What happens when you’re trying to sell premium automobiles and there’s such a long wait in your showroom that prospective customers leave? What happens when customer emails go unanswered? What happens when customers have to wait so long on the phone, they hang up?
The answers to those questions are what led the general manager of a premium brand automotive dealership to adopt a CRM project.
One and a half years ago, he came to me and said, “Look, my marketing manager keeps bothering me with the need of implementing CRM in our company, but I don’t see the what and how of CRM in my dealership. I have seen so many presentations on CRM that were too theoretical, too far away from my daily business, and never showed the direct results of CRM on my monthly sales performance. Are you able to support me in understanding what we should do, without showing me 50 PowerPoint slides?”
‘Look, my marketing manager keeps bothering me with the need of implementing CRM.
We have supported many multinational companies in defining and implementing CRM in their organizations. They are classical consulting project approaches. You take high-level mission statements to detailed tactical customer-centric processes in nine to 12 months. But automotive dealerships never think long term. What matters is the number of cars sold at the end of each month and their sales margins. In this case, the manager wanted to support his sales team in obtaining its monthly results, based on doing things differently and treating potential and existing customers differently.
So instead of 50 slides, I showed him just one:
This one slide convinced him that going for a very concrete, value-adding CRM project that would focus on improving the performance of sales and service personnel involved in each one of the above mentioned customer interactions/touch-points.
Customer-centricity starts in the heads of people, those who have direct customer contact, and those who give support in the internal organization for making the business with customers work. There are different customer interactions that require the collaboration of both.
This is actually the second step of our approach. First we investigated the level of customer-centricity in each interaction and identified gaps, areas for improvement and, most importantly, the change measures needed to create a collaborative, customer-oriented culture in the dealership. Our consultant team consisted only of two people; our client made his internal resources available to participate in meetings, workshops and decision-taking discussions.
As a result, we identified the main areas to undertake a cultural change toward customer-centricity:
- Sales personnel. They were used to just selling cars, not looking for customers in a pro-active and structured way that would include efficient lead management and personalized offers.
- Service personnel. They were focused on making an efficient diagnosis on the car on hand, not to reducing waiting times for customers during car delivery and pick-up after repair.
- Receptionists. They understood their job as sitting at the customer reception desk and responding to customer inquiries, not to making wait time as short and entertaining as possible, so the customer wouldn’t leave the dealership.
- First-level agents in the call center. They were used to just responding to incoming calls and putting the customers through to the desired person, not trying to resolve simple inquiries and requests on their own.
To assure an enduring change, we proposed implementing a customer-centric strategy, not only by defining pragmatic and concrete business rules in customer interactions (such as limiting the time a customer had a to wait for a sales consultant to a maximum of five minutes) but also through a tailor made, cross-organizational training program.
We started with first-line management. With these people, we defined corporate values based on customer-centricity and benchmarked the behavior the company would expect of all employees interacting with customers. We also defined the corrective actions to be taken when those measures were not met. For example, one measure was that every customer entering a showroom had to be met by an employee—any employee, not just a receptionist. If this did not happen, the whole team would suffer a negative evaluation. That went hand in hand with another element of the project: the establishment of rules for cross-departmental collaboration to fulfill customer needs.
In the next step, we trained all employees in the new customer-centric way of doing business in the dealership, with the focus on the “mindset” and understanding customer needs before delivering products or services based on product characteristics.
What’s the result? It’s been a year and a half, and so far the following achievements have been reached:
- Sales personnel. Before attending to a customer the customer history is checked in the implemented dealer management system in order to have a more personalized customer interaction. Also, sales personnel report their daily availability for attending to customers in the showroom and for telephone calls.
- Service personnel. They implemented an efficient methodology for the advanced planning of customer visits, reducing the average waiting time from 20min to 10min for vehicle reception. Also, a “help desk” for attending to customer calls has been implemented, with the result that a calling customer is getting hold of a service employee within a couple of minutes, or receives a call back if the help desk is not available.
- Receptionists. They serve the waiting customers in the showroom a coffee or orange juice, and offer product-specific catalogues until the requested sales representative is available.
- First-level agents in the call center. They were given access to the dealer management system to resolve simple inquiries like planned vehicle return after repair, status of a new vehicle order, etc. to decrease the number of calls to be transferred to sales and service personnel.
