Category Archives: CRM (Customer Relationship Management)

Why CRM Systems Fail: The Problem Isn’t What You Think

Each day thousands of business owners and executives read their profit and loss statements, financial records, and sales reports, searching for increases in sales and profits. Yet, through all this, they are probably missing the one figure that means the most but never shows up on financial reports—customer retention.

Lackluster sales, employee turnover and decreasing gross margins are just a few of the many problems facing businesses that lose sight of the ultimate purpose of business—to attract and maintain loyal customers. Customer loyalty, or rather the lack of customer loyalty, is the real issue and every company, large or small, needs to embrace it as a critical measurement for success.

Your best customers are the ones who’ve already purchased from you. This is a timeless fact to which any experienced salesperson, especially when economic times are tough and competition is fierce, will testify. Top businesses live by this rule and treat previous customers like they are the most important people in the world. They continually ask their customers for more business by offering perks and promotions and routinely prospect them for referrals. They do so because they know their reputation, profits, and ultimate survival depend on customer contact, satisfaction and loyalty.

I just received my monthly statement from Delta airlines and was notified that I’ve achieved “Platinum Medallion” status again. For another year, I will be eligible for complimentary upgrades, free travel, numerous perks and the all-so-important priority boarding. What an effective tool for customer relations! Does it matter? Yes, absolutely! Especially for a frequent flyer like me who routinely takes a “red eye” from Vegas back to the East Coast. I make sure to keep my account current with all my contact information.

Car sales and airline travel are much the same to the consumer. There are plenty of choices and competition is high. There is also very little difference between the “products” among competitors. Therefore, the competitive advantages must come from superior service and customer relations. A good CRM tool can dramatically improve sales and help make that little difference to keep you ahead of the competition.

However, any CRM is only as good as the data within it. As the old programmer’s motto goes, “Garbage in, garbage out.” Regardless of all the bells and whistles, a CRM is only a tool, or better yet, a vault. It’s the customer information contained within the database that is the real gold; it’s what you can do with that information that really makes a difference to your bottom line. In order for a CRM tool to be effective, the data must be accurate and kept up to date.

What a sinking feeling it is when you realize, after all the time, money and effort to install a CRM, that something’s wrong with your customer list. It’s much smaller than anticipated. It’s missing the names of recent customers. Many profiles have not been filled in. Numerous records are incorrect; others are riddled with typos. Even worse, your server just dumped and you lost the entire database. What an incredible waste of time and money! Now, what do you do?

Fortunately, you’re not alone. One of the most common reasons cited for the high failure rate of CRM systems is poor data quality. It is also one of the easiest problems to avoid. You need to first gather your key users and managers together and thrash out a “CRM Data Procedure” document to define the rules of use, and then enforce those rules with the same diligence you use to protect your vehicle inventory.

When formulating your CRM Data Procedure, you should:

[list:17v7bxrq]- Decide who has what rights to the system and which rights they have (i.e., who can create, insert, modify or delete records).

– Define the procedure to check for duplicates before creating a new record. Utilize the “data scrubbing” features your system has and watch out for salespeople who skate each other by purposely misspelling names.

– Make sure everyone using the system checks spellings. Do not trust spellchecker! When in doubt, ask the client.

– Pay attention to the simple stuff that will confuse a database search (i.e., abbreviations, acronyms, all letters being upper- or lower–case). A simple policy to ensure consistency will help to avoid duplications and search difficulties in future.

– Define when records, notes, etc., are to be created or updated. Set the rules and enforce them consistently. Remember to inspect what you expect. There is nothing worse than having and paying for a CRM that is not capturing accurate customer data.

– Ensure your data meets the specific requirements of the post office for bulk mail.

– Define rules for creating new profiles or User Definable Fields (UDF). Every time a new UDF is needed—lead source, for example—it should first be approved. Otherwise, duplicates will permeate your database and key metrics like lead source tracking will be useless.

– Ensure that e-mail addresses are accurate and input correctly. This may seem like a simple procedure, but it is a common and costly mistake!

– Set up procedures of how to create records from inbound e-mails and inquiries.

– Determine what data fields are mandatory to initiate a record.

