By on July 29, 2016

Data, Image: rh2ox/Flickr

I’m back like a rebel making trouble with another installment of Dealers Are The Worst Businessmen. Today, we’ll be talking about the information that most dealers use to make every decision in the dealership, and how it’s completely and utterly useless.

To those of you who’ve worked in the dealership world, you already know what I’m talking about, right? Yep. The CRM (Customer Relationship Management) tool. Doesn’t matter whether it’s VinSolutions, DealerSocket, or any of the other popular software solutions on the market. Nowhere will you find a more prominent example of “garbage in, garbage out” than in the customer data mining that occurs at every dealer group. It’s a wonderful example of how most dealers spend thousands of dollars on tools they believe they need and then neglect to learn how to properly use.

But first, a story.

Nearly 18 long months ago, I walked into a Ford store in central Kentucky to lease my Fiesta ST. As I mentioned in my original write-up, I spoke with the Internet Sales Manager for a couple of weeks about my decision, and even submitted a lead through Autotrader’s Trade-In Marketplace tool. But when it came time for my salesperson to enter my information into their CRM tool, I watched him as he selected “Referral” from the drop down window.

“Excuse me, sir,” I said, having a near heart attack (as I worked for Autotrader at the time), “but I am not a referral. I submitted a lead through Trade-In Marketplace.”

“Yeah,” said the older gentleman, without turning his face to me, “but I get paid less on the deal if the Internet Department is involved.”

Oof.

You see, my friends, there’s a struggle at every dealership. It’s called “attribution.” Every car dealer in America wants to know where each and every sale originates. Even though it’s a statistical fact that nearly ninety percent of today’s shoppers start their searches for their dream cars online, car dealers refuse to accept it. In fact, if I were to walk into any dealer’s office across the country and ask him where most of his sales come from, I’ll get these answers, and in this order:

  1. Referrals
  2. Walk-up/Drive-by
  3. Dealer’s Website

I’ll address these one at a time, starting with referrals.

Bitch, please.

We all know that these hoes ain’t loyal. The referral is as dead as Jacob Marley. Today’s car shopper is more price conscious than ever, and they don’t care that you sold Aunt Margie a Ford LTD in 1986. They’re going to go where they can get the best deal, and they’re likely willing to drive up to 100 miles to do it — so stop it with the referral stuff. It isn’t true, and you know it — which is why you complain constantly about third-party sites being a “race to the bottom.” Your pride is just hurting because you can’t admit that your “Family owned since 1953” bullshit doesn’t matter one bit to anyone.

Secondly, you want me to believe that the BMW 528i that you had parked behind the building of your Ford store was sold to a “walk-up?” Again, please stop. The only reason that your salespeople mark “walk-up” on the sourcing sheet is because they don’t want to share the credit with the Business Development Center/Internet Sales department. And they damn sure don’t want to give up their best “up” of the day because the customer might have already called and spoken to another salesman. “Walk-up” it is.

Lastly, if your website isn’t the number one driver of traffic to your business, you have bigger problems than either of us can fix, Mr. Dealer. In fact, it’s probably a CDK or CarsForSale template that looks no different from any one of a million dealer websites. There’s no differentiation, period. But you’re super proud of it. I get it. So you want to give that “last click” credit to your website. Of course, you rarely spend much time considering how they found your website, because you’re convinced that $8,000 a month you spend on Search Engine Marketing (which you don’t understand — like at all) is driving oodles of people to your site. Especially when they use search terms like “2011 Chevrolet Impala in Bremerton Washington” as one does.

As a result, your CRM tool is filled with useless data. Of course, you also get automatically generated data from phone calls and emails from third-party sites, which is probably the number one way that you evaluate the effectiveness of these advertising outlets. There’s just one, teeny, tiny problem with that — nobody, and I mean nobody calls or emails dealers anymore. The most generous study out there is J.D. Power, who estimates that only 24 percent of shoppers contact dealers via email or social media. Most other studies place the number at around 10 percent. Customers have learned that emailing a dealer is a super way to get a thousand autoresponder emails in their inboxes on the daily.

