Relationship Building Via Mutual Trust

When some people think about customer relationship management in the automotive retail business, they think of the manufacturers’ surveys and CSI scores that so many franchise dealerships focus on. An independent dealer doesn’t have to meet a manufacturer’s CSI goals, of course, but that doesn’t mean customer relationship management is any less important to the success of that independent dealer.

That is something Matt Ghazal has been very much aware of since becoming a dealer in 1995. Although he got his start in the business by focusing on indirect special finance, he eventually turned his attention entirely toward buy here pay here. Express Auto now consists of five locations in four cities in Michigan. The company originated in Kalamazoo and expanded to a second location, opened a store in the Battle Creek market in 2005, and most recently opened locations in Benton Harbor in August 2011 and in Niles in February 2012. Sales volume across all five locations averages between 150 and 200 units per month.

Express Auto
At Express Auto, a five-store BHPH operation based in Kalamazoo, Mich., follow-up is the most important aspect of CRM. Management wants to cultivate relationships with all customers who submit leads because many of them are weeks or months away from buying.

The buy here pay here business can present some challenges when it comes to customer relationship management, more so than for other independent dealers. Some BHPH dealers have found it difficult to cultivate healthy, trusting relationships with customers while having to collect payments from them and sometimes repossess their vehicles.

Ghazal and his team don’t seem to find this task as difficult as others might. His philosophy is, “Being able to build a relationship over time is as important as making the sale today,” and everything at the dealership is done with an eye toward that philosophy. The foundation of the relationship is establishing credibility and value for the dealership in the eyes of potential customers, which begins with the benefits Express Auto offers its customers. Ghazal said things like a limited warranty included with a vehicle purchase, a three-day “love-it-or-leave-it” policy, extended service contracts and other perks “all help give us credibility with our customers.”

Additionally, much of Express Auto’s marketing efforts are focused online, further helping the dealerships establish a credible presence with potential customers. “Reputation management is an important part of our online marketing strategy, so reviews, testimonials and our BBB accreditation are also things we take very seriously,” he stated.

To keep sales steady month after month, Ghazal and the staff at the Express Auto stores must maintain strong lead sources and do everything possible to cultivate each and every lead as best they can. “Industry-wide statistics show that walk-ins have decreased every year for the last 10 years. Our own tracking indicates this as well. We also know from our own experience that most third-party leads are expensive and ineffective for our business model,” he explained.

Ghazal said the dealership has all but eliminated the use of third-party lead sources. The one exception to that is the dealership’s use of a targeted direct mail program from Credit Mail Experts, which he described as “a unique program that helps us to identify and specifically target our demographic,” which he said has been “very effective” so far.

The addition of this direct mail program has altered how the dealership handles references. “We were also working our customer references aggressively after the sale; now we're treating them more as a targeted mailing list,” he said. “We now know that demographic and geographic targeting are the keys to making any lead source work for us. The more targeted, the better.”

He said that the dealer group’s other forms of marketing, such as a “street team that works local events of various types and develops some leads,” contribute to incoming lead volume but the group website and direct mail campaigns are the primary lead sources. All advertising directs potential customers to the website. Ghazal said, “Chat has been a great addition” to help generate leads on the website, and added that today’s technology has afforded more ways to effectively establish and develop customer relationships. “Emails, texting and chat give us more ways to engage the customer in conversation and develop that ongoing relationship,” he said. “Engaging is the key. We have to be talking with them, not at them. Dialogue has to flow both ways.”

Ghazal feels that follow-up is the most important aspect of the dealership’s customer relationship management efforts. “We are generating hundreds of leads each month from our own website now, but not all of these leads are at the point of making a buying decision. Up to 70 percent of them are weeks or months away from turning the corner from prospect to buyer. This makes effective follow-up critical.”

Currently, all incoming leads are handled by the sales staff, but this is changing. Ghazal is focusing intently on automating the lead follow-up process and stated that Express Auto’s general manager, Henry Ghazal, has been working closely with the dealership’s CRM provider, ProMax, to tailor the CRM tool to the Express Auto business model and automate part of the lead follow-up process.

For leads that are not quite ready to purchase, the goal is to institute an automated process “to move leads from active to lead nurturing, or drip campaigns, to maintain that ongoing touch with potential customers as they move through the decision-making process to the buying stage,” he said.

Matt Ghazal"Engaging is the key. We have to be talking with them, not at them. Dialogue has to flow both ways."

- Matt Ghazal, Dealer, Express Auto

For sold customers, he said the sales staff follows up about a week after the sale; then, they send out regular email blasts to those customers with specific promotions. “Last year we set up a program to reward repeat buyers that gives them perks throughout the year,” stated Ghazal. “Our sales team is now following up, setting service appointments for them to claim these perks, like free inspections and free detailing.”

Another part of the change in lead follow-up is the planned institution and implementation of a business development center, which Ghazal said will be overseen by Express Auto’s head of marketing, Cliff VanMeter. Ghazal believed that VanMeter’s approach to handling leads “will help make the BDC far more than a call center for the company.” He explained, “Sales[people] will continue to work most leads initially, but as we move leads from active to ongoing, they’ll shift over to the BDC. The BDC will also handle online chat and initial follow-up with our low-balance [client] list.”

In the meantime, he said, “Our focus now is on referrals and repeats, as well as generating new leads from our own website, then following up effectively with a plan that is specifically tailored for each lead type. We believe that the ability to track effectiveness and monitor contacts effectively is what will push us to the next level.”

Although the dealership is working to automate follow-up and email blasts are an important component of their sold customer follow-up, Ghazal emphasized that it is also important to not spam the customer in order to maintain a relationship based on mutual trust and respect.

“In the same way we want to nurture certain leads from prospect to buyer, we also nurture customer relationships,” he explained. “It’s also about maintaining professionalism in all our contacts with customers, not forgetting how important they are, and treating them with respect. We don’t spam them, so they don’t automatically tune us out.”

This helps when it comes to collections and repossessions. Ghazal said Express Auto has never used collection devices like starter interrupts or even GPS trackers. “We’ve never used them or have had a need to use them,” he stated. “We feel that we can do without them in small communities like ours.” He said that he has nothing against the use of such devices but felt his dealership could get by without them “by having good underwriting and good follow-up with the customer before, during and after the sale.” He added, “We have a relationship with them and there is mutual trust.”

That mutual trust goes so far, in fact, that on many occasions when a customer cannot keep up with their payments, it is not uncommon for the customer to agree to a voluntary repo and turn the car back in to the dealership. “We’ll hold onto the car for 30 or 60 days until they get back on track and we’ll give them the car back,” he explained. He said their customers trust them to hold onto their vehicles until they can get back on their feet, and the dealership trusts the customers to get current on their payments as soon as they are able. It is something that has worked well for all parties. “Our goal is to keep them in the car, not take it away from them. We win when the customer wins … We have a vested interest in making sure that they succeed in their loan, and if we have to work with them a little bit to get them back on track, we’re willing to do that.”

Vol. 9, Issue 7

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Kimberly Long

Kimberly Long

Assistant Editor

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