– Decide who is the responsible person for backing up and protecting the database, as well as who covers for that person when they are absent or unavailable. Decide how backups are to be done and how frequently, and find a secure place to store them. [/list:u:17v7bxrq]
Help your staff members to understand the need of accurate customer data and what they can do as a team with a robust CRM system to facilitate marketing, sales and reporting. Teach them that the success of the business and their careers relies heavily upon customer retention and that the CRM is how we track and protect that vital information. By creating a sense of pride and ownership in the company database, you are nurturing the essential process of buy-in, which is necessary for the success of your CRM initiative. Don’t compromise this critical tool by allowing your database to be infected by inferior data.
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Written by Tom Herald
Partner
Benjamin Herald and Associates
THerald@AutoDealerMonthly.com

With Today’s CRM Tools, Why Reinvent The Wheel?

Today, speaking with one of our account executives, I was told that a prospective client is planning to write their own CRM software. Wow! I was amazed that anyone would want to inflict such misery on themselves. With the number of systems on the market and all the tough competition out there, why would anyone want to jump in at this stage of the game… especially if a dealership or group is trying to simply avoid paying another CRM company to build it. Here is why I would never attempt such a project.

First of all, time is of the essence. If you need a CRM tool, you need it now. Any good product with the capabilities of the many excellent CRM tools on the market today will take close to two years to develop and another year to test. The most aggressive systems on the market have been operational for at least six years–and that is for a company with a large group of software developers. Few dealerships have the resources to put a team of such magnitude together, beyond basic financial reasons.

Secondly, if you employ a brilliant employee capable of such a task, could you trust that person not to take your company hostage? Because he or she would become indispensable to the dealership, they could potentially cause a number of problems. In my years as a CEO, I have realized that in any well-run company, everyone–from top to bottom–should be replaceable. There should be no employee whose loss could cripple the performance of any company. If that person is really good, and they would have to be to handle such a task, then they can also write software in such a way that it would be impossible for another programmer to support it.

Thirdly, he or she would develop this product on your time, but could sell it to others, making it very difficult to prove any difference between the two products. In this case, you would be faced with either paying their price or dealing with the consequences if they leave. Developing these systems is difficult, expensive, and taxing. Maintaining them is even more cumbersome, and requires a personal knowledge of the world of technology.

True– installing a CRM system is a difficult and time-consuming process that, depending on what your plan of execution includes, can sometimes be quite expensive. But if it’s done well, it will give great results. Remember that nothing worthwhile comes easily or cheaply. You pay for what you get. We all need to focus on what we do best and leave the rest of the work to the experts in their field. No matter how hard I try, I cannot build a quality car in a timely manner. The same analogies exist when writing a CRM tool. I cringe at the thought of a single dealership using a single developer, trying to come up with software that can accommodate the CRM needs of today’s automobile dealerships.
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Saphura Long is the president of ReckonUp by Prize Corporation, a provider of Web-based sales and service CRM solutions. She can be reached at 423-756-4084 or at: saphura@reckonup.com.

Your CRM is One of Your Best Employees

Every dealer has a few great employees, but few dealers think of their CRM as one of them. I’ve always thought otherwise. There are 10 reasons you should feel the same way

[list:2tmgbvrz]1. Your CRM does exactly what you tell it to do. I’ve had some pretty good employees over the years. They paid attention and followed instructions when it came to working a deal, working the phone or mining the database. But they were human and deviated from our processes. Deviation leads to defects and hinders timeliness. Your CRM doesn’t deviate. It says what you want it to say when you want it to say it, and it even knows who should receive the message through the media you choose.

2. Your CRM works 24/7. Your CRM is a dutiful soldier. It is ready anytime to receive that after-hours lead and respond. It can record those Sunday afternoon phone calls. In the middle of the night, it gets all your data cleaned up and synced with your DMS. It also sends broadcast e-mails, loads the letter queue and prepares prioritized daily work plans so your teams are organized and focused.

3. Your CRM can be in multiple places at once. When your CRM is integrated into your profit streams, it is covering all the points of contact. It can simultaneously handle walk-ins, phone ups, Internet leads, service lane traffic, the body shop, parts counters and the accessories store. It accepts data from all points concurrently. A good CRM unifies activities throughout the organization and can be a single looking glass into all areas of the dealership.

4. Your CRM is personable. It delivers a personalized message to an infinite number of customers at all the critical moments in the shopping process and ownership cycle. It reminds your customers when it’s time for service, asks for their feedback and thanks them for their business.

