Mention CRM (customer relationship management) in a roomful of car dealers and reaction is likely to vary from enthusiastic interest to glazed-over indifference.

For all the true believers in the industry, there are still some jargon-wary skeptics wondering if CRM is something really worth knowing about.

It is. Forget the hype, forget buzzword fatigue; CRM is an essential competitive strategy for 21st century dealers. And E-business-powered CRM refines customer service processes and integrates consumer data in ways that should increase customer satisfaction and enhance dealers' e-business.

New e-tools and technology make it easier and more profitable for dealers to manage sales and showroom processes and maximize customer retention through a more consistent customer service experience.

CRM is a business strategy for finding and keeping good customers. It breaks down into three fundamental phases that chart the lifecycle of your relationship with a customer: 1) Prospect acquisition; 2) Opportunity management; 3) Customer retention.

Put another way: it's getting the lead in the first place, converting the lead, then building customer loyalty from that initial sale to create future sales. The ultimate goal is to win customers for life.

The power of it comes when you combine CRM processes with the right e-business technology and the right training.

With the advent of sophisticated e-business tools for dealers — including new data cleansing and data integration technology — sales and services processes can now be standardized, tracked and targeted to accommodate customers' specific needs at specific times. Anyone who can better coordinate their marketing and service efforts with consumer buying cycles stands to profit.

However, there are several crucial factors to consider.

First, CRM tools aren't magic bullets. If a dealership has poor customer service processes to begin with, all the technology in the world won't change anything. It's the old “garbage in/garbage out.”

However, if a dealership already has well-conceived, efficient and responsive sales and service processes executed by well-trained personnel, then the addition of enabling e-business technology is like a booster rocket.

A good lead management system (technology) and fast dealership responses to customer e-mails (process) that include all of the information the prospect requested (training) is a proven profitable formula.

It's equally important that technology providers supply dealers the right tools for the job. That means products that are easy to use with functionality based on the way dealers actually sell cars — not a software engineer's interpretation of how dealers ought to sell cars.

Rule number one: E-business tools for dealers must be intuitive and user-friendly. No matter how “cool” some software engineer thinks a tool's functionality is, it's worthless to the dealership if nobody on the sales floor can figure out how to work it.

In that sense, e-business tools have a lot in common with the automobile. A car is a complicated piece of technology, but you needn't know how the engine works or read a 500-page user's manual before you drive the vehicle off the lot.

E-business technology should function much the same way — turn the key, put it in gear and go. All the fancy buttons don't mean a thing if nobody can figure out how to drive the vehicle.

John Holt is president and CEO of The Cobalt Group, a leading provider of e-business software and services to the automotive retail market.