04 | Customer Relationship Mgmt.

There are only two ways to sell more vehicles, spend more money every month in advertising to buy the market, or do a better job with your existing customer base. Which do you think costs less?

Basic Philosophy
Customer Relationship Management ("CRM") is the modern manifestation of business practices that Americans understood well in an earlier time. In the days of Norman Rockwell the druggist, butcher, grocer, and all the other small tradesmen knew each of their customers by name, understood what their needs and wants were, and were able to predict when they would be needing more of their particular product. Early automobile dealers understood this concept. They had only a few customers and needed to keep each one happy. Customers still want to be served in that manner, but the marketing methods of the last half century - driven by market expansion and tight budgets - have made it nearly impossible; particularly for small businesses that cannot afford the large computer systems needed to keep track of this level of detail.

Early on we recognized that automobile retailers had the needed data and often the requisite skill, but seldom had the time or specialized knowledge to create a CRM system that would operate effectively at the car dealership level. The Progressive Dynamics Dealership database was designed to fill this need - to make big business tools available to smaller companies (Dealerships), which lack the resources to construct such a system. Remember, we serve Automotive retailers exclusively. We also recognize that the marketplace is shifting, and that to remain competitive our clients must stay ahead of the curve; thus our system is continuously evolving as new features are added and existing functions improved.

Our system utilizes transactional data from dealership host computer systems (Reynolds and Reynolds, ADP, etc.) to update a database daily that contains the dealerships customer files. This database, using a blend of client preferences and predictive algorithms prepares daily customer communications and weekly dealership reports.

During the multi-year cycle of automobile ownership and operation, many opportunities are presented for dealer-to-customer communications - these points occur at events or natural intervals and customers accept them as reasonable. Communications from the dealership that fall at these times are accepted by the customer as being part of the dealer-customer relationship and are thus welcome. Our experience has shown that the relationship is strengthened each time these opportunities are taken, and it is weakened when they are missed. (We have also found that customers who receive communications regularly are more receptive to special or out-of-the-ordinary communications.) Our goal is to make this communications process seamless so that no opportunities are missed and the customer learns to anticipate each one. Each communication must also create a return channel for the customers use, but does not burden dealership personnel with the task of sorting through many returns to find those few that require additional follow-up.

Internet Strategy
While others may be seeking methods to sell automobiles using the Internet, we are working towards utilizing this media as a tool to improve customer service, satisfaction, and convenience. By strengthening the Customer Relationship Management process, your dealership clients can focus on doing what they do best: sell cars to satisfied customers.

Internet technology works in several ways. These include:

• E-mail communications to customers to provide a fast, inexpensive, and affordable level of customer control not previously available. E-mail takes on a power that direct mail cant match.

• Web-based response allows customers to provide solicited feedback on their own time. This friendly approach provides a real advantage to Dealerships, as customer responses are entered directly into the database eliminating any need for data entry services, handling of paper responses, or business reply postage expenses. Customer entered information is available instantly, thus expediting responses. We maintain the necessary firewall and automation processes to deal with in-bound messaging, so that dealership personnel dont need to worry about the problems frequently associated with the Internet. In short, we do the work for you!

• Process controls, allowing dealership and our dedicated personnel to modify client settings and information contained in customer records using a secure web-site, allowing dealer managers 24/7 access, but only to their own dealership information. All it takes is a web browser and a personal Internet connection.

Customer Communications
At Progressive Dynamics, we strongly believe that automotive customers enjoy receiving communications from car dealers, as long as the messages have a logical purpose and timing. If the messages are relevant and timely, and continue at appropriate intervals, they are welcome and are read. On the other hand, the customer who only receives messages from their dealer when they are ready to re-enter the marketplace is justifiably skeptical about that dealers desire to maintain a long-term relationship.

Regular communications prepared include: (sent by e-mail when appropriate)

• Service Follow-up letters, which are sent immediately after the service visit, and typically include a brief survey. These letters are designed to reinforce the dealers concern about the customers experience with the Dealers Service Department. Letters are not only personalized; the text can vary according to the nature of the service and vehicle usage. Customization is our specialty!

• Service Reminder letters, using predictive methodology, to help bring the customer in at the right time. These letters include second and optionally third reminders for customers who do not respond within a dealerships selected interval. Non-responders are also identified in weekly reports facilitating local follow-up.

• Anniversary Letters, sent at 1, 2, and 3-year intervals from the delivery date, simply remind the customer that the dealer is aware of the fact that these birthdays are passing. (In many cases they are presented as Birthday Greetings for the car.) These can include brief surveys, which help intercept problems before manufacturer surveys are sent, generally at the conclusion of the first year of ownership.

• Parts Department special order reminder letters help solve a persistent dealership problem. They are sent to customers who have a special order waiting for them, but who have not had these parts installed yet.

Dealership Reports
The ability to control and grow a business is based on a constant flow of information about how the business is functioning. Car dealerships have long mastered financial and inventory (for both cars and parts) reporting, but traditionally have not done as well in reporting on the most valuable asset of all: the customer base. We start with a basic definition of a customer: An individual who has (1) purchased a new car within 18 months, or (2) Purchased a used car within 12 months, or (3) Serviced at the dealership within 6 months.

Our reports are designed to provide information to answer the following questions:
• How many customers are there? Is the number growing, and how fast?
• Which customers are at risk?
• Is my customer contact personnel effective at helping grow the customer base?
• What new customer opportunities have come through the Service Department - and what has happened to them?

Along with these items are other specialized reports that deal with Parts Special Orders, the communications process itself, etc.

Data Transfer Process
We utilize a simple data extraction process that is ultimately under the control of the individual dealership, which can lock us out any time they want. Our computers call dealer host systems early each day (not during business hours) and obtain the needed information quickly - typically in less than 5 minutes. Other than the original set-up, dealer personnel are not involved in daily data transfer operations. During set-up we make sure that we are given access only to those files that are needed, and that we do not have the capacity to enter or alter any dealership system data. This process ensures that our data is complete, and that it does not add to the administrative burden of operating a busy dealership.

Each day dealership records contained in our database are updated with current information and computed data is refreshed. The system does not purge records, as dealership systems are often forced to do. We believe that an inactive record still has value, thus we will retain that record permanently.

Special Mailings
Since the stored files contain your up-to-date customer information we can generate a specialized mail list quickly - or automatically if needed at regular intervals. We can also manage the process completely, using dealership artwork or creating letters for special purposes, such as a special sale, a facility opening, a dealership newsletter, etc.

Note: we discourage the use of e-mail for unsolicited promotional mailing (a process generally termed spam) as it usually violates the explicit permission granted by the customer for such usage. Direct mail is more appropriate for unsolicited promotional offerings, even when sent to ongoing customers.

Data Ownership
Data security and integrity within our system is a high priority. We recognize that the dealer supplying the information is the sole owner of that information and of any relationship growing out of its usage. We will not provide any customer information to any third party except with the written authorization of the client who owns the data. Our confidentiality agreement survives the termination of any client relationship.

System Start-Up
The activation of a new account requires set-up work only on our part. The actual data connection is simple and requires only a brief conversation with dealership personnel. Before the process is ready to operate the database must be built. We typically utilize the last 3 years of sales records and 2 years of service records to construct a client database; these records are downloaded, compiled, purified, and stored in the system. Once an up-to-date client database is completed, daily updates are started and provide meaningful information.