5. Your CRM can deliver your value proposition consistently. Remember the game telephone? A message is whispered to a person in a circle, then they repeat it to the person next to them, and that person repeats it to the next person until it goes around the room. Finally, when it gets back to the original speaker, the message is all mixed up. You put a lot of time, effort and energy in defining your value to your prospects and owners. Your CRM won’t garble the message. It will consistently repeat that value proposition verbatim, boosting the impact of the message.

6. Your CRM has a great memory. Used correctly, your CRM should be able to put your customer’s entire business history in front of your frontline employees. If the customer in your service lane has bought three cars from you, the advisor should know that; the customer certainly thinks he should. Likewise, your sales reps need to know about current service issues and marketing promotions before attempting to cross-sell to a specific customer. Managers should be able to leverage customer information from both sales and service to better target campaigns and offers. Support personnel require quick and complete access to a customer’s sales and service history in order to perform their jobs efficiently.

7. Your CRM can make everybody better. Like a great point guard on a basketball team, CRM systems make everyone perform at a higher level. It makes your employees more organized, knowledgeable and capable of nurturing all of your customers, not just a handful of hot prospects. It reports all activity back to you with a broad a stroke or microscopic view, whatever you need at the time. This makes everybody accountable and provides the data you need to coach where it’s needed and reward when it’s earned.

8. Your CRM is customer-centric. CRM systems accelerate your processes, making transactions faster and easier for your customers. The longer a customer spends time in your store, the less they like you.

9. Your CRM doesn’t judge your customers. It performs with complete absence of human tendencies to decide who not to call, e-mail or otherwise follow up. While frontline employees can mark a task complete without performing the task, smart CRM systems look at the phone system to verify if a task has been completed.

10. Your CRM is a team player. Good CRM systems are collaborative. They can integrate with other technologies and have no lines of demarcation between departments. It helps the slow learner learn with inhuman patience and does not undermine other initiatives going on in the dealership.[/list:u:2tmgbvrz]
There is one thing your CRM can’t do. Your CRM can’t make you use it. A great CRM culture takes discipline, accountability, performance standards and commitment.

According to Forrester Research, customer relationship management spending will top $11 billion by the end of 2010. Unfortunately, adoption can be poor, resulting in wasted time and money. Ground-level support as well as support from the top is critical.

A client recently told me that he hasn’t invested in a CRM because he doesn’t think he has the right people to execute the campaign. I understand his concern, but CRM use for frontline employees is normally simple. In my experience, depending on your role, you have a handful of interactive tasks that are performed over and over. I have seen the most reluctant employees pick up their aspect of using the CRM quickly and with ease. If they can send a fax, pull a credit report or run a CarFax, they can use a CRM tool.
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Greg Wells
Partner, Kain Automotive Internet & BDC Training and Consulting

Where’s The Beef In The Automobile Business Now?

Most of us remember the famous Wendy’s advertisement “Where is the beef?”, where a little old lady would come up to the order counter of a fast food store and ask the proprietors where the beef had gone (in the ever shrinking hamburger patty world). This is analogous to what we hear in the auto industry, concerning profits. Clearly, the profit margins continue to decrease. This is especially true of the variable operations where consumers are well informed and the competition is fierce. We almost have nowhere to go but downward. However, this is by no means a doomsday article. As always, I still believe that this industry is a tremendously successful one, with great upside and high profitability. That profitability can be found in the relatively untapped area of fixed operations, or the service department. In other words, the beef is in your service department.

You say that you’ve tried everything, but the numbers just aren’t there. Well, you might be investing the effort, but not using all the resources available to you in the most productive manner. Here are just a few hurdles you must overcome before experiencing success in fixed operations.

Number one (and most important), you need to gain control of your client base. This means you need to have a clean customer database that you can use at a moment’s notice, in order to contact customers quickly and efficiently. Keep in mind, however, that the service department customer database tends to grow much faster than that of the variable side. You ask, “I have this DMS with all the data is in it, why can’t I use it?” The answer: DMS databases were not designed for today’s on-demand communication needs. You need to focus on utilizing a CRM tool. Here is where the challenge exists, and your ability to truly separate wheat from the chaff. Contrary to what most CRM companies want you to believe, not all CRM tools are properly equipped to handle fixed operations. Too many of these systems have been added by the service department as an afterthought. These products do not include the service department in their original product development, and therefore are not equipped to handle complex issues, such as service appointment setting and shop loading. Today’s CRM tools are able to accomadate these issues, and many other areas of fixed operations—not the DMS. In short, for more beef in the fixed side, first examine your CRM and see if it even has the beef to handle true service needs; if not, find one that can. Believe me—there are very few that can, but they exist.

