Automotive CRM

I would like to throw a question out to this community – does the automotive marketing "discipline" lack focus? Let me give you some background for my question...

Earlier this month, I had the opportunity to attend and also speak at the Thought Leadership Summit (TLS) 2010 Automotive Customer Centricity Summit. The topics included:

• The Near Term Future in the Auto Space (Thilo Koslowski, Gartner)
• Integration of CRM Data and Transactional Information (Chris Cawston, SCI)
• Hyundai Motor America Positioning and Growth (David Zuchowski, Hyundai)
• Localized, Data Driven Marketing (Lucette Mercer, Comcast)
• The Evolution of Lead Scoring (Yours truly!, Polk)

It was an excellent experience and as always, I enjoyed spending time with others closely engaged in the automotive marketing space. This is the fourth TLS conference I have attended, having chaired the event the previous two years.  I have participated in and presented at many similar conferences. Invariably, I have seen many interesting marketing ideas from/for OEMs, agencies, and dealers. What one rarely sees, is any research or strategy or plan detailing what activities are going to have the most impact on the consumer and generate vehicle sales and/or service. For example – is it more important to run a highly efficient owner data management and communications program,  or is it more important to have well trained staff within the dealership that know how to nurture and close the sale? 

So, to restate the question, what should be the focus of all these billions of dollars that are spent on automotive marketing, assuming all players – OEMs, dealers, agencies, and vendors -- are working together? (I know it is a huge, somewhat unrealistic assumption, but just go with it for now...) I am not asking which media is more effective or how should we approach social networking -- I want to know what, in the whole process of driving consumer interest and sales, at all levels from the OEM to the dealer, is the most important activity, maybe what is next most important and why. If this could be discussed, understood, and validated, then those that execute guided by that discipline would win. 

Posted by Mike Spadafore, Manager, Consumer & Commercial Portfolio, Polk (06.17.2010)

The National Automobile Dealers Association (NADA) Convention in Orlando, FL, is next week and customers, colleagues and industry suppliers seem less cautious and more optimistic about the industry trends for 2010.

And why shouldn’t we? New vehicle sales forecasts have continued to inch up to the mid and high 11 million ranges. New vehicle models have been launched with enthusiastic responses and early indications are a good start for January.

The word from dealers and dealer groups in 2010 is to capture consumers and households that have been orphaned from the dealership closures.

For new and used vehicle sales, or parts and service transactions, dealers know the importance of extending outside of their customer base and staking claim for new market share. Finding these prospects and transitioning them into customers is a key goal Polk is hearing from the dealers attending NADA. 

So what are the suppliers to dealers saying? The allied industry suppliers, like marketing services and automotive CRM companies, new & used inventory stocking tools and consumer portals, are all looking to integrate objective market data into their applications for helping dealers make good data-driven decisions. The days of disparate data bases and silo reporting are over. This method simply does not allow the industry to act quickly and economically to target audiences and individuals who are in the market to purchase.  Dealers are telling the suppliers to consolidate this data into an easy-to-use application so they can go to one spot and evaluate where to invest their automotive marketing budget, in what channels and with measured ROI.

So, what will be the buzz at NADA 2010? With a record number of workshops and companies exhibiting many of the tools mentioned above, I think we are going to see dealers that are looking for their suppliers to provide better methods for integrating the different market data while providing them and their employees more effective, economical and efficient ways to capture and convert consumers from their current data bases, as well as orphaned prospects that need a "new home" for their transportation needs. I'll report back after the show and let you know the outcome—stay tuned.

Posted by Brad Korner, Director - Client Sales & Service, Automotive Retail Solutions, Polk (02.02.2010)

With the market tsunamis of 2008 and 2009, dealers and OEMs who have weathered the storm are viewing their business and markets differently than the earlier "roaring 2000s."

When new vehicle sales shrink from 17 million new units to 10.5 million, the overall cost structure of the retail channel and consumer spending compresses at the same rate. Dealerships, agencies, lead providers and CRM companies must adjust their automotive marketing efforts and budgets to address the new volumes of new and used vehicle sales, parts & service and Finance & Insurance penetration. The pure numbers from a customer traffic and transaction point are stressful, and the resources and data used in the past will not result in the same level of sales renewals and fixed operations retention.

So, how do dealers and marketers acquire new customers at a cost which is acceptable to their P&L requirements? They use Budget Prospecting to acquire new customers from the pool of orphan owners, first-time buyers, non-traditional loyalists and social network influencers.

Having the opportunity to attend conferences like Driving Sales and J.D. Power has provided me with a number of insights into the dynamics of our new retail environment and how to transition to the dynamics of budget prospecting.

