CRM - February 2009 - (Page 18)

THE Recession ISSUE MARKET FOCUS: AUTOMOTIVE Running on Empty Will Detroit get the help it claims to need, or the fate some say it deserves? ot to mix transportation have energy-efficient vehicles. An Autometaphors, but Detroit’s Big bytel survey released in October found Three automakers—Gen- that, in addition to increases in used-car eral Motors, Ford, and purchases, 90 percent of dealers reported Chrysler—are clearing their decks in a an increase in sales of fuel-efficient cars. desperate attempt to stay afloat, or Unfortunately, trucks and sports-utility rather, hoping someone (that is, the gov- vehicles (SUVs) still populate the car lots ernment) will throw them a lifeline. At of America. Despite the belated push on press time, General Motors was asking for $18 billion in loans; Ford, $9 billion; fuel-efficient vehicles, the issue and Chrysler, $7 billion, according to involves more than just swapTime.com. Sales in November did little ping models, Garms says. For to offer any reassurance for a quick turn- one thing, fuel-efficient vehiaround—and American automakers were cles have lower profit marhardly the only ones feeling the pain: gins, and so long as there’s still Nissan reported a 44 percent drop in a demand, the Big Three will hold sales; Chrysler, 42 percent; GM, 41 per- out with the larger vehicles. “As soon as cent; Toyota and Honda, 35 percent each; [fuel prices] come back down, it doesn’t seem to take long before we’re back into and Ford, 30 percent. The good news is that the industry the SUVs,” Garms says. Realistically, overall has done little to rattle its all- however, he says that “it’s very hard to time high score of 82 out of a 100-point believe that a world where 50 percent of scale on the American Consumer Satis- your sales comes from trucks and SUVs is going to last going forward.” faction Index (ACSI). SatisfacSurvival will require a fundation with domestic brands is “A world where mental change. decreasing, however. 50 percent of “The approach of the domestic [manufacturers] is really your sales comes REVVING UP REVENUE not changing a great deal from trucks and Autobytel provides a service from…the last several years,” where consumers can research SUVs [isn’t] says David Van Amburg, manand request quotes from dealaging director of the ACSI, cit- going to last.” erships in their region. Aling price-war competition as a though site traffic has remained big culprit. “The bottom line for the do- relatively stable, Garms has seen a 10 mestic automakers is that if they con- percent decline in consumer requests, tinue to put out a product that consumers which reflects the general decline in don’t rate as high in terms of quality as potential buyers. As such, dealers report foreign competition they’ll just continue that their top priority now is to improve to see their market share erode.” their processes and long-term follow-up Mark Garms, senior vice president on Internet leads. of dealer operations and strategy at Customer satisfaction measurement California-based automotive marketing provider iPerceptions surveyed more services company Autobytel, says that the than 30,000 site visitors in the latter half Big Three have come a long way. The of 2008 and found that consumers plandifference, he says, involves the type of ning to purchase a car within one month cars. In a market where consumers are of taking the survey decreased from 17 being more cost-conscious, it helps to percent to 13 percent; in October 2008, 18 CUSTOMER RELATIONSHIP MANAGEMENT | FEBRUARY 2009 N 39 percent said that an automobile purchase was more than six months out. While Autobytel focuses strictly on customer acquisitions, California-based Auto Point provides technology for the entire life cycle, from purchase to postsale to maintenance to repurchase. Jim Roche, Auto Point’s president, says that most dealers are plagued by fragmentation in their customer interactions. They often rely on separate vendors to deliver service updates, newsletters, referral requests, or even birthday wishes, resulting in significant waste spent on overlapping processes. With customers simply buying less, a streamlined communication channel is critical for dealers looking to bolster the revenue stream. That, Roche says, enables dealers to effectively mine existing customer bases. Auto Point digs into the past four years of transaction data and segments customers into the appropriate life cycle. Results, he says, have been phenomenal: October 2008 was a painful month for the industry and yet the service-and-parts department of one Auto Point client managed to achieve record high sales. Declining gas prices will help, but Autobytel’s Garms says the industry’s only hope for a comeback is for consumers to be able to get the financing they need. Though poor financing policies seem to be what started this crisis in the first place, vehicles (unlike mortgages) are much more static in their value, he says. Under the right terms, lenders can minimize their risk and get consumers buying again. Garms remains hopeful that the industry will get the help it needs. “I find it very hard to imagine that a company or set of companies as critical as the automotive industry is going to be allowed to fail as we go through a really difficult period of time.” —Jessica Tsai Applied Virtual Vision (AVV) The Cobalt Group VENDORS The Reynolds and Reynolds Company Source: Jim Roche, president of Auto Point TOP AUTOMOTIVE 3 www.destinationCRM.com http://www.Time.com http://www.destinationCRM.com

Table of Contents Feed for the Digital Edition of CRM - February 2009

CRM - February 2009 Contents Front Office Reality Check Customer Centricity The Tipping Point Express Service CRM on Twitter Breaking Customer Service Tradition Outsprinted That’s (Not) Entertainment Running on Empty Required Reading Up Against the Downturn The Numbers Tell the Tale Make Marketing Your Megaphone! Hold Onto Your Customers! Spend Your Way Out! Constructing a Virtual Customer Experience Next Customer, Please! It’s Showtime! From A(erospace) to Z(oology) Secret of My Success Re:Tooling Scouting Report Pint of View

CRM - February 2009

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.