Dealership Communication Tools

Why hasn’t CRM sold me more cars?

crm-sell-carsAll of my DealerRefresh articles are inspired by something I have come across recently. This one is certainly no exception.  As most dealership employees whose job focuses around “the Internet” I too wear quite a few hats. One of those hats screams I am the CRM Dude at my dealer group. It is actually one of my favorite responsibilities because it is a never-ending cycle of developing better process, and I find that fun! In my travels from store to store, I come across the same question from frustrated sales people again and again:

Why hasn’t this CRM stuff helped me sell any more cars?

The answer is – it has! However, there are reasons why this question is being asked in the first place:

  1. Redundant Dealership Processes
  2. Too many customers
  3. Too many CRM’s/systems

These three things work together to destroy a dealership employee’s ability to buy into CRM.

I am very fortunate to have access to someone who I regard as “Mr. Dealership Process” who works for a CRM company and travels around the country. He is also a good friend who has helped me with all my CRM questions over the past few years. He asked to remain anonymous in this article, but I have to credit him with helping me write the rest of this.

1.  What does a CRM really do?

Technically it is a Contact/Customer Relationship Management tool, but we don’t use it that way.  We use CRM as a tool to capture and move “data”.  We rarely think of that data for what it really is; a live person that could potentially become a customer in the future. Instead all we want to do is make them disappear  because we get sick of seeing their names on our screens. However, real CRM power comes in the form of what it creates for the future. The Future….Yeah, the really bad F word in our vocabulary.  Unless we’re executives, we’re not thinking too much about the future. We’re in it for Now, Now, Now! Even managers and owners condition sales people to focus on NOW. Successful, veteran, sales people will tell you the real magic of sales is repeat and referral business that comes after 3-4 years of constant follow-up that cultivates a database or “live person base” without fail.

Pair a now culture (read Why We Suck) with something that makes us move into a planning culture and we’re doing battle.  Call it Old School vs. New School if you like.

2.  What does a CRM rely on?

The phone. For the vast majority of dealerships phone training is either a 30 minute Saturday morning meeting or a very expensive “trainer” from the outside. And when we were trained by our managers, in the dealership, it was mostly about what to do when the customer is at your desk, not about what to say on the phone or in an email. CRM works to get a customer to your desk where you are at your best. It does little for you when the customer is actually there.

If you get better on the phone, CRM will help you sell more cars. Plowing through the calls each day that are scheduled in the CRM by just clicking buttons will not help you sell more cars. You must work at your voicemail messages and appointment closing techniques each day if you want to achieve incremental sales success in the future.

3.  Creating Process

CRM makes us build process. We have to plan ahead for all those follow-ups we’re going to place on our staff. Does it make sense to “set it and forget it” when it comes to your follow-up processes?  This should be one of the biggest focuses your dealership has because this is where the rubber meets the road. Remember to put your best people on your biggest opportunity.

This is where buy-in comes from the strongest. Make sure each opportunity that is scheduled in the CRM adds value to the user. One of the biggest reasons sales people and managers don’t completely buy-in is due to the fact that scheduled CRM follow-ups are redundant or meaningless opportunities based on the current status of the customer.

Make sure that the decision makers, in your company, interview top performing sales people at least once a year to better understand what is working and not in regards to your follow-up processes. This will help make sure your organization is keeping pace with your staff’s experience levels and customer trends.

This is how you fix the two items I mentioned at the beginning of this article: 1. Redundant Dealership Process and 2. Too Many Customers on daily follow-up. It will dramatically affect overall dealership buy-in to the CRM.

Instead of thinking about it as how can this help me now, also think about it as how can this help me 3 years from now.

4.  Too Many Systems

If you have an ILM and a CRM, consolidate! There are way too many options on the market to continue to make some of your staff work out of multiple systems. There are even CRM companies that offer inventory support, service writing, penciling, and the list goes on and on. If your sales managers are working out of more than 3 systems (CRM, Inventory, Used Car Pricing, ILM, Penciling, OEM System, etc) it is time to re-look at what you’ve got.