All these improvements have had a positive effect on customer satisfaction and loyalty, even if we haven’t yet linked these performance improvements to sales performance in terms of more car sales. This is the next thing on our “to do” list that will make the dealership truly customer-centric.
Through defining the customer touch-points that needed improvement, establishing real goals and benchmarks—based on giving customers the best experience possible—and training the company on how to put the processes in place, we ensured that the dealership had a program that all employees could understand and apply to their daily business with customers. It may not have seemed like a “big bang” CRM project, but it will be one that will last.
Automotive retailing is a very unique business. Although, according to Drucker, the most profitable small business industry in history, the environment historically has been very provincial and localized, with high productivity employees (sales and finance reps) easily migrating to the local dealership offering the highest wage package with the least amount of work and effort required. Therefore any effort at change requires an approach that retains the highest producers while simultaneously maintaining (or, to be a local leader, far exceeding) manufacturer mandated customer satisfaction scores.
One of the largest profit centers at any dealership is the finance department, which traditionally supplies as much profit as the sale of new vehicles (if the dealership is being run properly). This means that the typical customer goes through two distinctly different selling cycles, usually with two different sales professionals, in two different departments (and two waiting cycles), in one buying experience.
Many years ago, in the 1980s, a dealer friend approached me to help him solve the problem of sales turnover and customer satisfaction. The solution was to leave both elements of the selling cycle alone. People paid on straight commission already knew how to keep customers on the lot and to move them through the sales process without losing an “up”.
Our approach was to modify the final step of the customer visit, the vehicle delivery. Typically, that process is handled by the same person that sells the vehicle. However, those folks have already earned their commission! The finance folks needed to move the customer out of that office as well. We hired part-time undergrads in marketing at a local university and trained that group in adult education, tailored presentations, and total customer focus. Vehicles were delivered under a tent with carpeting and refreshments, a total departure from typical dealer treatment. The vehicle delivery specialist would determine who was going to be the main driver of the vehicle, and what the major use of the vehicle would be…shopping, commuting, ferrying kids, etc. Presentations to the new owners incorporated that knowledge as well as tailored facts and tips not available through manufacturer literature or at most dealerships, but well known to the sales force and service technicians. Owners were shown how to set the radio stations and use the CD changer, then asked to tune to their own favorites (hands-on is the preferred adult education technique), and shown how to adjust the seats themselves, etc., going through all of the frequently used features. If a customer could not stay for the 30-45 minute vehicle orientation, they were asked to return at a convenient time with an appointment, which most were more than happy to do when they recognized the personalized and professional methods being utilized.
The results? The dealership became and stayed profitable for the first time in its history (a busy highway location with significant competition), and moved from the lowest quintile in customer satisfaction to the highest in less than six months, and stayed there.
The best story? An elderly woman drove her new vehicle to the dealership and asked “where are the young people who can show me my car?” Turned out the older woman had been talking with a neighbor who had just experienced the tailored delivery. The neighbor was so delighted with her “purchase” experience that the older neighbor was persuaded, on her own, to drive over and demand the same experience. Unfortunately, when she arrived, the delivery folks were busy, so the manager offered a personal delivery at a later time. Later that evening, the woman and the manager saw each other at a dry cleaners, and the “delivery” took place right there in the parking lot!!
The elderly woman had purchased her vehicle at a competing dealership. Do you know anyone who has been persuaded, by a neighbor’s enthusiasm, to drive to an unfamiliar auto dealership and ask to be shown their vehicle? Talk about building word-of-mouth!!
Good post, I would also mention that you can derive similar benefits by implementing an over-the-Web car sales CRM initiative as well.
We consulted a car dealer group that saw an immediate doubling of per-unit sales off their lot simply by responding immediately to not just incoming calls, but Web-generated requests as well.
Cars.com and Autotrader.com are great resources that are just dying to be utilized by dealers that are CRM-savvy, yet very few are really leveraging them to the levels they could.
The idea is to use the CRM tools to give the customer the best possible experience. Dealers that continue to let their on-the-lot sales reps “cold close” prospects, versus using CRM to give a better customer experience, are going to sink in the emerging automobile market.
thanks a lot for your feedback and the sharing of your experience with your dealer-friend – it definitely gives me some thoughts about positioning this with my dealer client, although it is not easy to adapt great “American” CRM experiences with the European World in Automotive – which I hope will change soon.