Little Story, Sad But True

You wonder how a dealer can handle it all — sales, service, financing, parts, advertising, human resources and a rapidly growing information technology capability.

Add to that the need to manage relationships with powerful manufacturers and shoppers who sometimes know more about the vehicle than the salesperson.

As someone who has spent a good chunk of his life in the automotive info tech world, I look forward to the National Automobile Dealers Assn. annual convention. Much of the buzz at this year's convention in Las Vegas was about customer relationship management (CRM), the process and technology that helps build closer life-long ties to vehicle buyers.

But before I get into that, a little story:

A friend told me about a new car he bought in late 2003. Typically, we wound up talking about the buying experience.

He raved about the dealer's facility, a recently converted “big box” retail building. Imagine walking into a Wal-Mart or a Home Depot and seeing it transformed into a dealership with a monster showroom, a spacious customer lounge and snack bar, and the biggest service area you've ever visited. It was truly a “wow” experience.

Something of a computer geek, my friend paid close attention to the salesman's use of the store's Dealer Management System (DMS). What impressed him, in particular, was the use of a Web-based OEM system to track incentives, finance rates and price plans. These days, there's no other way to do it.

But my friend noticed something odd about the salesman's business card. No e-mail address was on it. When asked about it, the salesman (something of a computer geek, too) shook his head and shrugged.

They did the deal and in the weeks that followed, something curious happened. Even before he received his payment book, the third-party lender that financed the car purchase sent my friend a credit card offer. The lender had flagged his sterling credit history and bounced that information to its credit card operation.

What has he received from the manufacturer? Nothing yet.

From the dealer? A voice mail from a clerical person asking if “everything was OK.” The only written communication has come in the form of thank you notes from the salesman, including a home-made “newsletter” that offered recipes. But nothing from the dealer principal.

A highly sophisticated finance company is using advanced CRM tools to, in effect, raid the dealer's customer base. The dealer, in this case, is not even putting up a fight.

I told my friend he'll continue to receive the lender's pitches for credit cards, home equity loans, mortgage financing and maybe at some date even auto loan offers to be used at a dealership of his choice.

They do it with CRM, a tool that assembles a “global” picture of the customer. In automotive, that means buying habits, finance preferences, warranty history and some very targeted marketing.

In some versions, CRM is combined with broader market data to make predictions about the customer's behavior and likely purchase patterns.

Increasingly, CRM tools are being integrated into DMS systems, where they can make the most of data generated by the dealership, the manufacturer and inquiries from the Web.

CRM is not a substitute for real human relationships. But it is, at last, a powerful and cost-effective means of handling customer interactions for an increasingly sophisticated automotive retail business.

Dealers who understand that use CRM to strengthen ties to customers whom they worked so hard to bring in.

Matt Parsons is vice president of sales and marketing for the ADP Automotive Retail Group.