CRM Technology in the Modern Dealership
Managing customer relationships is key to success in the auto dealership industry, but the nature of the dealership industry presents unique problems. If you run a café you get to great your customers in person a few times a week or month and build a relationship through day-to-day interaction and small purchases. In an auto dealership, however, customers only purchase a vehicle every few years and that purchase is a significant portion of their budget, so customers are more cautious, do more research, and communicate differently with a dealership than other businesses.
Fortunately, Customer Relationship Management (CRM) technology has replaced the index cards of a few decades ago. The first CRM systems were just contact management systems to help dealers hips keep track of their customers. As computing power increased and computers started appearing on desks everywhere, software became more powerful and the new systems helped sales staff to increase efficiency and better track their opportunities, leads, and sales. With more computing power available every year, CRM systems have evolved to handle the influx of new online technologies, big data, and communication channels that are essential to the survival of a twenty-first century auto dealership.
Modern CRM systems touch every aspect of the dealership, from scheduling and social media to measuring the success of marketing campaigns and tracking leads. With such far reaching tools, determining how to take full advantage of your CRM can be difficult. To help you sort it out, we spoke to three CRM experts from the auto dealership industry: Saphura Safavi Long, CEO/President of Gratis Technologies, Brian Skutta, Vice President and GM of VinSolutions, and Bill Wittenmyer, Partner with ELEAD1ONE. They gave us their thoughts on how best to use your CRM and where the technology is headed in the future.
Dealer Marketing Magazine: How can CRM and social media work together?
Saphura Safavi Long: Social Media constitute another toolset in the business’s arsenal for communicating their brand, timely messages, listening to their consumers, and informing customer care and future product development. The challenge here is that, in the conventional social media, it is difficult to be able to communicate with those that are truly affected by your message as they may not be part of your chosen community. In order to gain results from CRM using social media, the dealership needs to have a very strong “verifiable” plan of action to gain access to client profiles on social media. It is only after such, that dealership then can use social media for direct communication. Otherwise social media becomes no more a tool but to build awareness of brand.
Brian Skutta: With the rise of social media in recent years, consumers of all ages now say a lot about themselves online—birthdays, employment, family and friends, as well a host of likes and dislikes. This dynamic creates an opportunity for dealers to use these insights about current and prospective customers in a way that makes every engagement more personally meaningful and relevant. Customer relationship management (CRM) systems give dealers the ability to link social media profiles to their customer records, which helps them develop tailored and targeted communications across social media platforms and more traditional, off-line outreach. In the end, dealers have a more rich and robust understanding of each customer, which helps them meet customer needs as they develop meaningful, long-term relationships.
Bill Wittenmyer: I think that the real benefit is one that is not often thought of or used. Many dealers struggle to develop relevant content that effectively engages followers in their social media strategy, but the reality is that consumers utilize information in this channel differently than a traditional marketing approach or call to action. My belief is that one of the best ways to gather additional information on prospective clients is to mine their social media accounts; determine what they are doing, their relevant likes and interests. Information gathered should be added to the notes section in the CRM system, and relevant topics should be communicated when executing follow-up tasks. Always have talking points that engage the customer, enhance the relationship or provide further reasons to follow up. Too often, salespeople perceive there is a lack of reason to follow up with a customer, which causes discouragement and negative results. Put the discussion back into the sales process, use social media to gain further insight and common ground, and then refer to the notes stored in the CRM system for conversation pieces.
DMM: How has CRM been affected by the increased use of social media?
BS: Social media empowers consumers, giving them near-complete control of the content they see and hear, and the way they engage it. They like the ability to lurk in private and learn. They expect content to appear as soon as they want to see/learn more—often via a mobile device. They love video.
The popularity and richness of social media has profound implications for CRM system providers and their dealers. First, CRM systems must be able to power customer engagements with e-mail, text and video content customers prefer to see. Second, CRM systems must enable the permission-based nature of social media, giving customers the ability to interact with dealers in the ways they prefer. Third, CRM systems must be flexible to account for changing consumer expectations and needs, helping dealers engage current and prospective customers at the right time, in the right place and with the right information.
