The Ultimate
Dealers’ Guide
for Customer
Communication
to Maximize
Profits
The Ultimate Dealers’ Guide for Customer
Communication to Maximize Profits
TABLE
of
CONTENTS
3
13
4
23
NEW AND RETURNING
CUSTOMERS
6
8
19
10
15
CLOUD BASED
SOLUTIONS
18
WIRELESS
CONCLUSION
45%
of calls into automotive
dealerships are from
new customers.
MISSED
CALLS
LOGGING
LEADS
PAGING
16
Sales
satisfaction
among
new-vehicle
buyers is 52
points higher
when their
Salesperson
uses a tablet
device
INCREASE
PROFITS
MOBILITY
WHO’S CALLING?
Phone calls into your dealership
can provide intelligence on the
health of your business.
NETWORKING
22
24
SECURITY
REFERENCE
Three Ways You Can
Increase Your Profits:
Number of
customers
you have
Add-on sales
Frequency of
your customers’
purchases
Interestingly enough, the common theme throughout these is not
cutting expenses or having the perfect process—it is communication.
It is easy to see that without communication you cannot grow.
This white paper is packed full of statistical data to help you realize areas
of communication growth as well as the latest trends in automotive
dealerships.
3
The Phone’s Ringing …
Who is Calling and Why?
According to a Marchex, Inc. study, about
45% of calls into
automotive dealerships are from new customers.1
When the phone rings, someone needs to be there to answer it.
Potential new customers are calling:
?
With questions about new
vehicles or price quotes
4%
To get directions and find
out your hours of operation
23%
of the
time
About services or vehicles
not offered by your dealership
19%
of the
time
To make an appointment or
purchase over the phone
When the phone rings, someone
needs to be there to answer it.
4%
of the
time
of the
time
Calls into
dealerships
New
customers
45%
55%
Existing
customers
4
You’re Not the Only
One They Want
In a Service 360 study, they interviewed over 1,000 new car buyers and
found that the majority of them (58.2%) visited 2-4 dealerships before
they purchased their vehicle. Consumers today are more savvy and
money conscious than in years past. They can shop around and narrow
their choices much easier. Loyalty is not always a part of the equation.
71% of the people surveyed purchased
their vehicle from a new dealership.2
Previously purchased
vehicle from
same dealership?
Number of dealerships
visited before vehicle
purchase
29%
Yes
71%
No
31.4% 58.2% 10.4%
Only 1
2 to 4
5+
5
Do You Know What
You’re Missing?
What is really scary for dealerships, according to a Marchex, Inc.
study, is that 20% of all dealership calls go unanswered.1 That
means 1 in 5 calls are missed, each of which could be a new lead.
calls go
20% ofunanswered
Do you know which 20% you are missing?
And what is worse, according
to a CDK study, is that many
dealerships (45%) do not
even know how many
calls they missed.
The number of
missed calls for
these dealerships
could be even higher.
6
Missed Calls =
Missed Opportunities
Each call your dealership misses could be a revenue-generating
opportunity. Access to call reporting numbers can reveal some insightful,
yet shocking numbers. A CDK study looked at six different dealerships
of various OEMs and found the following departmental breakdown:
• Sales – 4% of calls were missed and 10.4% went to voicemail
• Service – 1.6% of calls were missed and 20.7% went to voicemail
• Parts – 1.1% of calls were missed and 6.4% went to voicemail3
Lost or Missed Calls
(during a month)
Average Profit
Loss Opportunity
(assuming 15%
close ratio)
SALES
SERVICE
PARTS
211
54
23
$1500
$300
$50
$47,475
$1,620
$172
Total Loss
$49,267 $591,204
monthyear
Dealerships are passing up huge profits when they
miss calls. Also, it is not hard to infer a direct correlation between CSI
scores and calls going to voicemail … no one likes to leave voicemails.
7
Logging the Lead is not
as Easy as it Sounds
You use your phone system every day to help generate thousands of
dollars of revenue, yet often times it is not integrated with any or all
of your valuable software applications. Integration is a key aspect to
effective communications.
