May 2010, Auto Dealer Today - WebXclusive
Either, Neither, or Both
Is a CRM right for you? Maybe a BDC is what you need. Whether they realize it or not, all BHPH dealers have some form of both, or at least they’d better if they want to survive.
Let’s start by defining each of these to clear things up a little. Wouldn’t want anyone running out to spend money on something they already have and just don’t realize it.
CRM, or customer relationship management, is simply a strategy for managing and nurturing a company’s interactions with customers and sales prospects. Technology is usually involved in the form of a software package that helps organize, automate and synchronize sales-related activities, as well as marketing and customer service activities. A CRM’s goals are to find, attract and win new customers, nurture and retain those you already have, entice former customers to return, and hopefully help reduce the cost of marketing and customer service. Sounds a whole lot like a repeat and referral program, doesn’t it? That’s something every BHPH dealer should already have.
Using some sort of a software package to help with your CRM is a necessity. That doesn’t mean you need to go out and purchase one specifically for this purpose. The software that you currently use for your day-to-day BHPH operations should be able to produce reports of customers with low balances and customer paid-out reports. All you need to do is make sure you have a process in place for working those low-balance customers, customers who have recently paid off, and the potential customers given as referrals from current customers or other sources. It needs to be a follow-up plan that a manager is responsible for instituting and can be as simple as a call log that the salesperson must turn in. As business grows, it may be necessary to invest in a software package that can better manage these tasks.
A truly effective CRM will cover not only sales, but service as well. Both need new customer development, current customer retention, and previous customer renewals. And since all are an integral part of customer service, they can have an effect on collections both positive and negative. A poorly managed CRM means poor customer service. Poor customer service can make it difficult to collect from them, much less resell them or get referral business. You know the old adage: A satisfied customer will tell five people about their experience, while a dissatisfied customer will tell 20.
A BDC, or business development center, is exactly what the name implies—a center to develop business. Usually, the department’s sole purpose is getting prospective customers through your doors. Their goal is to set as many appointments as possible. This is done through calling the referrals given by customers, Internet leads and handling incoming calls to the dealership. Hopefully, a fair amount of those appointments will show. Then, it’s up to your sales staff to close the deal.
A BDC can be as simple as utilizing your current sales staff or as in-depth as including business development representatives, team leaders, and business development managers. The level of staffing depends on the number of leads you have. As with a CRM, a BDC can be used for both sales and service and have a positive and negative effect on collections for all the same reasons.
A specific software package is not a necessity for an effective BDC. As we’ve already discussed, a BDC can be as simple as utilizing your current sales staff. A simple process for routing incoming calls and Internet leads to a salesperson, along with a process for when and how to work referrals, are all that is needed. As your lead volume grows, so must your ability to effectively manage them. That will be the time to call in the professionals and find a good BDC software to help manage leads.
By definition, every BHPH dealer has, or should have, both a CRM and BDC in some form. If they have a process for generating repeat business or a referral program, they have a CRM. If their salespeople are taking incoming sales calls or working Internet leads, they have BDC. I shudder to think there might be a BHPH dealer out there who doesn’t have both of these. The biggest question: Are they managing the CRM and BDC properly? By that I mean, do they have a process and procedure in place for these, do they have goals and expectations for each, and do they have follow-up and accountability in place? Successful dealers, I can assure you, do.
To be successful in the coming years, dealers are going to have to become more efficient at maximizing repeat business, holding onto customers and turning new leads into sales. Both of these can only be accomplished through CRM and business development. With the state of the current economy, there are more customers in the BHPH arena than ever. There is also more competition for those customers, so accomplishing the aforementioned has gotten a lot more difficult. To ensure long-term survival, dealers are going to have to manage both their CRMs and BDCs.
Vol. 7, Issue 3