Digital Dealer
Using Technology to Retain Customers
By Sandi Jerome
Part 5 of a 6-part series
During the previous issues, we discussed why you need a Business Development Center, how to decide who will call customers-salespeople or trained telemarketers, how to find the right BDC or CRC Manager, pay plans for the department and how to determine if you can afford it. Now that you've decided to start a Business Development Center, creating a Customer Retention Management (CRM) system can be overwhelming. Who should you contact and when? I have broken down a customer contact strategy into 5 major areas:
Customer Retention-calling customers on their birthdays, anniversaries, after they purchase the vehicle or have service work done. The idea is to "maintain and retain" a close contact with your customer.
Customer Defection-isolate the customers who have wandered away and are not having their vehicle serviced at your dealership. You want to bring them back into the fold and generate more service and parts business.
Sales Prospects and Internet Leads-this function is assisting the sales mangers in tracking your floor, phone, and Internet traffic.
Customer Loyalty-is creating a rewards program for your best sales and service customers.
Target Marketing-enables quick database retrieval of customers who are driving older Windstars that might be interested in the new 4-door model-or customers who own older competitive makes who might be interested in a special rebate program for them.
Customer Retention-probably the easiest of the five strategies and the many dealers are already doing this - or paying an outside service. Ideal is for the contact to be performed by the sales force, but the challenge is to provide them with timely information. Obviously the birthdays for March need to be provided to the salesperson in February. A key element is to get this data into your in-house database. For customers who financed their vehicle, it is in the car deal file. As long as your are doing a regular download of this data to your customer retention software, you're in luck. Many states require this information for licensing or dealerships photocopy the driver's license, which contains the birth date. Just have your billers enter data when they process the deal. In addition, your sales force needs a friendly reminder to call customers who purchased vehicles a few days or weeks later. A simple "To Do" list of the customers they sold to, phone numbers, and vehicle description should be generated by your customer retention software-with an area for the salesperson to note a follow-up date and possible leads. The same list should be generated for customers who have been in for service who were sold by that salesperson. Again, providing the salesperson with the tools they need to stay in contact, creates a long-term relationship with your customers.
Customer defection is a bigger challenge. Providing a new salesperson with a list of customers who purchased from you over 18 months ago who haven't been in for service for the past 12 months, is a great way to generate more service business and leads for the new salesperson. There are usually plenty of orphaned customers (customers whose salesperson has left your dealership) without having to dip into customers that belong to your established salespeople. Your new salesperson has a "reason to call."
Here's an example of a script;
"Hello, Mr. Jones, this is Tim Smith from ABC Chevrolet. I hope this is a convenient time to chat about your Lumina. I noticed that you haven't been in for service for a year and I wanted to let you know about a winterizing special we have this month in the service department."
I'm sure that there are many CRM professionals who can come up with a better script than that, but it's a start. A few things can happen from this phone call.
- 1. Mr. Jones takes Tim up on the offer of the winterizing special and books an appointment. Tim takes a look at the Lumina while it's in the shop and greets Mr. Jones when he comes to pick it up. He offers him a great trade-in value on a new Chevrolet-or maybe just chats about other people who have admired Mr. Jones' car and might be interested.
- 2. Mr. Jones tells Tim that he sold the Lumina a year ago-actually traded it in on a truck that his wife hates. Tim makes an appointment to show them a new Chevrolet on Friday.
- 3. Mr. Jones likes to get his service work done at Goodyear (or does it himself), but was thinking about stopping by in a few months to look for a car for his daughter. Tim makes a note to follow-up after finding out what type of car he'd like for his daughter.
- 4. Mr. Jones asks never to be called at home again. Tim notes this in the customer retention database and honors that request.
How to Monitor Sales Prospects and Internet Leads
Since your prospect and Internet leads are separate from your sold customers, we recommend handling them differently. Let's say that today you have 30 leads that translates into 10 sales. You should only be interested in the 20 that you didn't sell to since the 10 sales should come into your database automatically from the F&I car deal extraction. Rather than keeping duplicate data-you should keep these two databases separate for these reasons:
Sold customers coming in from the closed F&I car deals have the correct customer name, address, and vehicle description. If you move them from the prospect database to your master record-it's "garbage in-garbage out".
You will probably keep your sold customers for many years-but prospects and Internet leads will drop off when they either buy from you - or someone else. They can come back when you get lists from registrations or the factory.
The prospects and leads need different letters than sold customers ("thank you for stopping by and maybe consider us next time.")
Customer Loyalty-What if Andrew came into your dealership looking for a free rental car? Would you like to know if you sold him his car at a loss -or like shown below-4 cars-each with an average of $1873 gross profit? Are you selling to repeat customers - and if so-what is your average gross profit? This information means making decisions based on the profitability of your customers. Again, a good customer retention software accumulates and tracks this data and opens up the possibly for frequent buyer programs.
Target marketing is a key strategy if you are looking for just a certain type of buyer. Some examples are vehicle models that have rebates coming up, customers whose payoff date is within the next six months, or customers who purchased their vehicles elsewhere-but are having their vehicles serviced by your dealership (visitors.) If you use a product like Microsoft Access, you can retrieve data easy and quickly change what you want and how you want it. The sorting and selecting of data is just "highlight and click." Go to the table that holds your data, and highlight what you want-like Cavaliers. Go to Record, Filter by Selection-and only what you have highlighted is. If you can point and click with a mouse-you're on your way to powerful target marketing. Go one step further and click on Microsoft Word-and your customers are ready for a form letter.
I realize that it's an enormous task to cover all five of these strategies; the plan is to choose one and to start. A key to success is to make sure you have database-mining software in place so the information will be there when you're ready to take on another strategy. During our next issue we will explore the last steps to "Using Technology to Retain Customers: How to measure your results and maintain your database."
Sandi Jerome is the manager for consulting service for Jeff Sacks & Associates. sjerome@dealeronline.com