With too many systems, you cannot expect someone to handle all perfectly. It’s tough to expect your managers to inspect what you expect if they have to login, learn, and master multiple systems; which is what it takes to hold the sales staff accountable.

5.  Expectations

What do you want your technology to do for you?  Did I mention process yet?  Did I mention planning for the future?

Okay, you want your technology and employees to sell more cars, but how do you want them to do it? There are some very simple questions you need to think through. How do you want a sales agent to bring a deal to a manager? At what point does a vehicle going through reconditioning get too old in the reconditioning process?  Have you addressed these basic things, and if so, how do you implement your wants into your CRM?

Here are few best practice “Expectations” to move your CRM effort to the next level:

  1. All customers logged into CRM and no deals started without a worksheet printed from the system.
  2. Managers will take turns reviewing CRM challenges and re-training the staff during each weekly sales meeting for at least 90 days. This practice will help advance the aptitude and overall adoption of the system)
  3. All salespeople are required to touch the manager’s desk at the end of each shift to ensure that at least 10 quality out bound opportunity calls are completed.
  4. All salespeople are required to ask for a preferred email address on each new customer. Any salesperson with an email penetration rate below 50% on Walk-In customers will be subject to immediate review.
  5. All Appointments listed in the CRM must be confirmed by a sales manager before 11:00a each day. (Is the customer actually coming and a second voice/face for the customer that is someone that can “Make the Decision”.)
  6. Any salesperson that fails to schedule at least two appointments per week from opportunity calls will be subject to an immediate manager review and phone technique critique.
  7. Salespeople caught moving opportunity calls for a customer out more than 21 days without cause in notes will be subject to the following:  a. First Offense (re-train) and b. Second Offense (verbal/written warning).

Question yourself.  Question your people.  Let your people question you.  Discover your expectations; put them in writing, post them in high traffic areas of your dealership, and then put them to work.

Conclusion

If you just skipped any of the 5 points, and just skimmed down to this conclusion, then you’re short-changing yourself. I bet there is something for you in each point that can be immediately applied at your dealership.

CRM, like sales, is simply a numbers game. The more customers you talk to, and the more appointments you set, the more you will sell. However, the numbers are playing against us these days.  The Up Bus isn’t rolling up anymore. So, is it time to strategically think about your process from soup to nuts and make your technologies work to your process expectations? Instead of just playing the numbers, set your staff up for quality too. But be careful not to overburden them further.

Who knew an argument with Jeff Kershner, in 2005, would lead to Alex becoming a partner with him on DealerRefresh. Where will the next argument take ...
L
Alex,

Great post! You certainly answered the question if not in a round a bout way. The fact is that the CRM process when used sells more cars not the software. Too many dealers and salespeople think that because they have the software they will automatically sell more cars, then they are disappointed when it doesn't happen overnight.

What they didn't do is focus on the process making it more efficient and work the system they just got the tool and kept doing the same ole thing with it.

The definition of insanity - "Doing the same thing over and over expecting a different result." and now with their new CRM tool they can do the same thing over and over much faster!

CRM should cut the ad budget and give salespeople the ability to sell more...WHEN THEY WORK IT. Not when they just input the customer info send out a few letters and make a call or two in the first few weeks of a sale.

In 1984 @ Ron Craft Chevrolet in Baytown TX. I sold 30 cars per month with nothing more than a Clint McGee GOsystem card file. The premise is the same with all CRM apps. "Plan Your Work & Work Your Plan"

Larry Bruce (@pcmguy)
C
Alex,
Nice work. Our CRM is the heart of our process as well as our marketing. The best part about it is I get to turn down marketing companies all the time when they promise to make the phone ring by email marketing, snail mail marketing, phone marketing or whatever else comes along.

