On a consulting assignment a couple of years ago, we listened to a Philadelphia-area Pontiac/Nissan dealer bemoan the lack of customer-pay volume in his service department. We asked the dealer if he knew what his service market penetration was and he admitted he wasn't sure. Why not, we suggested, go through a simple exercise. Using information in the dealership's database, create a list of customers who had purchased a new or used vehicle two to five years ago. Run that list against a listing of current service customers. Vehicle purchasers who were not on the service list represented logical targets for a direct mail advertising campaign.
The dealer agreed that this was a good idea-in theory. However, the dealership's computer system and customer data were in such disarray that any such marketing list would have to be created manually. That would be too much work so the job never got done. We heard essentially the same excuse in a dealership that never, not once, contacted customers whose vehicle leases were expiring. It was too hard to get the data from the computer system in a usable form.
CRM to the rescue
These dealers could have benefited from a concept known as customer relationship management, usually reduced to the acronym CRM. CRM is the newest e-commerce buzzword. Car dealers who haven't heard the term needn't worry. They will be flooded with sales pitches for CRM software over the next six months. CRM software packages allow dealerships to use Internet-based technology and electronically collect, analyze, and manage the vast amounts of information they collect from their customers. The information can then be used to craft targeted marketing campaigns for existing products and new services. DaimlerChrysler, Ford, and General Motors already have systems in place for extracting customer data from dealerships and then feeding the information into their own CRM programs.
One of the newer entrants into the CRM game is called Autolink. Autolink is a joint venture formed by Ernst & Young, Steve Nickelsen, the well known dealer management and training consultant, and Data National Corporation, a Denver-based data management company. The group says they have developed the first complete Internet-based, automotive dealer one-to-one marketing package in North America. Don Warriner, CEO of Data National, describes the Autolink approach as one which allows dealerships to move quickly from a "vehicle-centric" sales and management strategy to a more cost-effective "customer-centric" approach. "In an environment where dealers are competing for the same customers in markets that are no longer expanding, dealers must shift their strategies from mass-marketing to highly targeted, micro-marketing programs to attract and retain their customers," says Mr. Warriner.
For instance, if a Ford dealer had 20 Expeditions in stock, the dealer could go online with a service like Autolink to identify target prospects in the dealerships market area. A special mailing and offer could be generated and mailed within 48 hours at a cost of less than 75 cents per letter.
The heart of these CRM systems is the ability to quickly take customer data entered by sales or service representatives and pull it together with information from a thirdparty source like R.L. Polk & Co. The CRM applications draw on this data to determine vehicle ownership, known customer preferences, patterns, and needs. Other CRM functions will help plan and automatically maintain communication with customers by e-mail, telephone, or regular mail, depending on the customer's own preferences.
Car dealers who are considering adding a CRM package to their marketing arsenal should make sure that the system has at least three main modules:
1. Acquisition programs to attract new customers through prospect modeling, prospect targeting campaigns, new resident programs, and lead management;
2. Retention programs to sustain the customers' on-going service business as well as future vehicle purchases through such things as thank you cards, service reminders, loyalty programs, feedback surveys and service histories;
3. Alliance programs to gain the customers' endorsement and recommendation of the dealership. This is achieved through special occasion cards and e-mails, newsletters and infograms, gift programs and reward programs.
CRM programs are expected to become the marketing tool of choice for dealers who are already committed to using the Internet as part of their sales strategy. These packages can bring to a dealership a totally integrated customer access and retention function. "From one Internet site, dealers will be able to get all the tools they need to increase customer service, increase repurchase ratios and off-brand leases, and decrease their overall advertising budgets," observes Don Warriner.
The NetSearch Merchant Notification System Helps Dealers Turn Virtual Leads Into Real-World Sales
The Merchant Notification SystemTM (MNS) from NetSearch, allows dealers to provide their online customers with fast, personalized responses to their online requests without being proximate to a desktop PC. Through the use of a hand-held wireless intelligent terminal (WIT) and proprietary software by NetSearch, dealers are able to receive and respond to their online customers' requests instantly-regardless of their location. Additionally the MNS offers dealers lead accountability, lead tracking and 'Round Robin' lead distribution.
"In the first three weeks I used the 'WIT,' not only was my response time shortened, but 90% of my leads responded back almost immediately," stated Cherele Weatherford-Dike, Internet Manager of Lithia Toyota of Vacaville. "My ability to communicate with my clients any time/anywhere increased my closing ratio to over 20% within 10 days time. My clients have commented repeatedly on the quick response time and the ease of contacting me. I also use the 1-800 option; this feature is a great asset when a client wishes to talk with me immediately. I can't imagine being without it! Thanks for all your help and for making my job 10 times easier!"
Few e-commerce sites can give their customers this individual attention and human interaction they desire. A survey by Jupiter Communications found that of the top 125 e-commerce sites, 42% refused to accept an e-mail message, never responded to one or took more than five days to respond. Another survey by NetEffect found that 67% of Web transactions are never completed largely due to the lack of online customer service and support.
Recent studies have shown also that the faster you respond to your Internet customer's request the better your chance of converting that sale into a lead. In fact, when dealerships respond to a customer's request within four hours, their closing ratio was 36% compared to only 4% when leads were not responded to until after 48 hours.
CONTACT: Michael Braun NetSearch, LLC (480) 607-1511 ext. 213 mike@netsearchllc.com
Blue Book Pricing on Dealership Web Sites
IRVINE, Calif., Oct. 26 - Kelley Blue Book has announced PriceLink, a new service which enables auto dealers to provide new and used car pricing directly to consumers from the dealers' own Web sites. With PriceLink, dealers can provide their Internet shoppers with several options. Dealers can show consumers how much their cars are worth with Blue Book trade-in values, as well as offer Blue Book suggested retail values for used cars they have for sale. Another option for dealers is to show new car prices, either just MSRP or invoice and MSRP.
Auto dealers have already begun to endorse PriceLink. Lee Miller, general manager of Showcase Chevrolet, Westminster, CA states, "We believe our customers appreciate the service and are more trusting of Showcase Chevrolet because we suggest they be informed." Matt Wolchock, Internet Manager of Holman Auto Group, New Jersey and Florida added, "What a great tool to build customer confidence!"
The service, which costs $500 a year, allows dealers to frame the pricing content of Kelley Blue Book's Web site, the most popular automotive site on the Internet. All advertisements and other services are removed.
"The consumer sees the Blue Book pricing they have come to trust, but the experience stays complete within the dealer's normal site navigation," said Stephen Henson, Director of Marketing and Business Development for Kelley Blue Book. "There's no chance of the consumer wandering off to other sites."
The nation's largest dealer Website developer, The Cobalt Group, has partnered with Kelley Blue Book to offer the service for free to its dealer clients.