BW: To date, I think the effects have been on connecting the two; to easily push out items stored within the CRM to social media accounts. From the store level, the challenge is to execute on a regular basis. Social media is short lived, and a constant task that requires full-time attention and relevant content. Some dealers attempt to use this vertical much like a traditional marketing campaign, such as weekend advertisement, and the results are ineffective. Dealers will only find success if they regularly add and update relevant content, and then hopefully generate a lead. Dedication from the store level is hard to find and even harder to justify as a full-time position.
SSL: CRM has been affected insofar as CRM campaigns, some believe, may no longer carry quite the impact they used to. Why? Because folk’s eyeballs, along with available share of “time” and “mind”, are more fragmented, and are doing a combination of digging into key media they prefer to consume content and, increasingly, tuning out media and communications—and the businesses who send them. This leads to all sorts of impacts. Shifting efficiency of spend from one channel to another, and improved or reduced efficacy of various methods to reach varying segments of the target audience. Also, most CRM communications are achieved via email and that venue of communication has lost its efficacy greatly.
DMM: Where is CRM technology headed in the next few years?
BW: I think it is only possible to speculate. With the progression of technology and the fast-changing consumer environment, it’s hard to determine what changes one year will bring. Currently, one, maybe two-year cycles are analyzed. I certainly think that mobile technology will continue to evolve and lead the way on information gathering for both consumers and dealers. The entire process by which we currently complete and consummate car sales will evolve and progress to a remote execution. Forward-thinking dealers who use this technology will speed up the in-store process and improve customer satisfaction throughout the shopping journey. It is possible some traditional steps-to-the-sale may continue to extinguish within certain departments by technology advancements in CRM, which will further automate and streamline the customer buying experience. Incorporating this with better predictability tools and data, will allow dealers to more effectively market, and plan variable business operations.
SSL: CRM technology is due for major change. The convergence of data and toolsets into platforms that serve to improve the attainment of business objectives is where things are going. Think integration, collaboration, big content, powered by big data, and the media and channels that are capable of delivering the right “rich” user experience. To the extent that an old-fashioned CRM campaign or tool, done in yester year, is still the preferred method of choice, the CRM, the campaign, or the business that uses or pushes that, and fails to adapt, will indeed, be relegated to the trash heap of technological history.
BS: CRM system technology must continue to evolve to help dealers make every customer connection count, whether it occurs online, on the lot or in the showroom. In this way, CRM system technology will increasingly feed and influence the processes that dealers use to sell and service vehicles, and give dealers a means to measure the success of every customer engagement, irrespective of where it occurs. Currently, many dealers rely on distinct systems and technologies in individual departments as they engage customers. Over time, CRM system technology will provide dealers a bridge across these systems, allowing a more holistic view of the business and the health of their relationship with individual customers.
DMM: How can dealers use CRM to increase the effectiveness of their marketing?
SSL: Dealers can use CRM, powered by consumer insight, and the convergence of tool sets, to boost their effectiveness, by running increasingly targeted, and simply worded, campaigns. These campaigns must speak to the consumers’ perceived needs and be “smart campaigns.” The same shoe does not fit all anymore. The dealer does not need to overwhelm the customers’ already saturated minds, so commonly found in today’s tech- and information-laden environment. Additionally, they can use private messaging, and tools based on CRM concepts, such as autoWALL®, to bring everything together in the service of the consumer, while supporting the business. That’s where the real win is and will increasingly be.
BS: To make every customer connection count, dealers must take advantage of the data their CRM system collects. Dealers who proactively use CRM data can analyze buyer behavior, and build targeted engagements—whether they occur online, in the showroom or on the service lane—that advance their vehicle sales and service objectives.
Increasingly, dealers recognize their CRM system as a profit-generating engine that drives meaningful customer connections. To these dealers, the CRM system is essential technology that touches all aspects of dealership operations, making it as important as the dealer management and inventory management systems that power other dealership departments.
BW: In the last few years, both CRM and dealers have progressed. The advent of data mining and CRM companies’ improved marketing tools available in one solution versus several different tools helps dealers stay more streamlined and target the right person with the right message at the right time.
