CRM Tools and Dealer Controlled Financing
Wikipedia defines customer relationship management (CRM) as “a widely implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service.”
To see how the buy here pay here (BHPH) dealer and lease here pay here (LHPH) dealer can benefit, we can divide customer relationship management into its two main components: managing interaction with prospective customers and managing interaction with existing customers.
Managing Contacts With Prospective Customers
Not everyone who walks into your BHPH or LHPH dealership is ready or able to buy that day. Depending on the level of competition in your market, these prospective customers may be looking to shop at other possible sources of a vehicle, they may not have the down payment needed at that time or they may not see a vehicle that meets their needs on their first visit.
Typically, most dealerships have depended on their salespeople logging these potential customers on the dealership’s traffic log and follow up with telephone calls or letters. There are two possible places where this process can break down. First, salespeople may not log every prospect on the traffic log, and management may not have the time to monitor and make sure every prospect is logged. Secondly, without a well-organized follow-up program, salespeople may or may not be making contact with these prospects and using the methods that have proven most effective.
A CRM tool not only gives you the ability to maintain, track and analyze the methods used to follow-up with these prospects; a good CRM tool can also save time by scheduling follow-up for each prospect by salesperson and automatically printing any correspondence that needs to be sent that day. It provides a means for a manager to monitor the activities of his staff in maintaining contact with prospects until they are no longer prospects. That becomes more and more important for BHPH and LHPH dealers as competition increases. A good CRM integrated with your DMS can save time and boost sales by organizing your prospect follow-up.
Managing Contacts with Current and Past Customers
Managing contacts with prospects seems to get most of the emphasis in franchise and retail sales dealerships. Contact with people once they have made a purchase is secondary. These dealers still ask their salespeople to follow up with customers who purchase a vehicle to ensure customer satisfaction and try to build repeat business, but working prospects to produce sales is the main purpose for their use of CRM software.
That is reversed in dealer controlled financing (DCF). DCF is far more about collecting the payments that are owed you and less about making an initial sale. It is a proven fact that the better a dealership’s relationship with a customer is, the more likely the dealer will be able to collect the payments on that account with minimal difficulty.
The right CRM software can be an invaluable tool in helping you develop that relationship. It can provide a framework of regularly-scheduled contacts to maintain that connection and it can automate many of those contacts. It can remind you of birthdays, purchase and wedding anniversaries, and other scheduled activities. Creating an organized system of contacts adds value to the relationship and builds rapport with you customer, making collections easier and reducing delinquency and charge-offs.
After your customers have paid off their accounts, they become prospects all over again. Your CRM can help you maintain contact with your previous customers until they are ready to buy again. Regular contact that keeps your dealership name fresh in the customer’s mind will increase repeat and referral business.
Although a lower percentage of DCF dealers use CRM software than franchise or independent retail dealers, that is rapidly changing. More and more BHPH and LHPH dealers are seeing the advantages a good CRM can offer in maintaining contact with customers and prospects alike. The right CRM product will boost both sales and collections. Is it time you took a look to see how your dealership could benefit from a CRM program?
From Auto Dealer Monthly, Vol. 9, Issue 3