SAN DIEGO – Thirteen years ago, Brad Perry and Jonathan Ord began calling on dealerships to pitch their newly developed customer-relationship management system.
CRM then didn’t hold the importance to dealership operations that it does today, says Perry, who with Ord is cofounder of CRM provider DealerSocket.
“We’d get blank stares,” Perry says of those early visits.
Still, they managed to sign up forward-thinking clients who were interested in software that could systematically capture, record, sort and leverage customer information on a grand scale.
Dealership use of CRM systems surged in 2008 and 2009 when the recession hit and auto sales plummeted.
“When the economy went bad, dealers wanted to get the most from their customer databases,” Perry says. “Today, CRM systems are a key part of a dealership’s business. You just look at the trajectory.”
Perry handles DealerSocket’s technical side. “I’ve got a backlog of new product ideas from dealers,” he says at a DealerSocket conference for clients here. “It’s important to get that feedback on what dealers need to stay competitive.”
Ord oversees the business side. He says CRM systems help dealers stay in touch with customers, offering them relevant, timely and personalized information.
For instance, a system can crunch purchasing data to determine when a customer might be in the market for a new vehicle and what type of vehicle that might be. Emails with specific and rich content go out to them.
The same process relies on mining records of customer service history to drum up backshop business.
“When a dealer knows about me, they can sell to my sweet spot,” Ord says.
Dealerships also can use CRM to identify and contact customers whose vehicles are 3 or 4 years old, offer to purchase them and sell them as one-owner used cars, Ord says in noting a trend. “As dealer margins shrink on new cars, used-car sales are becoming more critical.”
Recalling DealerSocket’s early days, Perry says it was necessary for him and Ord to take a crash course in auto retailing. That became clear after original product demonstrations to dealers.
“They said, ‘Your stuff is great, but you’re not car guys and the lingo you’re using isn’t car-oriented,’” Perry says. “So we went into dealerships to watch how dealers sell and service cars.
“We worked for free so they wouldn’t fire us. Then we took what we learned and changed the software to be more automotive.”
