• August 27, 2003

3 Ways to Capitalize on CRM

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Getting the right product to the right customer at the right price is a challenge for any company. But nowhere is it more difficult than in the automotive industry. Even as manufacturers and dealers embrace CRM, they still face significant obstacles. "CRM hasn't been easy for the automotive sector, where the focus has historically been on plant capacity utilization, distribution targets, and promotions," says Robert Taylor, vice president, automotive global CRM leader, Cap Gemini Ernst & Young. "Vehicle purchases are infrequent and lifecycle events and in-market timing are often unknown to the OEM. And even when an understanding of segment preferences and behavior exists, that insight is seldom leveraged operationally at the point of customer contact to optimize customer experience and influence critical events in the customer lifecycle." According to Taylor, the biggest barriers are manufacturers' complex legacy systems; their dependence on third parties for key sales, marketing, and service processes; and the lack of quality data--when they can even get their dealers to share it. But based on recent analysis of the industry, Taylor is convinced that if OEMs and their business partners collaborate, they can capitalize on three key CRM opportunities: Demand sensing: Tools exist to better understand current demand as expressed in sales, online configurations, and comparative model research and then to translate that understanding into improved forecasts and suggested order banks. This analytical capability will extend to increasingly smaller segments, resulting in better matching of local market supply and demand. Campaign and lead management
: As companies develop accurate, enhanced customer databases there will be a gradual shift of spending from mass media promotion to increasingly targeted marketing, using a variety of media, including the Internet, direct mail, promotions, and telephone calls. This will lead to offers that are increasingly tailored to the local market and individual, and quality leads worthy of dealers' attention. These incentives and offers will have to be more personalized to break the cycle of mass OEM-sponsored incentives. Managing leads requires close collaboration between the OEM, dealer, and third-party marketing agency. Their roles need to be clearly defined: At what point does the agency hand off the lead to the dealer? What level of support should the dealer receive to close the deal? Who is responsible for managing the customer after the purchase, for service work and future purchases? Communication: Manufacturers will discover new ways of communicating with and relating to their customers during the ownership period. Telematics will help open the door to new dimensions in that relationship and result in a frequency of contact and richness of data undreamed of today. From service reminders tied to actual vehicle performance to suggested offers based on travel patterns, the automotive industry will be limited only by its imagination. Contacts will serve as a rich source of customer preference and propensity information that help to achieve the objective of satisfying customer needs for the network of companies allied with the OEM.
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