This article is dedicated to the brave sales and marketing staff of Prize Corporation, who face the daily challenge of explaining what I have tried to do here.
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Saphura Long is the president of ReckonUp by Prize Corporation, a provider of Web-based sales and service CRM solutions. She can be reached at 423-756-4084 or at saphura@reckonup.com.

Who Is The Best Business Development Manager For Your Dealer

Now that the shake-down of CRM tools has occurred with the OEM’s throwing their endorsement behind certain products, the question still remains: Who should contact our customers, and in what form? The answer to this depends on your operation and what you are trying to accomplish. Do you remember when F&I did not exist? Can you run your F&I department without a manager? Treat your CRM department the same way. There must be accountability, just as in any other department of the dealership. Therefore, there must be a manager who can set goals, execute plans, and ensure results. The CRM department is a profit center—not just a tool for you to use.

There is a need for effective tools, I grant you that, but process training and proper assignment of responsibilities is equally critical. This does not mean that you should have to hire an army of professionals and fire your sales staff. However, you will have to reassign responsibilities, or, at a minimum, hire a manager for that department. With anything new, there is always resistance. CRM is no exception. It is also proven that this department is greatly needed, and, although it will not directly close deals for you, CRM will positively affect your business.

So, who is to lead this department? The most common structure is as follows: BDC managers follow the prospects, while owner base calls are made by the sales force. The owner base calls are much easier to make, take less time, and require less expertise in getting the job done. The handling of phone-ins and prospects is a different matter all together. However, to ensure optimum results, data quality is extremely important, and must have sales force buy-in. I have seen many examples where the sales force has deliberately sabotaged the CRM process by providing bad information. Management must ensure that the sales force understands that the customer follow-up department is here to stay—and that customer follow-up will occur.

So, who does what depends on the quality of management, the results you want to gain, and how you want to get there. Of course, I know that the key motivation is to increase profit, but in order to do that, there are many smaller steps you must implement along the way. A good CRM company with long-term experience can help you in all these processes and plans. They should become your partners. Remember, whomever you choose should be able to assist you for at least the next five years. So, choose wisely and choose with long-term in mind.

Good Selling!
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Saphura Long is the president of ReckonUp by Prize Corporation, a provider of Web-based sales and service CRM solutions. She can be reached at 423-756-4084 or at saphura@reckonup.com.

Who is the Best Candidate to Contact the Customer?

Customer Follow-Up: Who is the Best Candidate to Contact the Customer?

So, you have hired an outside company to make your calls. They are, as they say, "professionals" and therefore you must be getting results! If you are not getting results, the fault must be with the dealership; your up count is too low, or the quality no good. The answer to that is: "Absolutely Not True". Just because you outsource your customer contacts does not mean that you are getting the best people for the job or that they will deliver. You can have the same type of contact made from your dealership at a much lower cost and with a much higher rate of success.

Client management is a new concept to the auto world and we are all seeking the best, most advantageous, and most affordable method of reaching our clients. First and foremost, you must understand that the client management department is no different than any other department at your dealership. It too, requires management. No matter who the vendor of CRM services at your dealership is, someone must manage the department. This manager must have rights to hire and fire any member of the team responsible for client management, including every salesperson at your dealership. Then, with the help of higher-level managers, this manager must decide on the avenue of customer contact and the best candidates for the job.

CRM systems have failed at many dealerships because the CRM vendors are often inflexible and assume that their product fits every dealership. Each dealership, as a rule, has their own favorite method of management and it is very difficult to change their culture. So the CRM tool needs procedures that are changeable, allowing dealerships to change and append these avenues, in order to yield the best results. Now, we know that the customers need be contacted. It is a mistake to assume that outsourcing is necessarily the solution. It all depends on how you manage and what you want to gain. For example, if your focus is to improve service department bottom line, your client managers for the service department must be in-house, as they need continuous interaction with that department for maximum success. Your service manager needs to be involved with this department daily to share his or her goals for the service department. The CRM department at your dealership is there to open a path of communication between members of your company and your clientele. The most successful candidates are those who know the dealership well and realize that the well being of the dealership is directly tied to that of their own. Put yourself in the place of your customer; who would you like to hear from: some company in Thailand calling you on behalf of someone you do business with daily, or a viable member of that company? Treat your customers the way you would like to be treated.
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Saphura Long is the president of ReckonUp by Prize Corporation, a provider of Web based sales and service CRM solutions. She can be reached at 423-756-4084 or via email: saphura@reckonup.com

What is CRM? Breaking 5 Auto Industry Myths

Perhaps it is because the term CRM is loosely used to describe any tool that does anything that relates to a customer or prospect, or perhaps we simply just need to do a better job conveying what the standard is and how it can be effectively implemented at a dealership. Either way, I thought I’d attempt to set the record straight by debunking 5 popular myths about CRM in our industry.