With the information and email addresses cultivated over the years by salespeople and service writers we have the ability to make the phones ring constantly and consistently. With the only cost being the constant pain of reminding people to ask for an email address.

All the Automotive Technology products available do not make it possible for sustained growth without having a CRM that is used by employees and monitored and supported by management.
M
This was a great article and couldn't be more timely. We are switching CRM's to Vin Solutions January 15th and I've been setting up process after process for every conceivable situation and am ready, as the Internet Director, to work with the salespeople on using our CRM properly. The excuse was always about how bad Higher Gear was and made their jobs more difficult. This article really points out how important quality, consistent follow up is and not just "I completed my to do list. Aren't I great? What's for lunch". Since I got here after they've been using Higher Gear for 10 years it was not an easy switch but now that I'll be here at the ground level of the CRM I'll be able to get the most our the CRM and this article gave some great incite! Thank you!
R
The next generation requires customer experience management, (CEM). In 2010 those that focus on CRM as a process will fail, customers remember the experience not the relationship.
C
Ray,
Although I agree customers remember the experience... I believe this earns you the right to create and manage that relationship through effective process as well as CRM. Do you honestly think customers will just manage themselves because of their good experience?

I'll be the guy "failing" by focusing on creating great process and using our CRM in 2010....watch for us as Acton Toyota.
LMAO, Craig
J
The biggest problems is that dealers expect CRM tools to sell vehicles for them. CRM tools don't sell cars, people do, but CRM DO make people lazy. No one really considered just how rigid CRM tools are within the follow up process, which, considering the mass fluctuation in customer sales cycles, is a huge risk. Most CRM's simply set a follow up process that blasts out a note every 15, 30, 45 or however many days, which is the same for every customer - whether they are 3 days or 6 months away from a purchase. Also, dealers have unrealistic expectations of their sellers. If you just using a CRM system, thinking that more than 80 leads per month, per seller, is unrealistic. Even the best salesperson can't have over a 9 or 10% closing ratio handling 125 leads per month. You pay for the CRM and you pay for the Leads, it makes sense to pay for the process too. It will increase your ROI on every technology in the lead pipeline. There are process products out there that will maximize the results of your existing technology. Ever hear of ResponseLogix?
S
Great article Alex and very timely considering all that changes in this business.I agree that smart use of a CRM will help in selling more cars but it is still the processes that make it all happen. Expecting your CRM to do it for you is part of the problem. It;s like behaving poorly getting depressed about it and expecting to take a pill to get better, when you really need behavior modification to break the habits of what got you depressed in the first place.
Too many managers in this business expect a salesperson to just handle their clients with the system the dealership has in place that they really don't even understand. With all of the contact and communication tools out there now it is just plain laziness if you can't stay in touch with a customer and build a relationship with him, and the relationship is what it's about. Make it a good one and they will stay with you. Make them feel cared about and they will be back again and again.CRM's are great and make a job a lot easier in most cases but I have never seen one sell a car.
L
Very glad to see so many still focused on what get the job done and not side tracked with all the social media hype.
M
Larry,

What this post has to do with Social Media I have no idea so why anyone would anyone bring it up?
J
Social Media is an entirely other topic, and it is not "hype" that can be ignored. It's not 1984, and marketing a dealership or selling cars in the same way will lead to disaster.
M
I think everyone is living in some kind of dream world. Salespeople are inherently lazy and if left to their own devises would never pick up a phone, send a letter, an email etc. The fact that a CRM exists to "force" them to do a job is reason enough to have one and use it. I believe the point of the article is that it's not good enough to just set it and leave it but to be constantly monitoring your sales staff to make sure they are looking at their "tasks" as people. People who buy cars. Maybe now, maybe later but they do buy cars and the salesperson who maintains a good relationship with their customers (stemming from a good first experience) will be the ones who succeed. I have seen salespeople who never have to take a fresh up and just work their customer base. Unfortunately, I'm seeing less of that. If salespeople took their careers seriously, we wouldn't have to be talking about this. It's up to us, the managers, to insure the future of our dealerships!
M
Boy it was early when I first wrote this.

