How Four Dealerships Have Taken Control of Theirs

Customer relationship management can be one of the trickier aspects of the retail automotive business. At best, mishandling CRM within the dealership can result in lost sales and service business; at worst, it can lead to damage of the dealership’s reputation that can be difficult to repair.

Technology has made the task a little easier. With the help of a CRM tool (software or online application), much of the periodic and follow-up correspondence sent to customers can be done electronically and automatically, and CRM tools can compile to-do lists for phone calls, e-mails and/or letters that must be completed and then help track those contact points. However, only so much can be automated. After all, it is called customer relationship management, and a software program cannot make personal phone calls or truly cultivate a relationship with a living, breathing customer. The human factor is what defines the process, and is also precisely what can make it so challenging.

Part of what makes CRM so difficult is the fact that it is not a department unto itself, but rather a concept that must be applied to multiple areas of a dealer’s operation and undertaken by multiple personnel. Even with a CRM tool of some kind, if different departments and staff members are responsible for various CRM duties, it can be difficult to determine if tasks are being accomplished—or if efforts are even effective—without someone to centralize and oversee those efforts.

When CRM Isn’t Working
John Sherrell is e-commerce director for Rairdon Auto Group, which has six stores near Seattle, Wash., carrying multiple franchises. He observed that the dealership group seemed to have a great deal more customer issues before tightening up its CRM structure a few years ago. He described practices prior to that time as “old-school,” which, he added, “really didn’t deal with customer relationship management much.” Much of the dealership’s CRM efforts were reactionary, dealing with customer issues after they had escalated into bona fide complaints rather than trying to head off problems before they got out of hand. Follow-up was left entirely to the salespeople and wasn’t tracked very well, and salespeople weren’t consistently held accountable for their performance.

Even dealers who have processes in place and are tracking their salespeople’s activities can still find shortcomings in their CRM practices. That was the case about four years ago for Tracy Myers, owner of Frank Myers Auto Maxx, an independent dealership in Winston-Salem, N.C.

“I was tracking everything,” he said. “I was holding salespeople accountable for calling customers back after they bought cars, but my random spot-checks told me that that was probably getting done 30 percent of the time, even when it was mandatory.” Customer issues were not being brought up in the weekly management team meetings, either; when he would ask if there were any problems that week, the answer was always that everything was fine. The occasional letter from the Better Business Bureau informing him of a complaint, on the other hand, indicated otherwise.

Simply having a CRM tool, no matter how complete the software or online application, does not ensure that customer relationship management tasks will be taken care of properly. Judie Michener, business development director for Hare Chevrolet in Noblesville, Ind., said that prior to the establishment of the dealership’s business development center and its subsequent merge with the Internet department, “I don’t think the salesmen were touching the CRM [tool] at all. It was just the Internet department only, so there were a lot of miscommunications … Most of the salespeople would have their old journals or Excel files to do what they wanted to do and really didn’t stick with a plan or program.”

David Richards"After the sale, [salespeople are] required to follow up and ask for referrals ... and the managers are expected to make sure that the salesmen are doing that."

- David Richards, general manager
Dream Cars Credit

There was no way to get a good overall picture of what was going on, and often the Internet department would attempt to follow-up with a lead they believed was an unsold customer when in actuality the customer had already not only visited the dealership but also purchased a vehicle. Additionally, salespeople who took phone ups were not always getting the customer’s name and contact information, something that is now a prime directive for the BDC.

David Richards, general manager of Dream Cars Credit, an independent dealership in Austin, Texas, said, “We are definitely Internet-driven and computer-driven, so all of our follow-up stuff was computerized with the [CRM] program. [It] always has been since we’ve been here, but we hadn’t really put the hammer down.” Individual salespeople were responsible for follow-up and taking incoming calls, but he observed, “They weren’t doing a good job of it at all.”

