Editor's note: With this month's focus on customer relationship management (CRM), we felt it would help our readers to learn directly from some of the industry's proven CRM experts. Over the upcoming months, you will learn from various CRM experts who have enthusiastically contributed their advice and suggestions about what it takes to become successful automotive CRM practitioners, irrespective of the chosen application. We hope they help provide answers to your questions and leave you better equipped to make more informed decisions about your experience with CRM. Good luck!
How do I know which CRM solution (Web, server-based, outsourced) is best for my dealership?
There is a tremendous amount of work invoved in finding the right partner. Take the time necessary to fully investigate all available solutions. If possible, visit their home offices to better understand their culture. By visiting their offices, you will get an immediate sense of how they treat their customers and their employees. In addition, the technology should meet your needs. More importantly, make sure they fully understand your store's goals and objectives and are willing to help you achieve them.
What is the best way to introduce CRM to my dealership staff?
In the beginning, many dealers used to say, "Here is a great new tool - use it or else!" In recent years however, the buy-in from every department has become vital. Good CRM companies should focus on helping you build a playbook for your entire team. If a deployment fails, the CRM provider probably did not match the training and consulting to the dealer's specific goals and objectives. To do it right, you should build a six to seven month plan that gains momentum every month. Once the entire sales and management team understands it's a long term process, they can focus on the necessary steps to get there.
Who is the optimal dealership employee most critical to successful CRM implementation?
The owner and the GM. Without the leadership fully backing the initiative, the first six to seven months can be painful. With effective leadership, all of the processes get assigned to the entire time and everyone understands their role. Most importantly, your CRM prover should help you identify the key players and processes and then tell your leadership when these processes are broken or objectives are not met.
What should my contract with my CRM vendor look like?
Our typical dealer agreement averages 33 months. We fully understand that dealers don't want to make a long-term commitment until they see their ROI. At a minimum, I would plan on committing 12 to 18 months to see the full benefit. If you have the opportunity, make sure you can lock in your rates for the long-term to avoid annual increases.
Is CRM going to cost a lot of money?
Unless you commit to a longer-term contract, you can expect the first year or so to be costly. To kick off a CRM tool properly, the provider should work very lcosely with you for the first six months to a year. For that time and effort, they may ask for an up front investment up to $30,000 per site. I have seen some agreements that had larger payments for the beginning of the first year to cover the heavy up-front involvement of the CRM partner. After the initial investment, offerings should range from $1,000 to $3,500 per month for licensing and support, based on the size of the dealership and the services provided?
Why do so many CRM installations only achieve moderate success?
CRM installations often fall short because not everyone stays focused on the long-term objectives. Remember it is impossible to build every process in the first few months. I would also define "moderate success" as a dealer who becomes good at acquiring data, but does a poor job of leveraging it. Hard work and commitment are necessary; without them, the dealership will simply go through the motions and become "data collectors" and not "data users."
How safe is my customer information if it is stored somewhere other than at my dealership?
Most hosted CRM offerings comply with GLB in the handling of your data and have very secure hosting centers. Ensure you own the data. The provider is not allowed to use it for purposes other than training or usage analysis. The bigger concern with hosting is the performance of the application. All CRM solutions should be interwoven with the steps on the road to the sale and be customer facing. If the application or the database is poorly designed or hosted with inferior equipment an ongoing battle will occur to make those day-to-day processes stick.
What if my salespeople are not tech-savvy?
I remember training an elderly gentleman in the early nineties; he looked at the keyboard and then looked at me and said, "Hmm - these keys aren't in the right order." Fortunately, most dealership employees have become more familiar with a computer keyboard in the last decade. With the explosion of the Internet, the number of dealership employees who are not familiar with computers should be minimal. However, some CRM offerings are not as intuitive as others. When training new users, most of the keyboard skills can be managed using new e-learning tools. The real key is getting everyone to understand the "why's" and "when's" by using scenario training. Once a best practice is identified for each process in the dealership, it should be repeatable.
How do I capitalize on my current customers?
Keep in mind that most CRM databases will be exponentially larger than any DMS-derived database because they store all unsold opportunities, not just sold and service customers. I hear comments from veteran salespeople like, "Look, I have 2,218 customers in my database!" More important than the number of customers in your database is the fact that those customers aren't just mailing labels; they represent relationships. Besides the common sales and service history, a great CRM customer record has information about hobbies, family members, future wants and needs, communication history (calls, emails, and letters), appraisal information, and unlimited notes. As the data acquisition processes are perfected at each dealership, the focus can shift to campaign management - that is where the fun begins.
