CRM Helps During Hard Times

When Andy Graff, sales director for Galpin Motors Inc., didn't call his mother on her birthday, he got an earful the next day.

But Graff also learned his store's customer-relationship management software was working well.

When he belatedly spoke with his mother, she lightly scolded him, saying, “The only person who cares enough to call is the salesperson who sold me the car at your dealership.”

She probably is going to tell 20 of her friends that the Galpin salesperson phoned on her birthday, but not her son, Graff quips.

The hero salesman had help from the dealership's CRM system. It leverages customer information and allows dealers to manage leads; personalize messages to customers; market to them and contact them at important times, such as when (using buying-behavior data) they might be ready to buy a new vehicle and on special occasions — such as birthdays.

“That's the power of CRM,” Graff says. “The salesperson doesn't know my mom's birthday, but it came up on his agenda and he calls on the prescribed day and wishes her a happy birthday.”

Galpin Ford, the nation's No. 1 Ford dealer and part of a 10-brand dealership group north of Los Angeles uses CRM software from DealerSocket Inc.

Some dealerships, facing recent tough times, have dumped their CRM software to reduce expenses. Graff warns against that.

“During this economic downturn, CRM has become more and more valuable because most dealers, ourselves included, are not spending more money to attract new business,” he says. “You've got to try to keep your existing business.”

CRM can range from an automated birthday-call reminder to sending emails during, say, a cross/utility vehicle sales campaign that targets customers who have previously purchased such a vehicle.

The National Automobile Dealers Assn. compares features of 14 of the larger CRM vendors on its website. CRM works best when it complements business processes and provides information that aids dealerships' daily sales activities, says Dick Malaise, NADA's chief information officer.

DealerSocket CEO Jonathan Ord has seen some of his customers drop CRM to reduce expenses — usually about six months before they go out of business.

“CRM in this day and age is absolutely needed,” he says. “If they don't use us, they should be using somebody. When they don't do anything on the CRM side, it's usually the tell-tale signs that they're just sticking their heads in the sand and hoping it will blow over.”

Although some dealerships are shying away from CRM this year, many others are adding the systems to enhance sales opportunities.

While dealers continue to cut costs, DealerSocket and other CRM vendors say their sales have increased this year as they add functionality.

DealerSocket, based in San Clemente, CA, is installing its software in about 60 dealerships a month, Ord says. The company added a call center this year to serve as a safety net, he says.

For example, an inbound service call to the dealership can automatically be routed to the call center if the service department doesn't answer after three rings.

Another CRM firm, Autobase Inc., of Indianapolis has set numerous record sales months this year, says Steve Lausch, marketing manager.

“No longer is CRM an early adoption type of tool,” he says. “This is mainstream. I often call it the central nervous system of the dealership. We help identify the best opportunities in the database through data mining.”

Autobase this year added Managed Marketing Services, which provides business consultants to conduct dealership database marketing. This is for dealers who may lack the manpower, time or understanding to leverage their CRM software for all its worth, Lausch says.

CRM provider OneCommand, of Costa Mesa, CA, hit a wall last year, did not grow for the first time and had to readjust, CEO Al Babbington says.

“What we're seeing now, both at the OEM and dealership level, is a renewed awareness, excitement and interest in doing a much better job of maintaining their own customer base, of generating higher levels of repurchase and higher levels of service frequency,” Babbington says.

Dealers are starting to reconsider resources that can give them a guaranteed return on investment, he adds.

This year, OneCommand is providing its Preference Manager to all of its customers. Consumers use this tool to inform dealerships of their preference, such as how they want to communicate with the store. Consumers who provide preference information spend more and come in more often, Babbington says.

ADP Dealer Services, one of the two largest dealership-management system suppliers, says sales of its CRM application are ahead of its “fairly strong” expectations.

With the latest improvements this summer, dealers easily can navigate between ADP's CRM and DMS offerings in a setup called ADP Drive, says Kirsten Von Busch, an ADP product manager.

When the economy nosedives, CRM sales increase, says Saphura Long, vice president of iCRM, the CRM offering from Izmocars.

The San Francisco-based company offers iCRM to dealers as a Web-based, on-demand service. Long has seen an upsurge in the number of inquiries from prospective dealers since mid-year.

Dealers used to give lip service to CRM, “but in today's market, they really can't live without it,” Long adds.