In a CDK study, we surveyed
Sales Representatives and asked
how often they logged phone leads:
• 9% said they NEVER log the leads
• 39% said only SOMETIMES they log the leads3
This means that out of every 30 leads
your dealership receives, you may retain
data on only 15 of them.
According to a Cobalt study, the average
Sales cycle can range from 36-90 days.4
So, Salespeople are likely to enter leads
into the CRM system only if they believe
they will close the deal—and only if it will
happen in the next 10 days or less.
8
The Foundation of
Communication is Integration
Did you know that, according to a CDK study, 52%
of dealerships
enter the same customer data three or more times
during a single deal process?3
A simple feature like
SERVICE
REPAIR
Screen Pop can help
your employees view
full customer information
before they even pick up the
phone. For example,
PARTS
Service can receive a
ORDERS
call and create a repair
order simply by clicking
the screen pop, and the customer’s
information will automatically be populated.
DMS
CRM
Screen Pop
DESKING
We found that it typically takes 45 seconds for a dealership to access
one customer’s information.3 But, with integration between your phone
and software applications, information is available in less than 5 seconds.
Time taken to access customer information
3,352
Average # of calls to Service
x
45 seconds
=
3
42
42 HOURS per month
9
When Mobility
Gets Personal
You see it every day: Salespeople using their personal smartphones
for business.
Being accessible 24/7 is essential for the old Sales axiom, “ABC” (Always
Be Closing). In fact, a recent CDK survey uncovered that Salespeople
give their cell phone numbers to customers 86% of the time.3
Seems harmless enough.
But, combine that with the 2013 NADA Workforce Industry report that
says annual dealership Sales turnover is 62%.5 This means that
if you have 15 Salespeople on staff, 10 of them will leave your dealership
this year, taking their personal smartphones—containing many of your
leads—with them.
LEADS!
15 salespeople
on staff
10 will leave
your dealership
this year
taking their personal
smartphones
– AND YOUR LEADS –
with them
10
Don’t Ignore it!
Embrace Smartphones
that Protect the Dealership
One effective way to protect your dealership’s leads is by using a feature
that integrates a desk phone and a cell phone, called Simultaneous Ring.
This allows a customer to call
a single phone number—
one owned by your
dealership—to ring
an employee’s desk
and cell phone,
simultaneously.
Incoming
Call
123-456-7890
That means a dealership
employee can effectively
bring their desk phone with them, anywhere they go, to:
• Transfer calls between the two phones
• Dial internal extensions from their mobile device
• Tag and enter leads directly into the dealership’s CRM system
• Look up vehicle and customer information on the lot
11
Smartphone Apps Further
Increase Productivity
With easy-to-use, free mobile applications, employees’ smartphones can
be fully utilized—without additional cost to the dealership—
because they are connected using Wi-Fi. Many dealerships now provide
a free mobile application that gives Sales Representatives the ability to:
• See which employees are available for a call
• Dial out using the dealership’s phone number
• Instant message (IM) with co-workers and customers
• Make video calls between all of your departments
ervice will not need to
S
walk back and forth to
the Parts counter
Your F&I Manager can
easily communicate with
Sales when closing a deal
12
“James Smith, Line One”
“James Smith. You have a call on line one. James Smith, line one.”
Pages like these are often heard throughout the dealership … however,
James Smith is not always there to hear them.
Paging is an inefficient way to locate employees.
Productivity apps and unified communications can tell you if employees
are available and where they are, when used properly. Here are a few examples of the newest dealership communication technologies:
• Presence
• Chat
• Voice
• Desktop sharing
• Video
According to a CDK study, 43% of
participants reported that their CSI
score stayed the same or decreased
over the last 6 months.3 Better collaboration
within your dealership can help.
In Out
James Smith
Frank Jones
Sally McNally
13
Wasted Time
With unified communications, your dealership employees are empowered
to route calls not only to the right person, but to the right person who is
available to take your customer’s call.
