Consumer demand for a better customer experience is pushing third-party vendors to ensure their software complies with a more customer-centric business culture that includes real-time communication and new hosting methods.
Customer-relationship management software, or CRM, is rapidly evolving, and is making the shift from traditional uses and hosting methods towards a more customer-centric business culture.
The systems have traditionally been used to either help retain existing customers or for lead distribution. They still are, but CRM vendors like DealerSocket, a SaaS (Software as a Service) company, are looking at more modern strategies to boost retention.
For example, the company has a data mining software known as RevenueRadar, which is part of its CRM. They are now introducing what they call “Strategic Growth Managers” to help dealers improve their customer-relationship game, according to Darren Harris, General Manager of CRM, DealerSocket.
“The Strategic Growth Managers will consult dealers on best practices of how to approach customers, working with them to develop and implement processes, train staff, and create marketing strategies with campaign tracking, as well as provide analysis on equity mining opportunities,” said Harris, in an interview with Canadian auto dealer.
As margins compress and new car sales fall, Harris said it’s more important than ever for dealers to find ways to retain existing customers and get them back into their stores — particularly since retaining a customer is more cost effective than attracting a new one.
But even with Strategic Growth Managers, dealers still need to understand their CRM system and make the most of it.
It’s no secret that most people only use a portion of any software system that satisfies their immediate needs. That’s why DealerSocket also has what it calls a Customer Success Manager.
Customer Success Managers are there to show each customer how our technologies and services can work for them.
“The depth of capabilities within our CRM are extensive, spanning the needs of franchise and independently-owned dealerships alike, and our Customer Success Managers are there to show each customer how our technologies and services can work for them.”
CRM is more about “the now”
CRM vendors are also evolving the system in terms of how dealers use it to communicate with their customers. They are becoming real-time communication systems, according to Kole Hicks, VP of Sales and Marketing at AutoServe1, a cloud-based, SaaS company.
“We’ve seen things like chat functionalities on websites — how chat and social monitoring tie into CRM platforms so someone can communicate right now,” said Hicks. “In the service department, we are texting customers about their car in real-time so we can get instant responses, and not email-based communications.”
Similarly, AutoServe1 is a “piece of software right in the service department,” where tablets and smartphones are used to take photos and videos of the recommended repairs on a customer’s vehicle. Hicks said their two-way texting makes for real-time communication with the customer — it’s not post-follow up, although they also do some of that as well. But while post-follow up is still “hugely important,” Hicks said the now is stronger.
He may have a point: according to a HubSpot article, the open rate on a standard email in 2018 under the autos and vehicle category was 35 per cent. It’s not the lowest among the other categories, but it’s definitely not the highest: Arts and Entertainment reach 47 per cent; Beauty and Fitness 40 per cent; Construction 45 per cent; and Hospitality 40 per cent.
The Real Estate and Shopping categories also, unsurprisingly, have higher open rates. Marketing and Advertising, and Media, dip below the 35 per cent mark. But if you compare the open rate of all industries, the overall average is 32 per cent.
As changing customer expectations continue to push automotive retailers towards a more customer-centric business culture, it should come as no surprise that part of that evolution involves shifting the CRM to a cloud-based system.
“Email open rates have dropped over the last couple of years. Voicemail — most people don’t check their voicemail, but as a society we respond to text messages instantly,” said Hicks. “There’s a lot of good platforms starting to come into dealerships, where they are trying to utilize text messaging.”
CRM, he said, is becoming real-time communication as opposed to follow-up.
Making the shift to cloud
As changing customer expectations continue to push automotive retailers towards a more customer-centric business culture, it should come as no surprise that part of that evolution involves shifting the CRM to a cloud-based system.
A recent study from Frost & Sullivan indicates that cloud-based CRM solutions are expected to increase among the smaller dealerships within the next few years within the global automotive CRM market. They are anticipating that these systems will increase market penetration to 35 per cent by 2025.
More importantly, CRM vendors that are incorporating things like smart messaging tools, social media integration, and a predictive analytics engine will be best positioned to make the most of the emerging opportunities in the market, according to Dorothy Amy, Senior Research Analyst at Frost & Sullivan.
But what exactly is the difference between a traditional CRM system and a cloud-based system? “A cloud CRM system is not much different from the traditional CRM systems in terms of desktop applications that it entails. The only difference comes in the hosting method,” said Amy, in an interview with Canadian auto dealer.
She said traditional systems are web-based, but the newer ones — the cloud ones, will be hosted through cloud. It can either be a public cloud or a private cloud, depending on the preference of the dealer.
“The payment mode will also be different. Like for traditional systems there will be some hardware fees, monthly maintenance fees, and some support factors will come into this. So there is a lot of costs involved in the traditional CRM system, whereas in a cloud-based system a lot of these factors are being cut down,” said Amy.
Cloud-based CRM systems have no real traditional fees — no hardware fees, just monthly subscription fees.
But shifting a traditional web-based CRM system to a cloud-based one requires a decent budget, and smaller or newer dealerships just starting out may not have the funds. In this case, it makes sense for these dealers to start their CRM in the cloud. Larger dealerships are less likely to make that shift overnight, as moving their legacy application to the cloud will be challenging, and it will take time.
“The old software solutions may not be applicable with the latest softwares that are coming up, like analytics solutions, reporting engine, the DMS solution, so they may not be compatible,” said Amy. “And they might have to install another integration interface on top of that, and they might have to access these applications. So it’s quite challenging.”
Benefits of a cloud-based CRM
There are a lot of benefits to choosing a cloud-based CRM system. The first and foremost is installation: you don’t need to have a dedicated IT team to retrofit and take time to install software for you — and you don’t need a dedicated support team to take charge of things like support and maintenance requests. All of that will be handled by your provider.
“As an organization, you can cut down on a lot of costs. It’s one of the most beneficial reasons why most people consider this option. You also don’t have any upfront investment costs, which will again be covered by your provider. So your information will not be lost in servers or computers,” said Amy.
Then there is the benefit of seamlessness, a key word in the digital world for customer experience. When you install your CRM software in cloud, the dealer will be able to use it in various different modes, whether that means a laptop, smartphone or tablet. They only need to enter their login information to start using the CRM; it’s easily accessible at the click of a button.
“Everything is stored in cloud; the storage will not be an issue on your end, you just need to specify at the time of purchase the amount of storage that you want,” said Amy. “Again, it’s also affordable and the features can be customized according to the dealer’s preference. These are some of the reasons why some people believe that moving to a cloud-based system will be more beneficial for them.”