Larry,

What this post has to do with Social Media I have no idea so why would anyone bring it up? Personal agendas always get in the way.

Mitchell
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Speaking on both sides of the fence, Dealers and Vendors have a responsibility to making the processes effective. And Alex consolidating systems is a 1st step. Every store has a system or best practices. My dad had a saying in the business. "There is a million systems, but if you deviate, you no longer have a system" So a Vendors job is to understand what the Dealer wants to accomplish and set those processes in place, and if the Dealer gets off track, as a vendor you better monitor let him know his process is breaking down. That is how you become valuable to a Dealer as a Vendor and he looks forward to your input monthly as a Consultant. Dealers should hear from Vendor on suggestions that work in other stores. Do you know what the Dealers benchmarks are? How can you help him raise his penetrations? The biggest process improvement that we see in CRM is making sure the phones are integrated into CRM and those calls are set up on an immediate process or schedule. Over 60% of all your buisness will touch you by phone or Internet. Phone has been lost with the high focus on internet over the last few years. Dealers are now starting to get back to that most basic opportunity. Happy New Year everyone.
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    Lightnup
  • December 31, 2009
@Mitch

Perhaps two of your 2010 New Year Resolutions should be to, 1.)develop a better attitude toward your sales staff and, 2.)have your sales managers stop hiring lazy people who don't take their jobs seriously.

Managers who see their employees as "inherently lazy" tend to be condescending and somewhat dictatorial and end up with lazy employees who don't take their jobs seriously... and who harbor bad attitudes toward management. You get what you expect.

As a professional car salesman who had my own effective CRM processes in place long before CRM became a buzzword, and who was encouraged by management to view my position on the sales staff as if I were running my own business, I disagree with your characterization.

As an aside, valuing your salespeople with a good comp plan and not nickle-diming them with ridiculous packs and other little management "gotchas" will also help you keep motivated professionals who take their jobs seriously. (Not saying your store is guilty of this, but many are and you can usually tell just which ones just by walking in and seeing the caliber of the employees they are able to retain.)
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    Lightnup
  • December 31, 2009
Guy wrote: "Over 60% of all your buisness will touch you by phone or Internet."

Guy, can you please provide the study or documentation for this statement? It contradicts the theory that a vast majority of people arrive at the showroom without having called or emailed first.

Thanks.
J
There are a lot of stats out there, and if no one comes back with any I will dig some up for you. BIG key to remember - touching you by Internet cannot be narrowed down to just email. Most online shoppers are 2nd and 3rd generational shoppers and have realized that in-store email processes are really bad, therefore they avoid email. That drive many people to the phone and directly to the showroom. JD Powers stated that over 42% of used internet shoppers do not phone or email but go directly to the store. If you're still only counting emails to measure interactive advertising success you're setting up a risk.
J
And 60% is a low number - it is actually over 80% that will touch you by Internet alone.
M
First off, we have the best pay plan of all Acura dealers in our region so we don't "Nickle and Dime". Secondly, when I was a salesperson I had my own CRM called my looseleaf that I carried with me everywhere and followed up regularly so I know there are salespeople out there that can, and do, do a good job. The problem is there are less and less of them. Our sales staff, for the most part, have been here on average over 5 years and are good salespeople. They are not, however, above taking short cuts and "knocking out" their To Do list without actually doing the job. They cherry pick! I've been in this business 27 years and the caliber of salespeople have dropped significantly over the last few years (read Why We Suck http://www.dealerrefresh.com/car-dealership-career-principles/). As your new years resolution maybe you should go back to working in a dealership, any dealership, and see the quality of salespeople and then get back to me.
J
Alex, Great article. One could write a book on CRM and you've certainly nailed some of the better chapters. This would be a great forum discussion thread.