One problem was that it was difficult to get salespeople to input customer information into the system, making it impossible to track what was being done. He did note that prior to switching providers in September of 2009, the dealership’s CRM tool was not very easy to use, which certainly didn’t help matters. After the provider switch, tweaking the dealership’s CRM efforts has been mostly about oversight and accountability.
Getting CRM Under Control
Richards said that switching to ProMax as the dealership’s CRM tool has helped them get the dealership’s efforts on track. It has allowed them to automate much of the customary e-mail follow-up to ensure regular contact is made after the customer has visited the dealership even if a salesperson is unable to personally follow up. It has also made it easier to set CRM goals for each salesperson and track their efforts. Holding salespeople accountable for meeting these CRM goals has truly made the difference at Dream Cars Credit.

“After the sale, they’re required to follow up and ask for referrals … and the managers are expected to make sure that the salesmen are doing that,” said Richards. He has set specific monthly goals for the salespeople and made his two sales/finance managers responsible for monitoring activity and going over the numbers with the sales staff weekly.

Salespeople are required to have 100 inbound and/or outbound calls completed per month, send 25 e-mails per week, have e-mail addresses for 90 percent of their prospects, set 15 appointments per week, have eight appointments show per week and take 20 ups per week—all of which must be documented within ProMax. “This is something we go over with them on a week-to-week basis,” said Richards. “We do one-on-ones on Mondays and Tuesdays.”

The two sales/finance managers are also responsible for handling any customer concerns or problems after the sale; if they are unable to solve the problem, Richards steps in. “We take it really seriously. We know [Internet] reviews can hurt us, especially with us being as Internet-driven as we are … We’ve found that if you respond and handle the situation quickly, you’re going to resolve the problems a lot easier.”

According to Richards, the internal dealership structure is still evolving, which could eventually further influence how CRM is handled. They are essentially in the process of turning the Internet department into a business development center. He recently put a business development manager in place to oversee the store’s two dedicated Internet salespeople. All Internet leads have been handled by the two Internet salespeople for over a year, and Richards recently started having them also take all incoming calls, rather than letting the salespeople handle them.

Rairdon Auto Group started restructuring the way CRM was handled within its stores a little over three years ago. Their DealerSocket CRM tool is now monitored group-wide by both Sherrell and the group’s training director. Salespeople are still primarily responsible for follow-up duties and are required to periodically touch base with customers in the database, but now there is a structure and process in place to ensure accountability. The CRM system tracks the completion of scheduled calls, and Sherrell and the training director monitor those logs weekly. If calls are not being made, they will pull the salesperson aside to determine the reason and resolve the issue.

Judie Michener"I don't think the salesmen were touching the CRM [tool] at all. It was just the Internet department only, so there were a lot of miscommunications ... Most of the salespeople would have their old journals or Excel files to do what they wanted to do and really didn't stick with a plan or program."

- Judie Michener, business development director 
Hare Chevrolet

Additionally, the group enlisted an outside source to contact all sales and service customers a couple of days after their visit to determine if the customer is satisfied with the treatment they received. “We get the results of each one of those phone calls … and it gives us an idea of whether we need to make a phone call and take some action,” said Sherrell. Any customer issues or complaints are forwarded to a designated person who handles customer concerns for the entire group and to the appropriate store’s general manager.

Hare Chevrolet streamlined its CRM by making it a primary function of the business development center. In addition to the customary BDC task of fielding phone and Internet leads to set sales appointments, the BDC is also responsible for following up with customers to assess satisfaction; all customer issues and complaints are routed through the department as well. The BDC also regularly e-mails customers on their birthdays and cars’ anniversaries and performs follow-up phone calls for OnStar Vehicle Diagnostics.

Proper utilization of their CRM tool has also been critical, according to Michener. She stressed the importance of having a plan for how and how often customers are contacted and using the CRM tool to help automate part of that process. After a sale, an automatic e-mail goes out from the general manager, a follow-up call is added to the salesperson’s to-do list, a letter goes out from the owner and a CSI follow-up call is made by a BDC representative.

Michener monitors all activity. “Not only do I monitor it, but also each of the sales managers will have a team of salespeople that they look at, typically a couple times a week, and make sure that their to-dos are done,” she stated. She is also in charge of overseeing orphaned customers within the system and making sure they are assigned to a salesperson for follow-up.

At Frank Myers Auto Maxx, when tracking and spot-checking proved to be inadequate for ensuring the performance of CRM duties, Myers decided to institute a policy that every person who visited the store, sold or unsold, would be called the next day to see if their visit was satisfactory and determine if all their questions were answered.

