For an example of what CRM is all about, you only have to look at Tesco and all those ‘extra’ benefits it’s obtained by drilling down into consumer behaviour. From its roots as a food retailer, the company has exploited its bank of customer information - via ‘loyalty’ cards - to branch out into clothing, electrical goods, financial services….well, you name it and Tesco now sells it.
Study the enterprise shown by Tesco and other top retailers and it becomes clear that automotive dealers have a lot of catching up to do.
The most important aspect of CRM is of course ‘relationship’. A relationship is a connection and this connection, in a business context, is usually between a person and a business organisation. If CRM is to be effective, the business needs an insight into customers' wants, needs, lifestyles and behaviours so that it can develop a strong relationship with them. If the business achieves this goal and uses the information effectively, it will:
So how can a dealership achieve these rich rewards?
Research shows that most dealers operate on a transactional basis with customers and prospects. This means that the focus is on the ‘need of the moment’ rather than on a range of customer requirements over time. For example, many dealers ‘sell’ an MOT or a repair without considering the next service or the next vehicle.
Good CRM is not just the domain of high-tech multi-nationals utilising complex and expensive IT technology and systems; it is the lifeblood of every business. Basic CRM systems could be operated using paper alone; the issue is not the technology but the recognition to regard every customer’s touch point as an opportunity to build a relationship. Service advisors talk to customers about their vehicles, but not about the customers themselves. Sales executives embark on product presentations without knowing who customers are, and without asking enough questions about customer’s wants and needs. It is therefore no surprise that dealer databases are devoid of the essential ingredients of effective CRM, and contain only the contact details that are required to invoice the sale of the vehicle or the service provided.
If good CRM is at the heart of business success, what can a dealership do right now?
The answer depends on the strengths and weaknesses of the CRM system in place today, and therein lies the first issue on the road to improvement. Many dealership managers are often unaware of the extent of the problem, the size of the lost opportunity and the action that should be taken.
Carrying out a CRM health check is a great starting point, and it’s important that the dealer principal is personally involved. Consider current behaviour and processes at each customer touch point, for example:
Having evaluated the situation, it is then possible to develop a CRM strategy that involves the whole dealership. In this way the jigsaw is pieced together by the team as a whole, and can be updated as customers’ needs change over time.
Will Landon is specialist projects manager with TTL consulting, established 10 years ago and working exclusively in the automotive industry, focusing on improving dealer performance. For further information contact Nikki Perham on 07971 784905 (website www.ttlconsulting.co.uk).
Loyal to the cause
Even in the internet age, customers still love to find organisations to which they can be loyal, according to a new book about the relationship between businesses and their customers.
The book's findings contradict the common view that consumers are increasingly fickle and are apparently never more than a mouse click away from buying from a competitor. As co-author Lyn Etherington explains: “In today's confusing and fast-moving business world, consumers are frequently bewildered and stressed by too much choice.
“Our research shows very clearly that consumers - and business-to-business customers - are delighted when they find a supplier they like, trust and feel really comfortable about sticking with.”
Central to the authors’ argument is the principle that there is a definite similarity between the loyalty people give to their friends and relatives, and the loyalty they bestow on organisations they trust. Such organisations are highly likely to be able to win a 'price premium', because these loyal customers attach greater importance to quality than to achieving the lowest price.
The book includes observations from people who head organisations that are known for winning customer loyalty. For example, Sir Terry Leahy, chief executive of Tesco, is quoted as saying: “What creates loyalty is how much we understand your life, and what we do that helps your life.”
Customer Loyalty, a guide for time travellers, is published in hardback by Palgrave Macmillan (Recommended price: £25).