a number of different providers, but if you wanted to visit each one exhibiting, you had approximately 20 minutes to spend with each provider. Twenty minutes is not a sufficient amount of time to properly evaluate a product that is designed to improve dealership efficiency and profits. Some days it takes more time than that to decide what to have for lunch. Preparation is the key to making your search as painless as possible.
Industry vendors are offering an array of different products and services for CRM because over the past decade, dealers have realized the importance and profitability of loyal customers. If you are ready to replace or add to your CRM initiative you can simplify your search with preparation and knowledge.
Even though many of the different products and services seem similar at a glance, research is likely to indicate otherwise. To find the program that will provide the best return on your investment, preparation is necessary. Know what you want from a CRM program, and have questions ready to ask each provider.
According to Craig Colender, national sales manager at ProResponse, “If the salespeople start each day with a formal game plan, and if customers are consistently informed of service opportunities and dealership news, then that dealership does not need a CRM provider. But, if there is room for improvement in any of these areas, then an investment in the right CRM provider will be a wise decision.”
The first step in preparation is defining what CRM will include in your dealership. Don’t let a provider define it for you. According to Mike Chiricuzio, systems administrator at Antioch Auto Center in Antioch, Calif., “There is a whole marketing aspect to CRM, and there is a whole personal side.” Chiricuzio helped choose a CRM provider for Antioch almost four years ago, before CRM overload was the issue it is today.
The Antioch Auto Center chose Smart Web Concepts’ CRM application because, according to Chiricuzio, “They’re willing to work with us to fashion and customize to our own specific needs.” He reiterated the importance of a CRM provider’s ability to conform to your dealership’s needs, “The most important thing is the flexibility of the provider. How much customizing can I do to fit my particular needs? There are a lot of cookie cutters out there.”
“The best CRM blends a dealer’s marketing and sales efforts and drives them to seamlessly work together,” said Steve Lausch, marketing coordinator for Autobase. He also highlighted another important aspect – ease of use. He said, “Bringing technology-based CRM into dealerships is a necessary step forward, but unless that technology consistently and easily helps sell a significantly higher number of units each month, it only complicates the process of selling cars and has no business being in the dealership.”
Chuck Merritt, the service manager at Speedway Chevrolet in Monroe, Wash., summed up CRM in the dealership in three words. He said, “You live [CRM].” The service department at Speedway Chevrolet utilizes DiversiForm products to remind customers of service appointments, alert them of recalls and specials, and send out seasonal advertisements to all their service customers.
Customer relationship management for the Hoffman Auto Group, which has eight Connecticut locations, last for years after customers leave the showroom or service doors. According to Al Simon, the group’s director of business development and retention, “We’re trying to integrate a seamless customer interaction process from lead, through purchase, through service, though repeat purchase. It’s part of a larger vision.”
Rick Rogers, national e-commerce director at eLEAD CRM (a division of Fresh Beginnings), provided his working definition of CRM. He said, “[CRM] could be Client Retail Management, Customer Relationship Management, Client Retention Management… I think what we want to do in today’s world is embrace our customers and give them the highest quality of service on a consistent basis, whether they be a service customer or a new or pre-owned vehicle purchaser.
There are numerous definitions available for CRM, both from the dealership perspective and the provider perspective. Asking the right questions will help simplify the process and define what your CRM process will be. Before commencing your CRM search, you should consider these questions:
- How much of your operation do you want your CRM product/service to encompass – front end and back end operations, front end only, back end only?
- What kind(s) of contact do you want to have with customers – e-mail, telephone, direct mail, text
messaging, online or print newsletters?
- Is the ability to hold your employees accountable for their follow-up important to you?
- Do you want your CRM to build daily agendas for your sales associates and service department employees?
- Do you prefer automated follow-up?
- What type(s) of training works best in your dealership?
- How long of a contract are you willing to sign?
- What is your budget?
Once you can answer these questions, your search can begin. CRM providers can be loosely divided into three categories of CRM providers: in-house software solutions, Web based solutions and outsourced solutions. Naturally, each category of providers has pros and cons, and it’s your job to decide which type of provider will best fit your dealership.
The in-house software solution – This category of product offers you control of your data. Today, data security takes center stage and even though the automotive community hasn’t taken any direct hits in this area yet, the Federal Trade Commission has handed out multi-mullion dollar fines to other companies whose data has been breached. A data breach can result in more than a serious fine; it can also cost you current and future customers. With an in-house solution, your data is under your control, which means you control exactly who has access to it.
The in-house system, however, has drawbacks. First of all, you are relying on your staff to execute everything necessary to successfully carry out your CRM initiative. For them to do that you have to ensure they are properly trained. You also have to worry about upgrading the software and the associated costs of upgrades. Additionally you have to understand the hardware and system requirements of each system to assess the true cost of implementation.
The Web based solution – This solution category offers access to your CRM software via any computer with Web access, which can be extremely beneficial to the dealer who travels or owns more than one store. According to Jason Keith, chief technical officer at Wilson Technologies, “Web based CRMs are important because there are no on-site servers, which alleviates local support problems. Additionally, it protects a dealer’s data redundantly off-site, which is recognized as a key ingredient to disaster recovery compliance.”
On the Web based CRM solution, Ted Rubin, vice president and general manager of retail solutions at JM Solutions, said, “Dealers like that they can always have the most current version of software without having to purchase upgrades or alter their current hardware.” He also said Web based solutions integrate easier with other Web based products.
When reviewing a Web based CRM solution, there are a few things dealers should consider. The security of dealership data is one issue. What insurance do you have that the provider is securing your customer data? Another is Internet connections. The Internet isn’t always reliable in some areas, and you’ll usually need a high-speed connection to maximize this type of CRM solution. Even though high-speed Internet is commonplace in many dealerships almost 10 percent of Auto Dealer Monthly Web site subscribers still use dial-up Internet service.
The outsourced solution – Outsourcing CRM offers the benefits of CRM minus the necessary training that is required with other categories of providers. With the high turnover rates found in most dealerships, it’s a tedious process training every new sales associate. John Max Miller, founder and general manager of @utoRevenue, said, “A lot of money and time is wasted on CRM systems because they take a lot of time and people to make them work.” Regardless of turnover rates in your dealership, outsourcing CRM activities thrives on its own.
Conversely, for the dealer who likes to be hands-on with every department and system in his or her dealership, the outsourced solution may not be the best choice. Trust and faith are issues for some. If you choose an outsourced solution of any kind, not just CRM, you must trust that company to interact with your customers as you would personally. They represent you and your dealership. You have to trust that they will safeguard your customer data. You also have to have faith that they will do everything possible to maintain the best relationship with your customers. Outsourcing is no different than hiring an employee.
Now with the basic pros and cons of each type of CRM provider identified, hopefully you can narrow your search. If you still don’t know where to begin, one logical place you could start is with your Dealer Management System (DMS) – if you’re satisfied with your DMS. Your provider may offer a CRM module you can add to the DMS software you’re already utilizing.
Click Here to view three lists of questions, one for each type of provider. To stay focused while talking to service providers keep your questions in front of you, sales representatives can get your off track during a conversation. Record provider responses on paper so you can refer to them during your final evaluation.
Whether your original goal was to replace your existing CRM provider or implement a CRM program for the first time, the sea of CRM providers makes the decision both difficult and time consuming. However with the many providers to choose from, you should be able to find one that fits your needs. Building strong, long-term and profitable relationships with your customers should make all the CRM work you do worth the trouble.
Vol 4, Issue 4