“Driving Toward CRM 3.0 in the Automotive Industry” – Tom Colucci and Daniel Rubin
The trend toward personalized marketing is global. Today, across the world, buyers expect companies to interact with them as individuals, on a personal level, in a timely fashion, and with relevant content. The expectation is that buyers are seen and heard as individuals. This has a very different meaning from 10 years ago when pulling online content, from multiple devices, was relatively new.
The automotive industry has unique challenges with meeting the expectations of today’s sophisticated and well-researched buyer. The car buyer’s journey is long and complex and is a voyage with much product consideration. It typically takes months and, in many cases, years to complete. Ideally, if we are properly engaged with the consumer, the journey never ends—it simply progresses as the buyer identifies with the brand, the brand creates affinity, and the buyer makes repeat purchases.
The evolution of Customer Relationship Management (CRM) is the backbone for orchestrating this type of consumer engagement with buyers, and the automotive industry must keep pace with this evolution to deliver on consumers’ expectations.
Think of the progression of automotive CRM as going through a sequence of stages.
The first, CRM 1.0, is highly tactical and guided by the classic sales and marketing funnel. The focus is on new model launches and marketing to generic target markets to build showroom traffic. From there dealers are asked to close sales and provide excellent post-sale service.
The second stage, CRM 2.0, is heavily influenced by digital. A study by Google and Luth Research indicates that car buyers make many, if not most of, their purchase decisions before they ever visit a dealer—which they only visit live twice in their journey. They make as many as 900+ digital interactions on 139 Google searches. Much of the time spent in careful consideration is done in these digital micro-moments. They make quick searches, sift through facts, and watch videos on their smartphones. All the while, they are making important decisions about their future purchase.
The challenge in CRM 2.0 is gathering data for all disparate channels and integrating it into an actionable “single-view” of the customer. This single view makes it possible to build predictive models to guide new model launch programs. The mantra becomes maximizing synergies across channels and creating fractional attribution models to describe channel sales and profit contributions.
CRM 3.0 represents another jump shift. Now the focus is on helping car buyers throughout their long journeys, not just when they attend a car show, visit the company website, drive up to a showroom, purchase accessories, or have their car serviced. Each moment the customer thinks about a car purchase is on the table. There is no “single-view” of the customer. Instead, technology constantly scans for touchpoints through a vast network of possibilities, immediately reacting to signals along the way. The focus is on translating recent and current customer activity in terms of personas, and then helping the car buyer achieve specific outcomes during each interaction. The car buyer’s journey includes a long-term perspective of maximizing value delivered to and profits derived from each buyer.
Completing CRM 1.0
Currently, the biggest challenge for the automotive industry is completing its CRM 1.0 buildout. For example, sometimes customer touchpoints are not digitally codified. Dashboards often do not provide a full spectrum of dealer, auto show, service, and accessory metrics. Sometimes, there is no central customer data hub to track all product lines. Target markets typically rely on generic national demographics rather than segments reflecting regional or local purchase patterns.
Starting CRM 2.0
Most car manufacturers are considering CRM 2.0 initiatives. For example, bolt-on applications are being reviewed to create a more integrated customer record across channels. Customer showroom visit information is integrated with auto show attendance, prior purchases, service records and accessory purchases. Efforts are underway to create synergies between online and dealer channels. Fractional internet contributions to dealer sales are being explored.
Too Early to Think About CRM 3.0?
Given the fact that much of the automotive industry is just moving into CRM 2.0, does it make sense to even think about CRM 3.0? In an ideal world, the automotive industry would be left alone to complete these transitions in an orderly fashion. But the world is not cooperating. Other industries provide highly personalized responses to customers and are therefore far ahead of the automotive industry. Today’s customer has high expectations for personalization, and many industries are moving into CRM 3.0 as a means for bringing the human touch back to marketing.
So, the answer is ‘yes,’ it does make sense to begin thinking about CRM 3.0. Not only does it make sense; it is imperative to meet customers’ high expectations for seamless, omnichannel experiences and for meaningful relationships with brands that can connect with them on a personal level.
To make an accelerated CRM migration strategy financially viable, the automotive industry is looking for quick wins. It is critical to know which CRM upgrades are most likely to:
- Scale with us as we complete CRM 1.0, transition into 2.0, and plan for 3.0.
- Generate the most beneficial insights into customer needs.
- Deliver incremental, short-term market share or net promoter score gains.
- Accommodate changes to our definition of the buyer’s journey as new technologies and competitors exert more influence on customer expectations.
Tom Colucci is the Vice President of Consumer Brands Retail and Automotive at Harte Hanks.
Daniel Rubin is Head of Analytics—Consumer Brands at Harte Hanks.