Gartner to Auto Dealers: Internet Survival Is Based on Customer Relationship Management
21 June 2000
Gartner to Auto Dealers: Internet Survival Is Based on Customer Relationship Management
STAMFORD, Conn. - According to Gartner Group, Inc. , auto dealers are facing downward profit margin pressures on new and used car sales due to e-business strategies for Internet shopping. Ironically, 70 percent of auto dealer revenue is gained in the aftermarket by providing maintenance and repair services to consumers, not by car sales.Gartner's customer relationship management (CRM) advice to dealers is to shift their business focus to retaining and extending customer relationships. Dealerships that do not take this approach will be out of business by 2004, according to Gartner.
"Brands such as Mercedes and Land Rover do an excellent job of creating a vision of the total life of the car ownership for consumers," said Rob DeSisto, Gartner vice president and research director. "Pricing new cars is only the first step in car investments and dealers have to begin taking a longer view. The role of dealers must become more relationship-focused if they are to survive. Showing brochures and sales promotions on the Web is not going to cut it with the consumers in the new economy."
Gartner offers dealers the following advice in capturing that new consumer over the life of a car:
Participate in collaborative dealer councils with the original equipment manufacturer (OEM) for defining the complete consumer experience.
Demand technical support from OEMs for Internet capabilities. Such CRM strategies are not practical for individual dealers to deploy on their own.
Differentiate aftermarket value-added services, such as roadside assistance programs, and free routine maintenance during warranty periods
Embrace the Internet for customer communication. Offer a virtual garage, schedule appointments online, e-notify customers for service check-ups and inspections, and create targeted e-mail campaigns to renew car leases.
About Gartner
Gartner provides unrivaled thought leadership for more than 10,000 organizations, helping clients to achieve their business objectives through the intelligent and efficient use of technology. Additionally, Gartner helps technology companies identify and maximize technology market opportunities. Gartner's technology content and strong brand reach IT professionals globally through Gartner Research, its research and advisory unit; Gartner Services, its custom consulting unit; Gartner Events, including Gartner's renowned Symposia; and www.gartner.com. Gartner subsidiary TechRepublic, Inc. (www.techrepublic.com) is the leading online destination developed exclusively for IT professionals by IT professionals. Gartner, founded in 1979 and headquartered in Stamford, Connecticut, achieved fiscal 1999 revenues of $734 million. Gartner's 3,600 associates, including 1,200 research analysts and consultants, are in more than 80 locations worldwide.
