Imagine a customer looking for a new car, returning to the dealer who sold him his last vehicle: “Good morning – I bought my car from you two years ago. Nobody has written to me recently and your servicing department isn’t exactly inspiring, I’ve decided to come back and buy my next car from you anyway.”

Hardly likely, but this example holds a critical underlying message for the automotive industry today – a key differentiator between you and your competitors is the standard of customer service you deliver. In talking about customer service, that no longer just means the way your salesman or your service engineer talks to people. It means everything. The organisations that are winning in customer service today do so by presenting a consistent standard of excellence at every point of customer contact. From the moment a carefully targeted piece of literature lands on the doormat through to servicing the second family car, the customer is at the centre of their operation.

Why is this so important? In the automotive sector in particular, the customer has a huge choice of products to choose from, at a similar price, quality and style. When you consider an industry average customer retention rate of below 60%, the dealership offering excellence in customer service stands to make considerable headway in taking business from their competition. In short, good service gives the customer a reason why they should (to quote a stereotype) “buy a used car from this man.”

Every point of interaction between a customer and dealer can, if managed correctly, generate revenue. The initial sale; the used car trade-in; the finance package; the insurance deal; the add-on accessory and the lifetime of servicing all provide opportunities to either make more money, or lose the customer through bad service. Bearing in mind that a customer will, on average, tell four people about good service and eleven people about bad service, it is not just the customer in front of you who you are influencing.

CRM – Exploding the myths

Customer Relationship Management (CRM) is being widely talked about as the way of delivering this improvement in customer service. So what is it?

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The concepts behind CRM involve putting the customer at the centre of your operation, focusing around their needs. More specifically, this means that every customer interaction – at every point in the business lifecycle – needs to be a part of this co-ordinated approach, as illustrated in figure 1 .

The extent of the change some organisations may need to undertake can be frighteningly large but, if achieved, can deliver both increased revenue and improved business efficiencies throughout. Staff begin to act as ambassadors for the organisation, whatever their own role may be, which maximises every sales opportunity.

So what are the myths surrounding CRM? Perhaps the most significant, primarily perpetrated by many vendors wishing to capitalise on the current CRM bandwagon, is that a piece of CRM software will solve all your problems. It won’t. It is only your people who can deliver improved customer service, supported by the right business culture and technology solutions.

Without this careful balance, a technology led focus inevitably leads to a new system that does nothing more than deliver poor customer service more quickly, to more people. In addition, adding yet another IT system can demotivate and overload your staff; branding a crucial project as yet another expensive IT failure.

There is no question that the right CRM technology is the tool that will help your people deliver service. The word ‘right’ is important here. CRM is more than just contact management and a central database – another myth propagated by those vendors wishing to hide substandard products behind a popular acronym bandwagon. A CRM solution has to be come the core of your organisation’s customer interface. Seamlessly working with existing technology, leveraging new initiatives such as your company’s website, your CRM system has to provide a comprehensive, easy to use mechanism for every customer facing employee in your organisation. A good CRM solution will support your business processes to empower – not hinder – your employees in delivering better service. It places all the information your customer facing staff require, at their fingertips, when they need it, first time, regardless of the source of that information.

Far from being yet another IT system with yet another interface for people to learn, a well-run CRM project will transform your business potential and leave you with an enthusiastic, customer focused workforce empowered by a simple, integrated technology solution.

The challenge of e-business

Closely tied to CRM is another of today’s hot potatoes in the form of e-business. It’s another ‘must have’ of the new millennium, or at least a ‘must plan to have.’ With everyday usage of the internet growing at a truly phenomenal rate, recent publications have identified the important role of the website in playing “the greatest part in customer capture.” Interactive websites, allowing on-line conversation, browsing catalogues, information request forms and increasingly ‘call me’ buttons to initiate immediate telephone conversations provide even more opportunities for the customer to demand attention. With Vauxhall’s well publicised launch of internet car purchasing, the impact of e-commerce in the automotive sector cannot be questioned.

The dealerships have to be ready to face this challenge and leverage the technology to their best advantage. A customer’s e-mail has to be seen as an equally important method of contact as the telephone or personal query – nobody would seriously contemplate not answering the phone for two days! It is in this environment that your CRM solution comes into its own. Contacts from your website can be tracked, pre-qualified and a degree of self-service and automatic literature fulfilment delivered. Your sales and service staff are empowered to follow up prequalified contacts needing their personal attention, with your enterprise-wide CRM solution providing an up-to-the-minute record of customer contact for the rest of the organisation.

This scenario is today’s reality. Companies that previously registered 4,000 untracked daily hits on their website have, by implementing a CRM solution, converted these passing contacts into 1,500 real sales opportunities . Real customers, real revenue and ultimately, real profits.

Will you or your competitors be leading?

If you don’t currently consider the internet and CRM important enough to worry about, your competitors will soon force you to reconsider. Few people would argue that the organisation with the best customer service will beat its competitors in the race to retain and acquire new customers. Creating a culture of customer service that your people deliver using internet based CRM technology represents a picture that characterises market leaders.

The question that remains is whether that market leader will be you, or your competition?

How Deloitte & Touche can help

Deloitte & Touche Management Solutions, drawing on our experience of the automotive industry and leading capabilities in e-business and CRM, are uniquely positioned to help you transform your customer service capability.

For more information on CRM and e-business in the automotive sector, contact Chris Digby on +44 (0)113 292 1219 or Jason Price on +44 (0)121 695 5180.

Jason Price, Birmingham Management Solutions