Digital Dealer
By Jim Roche
A Personal CRM Fable
I have a favorite men's clothing store. I didn't used to go there because I considered it to be the "Cadillac" of men's clothing stores-enticing storefront, but too rich for my humble tastes. But now I go there at least six times a year (or so they tell me) and each time I end up spending a hefty amount. Why the change in behavior, you ask?
It's simple: Six years ago they sent me a coupon-half price off any suit in the store if you retire an old suit in its place. (No, they weren't just sending the fashion police after me-turns out they were going to donate all their customers' retired suits to charity.) My experience that first time was positive (I still have the suit) but I might not have gone back except for the store's monthly newsletter promotion and the fact that "my" sales consultant, Steve, calls me in advance about sales, and that they send me a 25% discount coupon on my birthday, and that whenever my girlfriend goes into the store, they have an up-to-date record of my sizes and preferences and past purchases.
This is Customer Relationship Management with a capital C, R and M! This is as good as it gets. A few well-thought-out pieces of mail directed to me, and I give this store a "lifetime of business." What is this lifetime of business worth to my favorite clothing store? I'd have to check my credit card records, but trust me, it's a lot.
Capitalizing On and Evaluating Your Customer Relationships
The National Independent Automobile Dealers Association reports that, as of December 31, 1999, a person in the U.S. will spend $145,500 on average on new automotive vehicles during a lifetime. That doesn't even include used car purchases or the cost of maintenance and service. This significant amount is the average value of an average customer, or, put another way, the value of dealer brand loyalty.
However, brand loyalty by itself isn't enough. As many others have pointed out, marketing programs should be judged on how well they help a company sell its wares, not on whether the customer has heard of you. Important as this is, very few marketing campaigns, especially traditional campaigns, recognize this. A review of the Adweek archives, for example, culled very few articles documenting results of ad or marketing campaigns. One that was found measured the results of online banner advertising to support an upgrade promotion in the computer hardware industry, with the goal to get customers to upgrade their PC modems. Unfortunately, the company only measured whether the customer clicked through to the "where to buy list" and wasn't able to actually compile data on the exact number of sales that were generated.
Which brings me to my point: It's not enough to cultivate good customer relationships; ideally, every online promotion that you do on the dealership level should be, and can be, evaluated on its effectiveness.
When choosing a CRM vehicle for online promotions, be sure to assess the ease with which you can track your results. Some online one-to-one systems include this ability as an integral part of the process. If a dealer targets a group of customers (e.g., Ford Taurus owners with more than 100,000 miles on their odometer who have recently been in for repairs), then sends them a promotion letter about the new line of cars, with built-in teleservice follow up, he/she can track the response rate from that campaign and the revenue generated to evaluate the return on investment.
Conclusion
By now, dealerships know they must re-engineer their marketing processes if they are to survive. Successful dealerships are capitalizing on the lifetime value of customer relationships as well as acquiring new customers using more cost effective and revolutionary marketing techniques. And smart dealerships recognize they should be measuring the results of these revolutionary marketing techniques as they implement them.
Jim Roche is president of carabunga.com, a wholly owned subsidiary of Newgen Results Corporation. jroche@dealeronline.com
