Inventory Floor Planning Solutions

Archive for October, 2009

Recently, I’ve heard several comments alluding to the fact that CRM (customer-relationship management) is dead, or at least is at a point where people are tired of talking about it. There is a notion among many dealers that vendors have over-promised and underdelivered. It might be dealers are expecting too much.

Ask for a definition of CRM and you’ll get 10 different answers. The problem is, automotive retail is a complicated business with a lot of moving parts. Add to that, dealers will have different goals or objectives for their CRM initiatives, and that makes measuring the return on investment difficult.

In the store, it’s easy to get bogged down in the details of the process, and if there isn’t a well-defined goal, dealership personnel get CRM-fatigue. Before long, you’re writing a check for a solution that sits on the shelf that never gets used.

Enough of the problems, what are some solutions? It’s not giving up on CRM — now, more thn ever, you need to find ways to drive both sales and service traffic. There are several simple solutions.

Here are some creative things dealers have told me they have done the last 12 months that have helped business. Nothing earth shattering — nevertheless, there may be some nuggets for you.

First, market to customers in your database. You already have the relationship with them. Offer something of real value on the service side. You can generate a ton of service traffic and repair orders with simple campaigns marketing to folks that haven’t been back to your store within the last year.

To do that you should find a solution that integrates easily with your dealer-management system. Being able to pull data from your DMS and integrate it with information in your CRM tool is invaluable.

Many of you are looking for used-vehicle inventory. CRM can help you do that. Create a list of vehicles you need, and then send targeted offers to people in your database that have those vehicles. Make it a special invitation, not a generic direct mail piece.

I know Cash for Clunkers probably is a dirty word right now in your stores. It was an intense program while it lasted and nobody wants to even mention the term now. But there has to be a way to continue leveraging those sales, and even the people who didn’t qualify who left the store without buying.

Offer a special service incentive for people who bought cars using the the program. Some dealers are planning a Cash for Clunkers after party a few months from now to generate service business. It doesn’t have to be a Clunkers party — it could be a party or picnic celebrating anything.

Tie into the local sports teams — whether it’s college, professional or high school. For example, offer free oil changes or car washes if the football scores 40 points. You can go in so many directions with this.

All of these things can be defined as CRM. The point is, be creative and aggressive now. Business is there, but it needs prodding.

Good luck, and if your store is doing something unique that is working, I’d love to hear about it.

After Kelley Blue Book’s relationship with AutoTrader.com ended prematurely this June, it immediately devised a strategy to take on the industry behemoths, AutoTrader and Cars.com.

Read the entire story here.

KBB is launching a pay-per-performance model (also called pay-per-lead) directly contrasting with the subscription models of Cars.com and AutoTrader. It’s a gutsy move, perhaps born out of some measure of desperation.

Kelley has the brand and the consumer visits, but it lacks the inventory and, some say, technological prowess to be successful. It is partnering with Vast, however, to provide it with the necessary technology. Vast’s goal is to create a network of lead providers that collectively will be powerful enough to force Cars.com and AutoTrader.com into the pay-per-lead model.

My guess is, dealers will continue doing business with Cars.com and AutoTrader in the subscription model, but certainly will play with Kelley and others pushing the pay-per-lead model.

What do think? Will Kelley succeed?

On the hunt for used vehicle inventory? Here are some tips from Consultant Tony Albertson, a used-car specialist with NCM and Associates, that he provided for a story in our Ward’s Remarketing 150.

Hire an offsite buyer to beat the bushes for vehicles. It’s OK to pay the buyer anywhere from $200 – $500 for each vehicle but tie the compensation to how fast the vehicle sells.

Provide specific instructions on which vehicles you need. Don’t let the buyer buy off the cuff.

Advertise everywhere you buy used cars.

“It’s what made Carmax famous,” Albertson says. “They will buy the used vehicle, even if the customer doesn’t buy a vehicle from them.”

Maintain close ties with other local dealers who might be wholesaling vehicles you need.

Leverage your customer database. Create a direct mail campaign to customers in your database offering to buy their vehicles.

You also can target your marketing to customers owning vehicles you need. Be sure to personalize the letters or emails for each customer, Albertson says.

Another critical piece — if you’re paying for inventory management software, such as AAX, VAuto or FirstLook, use it. It may take some effort, but it’s worth it.

Don’t give up on the auctions. If you’re not already using the online auctions and services, you likely will find it increasingly more difficult to secure used-vehicle inventory.

Sites such as Manheim’s OVE.com and Manheim Simulcast or AESA’s LiveBlock or DealerBlock allow dealers to conduct all of the pre-auction and pre-sale research, acquire inventory before it even reaches the auction and trade with other dealers.

AutoExec magazine, produced by the National Automobile Dealers Association, is folding. The publication is a victim of slumping ad revenue, changing readers’ preferences and auto industry turmoil, NADA spokesman David Hyatt said today.