What started as one person making daily showroom visit follow-up calls evolved into the dealership’s business development center, which now handles all incoming customer issues and concerns, outgoing communications like follow-up and thank-yous, and the solicitation of online reviews. Everything is overseen by a business development manager, and an outside training team comes in once a month for two days, said Myers, “just to keep [the employees] on their toes.”

Myers believes that many problems with customer relationship management occur because the brunt of CRM duties are left to the salespeople to handle, and at most dealerships, he said, “Salespeople are in charge of selling cars, moving the lot around, calling the customers back, doing customer follow-up—you know, everything under the sun.” His approach: “Let’s let our salespeople do what they do best, and that’s build relationships and sell cars, period.”

Tracy Myers"From my experience, customers generally don't call to complain or even give you feedback unless you put it out there and actually say, 'We want to hear from you.' I think more companies really need to do that, not just in the car business."

- Tracy Myers, owner 
Frank Myers Auto Maxx

Of course, superior salespeople will still follow up with customers, but Myers said this only enhances the dealership’s CRM efforts. “We do like them to call their customers back, but we realize at the end of the day, the customers are customers of Frank Myers Auto Maxx and it’s our responsibility to follow up with that customer,” he stated. The BDC makes note when customers report favorably on salespeople (who do not work on commission), and high customer satisfaction results in bonuses for those salespeople. “We’re trying to cover all the bases.”

Although Myers (who’s self-described as “a little bit of a control freak”) has a business development manager in place, he is also set up to be able to monitor everything though the store’s ProMax CRM tool. “Of course there’s no way I can review everything. I do spot-check correspondence … on a weekly basis. I spot-check phone calls coming in, going out.” This setup has been in place for close to four years now, but Myers said things are constantly being adjusted as needed.

Another CRM measure he has in place is a dedicated phone line for customer feedback, which he promotes heavily in the showroom. “We have signs hanging in the showroom saying, ‘If Uncle Frank ain’t happy, nobody’s happy. Call this number if you’ve got anything to say.’ It’s a toll-free number, it goes directly into the BDC and … if they call that number, that transcript is automatically forwarded over by e-mail to four members of the management team and me.”

The goal, he explained, is to give the customer a specific outlet other than just the basic switchboard number, so the dealership can hear firsthand about any issues and deal with them quickly and transparently. “From my experience, customers generally don’t call to complain or even give you feedback unless you put it out there and actually say, ‘We want to hear from you.’ I think more companies really need to do that, not just in the car business.”

Social Media and CRM
The realm of social media is still fairly new to dealers, and many are still determining the best way to capitalize on it. Many dealers tend to classify social media in the realm of marketing, but social media can be utilized as a customer relationship management tool as well—both for cultivating new relationships and maintaining existing ones.

“Social media, especially over the last year, year-and-a-half, has really become more relevant in people’s everyday lives,” said Myers. “I’ve got people I can reach 10 times faster on Facebook than I can calling them on the phone or with a standard e-mail, so I think if that’s the way they want to communicate, that’s the best place to try to reach them.” Myers is one dealer who has embraced social media and found it to be a very useful tool for customer relationship management.

“It’s something where processes have to be put in place; it has to be looked at on a daily basis,” he stated. He has Google alerts set up to e-mail him when the store is mentioned online, and the BDC monitors the dealership’s presence on social media outlets like Facebook and Twitter. While the dealership thankfully encounters few negative comments, any discovered by the BDC are forwarded to Myers and his management team, but Myers takes the lead in responding to such comments. “Processes and procedures need to be put in place … so everybody doesn’t assume that somebody else is answering it.”

Myers relayed a story of one customer relationship management issue that was handled almost entirely through Facebook. The customer posted on the dealership’s fan page that she had visited the store a couple of weeks before and the salesperson had been unable to help her, which she didn’t think was consistent with what the store had advertised. Within 30 seconds, Myers said the comment had been forwarded to him; he responded from his phone and asked for the woman’s contact number. It turned out to be a simple misunderstanding between the salesperson and the customer, but an incorrect phone number prevented the salesperson from reaching the customer after she’d left the store. “By her communicating with us and reaching out to us and us giving her the outlet to do so, we not only turned her opinion of us around, we sold her a car, and now hopefully she’ll be a cheerleader for us,” he said.