But wait: if 90 percent of shoppers use the Internet, but only 24 percent email the dealer, what are the rest of them doing? You got it. They just show up unannounced, at which point the lazy, slightly unethical salesman marks them as a referral or a walk-up. This leads to crazy behavior from dealers, like canceling all third-party advertisers — only to come crawling back a few months later, and at a higher rate. Oops. In my nearly five years in the business on the advertising side, I’ve never seen a dealer successfully walk away from third-party entirely. It might work out okay for a month or two, but eventually they all come crawling back.

So what’s a dealer to do? Well, here’s what I’ve recommended in the past: Don’t have your salespeople ask where customers found the car. It’s a bad time in the sales process to do it; customers aren’t ready to be transparent yet. Wait until the deal is done and the paperwork is signed. Then, hand them a sheet with all the logos of the places you advertise — and even the logos of the places you don’t. Don’t ask where they found your car, ask them where they did their research. Instead of having to remember exactly where they found your car, they can simply remember all the sites they used in the shopping process. If you see a large number of customers circling a site you don’t use, consider adding it to your repertoire.

Next, instead of figuring out which sources drive the most leads, they should figure out which advertising sources generate the most profit. Some sites drive a high volume of low-quality leads, while others drive a lower number of high-quality leads. Which one would you want as a dealer? A high number of emails and phone calls isn’t necessarily a good thing. It can lead to endless amounts of wasted time on deals that never materialize.

Having a CRM tool is a good thing for a dealership, but the corrupted data in it can lead to bad advertising decisions. Learning how to manage the data entry and discovering what the data truly means would help your neighborhood store make better decisions across the board. But until they do that, they’ll be counting phone calls and emails and congratulating themselves on their high number of referrals.

And now even you know that’s the wrong way to do it.

[Image: r2hox/Flickr (CC BY-SA 2.0)]

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73 Comments on “Bark’s Bites: Dealers Are the Worst Businessmen, Part Two...”


  • avatar

    Realistically, if I was looking for that sport/manual 528i, I could drive thousands of miles looking for a random hit, or I could search on line and find three in a 150 mile radius, and drill down, eliminate one as the photos show an automatic, eliminate the other as the car does NOT have the sport package (wrong description by dealer-you cannot trust any description for a used car not the home brand of the new car dealer).

    If you are looking to replace a normal car with a normal car (as in you don’t read this website) then you’d be likely to just go to the two local stores and see where you are treated better, unless it is Infiniti where the stores are sparse, even in the NY Metro Area. Normals will consult Consumer Reports, listen to their gearhead friend, and good luck.

    When I got my last car, I found it on line, asked the salesman if it was still there, and that was it. The Manager was much more interested in my searching…I told him I looked for the specific option set, looked at photos to confirm, and here I was.

    • 0 avatar
      JMII

      “If you are looking to replace a normal car with a normal car (as in you don’t read this website) then you’d be likely to just go to the two local stores and see where you are treated better”

      I amazed this still happens, but its true. My wife knows someone who bought a Dodge Nitro. Clearly that person never clicked on a single article on the internet or Consumer Reports because that vehicle was the most poorly rated vehicle… like ever. Yet they bought one. I guess the dealership had pretty balloons or flags out front.

      • 0 avatar
        Johnster

        My situation is not typical, but it is not at all unusual for people in the very rural town and state where I live to drive more than 600 miles for a deal on a new vehicle. A superstore in a neighboring state offers savings of more than 15% on well-equipped full-sized pickups and SUVs and I see a surprising number number of dealer stickers from out-of-state on late model cars here. The local dealers have a monopoly and aren’t really willing to deal.

  • avatar
    PrincipalDan

    Figures lie and liars figure.

    Where there is fear you will get false figures.

    • 0 avatar
      hglaber

      Actually, figures never lie, but liars often figure.

      At least I think that’s the old proverb you’re trying to reference. Which is a pretty good summary of the article – when someone manipulates the numbers to fit the framework of their needs (like the salesman maximizing his income) or expectations (like management clinging to the gospel of referrals), you can’t hear the truth the figures have to tell.

      But if you instead let the numbers tell the story by using correct data collection methods, sample size and independence, and other proper statistical analysis techniques, then you get very powerful, useful answers.

  • avatar
    LS1Fan

    Getting accurate source data is a problem for dealers.

    Salesmen’s primary job is selling cars. Which is as it should be. So they’re not the best folks to try to eludicate why a customer patronized Dealer X.