According to a CDK survey, 90% of dealership employees said that at
least one Technician per hour walks over to them to ask a question. And
93% said that it takes at least 1-2 minutes to walk from a Service bay, to
the employee’s desk, and back.3
24
2
technicians
x
1.5
minutes
x
8 hours
=
minutes wasted
per day
Using unified communications, employees can see if someone is
available and ask them a question via chat, video or desktop sharing.
How much time do your employees waste walking
throughout your dealership?
14
Do You Know
Who’s Calling?
Phone calls into your dealership can provide intelligence on the health
of your business. With an easy-to-use tracking solution, you can monitor:
• Missed calls
• Customer data from phone calls through the lead-logging
process with the click of a mouse
• Call volumes throughout the day
• The effectiveness of Sales follow-up calls
• Calls that go to voicemail
• No shows for Sales and Service
Knowing this information in real time can alert you to
when there are not enough employees to answer the
volume of incoming calls. It also gives you the ability to return
a customer’s missed call.
Additionally, dealerships that want insights into Marketing ROI can
use separate phone numbers to track the true effectiveness of every
Marketing promotion.
Calls to
Voicemail
Customer
Data
Missed
Calls
4
Call
Volumes
Service
No-shows
15
Cloud-based Solutions
Make it all Possible
Now you need to know how you can build a foundation to put all of
this in place.
Cloud-based, or hosted, solutions are the latest
innovation of today’s phone technologies. They can
free your dealership from the hands-on, day-to-day management of
your phone system.
With a cloud-based phone
system, your dealership can:
• Be flexible – Purchase only what you need by
expanding or decreasing the number of users you
have when changes arise
• Stay current – Receive updated software releases at no cost,
so every one of your stores is on the same software version
• Improve efficiency – Reduce repetitive IT maintenance
• Save money – Incur no upfront capital costs for call servers and
enjoy not having to upgrade, maintain or back up servers ever again
16
More Benefits of Putting
Your Business in the Cloud
When your phone service is delivered through the cloud, your
employees can be walking the lot, on a test drive, or in their kitchens.
Suddenly, you are far better equipped to deliver the level of
service your customers need and expect—the level of service that keeps
them coming back to your dealership, time and time again.
• 99.5% uptime (and business continuity) with secure hosting from
Tier IV Data Centers that can withstand most natural disasters (CDK)3
• Freedom to turn over all of your phone responsibilities to a single point
of accountability
• Reliability of affordable communication technologies with
predictable costs
17
The Backbone of
Your Phone System
DMS
A network consisting of routers
and switches make up the backbone
of any connected business. In a nutshell,
the router finds the best path for
traffic in and out of your network
and the switch sends it where it
needs to go inside the dealership.
CRM
That brings us to the needed “shock” to your system. Every phone or
wireless access point needs electricity to function. By combining your
network and electrical together (commonly called a powered network),
your devices only need one cable verses two—separate ones for cable
and electricity—for everything.
For real estate success, it’s all about “Location, Location, Location.”
For dealership success, it’s all about
“Network, Network, NETWORK.”
Investing in the right network that is supported 24/7 is critical for your
phone system, dealership applications and your wireless network.
18
Wireless
According to a JD Power Study, sales
satisfaction among
new-vehicle buyers is 52 points higher when their
Salesperson uses a tablet device—versus not using one—
during the Sales process.6
A few progressive dealerships have already started transitioning to
using tablets to empower their Salespeople with mobile technologies
that can help them find the information they need, when they need it.
But, what happens if wireless access is spotty or unavailable at times?
Suddenly, the tablet—and the investment in it—is almost useless.
According to an CDK study, almost
59% of dealership employees said
that their wireless access does not
work all of the time.3
No
Wi-Fi?!
A properly installed, commercial-grade
wireless network that rides on top of
your core powered network is essential to
enhancing the way your dealership operates.
19
Six Mistakes Dealers
Make when Implementing
Wireless Networks
Here are a few considerations when implementing or upgrading
your wireless network:
1
Powered network
Without having power
in your wired network,
you will have to run
electric to each one of
your wireless access
points, which can cost
as much as $1,200
per outlet.
3
2
Access point placement
Where you position your access
points is critical: if they are
too far from where dealership
employees use the Internet,
the connection will be weak,
and if they are too close to
your devices, they will drain
the batteries. Every dealership
is unique, so a comprehensive
site survey pays off.