How can I measure potential ROI from CRM?
ROI covers three specific areas:
- Focus on long-term data capture and data improcement initiatives. The ROI from this is not in dollars and cents, but it is a necessary step to enhance your measurable ROI. Closely track data capture and data improvement and reward the employees that do the best job.
- You will see the ROI in your day-to-day blocking and tackling. Most CRM solutions will provide you with the tools to manage your sales processes and make sure nothing "slips through the cracks."
- Attack your ever-growing database where you can measure ROI. Effective campaign management tools provide tremendous feedback. If you have marketing talent in your dealership, manage some of the database marketing initiatives inside.
Do we really need a BDC?
> I've always said that "business development is not a room; it's a frame of mind." I have seen some excellent call centers with dedicated employees, however, that help the sales and service departments manage customer communications. If you use dedicated personnel for this purpose, make sure they are using the same CRM tool as your sales team. As your database grows, you need to leverage a call center, either in-house or outsourced, to help with the heavy volume of contacts required to meet goals. Dedicated callers can help with this. The other benefit of dedicated callers pertains to the quality of the calls. Without a ton of training provided to your sales and service teams, BDC employees will always do a better job on the phone with your loyal customers.
Will technology help or hinder the CRM process?
Technology should not be an issue. Although the lack of investment in technology can negatively impact ROI. In the early nineties, when we pioneered the concept of putting a terminal on every salesperson's desk, there was some resistance. Now everyone realizes that many hands make light work, and the more your team is "in" the database, the higher the quality of data, and the more you can leverage it.
Is CRM mostly an Internet tool, or can I use it for phone ups and showroom ups as well?
If you look at the history of CRM for auto dealerships, there were very few solutions and they focused primarily on the floor and phone traffic. CRM was born on the showroom floor. Recently, the volume of Web leads has amplified the importance of Internet lead management as part of CRM. Unfortunately, many ILM providers added a few labels to thier program and called it a full-fledged CRM tool. Conversely, there were many of us who didn't build out the Internet lead processing until we identified all of the best practices necessary for success. With all of the emphasis on the Internet, don't lose focus on managing inbound phone prospects.
How much management visibility and control comes with CRM?
If you ever talk to a GM, GSM, or desk manager who relies on their CRM on a daily basis, they will tell you that there is no way they could go back to managing without it. Thousands of managers across the country rely on their CRM every day to make deals happen and coach their teams.
Is it possible for an individual dealer to get anything like the same CRM capabilities as the big groups?
Absolutely. In fact, the smaller the organization, the quicker you can get everyone dialed into the processes and start seeing results. Larger groups have additional challenges around process mapping and data sharing. Individual stores or small groups may not have all of the resources from a database marketing perspective, but they can still create a tremendous competitive advantage by leveraging the expertise of their CRM.
Can CRM show me the financial results, in units and gross that I'm getting from each lead provider?
Yes, this is a simple report. You should also see similar reports based on other customer sources. If you are truly practicing CRM, you can also focus on organic lead sources from your sales team. What would happen if each of your salespeople were responsible for adding four personal networking customers to your database each month? If you have a dozen salespeople, you would have 48 solid leads for free. You will quickly see from reports that the conversion and gross-per-vehicle will also be much higher for this group of customers.
Does CRM automatically follow-up on be-backs?
Your CRM should be able to queue up any activity for any cross section of your database. Be-backs are easily identified based on current status and date stamped history.
How long will it take to get my dealership up and running?
A proper kickoff meeting for your entire staff is necessary. Process mapping, e-learning for blocking and tackling skills, technology assessment, DMS data capture, data cleansing, and best practice identification should follow shortly. You should count on a heavy investment by your CRM partner for six to seven months. During that time, focus on building repeatable data capture processes and then leveraging the data using campaigns for both sales and service. After 12 months, you should feel comfortable with your CRM partner and all of the processes they have helped you build. Remember to hold both your team and your provider accountable to the plan that is designed for your store.
Bryan D. Anderson is the founder of Autobase, Inc. a Dominion Enterprises company. He can be reached at bryan@autobase.net or call 888-396-5911.