Digital marketing, media spread and prospect targeting are now sciences which take constant feeding and balancing for customer retention. The constantly changing population base requires retailing efforts to focus on a combination of targeting points to effectively reach new prospects with pertinent and valuable offers, advice, community support and service to earn, retain and grow a business relationship through social networking.

To survive as one of 15,000 franchised dealers, the discipline of building prospects outside of your DMS name file and CRM marketing database requires significant effort for capturing the consumers at the bottom of the funnel. Also critical are consumers in the "lost zone" of orphan owners, first-time buyers and consumers who can be influenced on where to service their vehicles or purchase their next new or used vehicle.

All of this must be done with a cost per acquisition that meets the financial and ROI requirements of dealers, agencies and OEMs. Those who balance lead acquisition with "budget prospecting" will achieve long term growth strategies for their market and brand(s). They will continue to adapt and adjust to this changing and challenging market by growing sales, profit and market share. All of these "scorecard" evaluation points are keys to the health and ongoing transition and growth of the automotive retail channel.

Posted by Brad Korner, Director - Client Sales & Service, Automotive Retail Solutions, Polk (12.3.2009)

In my last blog post, I shared two critical dealership survival strategies for today's economic slump: 1. Know your market and 2. Obtain a fair and objective assessment of your dealership facility. Following are two additional steps that all dealers should take in light of the current automotive industry challenges: 

Step 3: Maintain a steady and open dialog with your OEM and understand your dealer agreement: In most countries, the only way new vehicles can be sold or have warranty service performed is through a franchised dealer. Accordingly, auto companies are continually seeking to optimize their dealer networks by evaluating and scoring such items as sales performance, customer satisfaction and financial strength. Through open and direct communication with their OEM's field or home office personnel, dealers need to be in tune with their OEM's network strategy and how they fit into it.  Just as every college student knows what their GPA is, every dealer needs to know what their performance scores are with their OEM. Any shortfalls need to be addressed with a corrective plan.

While listening to the recent Capitol Hill testimony regarding U.S. dealer terminations, it became painfully clear that many dealers either didn't read or understand their dealer contracts to know what was expected of them. Most don't read it until there's trouble.  Dealers need to thoroughly understand every facet of the contract by reviewing it with either their field rep or business attorney.

Step 4: Take care of your current and potential customers:  CRM, business development centers and effective lead management are more than just industry buzzwords; they are the most important activities a dealer can and should undertake to ensure survival. Many dealers have told me that following up with existing customers is the major initiative getting them through these tough times. 

Customers now expect basic conveniences like service shuttles or free overnight service loaners. Dealers that don't offer these and other customer perks aren't even in the game. Customer handling may get a little lax in a 17 million unit industry, but it's importance cannot be overstated in a 10 million unit industry.

The economy will eventually recover, but the "good old days" and "boom times" for dealers may never return. The future for a dealer includes increased competition from existing dealers and new entrants (e.g., Mahindra, Geely, Cherry, Fiat and the "new" Saturn), continued economic pressures (fluctuating oil prices, credit & real estate) and a more discriminating consumer with lofty expectations. The days of "Mom & Pop" dealerships are long gone, and going forward, the successful dealer must be sophisticated, technologically advanced and competitive in all aspects of the business.

Posted by James Dimond, Vice President of Global Network Planning, Polk (07.29.2009)

I recently had the pleasure of participating in the Automotive Customer Centricity Summit 2009, hosted by Thought Leadership Summits (TLS) in Marina del Rey, California. We heard from some of the most respected thought leaders in the industry on the topic of Customer Centricity – the evolution of automotive CRM. We witnessed how Collier Automotive Group leverages technology to improve the showroom experience. And, the aftermarket showed us how collaboration and vehicle personalization can create not only profitable customer relationships, but can drive brand loyalty by appealing to an individual's need for self-expression.

Tactical efforts to improve customer experience are important. But, I feel that the fundamental challenge in the current automotive industry is its inability to consolidate customer touch points (vehicle purchase, sales satisfaction index [SSI], Captive Finance, warranty, CSI, customer pay service) into a single customer-centric view. Without this singular view, we see customers bombarded with often conflicting messages and offers from the OEM, the Dealer and the Captive Finance source, which invariably drives down credibility and damages the overall brand experience.

More importantly, this often impersonal approach to communication contributes to the defection of retail service customers into the aftermarket as the vehicle ages. As a result, dealerships are losing share of the aftermarket. According to the AAIA, in 2008, dealerships' share of the automotive aftermarket fell to below 30%, the 6th consecutive year of decline. This not only impacts short-term dealer profitability, but long-term repurchase consideration and loyalty. In today's challenging economic times, dealerships and OEMs can't afford to lose loyalty or vehicle sales. Maintaining customer relationships and customer loyalty to a brand is essential to not only prosper... but to survive.

Posted by Patrick Reininger, Vice President of Sales & Client Services, Polk (06.26.2009)