    On the customers side, I doubt they’d be very keen on answering a CRM document after spending X number of hours at the dealer signing form after form. They’ll write “referred by Mickey mouse” if that gets them out of the showroom with a car ten minutes faster.

    Lastly , there’s too many source variables in play. Why did Customer X buy a car from Dealer Y? Maybe Customer X’s old VW bit the dust and Dealer Y was in walking distance from the dead car’s carcass. Customer Z comes in because Dealer Y has the only car in stock they want for tens of miles. So on and so forth.
    Even if a dealers customers told the truth all the time and they had the staff to process the data accurately, it seems like you’d have a pile of data which can’t be used for jack.

    • 0 avatar
      notwhoithink

      It’s not the individual data points that matter, it’s the data in aggregate. There will always be edge cases but with generally good data you can still determine trends and make useful business decisions.

  • avatar
    NotFast

    I’ve noticed plenty of industry consolidation – are the bigger fish better at using CRM? I’d think that the big chains would have better controls in place than Joe Bob’s Chevrolet and Bait Shop.

  • avatar
    cdnsfan27

    I sell Jaguars and we use eleads as our CRM. It is not a bad system but is not without its faults, you have to select source from a drop down menu, there is no ability to write in a source that is not displayed, so we fudge because we have to put something down.

    I would say that 90% of my leads come from the internet but lately we have had a number of walk ins based on the tv ads for the new XE. They tend to be non-traditional Jaguar customers and must be handled in a whole new way.

    The F-Pace, with no advertizing is bringing in a ton of people, thank you Car and Driver for the great review:)

    • 0 avatar

      I’ll bite. How does one handle an XE customer vs. another ? I liked the XE when I saw it at the Auto show. Are folks still thinking E Type (Beautiful art made of tissue paper ?)

      • 0 avatar
        cdnsfan27

        The XE starts at $34,900 which is a new price point for Jaguar so we are getting a lot of customers new to a luxury brand. We are trying to make them feel at home and not be intimidated. We are also dealing with somewhat lower credit scores than we are used to. It’s all good though as the XE’s are selling very quickly except for the more expensive trim levels which are a little tougher to sell in the $55-60,000 range.

    • 0 avatar
      ericb91

      I used eLead at the Honda store I just left. Out of all the CRMs I’ve used, it was the best.

  • avatar
    Pch101

    It seems that you see the internet as being a sales channel, while the typical dealer regards it as an (annoying) advertising channel. Hence, the methodology.

    It goes back to fear of the internet. The purpose of a car salesman is to determine each customer’s tolerance for pricing. Some customers will pay a lot, some will pay only a little. The goal is to avoid losing the low price customer, while not giving the low price to the guy who would have paid the high price.

    The internet is inherently bad for this business model, as it has a tendency to commoditize everything. It reminds me of the record industry’s efforts to fight against and control downloads — they hoped that fighting it tenaciously would preserve the old way, when no amount of combat was going to halt a trend that was much bigger than themselves.

  • avatar
    notwhoithink

    You have to love the perverse incentives in the business world. I spent two years arguing with the CEO of a regional IT services firm about profit margins on projects. It seems that we never could come up with enough funding to do widespread professional development for our teams. Despite being the biggest shop in town by a large margin our margins were too thin. Why were they too thin? Because the sales team was paid a flat percentage commission regardless of the profitability of the project. They were paid the same if the project was won with a bid at 30% margin, a 5% margin, or actually lost money (to get in the door). The big national firms that we competed with were charging 3 times what we were for the same projects, and still winning some of them. I even had some of my SOWs for no-bid projects re-written by salesmen for a lower T&M rate AFTER I had already talked to my customer about bill rate. The sales staff was just programmed to bid everything as cheaply as possible, because they didn’t know any other way to sell and they got paid the same either way. They had no incentive to do things the right way, much like your Ford salesman, so they did whatever they wanted.

  • avatar

    When the trans malfunctioned for the third out of five times on my Honda, I was fairly close to my local VW store, so naturally I stopped there first. I figured what with dieselgate they would be willing to deal. They said “yeah! We can knock off $750!” I went home and started emailing every VW dealer within 75 miles of me, and a dealer in Perrysburg, Ohio responded with a quote of almost $4000 off the sticker! Needless to say, it will be worth the sixty mile drive south, and I’ll be taking delivery either tonight or tomorrow. So in my case, the email thing worked out well.

