New Way To Follow Up

Customer relationship management (CRM) technology helps dealers capture the valuable customer data they need. But it's the follow-up process that generates profitable and referral business and long-term customers.

Yet customer follow up — a.k.a. business development — can be a big job. Understandably, many dealerships today lack the time, staff, budget, floor space and expertise to run their own business development centers.

Even some dealers using the latest CRM technology aren't maximizing profits because they don't have the resources to execute effective follow up.

That's why many dealers outsource business development rather than staff and manage their own CRM follow-up efforts.

CRM technology lets dealers leverage leads. It helps maximize the profit potential of prospects and customers, capture and leverage data from customer interactions at all contact points (phone, email, sales floor), track the results of marketing efforts, and automate sales, service and follow-up processes.

Showroom control, service and parts integration, campaign management and sophisticated data mining that turns data into dollars — CRM technology offers all of these things, especially when combined with the right follow-up processes.

Outside business development services can create direct mail and phone campaigns, contact customers, set up service appointments and schedule test drives.

The services don't present themselves to dealership customers as third parties. Rather, they act as extensions of a dealership's customer-service operation, directly representing the store and leveraging its customer data to capitalize on customers likely to be in the market for vehicles or automotive services.

A good provider of outsourced business development services should:

Here's a question that's been making the industry rounds lately:

Can dealers survive without CRM technology and/or business development services?

Some of them can, at least for now. But I think that's the wrong question.

The real question is: In the long run, can dealerships thrive without CRM technology and a business development strategy?

I doubt it, especially, given the difficulties of the current economy. Forward-thinking dealers are already capitalizing on the powerful combination of strong CRM technology and effective follow up.

A business development manager at a Florida dealership told me about his success in outsourcing.

His dealership sold an additional 19 cars the first month — sales directly attributable to appointments set up by the business development service they now use.

He says, “In the future, this is the way dealerships are going to be run.”

I think he's right.

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