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Auto News Digest C R M Success For Car Dealers
1. Article Archive Page 1 of 2
3/4/2008 CRM Success, Ralph Paglia
In August 2005 I had the privilege of going to work for the largest sales volume and
revenue Chevrolet dealership in the world, Courtesy Chevrolet in Phoenix, AZ. Based on
my previous 24 years of experience in developing "CRM Programs" for both dealerships
and car companies, I knew that effectively communicating the concept of a CRM Profit
Center to Courtesy's entire management was one of my first essential objectives. This
brief article was originally used to introduce Courtesy Chevrolet's management team to
the 5 most essential results measurements that must be tracked if ANY dealership is to be
successful in managing their CRM activities as a source of incremental profits... A CRM
Profit Center. view article
http://www.automotivedealersnetwork.com/ArticleArchive.html 3/4/2008
2. CRM Success http://www.automotivedealersnetwork.com/Articles/CRMSuccess.html
SUPERIOR DEALER SOLUTIONSsm
CRM Success(continued)
Let me begin by assuring you that dealerships which have been successful
with CRM from a Profit Center approach usually develop additional
measures to these 5, but the more sophisticated measurements are
not useful without these five. Additionally, keep in mind that these 5 key
measurements (metrics) must be tracked for each category of CRM activities.
There are many sub-categories, especially in Service CRM that we must
track, but here’s an illustration that displays the 8 general CRM categories:
As you can see, there are 4 Inbound
(customer initiated) and 4 Outbound
(dealer initiated) CRM Process
Categories. At the dealership
management level, a summary report
of CRM activities within each of these
8 buckets should be reviewed weekly,
or at the very least monthly. I also
want to point out that the Inbound
Showroom category is best looked at
from a customer information capture
perspective within an overall CRM
program.
For every other type of CRM Process Category, here are the 5 Key Measurements:
Quantity of Customers Contacted within the measured time period (monthly is most common)
Quantity of Appointments Scheduled for a Showroom or Service Visit to the Dealership
Quantity of Customers included in Metric #1 that showed up at the dealership for Sales or
Service, whether or not they had an appointment included in #2
The Number of Vehicles Sold to Customers in #3, or the Total Parts and Labor Revenue from all
RO’s written to the Customers included in #3
The Total Gross Profit (front and back) on the Vehicle Sales in #4, and the Total Profits by Parts
and Labor from the Repair Order revenue measured in #4.
It has been my experience that although just about every manager sees the importance of measuring
these 5 results of CRM activities within each category, but other than Internet, very few dealerships do it.
Then there are the dealership managers who “get it”… These are the ones that show up at one of our
CRM seminars and bring these 5 measurements with them, broken out into several categories of
activities or CRM campaigns resulting from data mining programs. And, the ones that are in the top 10%
1 of 1 of all dealerships in regards to CRM performance will analyze each CRM category and data mining 3/4/2008 8:02 AM
3. CRM Success Page 1 of 3
SUPERIOR DEALER SOLUTIONSsm
As you can see, there are 4 Inbound
(customer initiated) and 4 Outbound
(dealer initiated) CRM Process
Categories. At the dealership
management level, a summary report
of CRM activities within each of these
8 buckets should be reviewed weekly,
or at the very least monthly. I also
want to point out that the Inbound
Showroom category is best looked at
from a customer information capture
perspective within an overall CRM
program.
campaign with some of the following performance ratios that are made possible by these 5 key metrics:
http://www.automotivedealersnetwork.com/Articles/CRMSuccess.html 3/4/2008
4. CRM Success Page 2 of 3
Without the 5 Key CRM Measurements, we could not see these analytics, or use them to manage
our CRM activities. But, why are these performance ratios important? Let me list some of the more basic
reasons and a few examples of how managers in dealerships use these ratios:
Appointments Made to Opportunity; this is simply the volume of appointments generated by that
specific CRM process or campaign divided by the total number of customers contacted. Whether this is an
Inbound or an Outbound CRM Process, the percentage of appointments generated reflects the effectiveness
of our process execution and the techniques or tactics used. For example, if Salesperson #1 takes sales
calls 6 hours per week and generates 5 appointments scheduled from 20 phone calls, he has a 25%
appointment ratio. If Salesperson #2 takes 30 incoming sales calls, and generates 6 appointments, then he
has a 20% appointment ratio.
Dealer Visits to Appointments Scheduled; this is in most cases the “Show Ratio” on appointments
scheduled. However, there are some stores where the volume of customers contacted through a CRM
process that show up at the dealership will exceed the total appointments scheduled, This results in a Show
Ratio exceeding 100%, which is an indicator that the CRM process being measured is not focusing on
seeking agreement from the customer to come into the dealership. This ratio should never be 100% or
higher, which indicates weak appointment seeking tactics within that category. Likewise, if we see a 50%
show ratio, then we need to establish better appointment confirmation processes, such as an email
confirmation of the appointment with door-to-door directions to the dealership from the customer’s address.
Dealer Visit Closing Ratio; for the Sales CRM Categories, this performance measurement evaluates
the effectiveness of your sales department’s appointment reception and sales processes. If we see that
Salesperson #1 has handled 20 Internet Sales Appointments that showed up in a month, and sold 5 cars,
then he has a closing ratio of 25% on that type of appointment. If Salesperson #2 handled 20 Internet Sales
Appointments that showed up and sold 10 cars, then #2 has a 50% closing ratio on Internet Appointments
that show up… Who do you want getting these appointments in your store?
Profit Per Customer Contact; this analytic allows dealership managers to see the relative value of
each CRM Category with each other category. For example, if we have a limited staff of people available for
outbound CRM campaigns, we will assign them to the Outbound CRM categories that have proven to be the
most profitable. When those high profit activities have been completed, we can tackle the lesser profitable
ones with any remaining time.
Let me close by showing a partial illustration (Outbound CRM only)
of the 5 Key CRM Metrics listed in a simple Excel Spreadsheet format:
http://www.automotivedealersnetwork.com/Articles/CRMSuccess.html 3/4/2008