    • 0 avatar
      notwhoithink

      Only $4k off sticker? What did you end up getting? Hatfield VW in Columbus has most of their stuff advertised at $5k-$6k off sticker.

    • 0 avatar
      here4aSammich

      It’s funny, I know the dealer you speak of (I’m in Toledo), and would never consider buying a car from them based on their local reputation. In fact they recently took the family name off their chain of dealerships in hopes people would think there’s new ownership. But I drove to Detroit to buy a Wrangler once because the dealer down the street here didn’t seem to want my business. Let us know how your experience went.

      • 0 avatar

        Interesting. I took delivery of the car Friday evening, and it went very well. They didn’t try to sell me anything extra, though I spoke up and decided to get an extended warranty (because Volkswagen). They were extremely nice and really went out of their way to accommodate me, so thus far I really can’t complain!

      • 0 avatar
        sgeffe

        Really? I hadn’t noticed.

        Yes, Ed Schitt..SCHMIDT’S reputation deservedly precedes them! After several half-a$$ed tries to fix some of the many and varied ills of my Mom’s Emm-Kay-Quattro Jetta, my parents started going to Bavarian Autosports, a decent German indie place just up the street. (Recall that GM pulled their Pontiac franchise, upon which the family built the business, either in the BK purge or maybe even a little before, and their Volvo store ain’t nothing to sneeze at, either!) The auto broker who I’ve mentioned in these comments before used to sell Pontiacs there as his day job, but got outta there in the early aughts when things started tanking; he advised my folks what they figured out, that their VW service department doesn’t know a lug wrench from a certain part of their anatomy!

        They are the ones who got national attention when the DSG in a Motor Trend long-term Passat TDI, IIRC, decided to leave fecal deposits in the bed as one of their scribes was passing through either from back east or on the way back from Detroit. It took a good month for parts, and the interior “detail” they attempted left the car an absolute mess!

        To the poster who just took delivery, don’t even go near that $hit-show of a “service department,” and say a prayer of thanksgiving that you got out of there with wallet intact!

      • 0 avatar
        sgeffe

        Is Yark the only Jeep store in Toledo? (Why do I think that either Rouen or the Charlie’s Dodge folks have a Jeep franchise? Or is it Al Smith in Bowling Green, where Ralph Thayer has most of the action, including my Honda dealership? As I’ve stated, all their dealers are great, from Ford to Toyota. Al Smith just put up a brand new showroom just north of town, right next to Thayer Honda.)

    • 0 avatar
      nrd515

      Schmidt gave you that deal? I’m shocked. I bought two vehicles from them, and they were decent deals, but they aren’t known to be great on pricing. I just hope you didn’t get the super weaseley F&I guy, I can’t remember his name anymore. He’s been there since 2000, at least and practically made us walk out with the games he played when we were buying our 2000 Sierra.

      • 0 avatar

        Yup, they really did give me that deal. I let them know in advance what extras I did and did not want, and nothing else was even suggested to me! It was nice not having anyone try to pressure or hard sell me on anything!

  • avatar
    vtnoah

    “because you’re convinced that $8,000 a month you spend on Search Engine Marketing (which you don’t understand — like at all) is driving oodles of people to your site.”

    It does. But it’s a part of the greater structure of your digital advertising portfolio. That said, you don’t know how many hours I’ve spent explaining the difference between SEO and SEM to dealers only to have them come back saying they’re going to invest more in TV or gasp… direct mail down the line because they don’t think that SEM / SEO is worth it.

  • avatar
    slance66

    This all matches my experience, and I’ve done a lot of car shopping over the last 2-3 years. I honestly think the entire model for how cars are sold is antiquated and poorly serves the customer and the manufacturer.

    Car salesmen are quite possibly the single least useful people I encounter in any process of buying anything. They add either zero or negative value. If there is any way to eliminate them, I’d be for it. If a dealer opened up selling multiple makes, and having an online scheduled test drive, where you put your license in a machine and the key pops out, then an electronic purchase process, that’s where I’d shop.

    • 0 avatar
      vtnoah

      That is actually a really cool idea. Wonder what the liability surrounding it would be.

    • 0 avatar
      George B

      After dealing with the dealership sales department, my goal is to never ever go back to a dealership. Feels like you need a shower afterward. The time wasting efforts from sales and financing to squeeze a little extra commission out of the customer has to be bad for the overall business.

