June Q&A: Don’t Be Held Hostage by Your CRM System
3 experts share the secrets to maximizing the benefits of your dealership’s CRM
When you bought your dealership’s customer relationship management (CRM) system, were your expectations sky high? Did you think it would free up you and your staff to spend more time on selling vehicles, and less on process and record-keeping?
But now that you and your employees have lived with it for awhile, are you feeling more like you’re being held hostage by that CRM system? That you’re trapped paying a lot of money for something you’re not getting enough out of, and that your employees don’t want to use?
If so, you’re not alone. The CRM experts in this month’s Q&A feature confirm that many dealers complain of CRM software that’s too complex or not user-friendly, and that getting staff buy-in for the system can be a challenge.
Even in cases where those obstacles are overcome, some dealers feel they’re not generating sufficient customer engagement from their CRM, or that promised integrations with other dealership systems aren’t happening.
If any of those complaints sound familiar, well, it doesn’t have to be that way. When you have a clear understanding of what a modern CRM system is capable of and combine that knowledge with a supportive vendor partner, you’ll realize you don’t have to be trapped by your CRM.
In the end, a state-of-the-art CRM system used to its full potential will boost your sales, identify new revenue streams, improve customer engagement and loyalty, streamline dealership processes, and more.
What’s key is identifying your expectations, then asking the right questions of CRM system vendors. Their answers will help you pinpoint the system you need, and create a roadmap that incorporates integration with current systems, staff training, ongoing support, and more.
Here, the three CRM vendor experts below address the key issues you need to consider. Their advice and insight will help you break free from the binds of the CRM system that’s been holding your dealership captive.
Bill Wittenmyer is partner at ELEAD1ONE. With more than 20 years experience in automotive, he oversees multiple divisions within the ELEAD1ONE organization, including sales, marketing, OEM relationships, and large client accounts. Highly regarded for his nontraditional views, he is an active speaker at industry forums and provides news commentary that reaches industry leaders.
Mo Zahabi is the director of sales and product consulting at VinSolutions, a Cox Automotive brand, who seamlessly integrates systems and tools to deliver a single view of the customer across a dealership, so dealers can maintain relationships and make more repeat sales.
A master in automotive sales management, Stephen Coambes joined AutoLoop as director of dealer development in 2015. His expertise in CRM solutions derives in part from 11 years as director of fixed ops at CAR-Research, the industry’s most customizable and user-friendly CRM solution.
Q:Describe what a dealer should expect to get out of his or her investment in a top-notch dealership CRM system.
Wittenmyer: Ultimately, dealers should always expect more sales. We all know software does not sell cars, but a great CRM should provide additional business opportunities in the sales and service departments using various aspects of the tool.
Whether those tools are data mining or advanced video [or] text and email communications, ultimately you need the ability to furnish better information for growing long-term relationships, streamlining sales presentations, and providing transparency in the buying process or service lane.
Your CRM should offer a holistic customer view with increased connection, interaction, and information-based selling tools.
Zahabi: Without a great experience, customers don’t come back, resulting in lost sales and service dollars, as well as a negative impact on CSI.
With a top-notch CRM, a dealer should expect an easy-to-use, yet robust, platform with the proper support to ensure buy-in from staff. This will allow you to connect the sales and service sides of the business and better expose new revenue streams, and increase efficiency.
Centralizing data in a CRM record empowers the dealer to create a more personalized experience by leveraging data to present more relevant, timely communication, resulting in increased profits and happier customers.
Coambes: As your dealership starts growing and you begin opening or acquiring new locations, the complexity of your business will increase exponentially.
With more employees, a larger customer base, increased inventory, greater sales expectations, and higher potential losses, organization and efficiency become the keys to managing your business effectively and avoiding costly mistakes—even small ones—which can accumulate quickly to create large losses.
With comprehensive and effective CRM systems, dealers should have all the tools necessary to manage their business effectively. This includes automating businesses processes, streamlining operations and minimizing paperwork, managing data, improving marketing methods, and increasing customer satisfaction.
Q:What are the complaints about—or problems with—dealerships CRM systems that you hear most often from dealers?
Wittenmyer: Dealer complaints about their CRM boil down to one of two things.
