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What is the role of CRM in the automotive industry?

crm customer relationship management

Working in the automotive industry has demonstrated some of the challenges that new vehicle manufacturers face due to Australian privacy principals as there is a common misconception amongst dealerships and manufacturers on who owns the customer data from a new vehicle sale.

Whilst dealerships focus on making sales and converting leads, it’s up to the manufacturer to generate consideration for the brand and drive prospect activity for dealers. Usually, this involves large marketing budgets, driving activity nationally for the brand, including some localized co-funding activity with dealerships.  Think of it as a funnel, the vehicle manufacturer is usually at the top of the funnel trying to drive traffic/consumers into considering the product/brand and the dealers to convert them into a sale. At the top of the funnel, usually, a customer will visit the manufacturer’s website, request a brochure and agree to the privacy and communication preferences, BOOM – permission granted, Head office/Vehicle Manufacturer can now directly contact the customer and control the customer journey. However, when that prospect becomes an owner what happens with their data?

This is where data ownership shifts to a dealership and Australian privacy principals prevent manufacturers from marketing directly to these owners. This has a lot to do with the phrases you may have heard, ’express consent’ and ‘implied consent’, ‘express’ consent is when a customer agrees or ticks a box directly agreeing to a business privacy terms and to receive communication from a business. Some vehicle manufacturers operate on the notion of ‘implied consent’ which is the idea that a customer would reasonably expect to hear from the business about their vehicle in terms of a safety recall…that’s where the permission about stops, unless the business is able to prove the customer has directly opted into the website when they were a prospect. 

Many new vehicle dealerships operate in a multi-franchise environment within in a concentrated geographic area. When driving past a dealership, ever wondered why they are so close to one another? The answer is because the operation is owned by the same Dealer Principal. With ownership under the same roof, the objective of a multi-franchise dealership is to streamline the operations, from IT to printing, marketing and legal, and in most cases, all communication efforts and customer journeys are controlled by the dealer management team at the dealership level. 

Generally speaking, to keep customers satisfied with your product you need a robust customer journey, from effective onboarding communications, service reminder program to incident management. Manufacturers/ Head office usually create robust email communication programs that are timed correctly to ensure you as a consumer remain satisfied with the product and relevant with the brand. Here is a basic model of a customer journey and the various programs put into place. 

automotive industry crm flow chart

To help dealerships implement these effective journies, and when thinking back to express and implied consent, manufacturers/head office work around this principle by making dealers utilise a highly effective cloud-based CRM system which dealers must share their customer information via an API from the dealers DMS (Dealer management system). Each time a new dealership is established contracts are put in place where a dealer must share their customer information into a centralized CRM system. This data is made up of the customer’s service records which are most up-to-date as they are updated at least once a year when the customer services their vehicle. There are about 5 – 6 reputable CRM systems in Australia for dealerships, most well known being Pentana. Although head office/manufacturers cannot market directly to these customers, dealerships can use these tools to implement head office/manufacturers communication objectives.

As a result of a cloud-based marketing platform, a service manager at the dealership can log in and send out specific offers to their customers, and these offers can be highly targeted down to individual customers based on mileage and timestamped service predictions. The power is now shifted to head office to create highly targeted campaigns and provide assets to dealers to help them market to their customers and maximise turnover for the business. Head office/ Manufacturers can design specific brake offers for groups of vehicles and understand how much supply they need to meet the market volume, using real dealership servicing data to make accurate planning and campaign initiatives.

If dealerships were left at their own to design CRM service programs, there would be massive overlap between dealerships, for example, if a customer services at dealership A, then the consecutive year services at dealership B, then the customer would receive multiple offers and be invited to programs from a number of dealers in an untimely fashion. As a result of this cloud-based CRM system this allows a single view of a customer – which many industries spend tens of thousands of dollars trying find the answer too.

automotive crm flow chart

This cloud-based CRM system not only enables dealerships to communicate with customers effectively but enables head office to report on the accurate indication of labour hours sold by dealer, service retention activity and customer re-purchase cycles. These reporting metrics are vital for vehicle manufacturers to adequately plan and work with individual dealerships, work out targets and ensuring they have proper staffing and level of parts available for the vehicle carpark within their PMA (prime market area).

New reports are then created to help head office decide on ‘sell in’ targets and ‘sell out’ targets for individual dealers.

automotive crm flowchart

 

If you have any questions, feel free to reach out to Martin Zboinski by contacting him via his Linkedin profile or his website.

What do you think?

Written by Martin Zboinski

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