      • 0 avatar
        nrd515

        I bought my 2003 Ram via the internet sales dept, and it was great, they sent me invoices for a bunch of trucks, and we finally did the final approval over the phone. Since then, I’ve bought one car from the same place, and sadly, it wasn’t through the ISD, it was a traditional purchase, with a lot of stress and anger by the time I drove out. My last one, in 2010, was done through the ISD, and wasn’t as pleasant, due to some weird confusion about what colors were acceptable. I had sent him an email with my preferred color and other acceptable alternatives. It was Yellow, either of two reds, orange, and blue as a last acceptable color. They had a red one which would have been fine, but he sold it thinking I wanted blue as my first choice, even though my message plainly said it was my last choice (It was too “weak”, I prefer strong/bold colors on cars). By the time I finally got it through to him that Detonator Yellow was THE color I really wanted, the one that was available, with the correct options, was gone too. I wound up with Hemi Orange, and I’ve grown to really like it.

  • avatar
    npaladin2000

    The car salesman is NOT the ideal person to collect CRM data, not when they have a vested interest in what that data shows, and both the motivation and the inclination to be dishonest about it. In our business, leads get assigned to salespeople, and there’s no poaching even possible. Get rid of that or just get rid of the dealers and let me order my car online. Configured the way I want it.

    • 0 avatar
      vtnoah

      This is what’s called a BDC which some dealers utilize. They have people who just do intake of customers non stop and assign leads to salespeople to close. Like all tools though, it depends on how you use it so a dealership could have a BDC and still do a crappy job collecting data.

  • avatar
    MrIcky

    “Dealers are the worst businessmen”… not even close. Check out a dentist’s financial statements sometime.

    But it’s a good read. I’m kind of glad car buying is ssuch a PITA or I’d probably make a lot more bad financial decisions

    • 0 avatar
      slance66

      My friend is a dentist and runs a fantastic business. Knows exactly what he makes on every procedure, cost of materials, real estate etc.

      • 0 avatar

        The more I think about having worked most my life for small and small/mid sized (less then 100 employees) companies, I would say that this category in general tend to have less records and business knowledge. There are some exceptions to this of course and they tend to be rather extreme. I had a boss at one company that even after investing in automating sales tools still tracked every expense and sale in spread sheets and would check the 2 every week to make sure they lined up. You could fill a server with that guys spreadsheets and databases.

        My wife worked for a Vet who almost went under twice despite a very large customer list. He then hired an accountant as a last ditch effort, the practice became incredibly profitable within months. It seemed he made up most prices of the top of his head all the accountant did was look at his costs and make an appropriate price list.

    • 0 avatar
      notwhoithink

      I suspect that most businessmen aren’t really all that great at running businesses. After all, over half of them fail in their first 2 years. A lot of the bad ones manage to survive despite their incompetence because they have good people working for them, or because they provide a needed service in a sector that isn’t often cross-shopped.

  • avatar
    eggsalad

    It makes for interesting reading, the way you list and explore the things that dealer principals do to make you believe they are bad business people.

    I get it (so far) and I agree (so far).

    But what I’d *really* like to understand is WHY dealers are such bad people. Customers don’t like the process, and I’m fairly well convinced that a lot of people who *work* at dealers don’t like the process.

    I hope you intend to tell us why the dealers are bad, at least your opinions.

    • 0 avatar
      S197GT

      cut throat sales environment based mainly on commission, constant employer pressure, long hours, customers who lie as much or more than the dealership…

      what else would you expect? i’ve never been in sales but i have read a lot of current and former car salesman blogs/books… it seems like a very shark-infested environment where only the strong survive long term.

      i’d actually like to do it for a year or two (maybe in retirement, if they’d take me) to see if i could hack it. my guess is i could do ok but would burn out quickly and quit.

      • 0 avatar
        cdnsfan27

        It’s a tough gig. Every $1,000 discount I give a customer is $200 out of my pocket. I also get bonuses based on volume but they do not compensate for lost gross. I wish there was a different way, but we play the hand we are dealt.

  • avatar

    One of craziest aspects of all this is how terrible some of these places are at the follow-up. I’ll contact a dealer on behalf of a customer get no response from the sales team whatsoever, then they will call 3 months later “Are you still in the market?”