He is also using the store’s Facebook fan page to build new relationships with potential customers. His has purchased Facebook ads to push people who live in the same zip code as the store to the dealership fan page. Once they become a fan, that information is pushed to the store’s CRM tool, and the BDC sends an introductory e-mail and starts building the relationship. “We want to be in the front of their mind when they’re thinking about a car,” he said.

Jacqulyn Diteman"Now [customers] are looking at how they're treated rather than just price ... If you have 100 reviews and 50 of them are bad, and the dealership down the street ... has extremely good ratings, then who are [the customers] going to go to?"

- Jacqulyn Diteman, marketing coordinator 
Rairdon Auto Group

An additional measure Myers is undertaking is cross-referencing a list of people who visit the dealership with Facebook then sending friend requests to those they find. “Right now, about 85 percent of the people that come into our store have a Facebook account,” he stated. “They’re really surprised when they come to the store Monday and by Tuesday they’ve got a friend request from our fan page … We’re getting almost 100 percent of those people to accept the friend request, so that’s just another way to build that relationship.”

Myers said live chat can also be a great place to learn about customer issues and views chat as both a CRM tool and a sales tool “because we have as many questions about our warranties or our service department after the sale with live chat as we do on the phone.” He added that online communication like chat and e-mail can also be a less confrontational way for a customer to raise an issue they might not be comfortable bringing up in person or over the phone. It’s important to make sure the customer is able to communicate the way they are most comfortable with, and Myers said learning of issues by e-mail or chat is “much better than a Google Maps review or a DealerRater review … I think that we can fix any problem, but they’ve got to let us know about the problem first.”

Sherrell would also rather hear about a problem direct from a customer, as opposed to learning about the problem from a bad review of a Rairdon dealership. “Because of our online presence and that being the majority of our advertising, we want to make sure that … we have a good reputation out there,” he said.

Rairdon’s marketing coordinator, Jacqulyn Diteman, highlighted the integration of CRM and online reputation management. “Now people are looking at how they’re treated rather than just price.” She said one bad customer experience that’s discussed online “can destroy a year’s worth of advertising … especially now with the Google search engine. The reviews are attached to the listing.” It became necessary to be proactive with managing customer relationships.

“We’re online looking at stuff, making sure that we’re watching our reviews, making sure there’s no one upset,” Sherrell stated. “We might go a little bit farther to make the customer happy knowing that that happy customer can really affect the view of our dealership from online consumers.”

Staying on Track
Customer relationship management within a dealership cannot remain static; it must always be tweaked and modified for maximum benefit. However, some principles remain constant and should be kept in mind as dealers periodically review their CRM practices.

Commitment is one such principle. “You establish a plan, you establish your processes and procedures, and you commit to it … Then you track those results,” said Myers. “You may have to change some of the processes and procedures, but you either commit to it or you don’t.”

Buy-in is another constant CRM principle. Sherrell explained the link between staff buy-in and understanding how important proper CRM is to the overall welfare of the dealership. “What I’ve noticed is that if they really realize and value the customer as not only a customer, but as someone who is going to refer friends [and] family and has influence over online customers, you’ll typically get more buy-in,” he stated. “I think if your staff knows that, it makes a huge difference in making sure customers are taken care of.” The idea is reinforced by periodic training and spiffs for sales consultants who continually get good reviews on customer surveys.

Richards said one-on-ones with the salespeople are key to maintaining good CRM at Dream Cars Credit. “I’ve got some guys that were in the car business that never used a CRM [tool] before,” he said. Although he acknowledged that getting everyone to properly utilize the CRM tool has been “a tough haul,” training the salespeople and making them understand there are requirements that must be met in terms of customer contact has helped ensure accountability.

Michener acknowledged the advantages to automating certain aspects of customer relationship management, such as standard follow-up e-mails and phone call to-do lists. However, automation alone is not enough. Most important, she said, is “having a plan in place, making sure everybody’s accountable for everything that they’re supposed to do.”

Vol. 8, Issue 2