By utilizing data stored within the DMS, dealers are able to make better business decisions on a deal by deal basis and target marketing campaigns more effectively: smaller campaigns at a lower cost and higher profits. Dealers continue to be more strategic with their email campaigns with increases in open and flow through rates, precision targeting versus mass emailing and data mining tools that, with very little effort, ensure messages are first to market and connect incentives to customers in a buying position. Every business opportunity can be maximized by delivering precise information and product choices readily available within the DMS, which improves the customer experience and increases the ease and speed of the buying process. Customize long-term follow with relevant content, including videos and pictures, tailored for a particular customer versus blanket messaging.
DMM: What can dealers and salespeople do to improve how they use their CRM solution?
BS: Times are different for dealers with strong CRM systems. In many cases, thanks to online engagements with customers, sales associates work from an existing profile. If they don’t, today’s tools make it far easier to capture each customer’s essential information, and use it to build meaningful connections from the handshake forward.
Dealers with the most successful CRM/sales integrations often follow three strategic objectives:
Required usage. In the past, it took strict discipline for dealers to capture every “up” on the handwritten showroom log. The same discipline is required today for dealers who want their CRM system to deliver its full potential. The good news: As dealers align their CRM and sales strategies, the CRM systems help dealers “inspect what they expect.”
Easy access. The best sales associates are on the go, all the time. If they can’t access the CRM system from any mobile device, at any time, a dealer’s efforts to create efficient, meaningful connections with customers loses steam. The goal: Make sure each customer connection picks up where the last one left off.
Performance improvement. Dealers with successful CRM/sales integrations make performance improvement an ongoing expectation for sales managers and associates. They require CRM system providers to provide the strategic guidance and training necessary to make the CRM system the customer engagement “hub” for their dealerships.
BW: It still boils down to basic items. Focus on the core features, and not so much utopia. Today, most dealers still achieve less than 100 percent customer logging within the CRM. That is the first step. The utopia of other items is trivial if you do not log every opportunity with good information. Inbound phone opportunities are still the largest gap for most stores in terms of the lead opportunity versus information that is logged or captured. These customers are further down the road to the sale, and recent data shows that mobile shoppers are submitting more calls into the dealerships than online lead forms. With the increased calls, most stores stills have yet to capture half of these opportunities. By integrating with any great telephony provider, the CRM system should be able to capture this information, in spite of the salesperson, and create processes. Dealers who use this information will not only have a competitive advantage, but also increase the opportunities captured to maximize CRM capabilities, such as follow up, management and coaching to those who are not closing deals.
SSL: It is very difficult if impossible for dealers in today’s technical environment to “improve” results from conventional CRM. As stated above CRM needs to evolve to address the evolution of the consumer of today. Dealers can explore and experiment with targeting, the incorporation of appropriately targeted content, the use of rich data to power the content, and business rules to leverage it all, to grow and hit their objectives. They can gear their approach to integrated solutions, that offer increased value, and take the consumer into account as the center of their universe.
DMM: What aspects of their CRM systems do dealers most often fail to take advantage of?
BW: The items that dealers most often fail to take advantage of varies widely by store. However as a blanket answer, I think that changing the perception is an evil necessity. Your CRM should be a tool that is first and foremost utilized and integrated across every department within the dealership. The other common piece is the lack of connection between service and sales. With today’s technology, opportunities are vast when dealers have the ability to review incoming service appointments, and their equity position, as well as receive alerts on specific amounts spent on repair. To have this information in real time and then act upon it, is a great area for improvement for additional sales and profit.
SSL: The accuracy of data in the CRM is one of the most problematic aspects of that tool. Dealers need to keep employees accountable for controlling duplicate entries. The value of data in CRM is greatly diminished by the lack of “cleanliness”. If this data had further accuracy, the dealership could then more effectively deliver content and messaging, to connect. They also fail to tap other internal data, from various departments, to inform treatment and offers, throughout the dealership business, in the service of the consumer.
BS: There are typically two areas where dealers do not fully take advantage of their CRM system capabilities. First, dealers don’t fully use CRM system analytics to drive performance and process improvements that yield positive customer connections, increased sales and profitability and more predictable business outcomes. Second, dealers often overlook the dynamic nature of customer engagement, which can lead to outdated communications and messaging that undermine positive customer connections. Ongoing performance management and process improvement help dealers overcome these pitfalls and fully realize the benefits their CRM system investment provides.