Lesson No.1: Count Customers

Dealerships rely on technology to capture, track and manage customer relationships and have benefited tremendously from the ability to do so. Yet an Automotive Profit Builders' client questioned the accuracy of his dealership's customer relationship management traffic count data. The CRM report showed 40 fewer customers than a paper-based log showed for the same period. This is common. CRM systems

Dealerships rely on technology to capture, track and manage customer relationships — and have benefited tremendously from the ability to do so.

Yet an Automotive Profit Builders' client questioned the accuracy of his dealership's customer relationship management traffic count data.

The CRM report showed 40 fewer customers than a paper-based log showed for the same period. This is common.

CRM systems can increase efficiency and accuracy significantly in a dealership. But the information they deliver is only as good as information entered.

So should dealerships abandon technology? No! But they must establish processes and be sure data is accurately captured.

Who Gets Counted?

Do sales people determine who to count or does management? Salespersons don't want to be held accountable if their performance is just adequate, so more than likely they will log only people they regard as real buyers.

Doing that can mean the difference between an 80% close vs. a 20% close. This is a big CRM challenge. Clearly, management must define who gets counted.

Dealerships, whether using automated or manual systems, typically miss 30 to 60 customers monthly, even with greeters who are responsible for counting every person who enters the store.

If a store misses 60 customers a month (720 per year) and typically closes 15%, they've lost 108 sales. Using an average of $2,500 profit per sale, these missed customers equate to a $270,000 loss.

Who should be counted? Count them all — even the mail carrier. Only fooling. But, think about it, isn't everyone is a potential customer?

Much like a baseball manager who tracks his players' statistics to evaluate performance and develop coaching and game strategies, dealership managers can leverage accurate traffic counts to identifying successes and problems.

Minimally, an accurate traffic count helps managers determine the most productive way to staff; who to put at bat in crunch times; the team's strengths and weaknesses, and impact of marketing on traffic.

Understanding the stats leads to a better operation. For example, if a dealership averages 500 customers per month — perhaps 250 new- and 250 used-car opportunities — a market influencer such as an incentive or a new model may alter the breakdown.

But they seldom change total customer count. Knowing this and pairing it with an accurate traffic count allows you to monitor changes likely caused by internal problems such as marketing and staffing.

Fully Utilize the CRM System

Traffic counting is integral to the sale process and must align exactly with the CRM system. When customers are greeted, their names and contact information should be captured in the system.

Regardless of first impressions — “this guy isn't going to buy, he's just looking” — everyone must be counted. This aids in providing as much business behind the sales people (be-backs, leads to be called) as there is in front of them (customers in the store), and gives them a pool of opportunities to pursue.

A greeter is the best way to register customers. If a store prefers to empower its sales team to greet customers, each staff member must be held accountable for counting every customer who comes in.

Random but frequent manual traffic counts by managers will provide data that can be compared to the CRM reports. Any discrepancies clearly indicate customers are being counted selectively and the process is being circumvented.

Dealerships across the country complain, “Traffic is down and my CRM system proves it.” But if managers haven't conducted manual traffic-count spot checks they don't really know.

Blaming a low traffic count for poor sales is easy. Capturing an accurate traffic count and leveraging the information to boost sales is more productive.

Richard F. Libin is president of Automotive Profit Builders Inc. that works with dealerships on customer satisfaction and maximizing sales and gross profits. He is at [email protected] or 508-626-9200.

Questions or comments about this column? Send us an e-mail at [email protected].

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