First, their people don’t use it. Sometimes the system is ineffective because it’s too complicated or has too many pages or tabs to navigate basic fundamentals—or a CRM is selected based on the “wow factor.” It may be shiny and flashy, but misses the mark on complementing the store’s process and culture.
The next complaint is support. Every store experiences turnover of some kind, and most salespeople are not keen on online training videos, preferring a more hands-on approach.
When support becomes limited, the team’s basis for knowledge becomes stagnant. At that point, the team is unlikely to grow their understanding of the tool, and loses the opportunity to master it.
Zahabi: The big one is connecting the customer experience online with the one in the dealership.
Customers have done 57% of the work before they show up at the dealership, only to be met with the waiting game, resulting in a poor experience. We fail to acknowledge the work they have already put in and bring them back through a process they thought they had circumvented.
The root cause of this is a lack of integration. If you do not have the tools to tie the two together, you’re missing out on the virtual cues the customer is giving you right now on your website.
Integrations like this display insight and tips on how to engage and convert from the online to the in-dealership customer.
Coambes: Some of the complaints that I hear from dealers about their CRM systems are that it’s not user-friendly, it doesn’t help drive sales by effectively engaging customers, and that it lacks effective reporting capabilities.
CRM systems should create a synergy between customers, your dealership, and your staff. Data collected from your customers should be easy to decipher, and turned into an opportunity to upsell and resell.
It should help you effectively manage the customer throughout the customer continuum life cycle, employing inbound marketing strategies to engage and promote benefits and opportunities, and the reporting function should help your sales staff create meaningful campaigns and your service department/BDC to schedule service appointments.
If it’s not, then it might not be the right CRM system for your business.
Q:What elements of automotive CRM systems are most commonly being underused—or incorrectly used—by dealerships?
Wittenmyer: Email communications are the primary misused element in automotive CRMs.
Almost every campaign executed is classified as spam because dealers send unsolicited offers to a large group of people who did not show interest in the first place. Because of this generally accepted practice, opt-out rates can go unmonitored, which over the course of years can decimate the number of email addresses in databases by up to 40%.
Further, dealers rarely ask a customer’s preferred method of contact, and rarely communicate effectively in the way they want. Text messaging is quickly becoming the preferred method of communication, and a huge opportunity for dealers.
A good CRM offers a texting component that records the communication inside the CRM, and provides required opt-in compliance documentation.
Zahabi: I think the two most commonly underused elements of a CRM are mobile and the data contained in the CRM itself.
The thing is, every salesperson in the dealership has a mobile phone, so why not capitalize on what they are already comfortable with? Allowing the salesperson to scan a license or piece of information tied to the deal, log activities, and utilize functionality like voice to text eliminates the barrier of the keyboard.
As for data, the CRM exposes the sales and service sides of the business, helping the dealership better understand what each customer has purchased, their needs now, and what they will be looking for in the future. This is an untapped resource too many dealerships are not taking advantage of.
Coambes: CRM systems as a whole are being underused.
Today’s software has evolved far beyond basic CRM, and the latest software contains a wide range of tools and services that can improve nearly every aspect of your business, from tracking sales effectively to making your service department more efficient, and proactively monitoring internet leads to approach them when they are ready to buy.
If you’re not taking advantage of these tools, you might not be getting the most out of your CRM system.
Q: What are the most interesting new developments in dealership CRM technology that you’ve encountered so far this year?
Wittenmyer: The continued advancement of mobile and the digital retail arena continue to impress me. Adoption rates in stores are still low at this point, but we certainly see dealers and consumers embracing more tablet-based tools throughout the sales process.
Today the entire CRM process is accessible outside typical brick-and-mortar stores, including the presentation of figures, remote vehicle selection, and price negotiation. Many consumers want to shop and begin the buying process at their leisure, away from the dealership, and will seek out the facilities able to provide them with this experience.
Therefore, dealers should seek out and choose partners that can help execute a self-serve buying experience via mobile advancements. Several manufacturers are pushing this initiative for their sales and service business already.
Zahabi: The big topic lately has to be segmentation. With compressing margins and sales volumes slowing down, dealers are looking to their existing customers as a gold mine of opportunity.
Segmentation lends insight needed to make timely, relevant offers to customers you already know, and who already know you. It proves that you understand and care about their needs, which is a major competitive advantage.