    No dumbass, my customer took delivery from one of your competitors that was actually responsive when I put the inquiry in the first time.

    • 0 avatar
      Jimal

      I never understood this. A potential customer is contacting you. Where I worked, you had 20 minutes to respond to the lead, and an entire multi-day, multi-step process to follow with internet leads. Sounds like overkill, until you realize that just about every salesperson out there will make exactly one attempt at contact, and if they don’t make the sale right then and there, they’ll move on.

    • 0 avatar
      nlinesk8s

      +1. I had the opportunity once to talk with a highly-successful VP of sales, and asked him what the most important thing a salesperson could do. I expected something on customer relationships, or knowing the product.

      But he didn’t even hesitate: “Follow up.”

      • 0 avatar
        notwhoithink

        There have actually been studies about sales processes to see how much the follow up matters. It obviously varies by industry, but for some segments you might need 10-15, or even more customer contacts before that customer is ready to sign a deal with you. We had one sales guy who worked for us (again, IT services firm) who everybody hated because he was, frankly, an idiot. But he followed up long after other people would have thrown in the towel, and his persistence cracked the door at a client we had been trying to get into for years and turned them into a $10 million/year account.

    • 0 avatar
      HotPotato

      Nah, I’ll get an instant autoresponder reply. What I will NOT get is an answer to my question. So I have to wait until the follow-up email where the actual salesman is sending it. I ask my question again, and he refers me to the manufacturer’s website…without an actual link to the relevant page, because there IS no relevant page, because the manufacturer’s website does not answer the question. End of potential transaction.

      God, I hate dealers.

  • avatar
    Jimal

    Up until the beginning of this year, this article would have been of extreme interest to me. I worked at a dealer group and I was tasked with (among other things) trying to find a new CRM as part of improving the internet sales process, because the old one was antiquated and generally sucked. I was also up against ownership that like the idea of being ahead of the technology curve (and was willing to spend the money) but was also convinced that the number one most effective advertising we did was plate frames.

    • 0 avatar
      notwhoithink

      “I was also up against ownership that like the idea of being ahead of the technology curve (and was willing to spend the money) but was also convinced that the number one most effective advertising we did was plate frames.”

      They didn’t figure out that most people either replace those or throw them away when they got the car home?

      • 0 avatar
        Jimal

        I don’t know where you come up with “most people”, but we were a top selling and servicing dealer for our brands in the country, and from my sample size of three stores, it is the opposite. I see those plate frames everywhere. What makes it funny is that we were constantly replacing the “DEALER Courtesy Vehicle” decals on the rear windows of our loaners because enough of our customers didn’t want to be seen driving around in a service loaner, but they vast majority of our customers didn’t remove their dealer plate frame or stuck-on dealer badge from the back of their cars.

      • 0 avatar
        HotPotato

        Ha! Three times I threw mine away, and three times the service department screwed new ones on at my next oil change.

  • avatar
    tobiasfunkemd

    I completely agree. I buy new cars every 2-3 years, and I absolutely use multiple internet sites to research and price cars. I’ve found limited success using the dealer website contact system, so I end up calling the Internet department and explaining my situation. I treat cars like the commodities they are and am going to make a decision on where to buy on price, I’m not going to service the vehicle there, have my own financing (but willing to entertain their financing offers), but am willing to give top marks on their customer service surveys if the in-person dealer experience is professional and quick. I’d say 1/3 of dealers immediately understand, but 2/3 still want to pull the old-school “what can I do to get you in here” bullshit and not talk price up front.

    • 0 avatar
      JimC2

      “I treat cars like the commodities they are…”

      Somewhere heads just exploded.

      No CarMax and similar chains do well.

      Only one or two of my friends have bought boats. I can’t say if that process is similar or not.

  • avatar
    Detroit-Iron

    I have had some good and bad experiences with dealers, and more of the former than the latter, although I think that may be because I had enough sense or paranoia to walk away from more than a few. That being said, my experiences with them and salespeople in general has been that it is a shocking demonstration of the disconnect between smart and successful. Whether it is cars, pharmaceuticals, or consulting, intelligence has almost no bearing on success at sales. A corollary to my anecdotal observation-news flash-because they have $2500 to spare car dealers have an unbelievable amount of influence at the state level.

