The Dealership CRM Debacle: Garbage In/Garbage Out.
(This blog was originally written and published on another industry site in 2010, but still holds up. Read on.)
Please open up your wallet, pull out a $50 bill, walk over to the nearest trash receptacle, and throw away your money. What do you mean ‘no?’ Of course, it sounds foolish, but that is what your sales team is doing with your money right now. There is a financial cost associated with bringing every customer into your showroom. Every day (maybe every hour), a member of your sales team works with an in-store customer and doesn’t source them properly, essentially wasting the advertising money you spent to lure them to the dealership in the first place.
Next to a strong website and DMS, a fully-functional CRM (customer relationship management) tool is the most important piece of technology you can utilize in your dealership. Some Internet experts that use them well might place their CRM’s importance even higher. Most quality CRMs have the ability to keep track of the ROI (return on investment) you are receiving from your advertising budget.
However, this only works if each and every prospect/customer/lead/sale is properly sourced when being logged into the system. There is no quick fix. The only answers are training, dedication, and discipline.
I see it almost every day I visit a dealership. A customer is greeted by a salesperson and when that salesperson logs them into their respective CRM, they don’t even ask what brought the customer in. They assume. They choose on behalf of their customers. The most common CRM crimes I witness occur when salespeople are logging the customers’ source. That is why 80% of all of your logged customers are wrongly sourced as “Lives in Area,” “Drive-by’” “Walk-in’” “Phone-up’” or “Manual Add.”
[blockquote name=”Joe Webb” organization=”@zonewebb”]The most common CRM crimes I witness occur when salespeople are logging the customers’ source.[/blockquote]
Let me help explain why these should not be allowed as sources.
- “Lives in Area” – Wow. Congratulations, customer. Did you just wake up, realize that we are members of the same town, and decide to pop in and purchase a vehicle with no research? If that is the case, Mr. Dealer, I want your location. More than likely, they studied up ahead of time, sent in a lead prior to in an effort to keep you honest, or has even used your service department in the past. If the latter is the case, then mark them as a “previous customer.” Sure, it isn’t as a previous sales customer, but there is at least some validity to that source.
- “Drive-by” – Mr. Customer, did you spot this exact vehicle you are purchasing as it was nestled in amongst 100 other vehicles while driving past our store at 35 mph? If so, your eyesight is that of a fighter pilot. Certainly some outside influence made you drive into the dealership rather than a glimpse out of the corner of your eye or a rare muscle-spasm and jerk of the wheel.
- “Walk-in” – Did your dealership have a multi-million dollar mechanical moving sidewalk installed from different corners of the neighborhood to drag unsuspecting customers into your store? No? Was someone involved in an accident in front of your dealership and immediately hoofed it over to pick out a replacement vehicle? If you answer ‘No’ to these two questions, then there is NO such thing as a walk-in.
- “Phone up” – Where did the customer get the phone number? THAT is the source. It’s not like you receive calls saying, “yes, I’m in the bathroom stall at the local KFC and your number is here. Thought I’d call…. Oh, a new car? Yes, that sounds great.” Even if that did happen, the source would be “KFC Bathroom Stall.”
- “Manual Add” – I can only assume you chose this source because you manually entered the customer as opposed to its alternative which is….. what? Telepathically input the customer’s info?
These sources must be removed from your CRMs. Having these fairy-tale sources as options makes your employees lazy and throws your hard-spent advertising dollars in the trash. The saying is “Garbage in/Garbage out.” If you allow this to continue, then you are paying your CRM to put out junk and that is unacceptable.
Here are two places to help source and avoid the Dealership CRM Debacle:
At the meet and greet: The order of questions you and your sales staff are asking the customers must change. After the customer states their vehicle of interest, have your team respond with “Great. Have you had the opportunity to research this vehicle online?” If they say no, be thankful and tell them you can answer all of their questions, thereby making you the “Internet.” If they say ‘yes,’ say “Great. Which sites? Did you have the opportunity to contact our Internet department?”
The purpose for this is two-fold. First, whatever sites they researched/found the vehicle on, THAT is your source and you can use that site to your advantage (if it is a resource site) during the negotiation process with the customer. Second, you will learn if they’ve contacted your Internet team ahead of time and get the customer in front of the correct person who has already built rapport with them (and prevent skating). Now, we have heard the phrase “buyers are liars,” but in my experience, if you ask them right away without hesitation if they’ve contacted the store already, they will tell the truth. If you don’t ask, they simply won’t tell. Why should they show their hand if you don’t even do your job and ask the right questions?
In the finance office: Have a basic sheet of paper with the printed logos from all of your true advertising sources – (knowing that KBB/Edmunds can go to different lead providers – research by shopping those sites ahead of time). The finance manager then simply asks the customers to circle the place(s) that they conducted the majority of their research on or which site led them to contacting you. Once the customer acknowledges, just ensure that the correct information is being filtered back into the CRM.
Now when you run your reports, you will see how much the Internet truly influences your customers and you will learn your actual ROI from your advertising expenditures. It takes training, time, and discipline.
Our industry is battling to determine Return on Investment from our advertising expenditures. Is it first click attribution? Last click attribution? Is our only means to determine the worth of our vendors to monitor the consumers’ conversion paths on our sites, and our conversion goals in Google Analytics? Surely some manual effort like I described above can be implemented in the showroom to help us identify the defining influence. But alas, we know it is not that easy. ROI data should reside inside the CRM as that is where the majority of attributing sources would be held.
Don’t let your salespeople turn your CRM into a garbage dump. You spend too much money on the technology and the advertising to let that happen. Put the right processes in place. You’ll spend your money better find new ways to market to past (properly-sourced) customers. Your mother was right. It’s time to take out the trash.