It’s easier too—according to a Marketing Metrics study, you have a 15% chance of selling to a new customer, but a 65% chance of selling to an existing one.
To top this all off, personalization is a key factor to increased CSI, by delivering a clearer message to the customer at the appropriate time in their unique customer journey.
Coambes: CRM software has come a long way—even in the past year.
The improvement of CRM technology has made it essential for many businesses, particularly those like auto dealers, who rely heavily on customer relationships.
Today’s CRM systems are more user-friendly than ever before. Advancements in mobile capabilities, easier integration and customization, social media functionality, and cloud computing make CRM systems a must-have for dealers seeking a leg up on the competition through new and improved technology.
Q:What are the most important questions dealers should ask vendors when looking to buy or replace a CRM system?
Wittenmyer: First, you have to ask, “Why do I feel the need to switch from my current provider?” Be cautious in expecting a vendor to solve internal challenges. If the concern is a lack of usage, ascertain the real reason—is it the CRM tool or the store’s processes or culture?
Next, determine your path with the next CRM, and plan to implement process changes that will resolve past issues. Finally, review the support structure from the new CRM provider carefully.
It is vital for any dealership or group that vendors be valued partners in your business goals. CRM partners should actively participate in your strategy and planning meetings to build strong, long-term business relationships.
Zahabi: There are so many questions to ask but here are a few:
Will this CRM help us evolve to help us meet or exceed our customers’ expectations? Will this impact what we are doing both as a connected dealership in sales and service, and as a revenue generator? Can the CRM give me a better understanding of my customer and how to more effectively communicate with them, and not touch them too often? Does the CRM offer any integrations to streamline the way we do business now?
If your vendor answers any of the questions with a “no” or cannot answer the last question effectively, then you need find a vendor who can answer “yes,” and positively discuss the impact to your bottom line.
Coambes: Automotive dealer CRM software is a great way to simplify your dealership’s operations, make it run more efficiently, and increase your sales and profit figures, but there are many competing packages available today.
To find the right one to meet your dealership’s needs, you must do a bit of research and learn about the various features that are available. When you’re ready to purchase or replace your CRM system, you should ask potential vendors plenty of questions to ensure that their product is a good fit.
Questions like “How will your system improve my business?”; “What are the standard and available features?”; and “Do you offer training and support?” are all valid, and ones that these vendors should be able to answer easily.
Q:When you consider today’s state-of-the-art CRM systems, what components or functions have the most room for improvement?
Wittenmyer: Integrations and data by far are the biggest areas of potential challenge for CRMs.
Often dealers struggle to walk the fine line of choosing the solution that provides the most significant business advantage. Hundreds of different companies and tools are in the market, and they all want to integrate with CRMs.
In addition to the initial cost factor, dealers should also weigh the ongoing costs of support, future upgrades, and modifications to the integration.
We currently provide over 300 active integrations, and receive new requests weekly. We prioritize our efforts with the goal of balancing between offering an open architecture and managing ongoing costs of support and maintenance to ensure that we remain competitive in our price structure.
Zahabi: There are a few things that today’s CRMs should improve on, with the glaring one being the deal flow itself. This goes back to tying together the online and in-dealership experience and giving the customer a more enjoyable and abbreviated experience.
Integrations are a big driving force here, and CRMs need to understand this. Information capture should be simple, and once captured, that information should be shared throughout the process to eliminate the need for double entry.
This starts online with the website experience, moves to the dealership, test drive, appraisal, and, ultimately, financing of the vehicle.
The second need would be reporting and giving the dealership a better ability to create and customize what’s needed, and allow for multiple outputs, including automation and dashboards.
Coambes: Modern CRM systems should be complete, comprehensive solutions for your business needs. However, nothing’s perfect.
One of the components of today’s advanced CRM systems that has room for improvement is the interpretation of customer data for marketing purposes. Without accurate customer data, you’re missing out on sales and service opportunities.
This isn’t necessarily the fault of the CRM system, [because] names and email addresses can be entered into the system incorrectly, but the CRM system can’t work to engage these customers without valid and complete data.
By working to eradicate inferior or out-of-date customer data, your CRM system will be able to continue effectively marketing to your customers. Continuous improvements to CRM systems should help with this.