  • avatar
    JMII

    While they may not be capturing sales leads very well (or at all) I was amazed just how well tuned their “buyer profile” for a particular car was. During the purchase on my new (at the time) 1996 Mitsubishi Eclipse at one point during the sales process our sales guy walked away and my wife quickly grabbed a bunch of his paperwork in an effort to see what voodoo tricks he was using to rip us off. Instead we found a profile of what type of person buys a ’96 Eclipse. And we fit that description perfectly: age, income, past purchases, current credit, job status, education background… you name they knew it. I think they even knew I perfered strawberry jam vs raspberry, it was amazing.

    What I learned from this is that the seemly pleasant conversation with the sales guy was actually him comparing my profile vs the idea buyer. The more boxes I checked the harder he worked knowing I fit-the-mold and thus was buying this car regardless, he just had to ensure I didn’t walk off the lot. Random questions like “Where did you go to school? Just married but no kids yet huh?” where all just check points on a list, it was not worthless chit chat. Even questions about the local sports team gave he key information to move the sales process along.

    • 0 avatar
      notwhoithink

      That’s an interesting observation. I didn’t realize that they had statistics about a typical buyer for certain cars, but always knew that there was no such thing as idle chit chat on a dealer lot. Half the time I’m leery of telling them much about myself at all, because I feel like if they figure out that I have a job with a six figure salary that they’ll be less likely to negotiate.

    • 0 avatar
      Scoutdude

      I’d say that data came from Mitsubishi themselves as part of the sales training materials provided to the dealer to help them tell the customer what he or she should buy.

  • avatar
    -Nate

    They don’t call the sales people ‘ lot lizards ‘ for nothing .
    .
    It’s been thirty years since I worked for a dealer , sounds like little has changed on the personnel front .
    .
    Good stories , keep ’em coming .
    .
    -Nate

  • avatar

    Dealers with an active BDC department, the lead/inquiry is entered in the CRM by the BDC and then forwarded to a sales consultant after an appointment is set for the customer/prospect to visit the showroom.

    Dealers without a BDC possibly have issues in how a “walk in” is entered in the CRM.

    Ultimately the function of the CRM is to enable a dealer to follow up on customers, and increasingly “pull ahead” customers for another deal.

    How a customer arrived at a showroom to do a deal becomes irrelevant, its the customer, the model, the year, the amount financed that becomes the critical information for a dealer to perform a “triage” of which customers the dealer will try to “pull ahead”.

    Not only does the BDC respond to online inquiries, or a 1-800 number and enter a customer in the CRM, the BDC also follows up and is the first step in the “pull ahead” process.

    Or “We need xx 2014 model abc, lets go in the CRM and see what we can pull ahead”

    • 0 avatar
      sgeffe

      Aha! And just like that, you schedule an oil change on a Saturday morning; it’s a drive, but there’s a damn fine local pizza joint in this university town, and the students are out of session ’till fall. (This scenario could happen for me; dealer’s in a town with the same name as the town in Kentucky where Corvettes are made, with a ‘zza place rhyming with “miles.”)

      So knowing this, as I’m making my Keurig coffee while waiting, up walks salesman Some Thing Upmysleeve, who asks me what brings me down here? Car still good? Have you driven the new Civic? Let’s take a spin! Keurig crappucino is left behind, and an hour later, I’ve taken leave of my senses, and am driving a new Civic off the lot, so excited that I forget about lunch!

      I’d never make such an impulsive decision, but that’s a function of the CRM systems, if I understand correctly. Thought I’ve seen where, in the ultimate sleazeball scenario, a dealer will pull up your license number as you pull in, and by the time the assigned lot lizard strangles you with the seat belt as they practically rip your door off before you have a chance to turn off the car, a complete dossier is pulled on you, including several hard credit inquiries, in order that the dealer knows how much flimflam they can pull! All before you even step into the showroom!

  • avatar
    5280thinair

    CRM isn’t just badly done at car dealerships, in general it’s crappily done everywhere. Most people (and, by extension, businesses) want to measure things but don’t want to have to put much effort into collecting or validating the data. They go looking for a simple yardstick to measure a complex thing, and so buy into products that are touted to manage the complexity for them (like CRM tools).