Configuration
OEMs are building wireless solutions to make your business
better, and to run those solutions effectively, you should
follow their recommended wireless configurations.
20
Six Mistakes Dealers Make when
Implementing Wireless Networks
(continued)
Access point type
4
Many dealerships wrongly believe that a consumer-grade wireless access
point is good enough for business. These devices are designed to support
about four wireless devices, so once your employees and customers join
your wireless network, they will absorb tons of bandwidth, decreasing the
coverage area as well as slowing down the entire network.
5
A single wireless network
Make sure you link your wireless
access points together so users can
move throughout your dealership,
and—like a cell phone connection—
seamlessly flow from access point
to access point, maintaining a strong
wireless connection. Wireless controllers
can also mitigate signal interference as
well as maintain a separate guest
network for your customers.
6
Tablet management
Purchasing, fixing, configuring
and managing tablets can
become overwhelming.
Select a vendor that supplies,
configures, supports and
replaces tablets, saving you
the trouble of running around
to fix tablets, day in and day out.
21
Don’t Forget About Security
Dealerships are becoming one of the most regulated businesses in the
country. According to NADA, dealerships are subjected to nearly 100
federal regulations as well as additional state laws, depending where you
reside. The FTC has even gone as far as considering
dealerships to be financial institutions—basically the
same as banks.
It then goes without saying that your dealership is a target for cyberthieves.
According to a Verizon report, in 2011, the second-highest data loss total
was reported since they began keeping track in 2004.
• 98% of attacks were from outsiders, organized crime
and activist groups
• 81% of attacks used some form of hacking
• 79% of dealerships were targets of opportunity—
targets with known weaknesses
• Breaches resulting from privilege misuse
were only 5% of the total
As you can see, the
data your dealership
holds is extremely important, so
you want to do everything you can
to protect it.
22
Conclusion… Collaboration
is King
The way you collaborate with your customers and your employees
says a lot about your dealership. Having the right solutions
that will help productivity, clarity and speed is what will
separate you from your competition.
CDK has been providing INTEGRATED phone systems to dealerships
for the past eight years. In conjunction with Cisco, who specializes in
networking, cloud computing and phone systems, CDK is the industry’s
authority on dealership communications.
Currently, CDK:
• Has sold over 100,000 phones
• Supports over 3,000 dealership sites
• Manages almost 80 million calls per month
To learn how you can advance your communication processes, contact
your local CDK Sales Representative or call 888.424.6342.
CDK Global is a Cisco Gold Certified partner in the USA, allowing us to
incorporate the deepest level of Cisco Lifecycle Services expertise into our offerings
and demonstrate a measurably high level of customer satisfaction. Listed below
are the architectural specializations that helped us obtain our certification:
• Advanced Data Center
• Advanced Collaboration
• Advanced Borderless Networks
• Master Unified Communications
Additionally, CDK Global is a worldwide Cisco Cloud and Managed Services
Partner with the following Powered Managed Services specializations:
• Managed Security
• Business Communications
• Application Performance Management
cdkglobal.com
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23
Reference
1
archex, Inc. Study: Auto Dealers Pay Big for Letting Calls
M
go to Voicemail. Marchex Investors, 24 Oct. 2012.
http://investors.marchex.com/phoenix.zhtml?c=175199&p=
irol-newsArticle&ID=1749668&highlight
Service 360 Report
2
CDK Business Intelligence
3
Cobalt eBook. A Guide to the Modern Car-Shopper Journey.
http://www.cobalt.com/consumerjourney/ebook.php
4
2013 NADA Dealership Workforce Study Industry Report.
http://www.nadauniversity.com/workforcestudy/
5
J.D. Power 2013 U.S. Sales Satisfaction Index (SSI) StudySM.
Released November 14, 2013. Based on responses from 29,040
buyers who purchased or leased their new vehicle in April or May
2013. https://pictures.dealer.com/jdpower/5400baf10a0d02b7014
7e0bad968f014.pdf
6
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