@lightnup, Thanks for the laugh this morning. You said what I was thinking.

As far as the 60% number by mentioned by Guy, I can validate some of that. I did a study on a little over 100 dealerships using CRM last year. I looked at the percentage of customers who were Walk-in, Internet & phone. Internet represented 40% of the customer base while, phone was around 30%. In any given day other than Saturday, most dealers are logging more Internet & phone-ups than walk-in traffic.
J
Again, phone, Internet and walk-in traffic is NOT mutually exclusive. Internet should account for 80+/-% of all your traffic, walkin, phone etc. If it doesn't your sales people are lying to you or you have a pay plan set up for sales people that makes sure they do.
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    Lightnup
  • December 31, 2009
Thanks John. I probably misinterpreted the use of the term "touch you," thinking Guy meant "contact" rather than exposure to the dealership.

@Mitch - I am in dealerships of all sizes, franchised and independent, working with their sales staff every day and, like you, I have been in this business for over 27 years. There are still professionals and not-so-professionals on the sales floor.

I just thought your original assessment was rather derogatory toward salespeople in general and I wanted to point out that it's management's responsibility to hire, motivate and, if necessary, develop professionals rather than lazy salespeople who don't take their jobs seriously.

Hope you have a Happy New year.
L
@Mitchell

Seems like every post I read lately has something to do with social media. In fact most of my posts lately have been about social media so, I was glad to see one that wasn't about social meida, that's all.

Who's agenda are you referring to yours or mine?
L
@John,

John in this context by "hype" I meant the obsession the industry seem to have with social media. Not a bad thing in fact I used it very effectively at motortrendsonline.com, and write about social media quite often.

Secondly I would argue that social media is a separate topic, in fact what salespeople should be doing with CRM they should also be doing with social media.

Engaging customers, answering questions, helping them with issues, and following up on concerns.

Is there something in the list above you would not have a salesperson do with CRM?

The only difference, the conversations that take place in social media do so in public rather than within your CRM system, the good and the bad.

While I DO NOT want to turn the comments in this post to social media, I am compelled to address comments that these things are separate, they are not and in fact social media is closer to CRM than it is to marketing.
G
In regards to stats, I was trying to be conservative on the numbers, thank you John & Jerry for jumping in. I think if you are in a College Town, Higher dollar demgraphic,High-end brand, the percentages will spike to larger percentages. I would say less than 30% of the Dealers can really tell you how many calls, ups, internet leads have come into there stores and created sales, and if it was a be-back or fresh-up with or without a CRM. I can tell you this year has changed a lot of people. Dealers, GM's, Managers, salespeople are starting to pay attention to the reports and functionality and are actually looking forward to our monthly calls.
R
Craig,
I believe in a strict policy concerning maintaining an active tool to manage prospects and customers. My point was those that manage relationship and do not understand the customers experience, will fail. I will monitor Action Toyota and report in social media your progress and throw in a few mystery shops to boot. Best in the New Year.
M
one i would like to add is that the CRM, any CRM, needs to remain a tool and not used as a weapon. if the sales staff lives in fear of the CRM because the GM, GSM, Desk and their Closer are constantly hunting thru it to find all the faults and then beat the sales staff up with them its soon loses its effectiveness. as we are training on the importance of making the calls we need to remember to repeat that making the calls is not a punishment but a road to the reward of a commission! sometimes its good to step back and realise that all the process management is only a means to the end, which is the sale of a car! I hope everyone has a happy, and safe, new year! all the best to you all ;)
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    Alex Snyder
  • December 31, 2009
That is an excellent point Mike. Thank you for bringing that up.
C
Ray,
Please check in on us...lots do.
As far as customer experience watching us here,
http://www.dealerrater.com/dealer/Acton-Toyota-of-Littleton-review-15322/

You may learn something.
M
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    Mark McKinney
  • December 31, 2009
Alex,

Your article was excellent. The message was clear. I also want to ditto Mike Correra's coments. Mike, you hit the nail on the head.

