If you put a frog into a pot of boiling water, it will leap out immediately. But if you put a frog in a pot of cool water and then gradually heat the water until it starts boiling, the frog will not become aware of the danger until it is too late. The frog’s survival instincts are geared towards detecting sudden changes. This story is a warning to pay attention to threats that are slowly increasing – like expenses. If you compare your CRM costs from ten years ago to today, you might realize that you got boiled like a frog. In my last article I mentioned that there are five factors to selecting a DMS; Report writer, Integrated CRM, Price per user, Productivity features, and Multi-company ability. Last month I covered Report Writers and in this article I’ll discuss CRM. In future issues I’ll address the other three factors.
For most dealers, technology costs have tripled in the past ten years – during a time when hardware and software costs are a fraction of what they used to be. For example, a mass storage hard drive once cost over $20,000 – but today you can get a terabyte hard drive for under $100. Why are your DMS and CRM bills climbing? The obvious reason is the amount of new technology, especially software that manages people and processes. In 2003, there were only a handful of CRM providers and a typical CRM software cost less than $750 a month. Today we have over 100 CRM providers and typical monthly charges are between $1,500-$3,000. We took a survey during my last Profit Accounting Academy and half of the attendees were paying MORE for CRM software than their core DMS bill. You might say “that fair, CRM software sells more vehicles and service – it makes me money and it should cost more than that old clunky DMS that only keeps track of my money!” Why does CRM software cost more than DMS software that is over ten times more complicated? It is probably the same reason why the healthcare site cost over 640 million to develop and it does a fraction of what a DMS does. The users of CRM – like the government are willing to pay the price and it is often developed by many different technology companies or teams. But what if you could have both CRM and DMS in one single product and a lower price? That is the debate between integrated and interfaced CRM. Currently three DMS providers offer fully integrated CRM with their DMS; ADP (Drive,) R+R (Ignite) and DealerStar DMS. Some of the other tier 2 and 3 providers offer an interface with the major CRM providers. The biggest problem with an interfaced system is that there are timing and mapping issues. When data is exchanged between the two systems – it doesn’t always go where you want it – when you want it. For example, there might be a “bi-directional” interface, but this is very limited on what data is truly shared. Your sales managers sell from cost and what happens when purchase orders and internal repair orders closed today don’t show up in your desking or CRM software until tomorrow? What if you make a follow-up or prospecting call to a customer that has a vehicle in the shop waiting for parts? Sales completed in your CRM, are not updating the DMS and visa versa. When my daughter-in-law bought her new vehicle last year, she got an email five days later offering fifty dollars in free gas if she’d come in for a test drive. In six months, she got an equity postcard telling her that she could reduce her monthly payments by trading in on a more expensive model. By that time, she had received over a dozen “robot calls” and automated emails even one that asked her to come in for service the day after her last visit. Fortunately, I had used my email address and phone number during the purchasing process, otherwise she would have thought the dealership was terribly unorganized.
Should you pick one DMS over another because it interfaces to your CRM software? Should you only consider a DMS that has truly integrated CRM? Both of these questions can only be answered by careful analysis. If you currently have an interfaced CRM – do a spot check of 3 stock numbers with open purchase orders and internals. Does the correct cost of the vehicle show in your CRM software? Next, look up 3 customers in your CRM software that came into the shop today. Does it show that information to your salespeople? Look at your website today. Are all the vehicles that you have in stock on the website and are sold ones removed? Finally, track down all customer communications and find out how times customers are being contacted and when? Are there duplicates from your various 3rd party providers? By performing this audit it should become apparent to you if your interfaced CRM is functioning properly with your DMS and if that interface should be a deciding factor on your new DMS purchase.