Fixed Operations
A Close Look at Your CRM System
Fred Wallace
The quickest route between two places is not always the most obvious road on the map. Nor is the quickest route to profitability always about attracting more and more new customers for big-ticket sales. Despite the hype and hoopla surrounding Web-based car buying services, consolidators and virtual garages, automotive dealers need not panic about the frenzied state of the auto industry as long as they remember one thing: The greatest opportunity for dealers to increase their revenues is in aftermarket services. In fact, 70 percent of a dealer's revenue comes from fixed operations (maintenance, repair, and parts). And as many dealers already know, the best way to capture a large share of this market is through effective customer relationship management (CRM).
Good CRM Delivers Customers and Results
Customer relationship management is a set of processes that anticipates the needs of current and potential customers. CRM technology helps consolidate customer data with external sources from across the dealership and then enables dealers to analyze that data. CRM tools enable a dealer to use that information when communicating with customers through many interactions, including a sales force, call lines, Web sites, point-of-sale, mail, e-mail, and many other direct marketing or communication channels.
The goal, of course, is increased customer loyalty across all department lines.
But that's not all, because there is also a business goal connected to good CRM systems, and that business goal is for a dealer to get the most out of his marketing dollars. To do that, a dealer must ensure that CRM systems and fixed operations point-of-contact procedures are set up to enable tracking of results. Without the ability to calculate response rate and return on investment data, a dealer cannot evaluate the effectiveness of his efforts in this area.
Setting Up Effective Fixed Operations CRM Systems
No matter how or by whom your CRM efforts are being conducted, there are several factors to consider if you want your CRM system to deliver optimal results.
· How clean is your customer database? A database filled with inaccurate or incomplete information means more mail sent to bad addresses. This results in a lower response rate and ROI. Getting accurate data from your customers is where a good CRM system starts.
- How many customers are in your CRM system? Limiting the number of customers in your CRM system for budgetary reasons can actually defeat the purpose of having a CRM system. Avoid having a limited CRM system just to say you have one.
- If a customer doesn't respond to the initial solicitation, is the follow-up contact made shortly after the initial contact? Following up 4560 days after the initial solicitation is too late since the customer probably has gone elsewhere.
- Does your CRM system have the flexibility to offer your customers the option to receive communications via e-mail? E-mail is more cost effective, and it allows you to communicate with those customers who prefer e-mail communications.
- Are you delivering a consistent message of professionalism, value and service to your customers? If you are only sending coupons, you may be projecting an image that is counter to your message of quality. You also are lowering your selling proposition to that of the aftermarket and missing out on your strongest differentiators: factory trained vehicle expertise and factory support. Fixed operations managers can't win the price war, but the good news is they don't need to.
- Are you communicating with customers in a targeted manner when they should be due for service? Studies have shown that a communication process focused as close to the actual service due date as possible is most effective. Monthly service reminders will not target customers close enough to their due dates.
- Do you have procedures set up to track response rate? All targeted communications should have an identifier (a code or name) that is used on the service order or invoice when the customer comes in to the dealership. And all fixed operations personnel must be made aware of the importance of collecting this information. Without this you won't be able to track results.
And, without that kind of attention to detail, you (and your CRM system) might as well be driving blindfolded.
Fred Wallace is vice president marketing/business development of Newgen Results Corporation, Inc. fwallace@dealeronline.com