Myth #1 – I have an Internet Lead Manager, that’s my CRM

[list:1n27hl04]While it is true that an ILM does a great job of tracking your inbound Internet leads, it will not follow that customer through their life cycle. If the only relationships you follow are those generated through the web, what is happening to the ones who walk in or are come in for service? CRM should help you track ALL customers, not just Internet leads. It is not an “Internet” customer – it’s a dealership customer using the Internet to communicate, and they will surely use other means over time. We need to be able and ready to communicate proactively with them – through ALL mediums. [/list:u:1n27hl04]
Myth #2 – My DMS is my CRM

[list:1n27hl04]Dealer Management technologies were built to manage inventory and transactions, not customer relationships. We expect DMS providers to understand how to support our sales and service people when they can’t effectively support the back office? Using your DMS to manage customer relationships is a like using your dealership’s car wash to clean your suits – enough said.[/list:u:1n27hl04]
Myth #3 – I have someone mail out service reminders, I don’t need CRM

[list:1n27hl04]Now more than ever dealers need a way to seize each and every revenue opportunity from each and every customer. Without a CRM solution tracking who has been in for service, who has declined service and who needs service, your dealership is letting dollars slip away. Don’t outsource the CRM vision to someone that provides a direct mail campaign for you and think you’re done. You are leaving money on the table and not just this month, but every month. Understand the customer lifecycle, support that lifecycle with technology and then outsource only those things that must be done, but you cannot do yourself. Don’t do it the other way around![/list:u:1n27hl04]
Myth #4 – I have someone making calls for me, that’s my CRM

[list:1n27hl04]Using a call center or a BDC is a phenomenal way to drive sales, but it is only half the equation. If you cannot track the appointment through to conversion how will you know if your dollars are being well spent? Your CRM should drive your BDC or call center activity and provide detailed reports that show you exactly what is working, and more importantly, what is NOT working. Again, identify the best practices and see that they are done either by the dealership or through an outsourced relationship. Then use the results to evolve and get better.
[/list:u:1n27hl04]
Myth #5 – I can’t afford a CRM

A well executed CRM can pay for itself the very month you install it. In an extremely tough economic environment dealers who have not implemented one CRM solution for all departments are missing the boat. The ability to produce the right buying experience through better marketing, sales and service efforts will drive revenues. One way is highly targeted marketing communications and offers to drive traffic to your showroom and service drive. This will be one of the big differences between those that survive and those that don’t.

So what is CRM? True CRM is managing and nurturing your prospects and customers through their buying experiences with your dealership. CRM should provide you with tools that can be used in every department to direct customer interactions and drive sales. CRM should provide an at-a-glance view into the buying cycle of each customer, how much have they spent in service, parts and new and used vehicles and the timing of those experiences. CRM should also track every customer interaction, marketing, sales, service, CSI – know how, when and what was communicated and what the ROI was on that communication. CRM should then help you hold your people and vendors accountable to results and activities that drive the buying experience. CRM should be supported by technology that enforces and reinforces your leadership. CRM to your dealership is like air to your body – are you breathing on your own or on life support?
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Written by Jonathan Ord

What Nordstrom Can Teach The Auto Industry

At first glance, it seems doubtful that a high-end department store chain and an automotive dealership have much in common. One sells clothing that tops out at a couple hundred dollars while the other brings in customers for a major purchase that costs thousands. However, Nordstrom has built something that all dealers should emulate: Effective customer relationships built around good communication. How can you use your customer relationship management (CRM) and lead management systems to build a Nordstrom-like fan base?

How does CRM work?

The most successful dealers today use CRM to gather information about their customers while analyzing the information collected. An example of this would be offering some sort of rewards program or a VIP discount card to help build loyalty and to help track and measure consumer-buying habits. For example, when a consumer inquires about or purchases a specific product or service, their actions are recorded and stored in a database. This provides dealers with an accurate picture of which customers buy what. After analyzing the data, dealers can adjust their marketing campaigns to increase sales. CRM closes a relationship gap formed between the business and its customers.