It's been a few years since I was a Sales Manager at a dealership. I may be old fashioned but, what ever happened to the 15 minute "One on One" weekly meeting with each Salesperson from their Sales Manager?

Back in my day as a Sales Manager all I had to follow up with and call for appointments was the daily log sheet. I would of killed to have today's technology like Autobase, Higher Gear, etc... My "One on One" meetings with each salesperson would of been so much more productive.

In closing, Happy New Year!
B
@Alex
In your dealerships, how many hours a week are invested in listening to the recorded calls that come in to the dealership? Are they graded or scored in any way?

I was interested in this because I come from a call center data management background. I know that dealers use CallSource and WhosCalling for tracking call volume from various ad sources. I was interested if dealers are using different scripts, A/B testing on improving phone skills and phone scripting processes.
E
Alex,

This was an excellent break-down; its one of the "car-guy" areas I'm not really involved with...

I hear a lot of the same rumblings from afar - I've already passed this along to a couple of people as well.

Thanks.
A
Brian,

Sorry for the late reply. We have two phone monitoring systems: ADP/Cisco and iMagicLab. We use ADP/Cisco primarily as an incoming call tracking system and iMagicLab records specific outgoing calls. As a company, we probably spend more time listening to the outbound calls because most of the inbound calls go to our BDC and the BDC manager listens to those moreso than our sales managers.

With roughly 150 people making a minimum of 8 outbound sales calls per day, the majority of sales call volume is on outbound. Thanks to the BDC, the largest opportunity is on the outbound side, so that receives the bulk of our focus today.

I have no idea what the overall management team is spending, in time, on call monitoring. I do know that time is spent on one-on-one training based off of what was monitored. However, I can say that we suffer from the same issue most dealerships do: managers don't know how to use the phone appropriately either. Most of our managers are experts at working with a customer while they're physically in the showroom, but have trouble effectively transitioning to a world where the customer has all the control.* This is a focus for me in 2010. Hopefully another DealerRefresh contributor (Jerry Thibeau) will be along to help me in that endeavor soon!

Does that answer your question? It is probably worth its own article.

*I have to condition this statement by saying that our sales floor is far better at working in the new world than they were even in 2008. However, traditional dealership training was in place for many of our managers (myself included) when we were sales agents, and that was a time when the Internet either didn't exist or was not a place you spoke to customers directly. Due to the economy changes I've found our management team to be more eager and open to learning and I plan to help them learn a ton more in 2010!
J
Alex -- talk about hitting the nail on the head -- bravo! Love the part about too many systems... especially in this era where many of the most critical responsibilities seem to keep landing in the desk managers'lap -- definitely seeing some overload. Part of the "promise" of CRM was to take what the best long-time salespeople were doing, and make it "easy" for salespeople to do the same, and easy for managers to manage that process for everybody... My boss told me once, many years ago, to "make it easy" (whatever I was doing), and I'd get results. No different with CRM. Again -- nice job!
S
  • S
  • August 20, 2010
I too like the post. People also need to remember its a team. So many times I see a customer called twice a week just came in and buy without warning. The owner said its a team,as long as the company gets the sale it does not matter who gets paid
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    Scott
  • October 23, 2010
It sure would be nice if this article had a "Print" and "Email to Friend" Feature.
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    Mel
  • February 21, 2011
Point #1 really rocks! It's true, it's not abt the technology, it's what you do with it!! And ditto on everyone seems to only focus on NOW! Hence, faces risk of losing their old customers as sales person go on a chase after new ones, and neglecting the old customers who bought from them, and probably would buy & refer...IF the sales person bothers to keep the connection going. :)
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    heidiadele
  • May 9, 2013
Thank you.
H