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When a customer comes into a dealer’s showroom, that’s a valuable chance to sell a vehicle. But the benefits of taking advantage of that opportunity run deeper, because that sale is also an entry point for selling other services and products, including financing, insurance, service contracts, extended warranties and accessories-not to mention ongoing service. It is, ideally, the beginning of a lasting relationship, and dealers need to arm their salespeople to succeed in those opening interactions, and build solid relationships with customers.

Thomas Wright, Industry Principal at SAP America, and http://www.sdn.sap.com/irj/sdn/weblogs?blog=/pub/u/251860903 [original link is broken] [original link is broken] [original link is broken] [original link is broken] [original link is broken] [original link is broken], Senior Scientist at Automotive Insight, recently got together to discuss how to support those frontline sales efforts at the dealer. Their discussion was facilitated by Ute Gramann, SAP AG, BPX Automotive.

Gramann: Tom, how do you rate the importance of sales-assistant software for dealers’ salespeople?

Wright: In Europe, it’s called sales-assistant software, and in the US, it’s called Dealer CRM. Either way, it’s about capturing and leveraging detailed customer data when the prospect is in the showroom. Knowing the customer is very important to dealers, because it increases the likelihood of the customer’s satisfaction during a visit. While Dealer CRM might not prevent a “walk,” it at least helps ensure that follow-up activities are initiated and that the customer, when returning, need not start the process over.

Gramann: So, the lead management aspect is important ….

Wright: Yes, both to drive the customer into the showroom, and to ensure that when he or she arrives, they are associated with the lead to enable measurement of the effectiveness of different lead sources. Effective Dealer CRM provides this by accepting leads from OEMs, aggregators and the dealer’s own marketing efforts, and then tying the lead activity to both the Internet sales desk and showroom control, where the customer is welcomed to the store. This process must be seamless, both to show respect for the customer and to ensure no “leakage” of information.

Gramann: Are dealers taking full advantage of these approaches?

Schwarz: Lead management and CRM are often are not conducted in an effective manner in vehicle retailing. With lead management, a sufficient number of leads have to be generated, as only 3% to 5% of leads result in a new car sale in the end. In retailing, various sources have to be taken into account beside the leads provided by the OEM: Events, leads from agencies and, especially, contact details from people visiting the showroom-even if they only buy an accessory-should be used. But it’s not just the number of leads that is important-their quality also has to be considered. So the OEMs and agencies should pre-qualify the leads they provide to the dealers. It is also important that the sales employee has guidelines for contacting potential customers within a given timeframe, such as two working days, which can be measured via a dealer management system. In addition, “lost” customers should be contacted by the sales department after two to three years, as there may be a chance to get them back to the dealer or to the brand.

By the way, we are often missing a link between sales and after-sales departments regarding prospective customers. Systems often do not link the two departments, even though there is a great chance for salespeople to sell a new car in cases where there is an expensive repair. The point is, the whole customer history has to be stored within one system to target customers individually, based on their information.

Wright: That integrated view is only getting more important. Like all consumer-facing businesses, automotive retail is becoming more and more brutal. The information available to the consumer tends to commoditize dealers, as the buyer can easily evaluate and make product decisions prior to obtaining multiple quotes for their desired vehicle. Thus, the dealer needs to start with initial receipt of a lead-a classic example of time-based competition–to engage the customer in a relationship that offers an opportunity to differentiate through knowledge-based service

Schwarz. To sum up, I would say that it is the task of the OEMs and the service provider to develop IT tools that support the dealer in his complex daily business, including new and used vehicles and after-market sales. Retailers have to be supported to make sure that they use their systems efficiently. Various benchmark projects we have done for the industry show that there’s room for improvement in car retailing.

Please note: This conversation is continued in The Dealer Sales Process: Enabling the Front Line (Part 2).

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