CRM is also useful for customer service. Dealers use automated CRM applications to analyze consumer interests, complaints, or compliments, allowing dealers to change their sales processes accordingly.

What can a dealer gain from CRM?

Dealers have many goals when implementing CRM. Some dealers may wish to improve customer service, which will subsequently improve customer satisfaction, while others want to maximize revenues by advertising the right products to the right people. In other words, dealers need to know what their customers want. Once a dealer determines this through CRM, they can provide their customers with exactly what they want, exactly when they want it. This results in repeat customers telling their friends, who in turn become new customers. CRM processes are also designed to monitor communication between your customers and every department within your dealership. This includes tracking of every email inquiry, phone-up, and walk-in customer. Remember—maintaining a positive relationship with your customers is an essential element of successful business. A well-rounded CRM initiative will work to ensure that this becomes reality.

Nordstrom is well known for legendary customer service. If a sales associate says they’ll call a customer when a specific clothing item comes in, they do. And sadly, in today’s consumer-driven market, fewer companies provide this level of service. It takes time to build a loyal customer base; however, implementing an effective CRM strategy and using the right technology, dealers will notice an increase in sales, customer satisfaction, and the satisfaction of operating a successful business.
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Ali Amirrezvani is president and CEO of DealerOn, Inc., a leading provider of interactive Websites and online marketing solutions exclusively for the automotive industry. He can be reached at 877-543-4200 or visit http://www.dealeron.com for more information.

Tracking Your Internet Business for Profit

It’s an oldie but a goodie – you can’t manage what you can’t measure. If you are going to develop an Internet sales department that works, it’s going to have to be based on numbers. Otherwise you run the risk of the Internet becoming a hole where you throw good money after bad or a lost opportunity to differentiate your dealership from the competition.

Already you may have faced the web site fallacy of "build it and they will come." I have seen a number of dealerships give up on solid website beginnings rather than determine what went wrong. Without decent stats, it’s difficult to know where your Internet presence floundered. Was it at the level of the website or was it because your Internet salesperson wasn’t trained to adequately follow-up on hot leads?

Two recent statistics have made me believe that the Internet is not being taken as seriously as it should be within the automotive industry:

[list:1yorirex]1. Only 63% of Internet requests are followed up by dealerships’ salespeople.
2. Internet prospects were, on average, contacted a full 48 hours after sending their requests. [/list:u:1yorirex]

Before we focus on the automotive stats, let’s build some foundations for using statistics.

[list:1yorirex]1. What’s most effective, keeping statistics by the day, week or month?
2. What works best, using a limited number of statistics or using enough to not miss anything?
3. Who should keep the statistics?
4. Should pay plans be based on statistics?
5. Should you focus on the bottom line or continual improvement? [/list:u:1yorirex]

Statistical Control
Imagine for a moment that you are racing a Formula One car at Monaco. When you hit a short straight area of track and you glance down at the dash, what do you want to see, the critical measurements or a dash filled with gauges? It’s the same when you’re keeping statistics. You want to see a few critical stats. Statistics need to be kept simple but they need to give you peace of mind through an adequate sense of control. I don’t believe that you should keep a dozen metrics when 5 to 7 will give you all you need to know.

And if you’re driving the track at Monaco, what gives you more sense of control, being able to shift the gears five times or fifty times? Obviously the more you can shift the gears, the more sense of control you will feel and the faster you will lap the field. To a point, it’s the same with statistics. If you keep statistics on a monthly basis, you really don’t have a sense of control because you can only make measurable changes 12 times a year. But does that mean you want to keep statistics 365 days a year? From working with dealers, I have found that keeping statistics hourly or daily does give you more control, but if you are going to manage by statistics you can be thrown off by minor variations that occur in the dealership over short periods of time. We have found that weekly statistics for most dealerships are an ideal compromise. Keeping weekly statistics gives you control to shift gears 52 times a year but it doesn’t get you overwhelmed with stats.

When it comes to keeping statistics, you want to be able to personally verify statistics, but you also want the people who are responsible for results to understand the numbers they are going to be judged by and have ownership of those numbers. It is also important that these numbers be used in developing pay plans for your Internet department. You want the numbers that are good for the individual to be good for the dealership. I call this congruity. In other words, if the employee is to prosper, the dealership will also prosper. If the dealership suffers, the employee’s pay suffers.

