5 Reasons to Implement Automotive CRM for Maximizing Sales

Buying a new set of wheels is a love-hate process that often fills customers with unexpected fear and anxiety. CRM is the optimal solution and has not only become a bare necessity in this industry, but has also changed the means of customer interactions primarily for the industry’s own survival. Automotive CRM makes personnel management a breeze, optimizes lead proficiency and assists in developing an unbeatable competitive advantage.

A senior Gartner analyst (automotive practice) throws light on the fact that new vehicle profit margins are wafer thin. Additionally, in a growing multi-channel world, it has been discovered that customers are ultimately interested in the final product and don’t really care what kind of touch point was used to interact with car dealers.

This makes it essential for companies to ensure that the focus is not just on making a sale but to gain a loyal customer for life, in order to harness the massive potential pay-off in the long run. 

Senior executives in Price Waterhouse Coopers’ retail automotive operations department find that in the automotive industry, expenditures on marketing efforts touch almost 30%. To balance this out, it is vital to bring in excellent CRM and ward off bad sales.

CRM in the automotive industry is complex and despite its size, there are very few CRM software solutions which can be tailored to meet the industry’s specific needs. Vendors providing back-end management systems for dealers are not very quick in adding new CRM modules, thereby causing a dearth of definitive automotive CRM packages.

Traditionally, the distribution system of the automotive industry was such that the manufacturers and end customers were largely distanced. For most automotive manufacturers, their real customer was the 'dealer' and focus was on how to keep them happy. Once the vehicle reached the dealer and the OEMs’ dues were settled, the only interest that the manufacturers had was to ensure that the dealer succeeded in making a sale. Manufacturers are concerned with keeping their factories running, car production and shipping them - after which the final onus to sell the car is transferred to the dealer.

However, as progressing time gave birth to the much evolved customer; many manufacturers are today regretting having ever had this outlook. Having washed their hands off all proximity with the end customer, a large volume of customer related information was lost - customer preferences played a small role in vehicle manufacturing.

A senior analyst at Forrester Research points out that today cars are primarily built on a ‘push’ manufacturing prototype, making the transition to a completely customer centric / made-to-order philosophy quite tough. This is proven by the fact that when a customer walks into a showroom with a mental image of the exact car he/she wants to purchase, often, several compromises have to be made with regard to certain features or even something as basic as colour.

Capturing customer requirements efficiently
In order to achieve “The-CRM-built-car” there are two important steps which the industry needs to take forward. First of all, the manufacturing process flexibility has to be increased and secondly dealer-manufacturer integration must be improvised.

Another Forrester analyst suggests that during the manufacturing process, work like paint, seating or other last-minute-jobs can be delayed a little until exact customer preferences are conveyed. 

The biggest reason to concentrate on 'built to order' (BTO car models) is to do away with waste that occurs due to large left-over inventories. In an ideal automotive world, the manufacturer will start building the car only after getting specific orders from customers thereby leading to smart use of inventories and negligible wastage. This is the crux of CRM in the automotive industry - customer inputs kick start production.

Even though this may be resisted by dealers initially, a competent CRM will make life easier for dealers compared to the existing trial and error approach to inventory.

The idea is to have a fewer number of cars but more customized, thereby eliminating features or options that customers do not even want. There needs to be a shift from the stagnant mentality that quota fulfilment is more important than a satisfied customer. The ideal tagline for CRM in the automotive industry should be “Specify what you want and we will build it for you.”

Automotive Sales Teams and Customer Relationship Mapping
If sales reps believe strongly in the CRM system and can be convinced to work for the greater vertical good, they have the potential to bring in huge value to the customer and vendor relationship management process.
  • Foresee demand - The automotive industry faces an ongoing issue of accurate demand measurement, the solution to which is not just technological. Sometimes, certain options in cars are not even offered to customers, as a result of which gauging the demand for it is out of the question. Through a comprehensive CRM solution which incorporates social CRM, sales reps can make note of customer requirements/ interests and establish links between features and specific customer demands while simultaneously tracking competitors' offerings. This can then be put forth to the manufacturer for consideration. However, this is only effective with high user adoption. 
  • Track open activities - Customers often have strict preferences with regards to when they want to be contacted by sales people and often request pertinent written material/ reviews/ catalogues prior to further discussions or negotiations. This information and related tasks can be captured in the CRM system for each customer in the database, making it available through a central repository. In addition, escalation rules can be customized to ensure efficient follow-ups. 
  • Auto-populate campaign participants - Connections between customers and marketing programs can be established through an effective CRM solution - customer names can pop up against a particular marketing program or a specific segment can be suggested to optimize lead generation. 
  • Calculate ROI for new initiatives - Integrate with multiple systems and collate expenses and outcomes of various vendor/ dealer related marketing activities and incentives on a single CRM software to ensure accurate calculation of return on investment (ROI).
Achieving CRM Success in the automotive industryMarketing executives are discovering that mere implementation of a CRM system is not the only solution to woo, communicate with and retain customers. There is often a communication gap between customers and companies which IT systems alone cannot bridge. Studies reveal that auto company-customer interaction occurs about 1.5 times per annum which does not provide sufficient data to answer questions like which customer should receive what offer and product, when, etc. This brings forth a crucial fact – automotive companies need that approach to CRM that marketers and customers both can embrace with ease.

Automotive industry CRM programs must incorporate two vital principles in order to succeed –
1. Understanding purchase-cycle intimacy - A productive CRM system must dig deep into what drives the purchase decision before the purchase is made, and unlock real value by recognizing that different customers tread on different purchase paths.
2. Analyse ownership experience - Since different customers follow different paths of ownership, good CRM systems must establish a deep link to every individual’s ownership experience, their relationship with the automotive throughout the cycle of ownership. A single repository with details of all related purchases (services, AMC, insurance, accessories, etc.) and complaints will facilitate analytical insights and redesign of strategies to optimize customer experience.

For the above principles to work, it is necessary that sporadic technology programs be fused together in mutually complementary ways.

It is found that 65% of consumers make use of the internet at some point during the automotive purchase cycle. Interactive kiosks in dealer shops or venues like shopping malls are also becoming great mediums to engage customers. Web enabled systems also make it easily possible to capture crucial customer insights in the midst of the buying process. Internet activity is a fruitful path to achieve purchase cycle intimacy.

In the next few years..
CRM is going to elevate the future of the automotive industry. With properly implemented CRM initiatives, the future will encounter automotive web sites making adjustments according to customer profiles and preferences. It will also enhance companies’ abilities to achieve better purchase cycle intimacy when customer engagements move from the web into home entertainment hubs.

Successful automotive CRM systems will harness crucial customer feedback and data will flow back to dealers and manufacturers, thus enabling them to design the correct follow up campaigns to seal the gap between sales and marketing.

Good CRM means better multi-channel access and transparency with regard to offers, quotes and pricing. Tight dealer-manufacturer integration is also essential to avoid information overload and inconsistent customer details while collaboratively optimizing strategies and products.

Another critical factor for CRM success in the automotive industry is capturing a holistic picture of its leads, customers, partners and vendors. Social CRM is that tool which can be used across teams to sieve through comments and profiles thereby allowing careful and accurate analysis of new trends and customer expectations from Twitter, Pinterest, LinkedIn and more.  



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