Customer-relationship management — CRM — is gaining fierce attention as anyone who plays today's tough competitive version of car wars knows.
Dealers are fighting for sales and service profits, one customer at a time. Solid CRM efforts maintain and track customer contacts to reap and keep customers.
Many large-volume dealers go outside to a mushrooming CRM vendor industry for leads, referrals, direct mailings, appointments and follow-ups.
Major dealership CRM providers now number about 20, but there are thousands springing up, all vowing to deliver customers and sales to dealers.
Internet customer leads can be expensive. Third-party lead referral fees average $20 per lead, good or bad, according to Jeff Kershner, Internet sales director, Mercedes-Benz of Hagerstown, MD. Kershner also manages DealerRefresh.com, a blog that covers news and products for Internet managers.
Some dealers, like Connecticut and New York-based Harte Auto Group, think they're better off handling customer processes internally as part of its business development center.
Harte set up a centralized, high-tech BDC system three years ago.
It takes all sales calls; follows up with unsold showroom visitors; handles Internet leads; maintains lease and retail portfolios; sets all service appointments; and follows up on customer satisfaction calls.
All seven Harte deealerships are served by the BDC housed in the Harte Chevrolet store in Meriden, CT.
Original owner George Harte Sr. started Harte Chevrolet in Meriden in 1951. His son George Jr., and grandsons, Gregory and Thomas, still operate the multi-line dealership chain.
It consists of two Infiniti and three Nissan stores; plus the Chevrolet store and a new world-class Subaru franchise. There also are three separate used-car facilities.
“A centralized BDC has helped us from an expense standpoint, says Greg Harte, vice president of operations.
“We're able to look at who's the best for what we need,” he says. “We get the best people in-house and provide constant training to put them in the best spot.”
Adds Erin Touponse, who oversees the BDC operation: “A lot of energy comes from having it internal. We develop a flow, and it gets dealership people all moving in the same direction. Everyone here has direct access to everyone else.”
That's a plus for various reasons, including this one:
Touponse recalls using a clueless outside call center provider who scheduled customer service appointments at a time the dealership wasn't open.
“We can fix things that are broken.”
Harte's system differs from appointment-type services and third-party lead generators. These providers are not able to distinguish customer patterns, and can't track if they are shopping elsewhere in a multi-franchise network, Harte says. They also don't have an insider's advantage.
He maintains the internal system gives them more control at every customer touch point — and helps build long-term relationships as well as customer loyalty, rarely found in car-buying circles today.
“When it comes to tasks like following up on a CSI (customer satisfaction index) call and detecting if a customer is happy or not, they don't do it with the passion we do. We have the controls. We can fix things that are broken,” Harte says.
Internal tracking also means the stores don't fight among themselves for customers, he notes.
True, they pay staffers — about 30 are employed in the BDC, including managers. But in the long run, the expense pays off, Harte says.
The total number of deals the BDC influences are between 30% and 45% of sales per store per month for the group, according to Touponse. Gross profit for 2006 in sales attributed to BDC was about $4 million, she says.
“Internet sales percentages are between 15% and 28% of total stores deals, and we are only growing,” says Touponse, who has managed the BDC for five years. She began overseeing group Internet operations last July.
She says lead expenses range from $1,300 to $4,900 per store, but the group is moving away from such services.
Customer calls are recorded and dealership managers listen to them randomly. That way they know what needs tweaking and continuously improving.
For those customers who want an early quote, training includes giving staffers a pricing grid with the goal of getting customers into the dealership.
As result of handling customers their way, Harte's Infiniti stores rarely dip below a 95 CSI total score, the important barometer car makers and industry look at to assess how customers rate their dealership experience. Other stores also rate high, Harte says.
Third-party or lead referral agents can't detect if someone is disgruntled, Harte notes. That person usually just goes away.
Unhappy customers stand a good chance of being turned into happier ones, if caught in time, and probably will return to the dealership, he says.
“Auto makers relieved to have us do it”
Auto makers lately have realized the importance of CRM and BDCs, Harte says.
“If more dealers do it better than they do, they'd rather we do it,” he says. “We have the latest high-tech tools and cutting-edge software — we're in the forefront of the CRM business. Auto makers are relieved to have us do it, if we can increase closing ratios.”
Kershner sees a growing CRM and training trend, with more dealers required to move toward approved vendors and BDC training companies.
“I see a lot of manufacturers getting more control of dealers, rather than the other way around,” he says. “It's a great situation for this generation of customers to be in.”
But the Harte concept is working from the auto maker aspect. The Nissan, Infiniti field offices and others have referred other dealers and visitors to study the model.
For now, Harte managers are sold on the internal system. “We can detect problems quickly and repair it with added attention and goodwill offers,” Harte says.
The group began a new training system this year.
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