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October 02, 2001 20:29:58
Using Technology to Find and Sell Customers

Kevin Kavanagh
The Profit Point Group

In my last article I explained my definition of “What is CRM”. In short my belief is “CRM is how you set the initial expectation, meet and greet, handle the transaction (sales, parts, body or service) and what you do after the fact to ensure the a prospect or customer left your dealership with the intention of returning.”

I also discussed 10 items that needed to be considered in any CRM implementation. Let's look at a few of these items and see how technology can help us find and sell customers:

  1. Define the business objectives
  2. Identify both Business and Customer needs
  3. Select technology based on dealership needs and functionality
  4. Establish measurable customer performance results

We'll look at finding and selling both vehicle and service customers and what some of your technology choices are.

Given recent events vehicle sales are predicted to be down, significantly if you believe some analysts. Throwing more money at advertising will probably not have a significant effect. Your best chance to maintain your current sales level, or as close to it as you can, is to maximize on every opportunity that presents itself to you. We can't just look at Floor Ups we need to take into consideration our Phone Ups, Internet Ups and Owner Base customers. If we are all honest with ourselves most of us know we do a fair job, at best, with Floor Ups and a far from adequate job with Phone and probably Internet opportunities. Most of us do little to “mine” the Owner Base we have.

Here's a plan for Owner Base opportunities:

  1. Define the business objectives
    1. Identify Owner Base opportunities
    2. Give them a reason to come back to buy a car
    3. Give them a reason to come back in for service
  2. Identify both Business and Customer needs
    1. Business – Sell more cars and service!
    2. Customer – Buy a car or have it serviced
  3. Select technology based on dealership needs and functionality
    1. A good contact and task management system that can generate daily work plans, produce letters and emails
    2. Your in-house computer system for service merchandising
  4. Establish measurable customer performance results

Let's assume your dealership sells 150 units per month. That means you have an owner base of approximately 9,000 customers after five years. For every ten of these customers you contact you will get an appointment. Another statistic is just over 60% of the people you talk to know someone that will buy a car in the next six months. We believe there are 17 compelling reasons to call a customer. These begin with the 3-day call and go through the life of the relationship. Now is the time to begin to manage your owner base effectively! If you haven't been keeping in touch with your owner base your sales force doesn't know why or how to call them. You have had turnover and need a system that can assist you in the reassigning of orphaned owners process. Given the promotions and interest rates currently being offered a compelling reason for vehicle sales might be cost reduction. For service customers you might offer specific service specials (based on mileage, model, etc). Identifying Owner Base opportunities with your in house computer is not a difficult process. You can look for high mileage customers (for vehicle sales and service opportunities), customers that have had the vehicle for a defined period of time (for vehicle sales and service opportunities), or even customer that haven't been back to the service department recently(for service opportunities). Now you need a method and reason to contact these people, a process to get it done and a measurement mechanism in place.

The next challenge has more to do with training and skills than anything else. If you have a compelling reason to call can you turn that call into an appointment or a referral? Some in your sales force can and many cannot. Training in phone skills and a solid follow-up process will help that. Identifying recalls and service intervals will assist in service. Today's customers want more control over the process so let them choose the method of contact. Your web site should be prominently mentioned in these communications so they can contact you by email if they choose. Create Internet specials for both sales and service. Create owner areas for your customers on your web site to increase communication. Create direct mail pieces with coupons and specials to track return rates. Have measurement tools in place, the above-mentioned contact and task management systems, to track results and allow for effective and consistent follow-up. Utilize the tools in your in-house computer systems to track the effectiveness of your service-merchandising rate of return and recall penetration.

I stated earlier that Customer Relationship Management (CRM) is a dealership wide strategy. All departments need to be involved. Don't market recalls if you don't have the parts! Set expectations and exceed them!

The manufacturers are beginning to control prices for vehicle sales. DaimlerChrysler has already done this with Mercedes and Chrysler and the rest of the manufacturers probably won't be far behind. The fixed operations departments have always generated a higher percentage of gross profit than the vehicle sales departments and you control this profit!

What will differentiate your dealership from the one down the street with the same franchise? One of the only things that will, and you have complete control over this, is how you treat your customers, handle communications, add value to your relationship, set and exceed expectations. CRM is truly a dealership wide strategy.

You can profit from technology but technology alone will not bring profits. What dealerships need today are integrated solutions that incorporate people (yours and your vendors), process (the “best practices” steps to meet your goals) and the supporting technology to assist you in maximizing profits.

Look carefully at your vendors. Many of the Internets “high flyers” and “new leaders” are going the way of the buffalo. Many of today's CRM vendors, like many of the automotive Internet companies will not be at NADA 2003. Finally don't be afraid to ask for help! The people and the process part of this equation is about getting “back to solid business basics” in a changing business environment. Find partners that can deliver all three of these items to the equation. In my next article we'll focus on Floor Ups, Phone Ups and Internet Ups and look at the technologies to assist those opportunities. If you wish to ask questions or comment I can be reached at

Kevin Kavanagh is VP of Sales and Marketing for the Profit Point Group an ADP group of consulting companies.



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