CRM tools that can serve both the big enterprise needs of automakers and dealers' small-business setups are nonexistent, and getting dealers to standardize on tools used by automakers is difficult.
Lack of coordination between automakers and their dealers is an obstacle in the auto industry's efforts to make customer-relationship-management investments pay off, according to executives gathered in Los Angeles for this week's Automotive CRM Summit 2005 conference.
The challenges in getting manufacturers and dealers on the same page with CRM efforts are numerous. CRM tools that can effectively serve both the enterprise needs of automakers and dealers' small-business setups are nonexistent, attendees say. Getting dealers to standardize on tools used by the automakers to manage sales leads is difficult. And because dealership groups often sell multiple brands of cars, their mixed allegiances further soil the efforts.
The situation is largely unique to the U.S., because dealers have much more autonomy. "When I talk to automakers overseas, they see the situation as some kind of incurable disease they don't want to catch," Forrester Research analyst Mark Bunger told the audience of 100 auto industry execs Tuesday. Bunger warned execs that they're going to have to do a better job of sharing data and extending their systems to dealers if they hope to develop more cohesive CRM programs.
But technical coordination is only the beginning. Rethinking the processes manufacturers and dealers rely on to collaborate also is key, said Ted Gambogi, director of eCRM at Caterpillar Inc., the $30 billion-a-year maker of industrial vehicles and engines. "We all know how to generate leads," Gambogi said. "We just don't know what happens to them after we hand them off."
Caterpillar realized that the long-standing practice of filtering leads from manufacturing down to sales outlets was creating that black hole, so it's reversed the equation by letting sales outlets dictate how many leads they need to meet pre-determined business objectives. That way, they only receive leads they can act on, preventing them from being overwhelmed by large numbers of leads that are likely to stagnate.
Simply getting leads to the dealers has been a problem for the automakers, which have far larger retail networks than Caterpillar. Volvo Cars North America had standardized on one software tool for all of its dealers to receive and manage leads, but it discovered that many dealers were going their own way, resulting in 38 different lead-management tools in use and undermining the parent company's standardization attempts. Now, Volvo has created a program for certifying dealer tools that will give it more control over how leads are managed at the dealer level, said CRM manager Elaina Verhoff. By the end of June, Volvo will have certified eight lead-management tools from which dealers can choose.
Meanwhile, American Suzuki Motor Corp. has chosen a different approach, creating a portal where dealers can pick up leads, said David Harris, E-business and database marketing manager. American Suzuki also has established what it calls a jump-ball strategy in which leads that aren't picked up by the targeted dealership within a certain amount of time are made available to competing dealerships on a first-come, first-served basis. "The only thing worse than losing a lead is to lose a lead to a buddy up the street," said Harris. "We've begun using that as incentive."
Getting leads into the right hands is only part of the struggle, Harris emphasized. Even more important is making sure the data in those leads is complete, and that the CRM program nurtures that lead until it evolves into a sale. "The bigger challenge is ensuring there are processes that follow up," he said. "If a dealer calls up and says he's having a problem, then I'm having a problem. He's telling me 'I want to sell a car, but I can't because of X, Y or Z.' It's my job to remove those barriers."
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