The auto dealership industry is changing and evolving all the time. Technology has brought a lot of changes to the way we interact with customers. From online reviews and social media to text messages and email, the way we communicate with customers has changed significantly from just 10 years ago.
Some things never change, however, and as the famous writer, management consultant and self described “social ecologist” Peter Drucker said fifty years ago, “The true business of every company is to make and keep customers.” As dealers we can never forget that.
Fortunately for us, while the customer still remains central to our business, the days of notepads and rolodexes are long gone. Today’s dealerships have advanced CRM technology to help them connect with the right customers at the right time to make the sale. The question is: What are the latest advances in CRM technology and how can dealers take advantage of them?
In order to help sort that out, we spoke with a broad range of experts in the automotive CRM field: Jonathan Ord, CEO and president of DealerSocket, Bill Wittenmyer, vice president of eLEAD CRM, David Metter, president of Automotive HookLogic, and Patrick Kelly, president and COO of CAR-Research XRM. They gave us their opinions on how dealers can best use current CRM technology and the future of the industry.
CRM and social media
Social media is becoming increasingly important to auto dealerships’ internet marketing, so we wanted to know how a CRM system can improve and integrate with dealerships’ social media efforts.
Jonathan Ord of DealerSocket reminded us that even with all of the technology available to dealerships, “The best way to ensure that great things are being said about you is to make sure you are doing great things for your customers.”
“Secondarily,” he added, “CRM can manage those conversations that we know about and drive positive feedback from your best customers to balance any negative. Also, any negative feedback can be understood and a resolution process can be enacted. Immediacy of attention is key and CRM helps gather, catalog, and drive resolution of these issues immediately.”
Patrick Kelly of CAR-Research XRM told us that, “Social media has significant relevance and it’s very powerful and it’s not going away.” He agreed however, that “unless we do the basics of prospecting the household; whether you’re doing Google reviews or Facebook or ‘follow us on Twitter,‘ whatever you’re doing; none of that really matters if you’re not doing the basics: the road to the sale, follow up, sending out letters, prospecting the household—that’s the basics of the whole process and if you aren’t doing that, then what good is the rest of it?”
Facebook is a big topic in auto dealership marketing right now, but David Metter of Automotive HookLogic – AutoHook pointed out that, “People believe that social equals Facebook, but it is so much more. People spend more time online watching videos than any other activity. If you can differentiate yourself with video responses integrated into your CRM, then you win with the customer.”
The way that your CRM interacts with social media is essential, according to Bill Wittenmyer of eLEAD CRM. “Good CRMs should be able to push out to your social services, real-time updates, and even help generate and manage reviews,” he told us. “Reputation management is such a critical factor today in decision making from the consumer end, a good CRM should be able to not only manage that and help you communicate reviews, but actually help generate new ones and focus on positive contributions.”
Lessons from the downturn
The Great Recession was particularly tough on the auto industry. Along with all the pain, however, there came a few lessons. Dealerships streamlined their operations and found ways to increase their sales with better lead management and grow their business through improved use of internet marketing and CRM. These improvements, coupled with a renewed focus on long-term growth, are part of the reason the auto industry is a leading part of the recovery.
“For long-term success the dealer has to base their business values, technology, people and process around solving a problem or satisfying a need of every individual customer,” advised Jonathan Ord. “It is an individual game at its simplest form and CRM should allow you to make sure very little slips through the cracks — and when we make mistakes there is technology that helps identify and drive the resolution. I think the downturn has helped many dealers understand that…They have also found out that it is less expensive and more profitable, as well.”
Patrick Kelly told us that, “Technology is always moving [forward]…but as far as the basic tenets of CRM methodology, it’s still the same.” Hewarned however, that “We can Facebook them all day long and spend millions of dollars on advertising and have ups lined up two miles long outside our dealership, but if we don’t do the basics on the road to the sale — courteous, great follow-up with great verbiage and then prospect the household and find out how many drivers [and] how many vehicles in the family, then the CRM is never going to be successful for the dealer.”
Bill Wittenmyer noted that, “As floor traffic became less plentiful, and as more consumers have shifted to digital shopping, the importance of tracking, follow up, and quick, concise and timely communication, has become the standard practice versus a luxury. Before, it was a tool that dealers felt they needed; now they know they need it, and furthermore, they need to ensure that it gets executed. You have seen a trend of dealer usage shift from just basic follow up on clients and leads to proactive use of data base marketing and communication.
Improving how your dealership uses CRM
Modern CRM systems can do things that dealers never would have imagined a decade ago, but they can only take advantage of them if they are using their CRM properly.
“The most basic part they’re [dealers] missing is logging ups and having accountability,” Patrick Kelly told us. “Radio Shack is better at it than we are. Try to buy a five-dollar pack of batteries and they’ll ask you, ‘Can I get your email address? Can I get a phone number?’ And we’ve got people trying to buy $50,000 ticket items that our sales- people aren’t logging.”
“Most dealers know the importance of getting the info into a system,” offered Bill Wittenmyer, “but we still see a lack of execution on (by?) the salesperson, day to day. There are great examples of BDC usage and marketing, but the great tools that are available, such as electronic brochures and daily marketing plans and even equity predictors as examples, still don’t get daily and widespread use at the salesperson level.”
In addition to the importance of adding information, Patrick Kelly continued, “The second area we are missing is that dealers have hundreds of thousands, even millions, of orphan owners. Customers who bought a car, the salesperson no longer works at the dealership, and the other salespeople are not working the orphan database…The third area that’s missed is the opportunity to sell cars to service and parts customers. These are people that own our product. They’re servicing with us but never bought a car. Buying parts from us, but never bought a car from us. To actually get our salespeople engaged in calling service and parts and body shop customers that have never bought a car [is essential].”
Jonathan Ord advised that dealerships should use their CRM to improve both their strengths and their weaknesses. “Every dealership has types of customers that they always handle correctly and without problems,” he explained. “If a dealer is really good at quick lube in service, and economy cars in sales, then focus on that. Make that the marketing message and your social media, your employees and your customers will be in alignment in saying that you are great. If you are not good at something—get good at it first, before you start attracting the masses, because your customers do talk and so do your employees.”
CRM systems, as with any technology, is only effective if it is used properly and effectively. As Patrick Kelly reminded us, the most important part of any CRM is the people who use it. “The people factor is the most important part of CRM. I’ve said for years that you can have a terrible CRM tool, but actually use it and have commitment and you’ll sell more cars. Whereas you can have the best CRM tool in the world, and not be committed, and not have leadership and discipline and processes in place, and CRM will not sell you another car.”0