This may make it look like I am just focused on the bottom line. The reality is that I believe people fail their way to success. If I am going to start out making bottom-line demands, it is going to be tough to man a new Internet department that is feeling its way toward success. I want to focus on continual improvement and work towards trending upward. In three years, when your Internet department has a solid track record, it’s going to be easier to focus on the bottom-line.

If your Internet department is going to produce numbers, it’s important to give your salespeople the tools they will need to do the job. The dealership will need an effective website and the sales staff will need computers, E-mail capability, database software, word processing software and digital beepers.

It’s also important to understand that if you are going to manage your Internet department by statistics, you can’t rush into it. Keeping statistics and managing by statistics are quite different. The first step is to keep the statistics and get comfortable that you have the right measurements. Once you are comfortable you can start giving variable weighting to the statistics and start judging general trends. It’s critical that your weighting is correct if you are going to manage the department by the numbers. In other words, it’s important that there be a direct relationship between how the department is actually doing and what the statistics reveal. If your statistics are weighted improperly your pay plan may not be congruent. So don’t rush into managing by the numbers.

Now, let’s look at the behaviors we want from our Internet department:

[list:1yorirex]1. Good product knowledge, Internet skills and sales skills
2. Solid numbers of leads from your website
3. Percentage of leads (from our own websites and from the automotive lead providers) followed-up within strict time limitations – cold leads lose Internet deals and cost your dealership money
4. Leads converted to prospects (i.e., they show up at the dealership)
5. Test drives from Internet leads
6. Sales/delivered vehicles from Internet leads
7. Solid follow-up with potential customers and sold customers [/list:u:1yorirex]

Good product knowledge is going to be related to good training and testing to be sure each individual is up to speed. The only specific graphing to be done would pertain to test scores and classes completed. Remember that your Internet department is only going to be as strong as its weakest link. You could have a strong website and sales system, but if the Internet salesperson lacks product knowledge, it can undermine the process.

The other six numbers you want to graph can be kept easily on weekly graphs. If your staff in the Internet department are keeping the weekly graphs charted by hand, the units being measured must be relevant. This means that as a statistic goes up or down you should clearly be able to see positive and negative results. For example, if you are getting four Internet leads per week from your web site and the graph of leads tops out at one hundred, a change to six leads per week looks insignificant. It may feel insignificant but it should show up as what it is-a fifty percent increase in web site leads. So if you’re getting four web leads a week, the graph should top out at 20.

Be wary of turning management by statistics into managing by quota. Managing by quota results in meeting quotas but not in the ultimate results you want. For example, if you want to develop better relationships and loyalty from customers who buy your vehicles, you might determine that making more follow-up contacts will do the job. So you establish a quota of 600 follow-up messages per week to past customers who purchased vehicles in the last twelve calendar months. Within several weeks you discover that the number goes to 650 messages sent out per week. You are tickled to see the number until you discover that the staff member who has the responsibility has made 5,000 copies of the same letter and they are just filling in the person’s name and sending them out. In other words, quotas will be filled but what you are looking for is effective results.

Keeping statistics to track your Internet department is going to give you more control and ultimately more Internet sales. Keep in mind one final point that will help keep this project in perspective: Actively focus on continual improvement. Some of the things you try will move you forward and some will be total failures. Developing your Internet department is like creating a whole new business within your dealership. It will be an incremental project that won’t pay off instantly. I guarantee that keeping key statistics on your Internet department will help keep you heading in the right direction and speed you along the track.

What is CRM for Your Dealership

With the right plan, you’ll certainly know

Of all the technology in a dealership, CRM (Customer Relationship Management) is the most difficult to measure regarding success. Part of this difficulty comes with defining what CRM is. For most dealerships, CRM is one or more of these three items:

[list:2nuef4do]- Prospect control
– Follow-up (sales and service)
– Campaigns or database mining [/list:u:2nuef4do]
But can you answer the three big questions for each of these items: what, how, who? Many dealers complain that their CRM software doesn’t “work.” They are right – CRM software just sits there. Most software was created to automate a manual process. Let’s compare CRM to service invoicing. When we computerized service invoicing in the late ‘80s we knew what service invoicing should do; it should take labor rate times labor hours, add parts, shop supplies, and apply sales tax. Print the invoice and create an accounting record. It was easy to figure out since the computer just needed to automate the manual process.

