CRM, or customer relationship management, is at the forefront of the latest management buzzwords. Across industries, businesses have come to realize the key role customer relations plays in their success, and auto dealers are no different. CRM can offer a number of benefits to dealers that seek to increase both customer loyalty and profitability.

CRM Basics

Essentially, CRM calls on businesses to take a customer-centric approach to management with the goal of building stronger and mutually beneficial relationships with customers. This often involves leveraging information technology to discover and anticipate customers’ needs.

CRM allows auto dealers to identify opportunities for cross-selling products and services, to develop customized marketing techniques, and to efficiently deploy resources, resulting in increased customer satisfaction and profitability. Some dealers have been implementing a simple form of CRM for years by using mailings and phone calls to maintain contact with their customers, but technological developments have paved the way for much more.

Several benefits have been associated with CRM. CRM gives dealers a method to differentiate themselves from their competitors by showcasing a service orientation. It often improves the effectiveness of marketing by facilitating segmentation and timely, targeted, and cost-efficient communications. CRM creates greater cohesiveness within the dealership between the sales, marketing, and service departments, in part by channeling leads and other customer-specific information into a single system.

As a result, customers enjoy consistent treatment in every department. Information can also be shared between franchises or between dealers and manufacturers. Although fewer than five percent of dealers currently share information with manufacturers, that figure is expected to increase.

Getting Started

Several software products are available for dealers interested in implementing CRM. Off-the-shelf products include ACT!, Goldmine, and Lotus Organizer. Some dealer management system vendors, such as Reynolds and ADP Dealer Services, also offer CRM software packages. Other products being used by auto dealers include Lead Manager from Cobalt Group Inc. and AUTO-VISION from EDS. Basic, off-the-shelf products can cost as little as $50 to $250. Pricing for more sophisticated packages covers the software license, installation, and training, plus monthly per-user fees.