In an increasingly competitive new car market, any advantage you can gain over the competition, no matter how small, can make a difference.
Several key areas have been identified where many dealers are currently underutilizing their systems. The first is marketing. This can be a hazy area and often means different things to different people. Some dealers are happy to just send out the usual reminder letters, but others want to drill down to understand the source of the lead for every customer who enters their showroom.
This means they can identify the cost to the dealership of getting that customer onto the premises and can find cost effective ways in which to drive new business by contacting both existing and potential customers.
Keeping data up-to-date
“The two approaches are very different in many ways, but the extra effort expended reaps massive rewards in terms of profitability,” says David Hayward, managing director of MMI Automotive. But dealers need to get the data right as, without this, much of the work done is wasted.
“We had one customer who was sending out around 3,500 mailers and only 700 of the contacts were valid. The time and money wasted, both in terms of the initial mail piece and follow up, were extraordinary, especially as a simple data cleanse would have prevented what became an expensive way to damage the dealer’s reputation,” says Hayward.
Once the core data is right, dealers should capture new data directly on the system, whether it is basic contact details via the showroom diary, or checking customer information when a customer books in for a service. Hayward describes the DMS as a massive data warehouse and, if you know how to get the data out, the options for reporting are limitless.
The power of CRM
“Use this information to your advantage when planning how to go to market in the most effective manner. Advertising in the paper may not be the answer. Unfortunately, very few dealers understand the depth of functionality within their systems, regardless of vendor, and few have time to explore it,” says Hayward.
He believes that if dealers can harness the power of their management system it will lead to more sales, and more importantly allow them to identify areas in which profitability can be improved. “But dealers need to ensure that their staff are fully trained and, therefore, understand the power they have at their fingertips,” adds Hayward.
Over recent years the customer relationship management (CRM) aspect of the DMS has become increasingly important and most providers now build systems around a CRM module, rather than simply ‘bolting’ one on to existing software.
Research by Pinewood shows that during 2005, two-thirds of dealers were using outdated CRM techniques or not employing any form of CRM at all. According to the company, these same dealers usually failed to seen any growth in profitability.
“Most dealers spend a lot of time accumulating data about existing and potential customers but then do not employ techniques which maximize the return on investment,” says Geoff Miller, sales manager for Pinewood. He explains that dealers could benefit massively from even the most basic CRM activities based on the information stored in their dealer management systems.
#AM_ART_SPLIT# Use marketing to reach customers
Marketing is the route to get potential buyers into the showroom, but good customer relationship management will keep them coming back. Here knowledge is key, dealers need to understand the customer and be able to track their behaviour.
“Many dealers fail to get in touch with a customer when they have had their car for three years to see if they are thinking of buying a new one.
“We are not talking about advanced CRM techniques but the basics. Just adopting a few ideas could have a worthwhile impact on dealer performance. Our most successful users really push their DMS to the limits and use its capabilities to the maximum,” says Miller.
In Miller’s experience, paying more attention to CRM will always have a positive impact for dealers. He has come across dealers who never mailshot existing and potential customers to keep them informed about their new car ranges.
“It is up to them to ensure that they are doing everything that they can to fight back against the market trend and improve their own results,” he adds.
Making information accessible
Management reports are another key area of dealer management systems. The ability to see, at a glance, how the business is performing and which areas are doing well or badly is essential for the efficient running of a dealership. But again, this is an area that is often not used to its maximum.
Many dealers still have older style systems, which, although allow users to carry out basic functions, do not have the flexibility to help drive businesses forward. The key is to have the ability to find the most pertinent information and be able to view it in a simple and concise fashion.
“Dealers need to ensure they have a DMS that can integrate with standard modern business tools such as Microsoft Excel,” says Adrian Moss, sales manager at Ebbon-Dacs. “For some, the time is coming to upgrade, but it’s not all about simply upgrading your system. Dealers need to look at what they want to get from their DMS and what information is most important to them,” he adds.
Dealer principals and finance directors need to access data quickly and don’t want to spend hours looking through print outs of reports. They need to see the key performance indicators in front of them and a simple to read, on-screen report is vital.
Ebbon-Dacs has launched its new EDvantage internet-based dealer management system. It claims the system has three key advantages over conventional offerings in that it is completely customer focused, business process-orientated and operates in real time.
“The system has been a long time in development – five years – but this has enabled us to ensure that it uses the very latest technologies that will provide great scale and flexibility advantages going forward,” says Rob Wood, Ebbon-Dacs director responsible for EDvantage.
The system was designed partially in conjunction with Microsoft and uses a modular system approach. Features include a full multi-channel CRM application, which helps dealers to increase sales and helps retain customers for longer. The Microsoft connection means users can also fully integrate the DMS with any current and future Microsoft systems and programmes.
Meanwhile MMI Automotive has launched its new CRM tool, Voice Messaging, which allows dealers to send voice messages directly to a customer’s home phone or mobile.
Dealers can create a message, which can be used to inform or proactively market new vehicle launches and services to some or all of their database. It can also improve service to customers, reminding or alerting them to a deadline such as MoT or service.
The system also enables the customer to send a reply back, by pressing a particular key on their phone to register interest. Each reply is then automatically entered into the DMS prospecting diary, enabling the sales team to follow up.