Welcome to Real World of CRM
By Steve Finlay Ward's Dealer Business, Feb 1, 2008 12:00 PM

In an ideal world, auto dealerships would use computer power to capture, record, sort and leverage customer information on a grand scale; track sales leads from beginning to end; and keep in touch with car buyers thereafter.

In the real world, it's different.

Information technology firms offer dealers an array of customer-relationship management software that systematically does all of the above and more.

But seldom are those systems used anywhere close to their capacity. It's sort of like driving a Chevrolet Corvette no more than 25 mph.

CRM systems are wonderful if used correctly. Trouble is, they're not being used that much, even at many dealerships that have splurged on them, with visions of entering the brave new world of auto retailing.

Panelists at a recent E.N.G. Automotive CRM conference discussed the level of CRM usage and integration at dealerships. It was a sobering seminar.

“In assessing CRMs at our stores, what we're finding is shocking, not surprising,” says Stephen Stauning, e-commerce director for Ausbury Automotive Group, a dealership chain. “There is a low level of integration on the floor.”

Some dealerships spend $2,000 to $2,300 a month for CRM systems that are barely used, says Paul McDonald, an information technology consultant and co-owner of Bountiful Mazda in Bountiful, UT.

“If all CRM does is turn into an electronic upsheet, dealers are paying a humungous bill without a proper return on investment,” he says.

McDonald recommends incremental implementation of CRM systems.

“The simpler you can make it, the better,” he says. “People can't absorb it all at once, not with the other responsibilities they have at a dealership. I'd never recommend a full-blown system for a dealership starting out.”

He partly blames CRM companies for failing to address the fact that many dealership employees are baffled, overwhelmed and frustrated when it comes to using the systems that require a proficiency user level.

“The vendors know what's going on and aren't doing much about it,” McDonald says. “But I don't want to throw vendors under the bus. Dealers deserve part of the blame if they buy a system that is way above their staffs' skill sets. Some responsibility belongs to dealers; they're the ones pulling the switch.”

He says many dealers still consider technology as an expense, rather than as a performing asset.

That's because most dealers, general managers and sales managers “didn't grow up in the Internet sales department,” says Michael Baker, CEO of Bob Baker Auto Group in San Diego.

He says a properly used CRM system, in conjunction with e-mail exchanges, allows dealership personnel to know a lot about a customer before that prospect enters the store.

“If they are buying an SUV, they should be referred to the parts department for running boards, but that's rarely done,” Baker says. “What about unsold warranty contracts? Customers will say, ‘I'll think about it.’ How many times do we follow up on that with an e-mail or phone call?

“We need CRM to get back to the service department, parts department and F&I (finance and insurance) office,” Baker says. “We've become so front-end oriented, and we remain there.”

Baker says dealers should use CRM systems to personalize customer contacts before and after a vehicle sale.

McDonald says that happens “perhaps 2% of the time” — and sometimes it is done so badly it becomes counterproductive.

“A birthday card with a misspelled name doesn't cut it,” he says. “To me, personalization means a handwritten note.”

Stauning says, “Our vendors have failed us in some ways. They write contracts, then walk away. We're paying for technology but under-utilizing it.”

Ralph Paglia, director of digital marketing for ADP Dealer Services, would like to see CRM providers and dealers convene to develop a set of best practices.

“A dealer told me, ‘A rising tide floats all boats.’ If we all decided what are the core competencies for a CRM system, it would benefit everyone,” Paglia says.