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Auto News Digest CRM Success

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Auto News Digest CRM Success

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    Auto News Digest CRM Success Auto News Digest CRM Success Document Transcript

    • Article Archive Page 1 of 2 3/4/2008 CRM Success, Ralph Paglia In August 2005 I had the privilege of going to work for the largest sales volume and revenue Chevrolet dealership in the world, Courtesy Chevrolet in Phoenix, AZ. Based on my previous 24 years of experience in developing "CRM Programs" for both dealerships and car companies, I knew that effectively communicating the concept of a CRM Profit Center to Courtesy's entire management was one of my first essential objectives. This brief article was originally used to introduce Courtesy Chevrolet's management team to the 5 most essential results measurements that must be tracked if ANY dealership is to be successful in managing their CRM activities as a source of incremental profits... A CRM Profit Center. view article http://www.automotivedealersnetwork.com/ArticleArchive.html 3/4/2008
    • CRM Success http://www.automotivedealersnetwork.com/Articles/CRMSuccess.html SUPERIOR DEALER SOLUTIONSsm CRM Success(continued) Let me begin by assuring you that dealerships which have been successful with CRM from a Profit Center approach usually develop additional measures to these 5, but the more sophisticated measurements are not useful without these five. Additionally, keep in mind that these 5 key measurements (metrics) must be tracked for each category of CRM activities. There are many sub-categories, especially in Service CRM that we must track, but here’s an illustration that displays the 8 general CRM categories: As you can see, there are 4 Inbound (customer initiated) and 4 Outbound (dealer initiated) CRM Process Categories. At the dealership management level, a summary report of CRM activities within each of these 8 buckets should be reviewed weekly, or at the very least monthly. I also want to point out that the Inbound Showroom category is best looked at from a customer information capture perspective within an overall CRM program. For every other type of CRM Process Category, here are the 5 Key Measurements: Quantity of Customers Contacted within the measured time period (monthly is most common) Quantity of Appointments Scheduled for a Showroom or Service Visit to the Dealership Quantity of Customers included in Metric #1 that showed up at the dealership for Sales or Service, whether or not they had an appointment included in #2 The Number of Vehicles Sold to Customers in #3, or the Total Parts and Labor Revenue from all RO’s written to the Customers included in #3 The Total Gross Profit (front and back) on the Vehicle Sales in #4, and the Total Profits by Parts and Labor from the Repair Order revenue measured in #4. It has been my experience that although just about every manager sees the importance of measuring these 5 results of CRM activities within each category, but other than Internet, very few dealerships do it. Then there are the dealership managers who “get it”… These are the ones that show up at one of our CRM seminars and bring these 5 measurements with them, broken out into several categories of activities or CRM campaigns resulting from data mining programs. And, the ones that are in the top 10% 1 of 1 of all dealerships in regards to CRM performance will analyze each CRM category and data mining 3/4/2008 8:02 AM
    • CRM Success Page 1 of 3 SUPERIOR DEALER SOLUTIONSsm As you can see, there are 4 Inbound (customer initiated) and 4 Outbound (dealer initiated) CRM Process Categories. At the dealership management level, a summary report of CRM activities within each of these 8 buckets should be reviewed weekly, or at the very least monthly. I also want to point out that the Inbound Showroom category is best looked at from a customer information capture perspective within an overall CRM program. campaign with some of the following performance ratios that are made possible by these 5 key metrics: http://www.automotivedealersnetwork.com/Articles/CRMSuccess.html 3/4/2008
    • CRM Success Page 2 of 3 Without the 5 Key CRM Measurements, we could not see these analytics, or use them to manage our CRM activities. But, why are these performance ratios important? Let me list some of the more basic reasons and a few examples of how managers in dealerships use these ratios: Appointments Made to Opportunity; this is simply the volume of appointments generated by that specific CRM process or campaign divided by the total number of customers contacted. Whether this is an Inbound or an Outbound CRM Process, the percentage of appointments generated reflects the effectiveness of our process execution and the techniques or tactics used. For example, if Salesperson #1 takes sales calls 6 hours per week and generates 5 appointments scheduled from 20 phone calls, he has a 25% appointment ratio. If Salesperson #2 takes 30 incoming sales calls, and generates 6 appointments, then he has a 20% appointment ratio. Dealer Visits to Appointments Scheduled; this is in most cases the “Show Ratio” on appointments scheduled. However, there are some stores where the volume of customers contacted through a CRM process that show up at the dealership will exceed the total appointments scheduled, This results in a Show Ratio exceeding 100%, which is an indicator that the CRM process being measured is not focusing on seeking agreement from the customer to come into the dealership. This ratio should never be 100% or higher, which indicates weak appointment seeking tactics within that category. Likewise, if we see a 50% show ratio, then we need to establish better appointment confirmation processes, such as an email confirmation of the appointment with door-to-door directions to the dealership from the customer’s address. Dealer Visit Closing Ratio; for the Sales CRM Categories, this performance measurement evaluates the effectiveness of your sales department’s appointment reception and sales processes. If we see that Salesperson #1 has handled 20 Internet Sales Appointments that showed up in a month, and sold 5 cars, then he has a closing ratio of 25% on that type of appointment. If Salesperson #2 handled 20 Internet Sales Appointments that showed up and sold 10 cars, then #2 has a 50% closing ratio on Internet Appointments that show up… Who do you want getting these appointments in your store? Profit Per Customer Contact; this analytic allows dealership managers to see the relative value of each CRM Category with each other category. For example, if we have a limited staff of people available for outbound CRM campaigns, we will assign them to the Outbound CRM categories that have proven to be the most profitable. When those high profit activities have been completed, we can tackle the lesser profitable ones with any remaining time. Let me close by showing a partial illustration (Outbound CRM only) of the 5 Key CRM Metrics listed in a simple Excel Spreadsheet format: http://www.automotivedealersnetwork.com/Articles/CRMSuccess.html 3/4/2008
    • CRM Success Page 3 of 3 Ralph has held positions such as OEM Partnership Executive for Reynolds and Reynolds, CRM/eBusiness Director, New Car Sales Manager, Used Car Manager, Ralph Paglia F&I Director, General Sales Manager and General Director – Digital Marketing / ADP Dealer Services Manager. He led the development and design of email: RPaglia@AutomotiveDealersNetwork.com nationally implemented CRM and eBusiness programs for Ford, Honda, Mercedes-Benz, Toyota and other car companies. He also designed Ford’s BDC program Mercedes-Benz StarLeads CRM system and the Mercedes-Benz BDC. Copyright © 2008 Automotive Dealers Network. All rights reserved. Receive our E-Newsletter http://www.automotivedealersnetwork.com/Articles/CRMSuccess.html 3/4/2008