Every business must have customers in order to survive; it doesn’t matter what you sell, if you don’t have any customers you won’t be in business very long. The auto dealership industry is no exception. In fact, managing customer relationships are far more complicated for auto dealers than for most other industries. The long periods of time between purchases, the amount of money involved in the transaction, and consumers’ general lack of understanding about how the auto industry works all cause managing customer relations in the auto dealer industry to be a complicated endeavor. Auto dealers know this and that’s why they have been at the forefront of technology when it comes to Customer Relationship Management (CRM) systems.

CRM systems are ubiquitous in the auto industry. Walk into any dealership nationwide and you will see computers on the desks of the sales staff and salespeople working away trying to find new customers and close deals. The question is: Where do we go from here? How can dealers best use their CRM systems? And what new technologies will help boost future sales? In order to help you answer these questions and learn how to get more out of your CRM system we’ve spoken to several industry experts and convinced them to share their insights and advice with you, our readers.

The essential parts of an auto dealership CRM system

There are a lot of programs out there that do a lot of things, but before you look for bells and whistles you need to make sure you’ve covered the basics of an effective CRM system. “Unfortunately, specific standards don’t exist for all aspects of automotive CRM so various providers will develop their own set of standards for what they think should be a uniform standard. Many tools, features, and processes comprise each element and vary in importance and even presence from solution to solution,” warns Jock Freese, president and CEO of Votenza Systems. “At Votenza, we believe CRM must include four primary essential elements: opportunity management, positive integrations, database optimization, and database marketing.”

Other experts have similar advice about the essentials of a CRM system. Jeffrey Henning, chief strategy officer and cofounder of Vovici and a pioneer in the feedback industry, for example, advises that the most important parts of CRM system are “central lead management, salesforce automation, desking, personalized services marketing, and digital marketing.”

Some, such as Jonathan Ord, chief executive officer and cofounder of DealerSocket, believe that “your CRM should be the central customer and prospect database and house all customer information, including customer activity, it should then allow you to know the lifetime value of each and every customer and the ROI on all marketing activities.”

Gary Mitchell, director of telephony and virtual BDC products for DME Automotive, sums it up by explaining, “The essential parts of an auto dealership CRM system are based on two things: one, the timely, accurate, and efficient input of customer and prospect data, and two, tracking, follow up, and fulfillment of the customer and prospect data.”

Third-party integration

Jock Freese reminds us that “CRM started when Henry Ford pushed the second Ford off the line. Technology as we know it today wasn’t even a glimmer in his eyes and tomorrow’s technology will be even cooler and more complex.” Technology is always advancing and CRM systems are no exception. In order to keep up with the latest advances and stay ahead of the competition, one must look at the latest trends in marketing and technology and see how they can apply to CRM.

“CRM is an ever-evolving blend of people, processes, and technology, CRM can never really come to a point where it is mature, outdated, or unnecessary,” adds H. Stephen Lausch, marketing manager for Autobase, Inc.
One advance that is taking root in everything from Apple’s iPod to video production and marketing is third-party integration. “Complete integration with third-party companies that provide outsourcing of professional services to enhance fulfillment functionality. For example: direct access to printing and mailing services to ensure timely and relevant communications,” offers Gary Mitchell.

It all comes down to specialization and comparative advantage. If one company can produce something at a lower cost than others, it has a comparative advantage over others in the same industry because it can offer the same good or service for a lower price. If a CRM program allows a dealer to lower their marketing costs by printing and mailing directly from their CRM for example, that dealer will realize a better return on investment for his marketing efforts and increase his profits by using his comparative advantage. Third-party integration, however, is not limited to things like printing and mailing. Other technologies such as social networking and mobile technology can be integrated as third-party tools into many CRM systems.

Social networking

One aspect of marketing that many dealers are just starting to take advantage of is social networking. Social networking is one of the biggest trends in marketing right now and Jeffrey Henning believes this will also be a key part of CRM technology in the future. “The latest general trend in CRM is social CRM, tying CRM into social networking. This has not yet happened with automotive CRM systems, which have moved more into digital marketing, but haven’t yet taken this to social media. Digital marketing—e-leads, inventory display on websites—should be on any dealer’s ‘must have’ list when comparing CRM packages,” he believes, but “as the Internet continues to transform consumer behavior it continues to create new opportunities for CRM vendors to add functionality.”

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