    “Simplify as much as possible, but no further.” In most cases, the users of such tools go too far and so end up failing to collect the important data or having it corrupted at the point of collection (like Bark’s take about the sales guy.)

    • 0 avatar
      cwallace

      Amen to that. In my experience, CRM goes from management’s silver bullet to cannon fodder for budget cuts over the course of about 24 months. Then again, the oil and gas industry goes through gut-wrenching collapses about every eight to 10 years, and CRM subscriptions make for obvious targets.

  • avatar

    It may be irrelevant to the deal but it’s very relevant on how the dealership allocates its advertising and marketing dollars.

  • avatar
    dwford

    People definitely do most of their pre-shopping online these days, but I was always amazed at walk ins who would start of with “Tell me about Hyundai, what kind of cars do they sell?” Um, are you serious right now??

    CRMs are a giant waste at most dealerships. They create unnecessary busy work (pre-scheduled tasks to “complete” whether there is something that needs to be done with the customer or not) and generate unnecessary junk email for customers to be annoyed by.

    It is not just the CRM that dealers waste money on, there are systems for posting online content, f&i systems, etc. In reality many of these systems do everything, but dealers pay for different ones to do different things for some reason.

  • avatar
    SoCalMikester

    i used email when i bought my scion xa… actually, i used the scion dealer finder email.

    i wanted an indigo ink pearl 5 speed. closest dealer to me had one coming off the truck. for DAYS i had other dealers offering me white, gray, silver, or black automatics…

    it was nice only having trans and paint options, and knowing the price beforehand. but yeah, the Fn I guy tried to upsell me on all the shit. i shut him down quick.

    but still knowing the price, and it was the car i wanted, no trade and paying about $5k down with the other $9k with the first payment it took FOUR HOURS. WTF?

  • avatar
    CincyDavid

    I’m in the deathcare business, and we use our CRM religiously. We are switching from saleslogix to something tied to outlook that is just being called CRM internally. In a business where you can revisit a family and make multiple sales over a multi-year period, from my perspective, its main value is being able to “pee on the tires” and keep a customer family as a protected contact so none of my esteemed cohorts tries to poach them. As long as I follow up periodically and reach out to these families, they are mine when the need arises to purchase more graves, burial vaults, preplanned funerals or memorialization products. When you are talking about a private mausoleum costing in excess of $1 million dollars, the sales cycle can be SLOW.

  • avatar
    CincyDavid

    If you think it’s a bad feeling having to shop for a car when yours just died, try shopping for a funeral and cemetery property when a loved one just died…and the cemetery doesn’t offer financing when there’s been a death, so not only is the whole thing a shock and you’re forced to make lots of decisions quickly, you also need to have access to thousands of dollars, perhaps tens of thousands of dollars, within 48-72 hours.

  • avatar
    greytraveler

    I have purchased more cars than I can count over the last 60 years. When single, I found going to a dealer and negotiating for a car to be a form of entertainment. Back in the day, a salesperson could actually quote a price and close the deal. No “OK, now we see the guy who closes the deal”.

    I don’t have the time or energy to screw around with the current process when one walks into a dealer these days. I am strongly considering a broker for the next buy. Or the option of using something like True Car to find an acceptable car/price. I want the paperwork ready to sign when I walk in the door and the car ready to drive away. No more multiple hours screwing around with some jerk “closer”.

    Cars, for me, are no longer something that give me a rush, like my new Pontiac 1968 GTO. Now they are just an appliance and need to be reliable and safe.

  • avatar
    Jeff S

    Next time I buy a new vehicle I am going to use COSCO. I would rather go to the dentist than deal directly with a stealership.

    • 0 avatar
      HotPotato

      China Ocean Shipping Corporation?

      If you mean Costco, you still have to deal with the dealer, you just get to do it with a pre-negotiated price; IIRC it depends on the car but is likely $600 over invoice.

      • 0 avatar
        Scoutdude

        I did the Costco thing years ago and at that time they had been told to stop referencing the invoice price and simply say $x is the pre-negotiated price. At that time on the particular vehicle I was purchasing the price was $200 over invoice.

        And yes you still have to deal with the dealer though you go directly to a particular contact, who is often the fleet/internet sales manager. You still need to negotiate for your trade-in, and run the F&I tru-coat, vin etching, extended warranty obstacle course to finish the deal and drive home in your new car.

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