When CRM software was created, there was no process to automate. Nobody really knew what CRM software should do, and if I compared the 25 or more products on the market for dealership CRM, no two are even similar. If I compare service invoicing for the 19 DMS companies all are pretty much identical.

Make it work with a plan
You need a plan or process to make your CRM software work. Before you can create a plan, you first need to determine what your CRM process is at your dealership. It’s simple; just answer the what, how, and who.

Let’s use as an example a “what” in Prospect control – the simple function of entering new prospects.

[list:2nuef4do]- What? – Entering New Prospects
– How? – Swipe the customer’s driver’s license
– Who? – The salesperson[/list:u:2nuef4do]
We also need to add a column to determine who will monitor this process – or what report will measure the results. The complication comes when there are lots of “what’s” for one function. In the “entering new prospects” item above, there are other new prospects: Internet leads, phone ups, and campaign prospects. The first step is to create a chart like the example below and create greater detail for what seems like a simple item.

The chart is an example of just one function within one of the three items. If you have CRM software you might want to detail exactly what screen or program that you use for each function and spend some time deciding what fields need to be entered and how the person entering the items should deal with incomplete data. I realize this is an enormous task, but let’s start back with the “who” and make some team leaders for the process.

Making it work
Another problem with CRM software is that one person gets assigned the responsibility to “make it work” when that person might not be the person who knows what CRM is supposed to do. A team leader for each item will help define the process and be the person to monitor the results. Here are some suggested CRM team leaders:

[list:2nuef4do]• Prospect control – The team leader should be the general sales manager or one of the sales managers who has some extra time. Some other ideas for smaller stores are the F&I managers (especially one who is training to be a sales manager), inventory control manager, CSI or Internet manager.

• Follow-up (sales and service) – is a process for the service department. Our number one objective of follow-up with sales customers is so they will become service customers. Our thank you letters should remind them of their first service appointment and additional letters should offer service specials – anything to keep them coming into your service department. If your service manager is the team leader for follow-up, then he or she can determine what volume of letters should go out and what service special should be offered, depending on your shop loading for the month. They might decide that used vehicle sales that are not in your make line do not get a letter offering service specials.

• Campaigns – Database mining is an area that I like to leave for the dealer or general manager. They know the most about the total dealership and what it needs for the next month. They are also aware of upcoming special financing deals, rebates, and inventory levels.[/list:u:2nuef4do]
One of my dealership clients had a BDC manager with a hodgepodge of duties: letters to send out, daily work plans to create, special mailings, and phone calls to make. In addition, this manager was entering all the prospects into the system and running around trying to figure out the status of the deals. He had no time to work on a new campaign and was resentful that we were adding to his already busy work day.

I found a tremendous amount of overlapping of his efforts because the dealership was using two CRM programs along with the DMS system! We assigned the general manger as the campaign and database mining team leader, the service director for follow-up, and there was a “power PC user” sales manager that wanted the prospect control job. Next we worked on the “plan” determining how customers would be collected, stored and contacted – and how.

Using those three team leaders along with the BDC manager, the plan was streamlined – yet expanded to add campaigns that the BDC manager didn’t have time for before. By delegating some of the CRM tasks to sales people, the receptionist, and the service cashier – the BDC manager could focus on what could generate profit for the dealership. Now that he no longer entered each prospect into the CRM system, and didn’t spend his day stuffing envelopes, he had time to manage a campaign each month and monitor prospects that were over two days old. He has a simple bonus plan: a percentage of the campaign’s profit and a spiff for every old prospect that he makes an appointment for that shows up.

This dealership’s CRM plan might not work for your dealership, but until you sit down with each team leader and determine what should be done and who is the best person to do the task you’ll never know if your lack of results is the fault of the CRM software, your manager, your salespeople, or the lack of a “plan.”

During the last 20 years we have forced technology on employees, but now we’re at a point where we can analyze technology and find a why to make their jobs easier while the jobs they do increase dealership profits. That would be the final objective of the plan.

Could you add a driver’s license swipe to help salespeople enter in prospects? Could you start sending e-mail service reminders instead of labor-intensive letters? Would customers take a survey on your web site instead of sitting through a long phone call?

Without a plan, you’ll never know if you’ve evaluated these options and created the CRM program for your dealership. If you would like a sample plan, send me an e-mail.
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Sandi Jerome is a former controller, CFO, system administrator, F&I, assistant GM, and fixed operations manager with over 20 years experience in the automotive industry. She is the owner of Sandi Jerome Computer Consulting.