The value of a CRM is undeniable. For decades, successful dealerships have been using customer relationship management tools like loyalty programs, multitouch campaigns, and lead tracking to enhance their interactions with customers and grow brand loyalty.
"It’s not the product that sets a dealership apart but their unique services and experiences."
But as markets become more competitive, the demand for a new level of customer interaction has emerged. CXM — for customer experience management — is filling the void.
The Elements of CXM
CXM encompasses both CRM and customer service strategies to optimize every interaction throughout a customer’s lifecycle. It’s a holistic approach that focuses on delivering relevant, superior experiences to customers.
Building on the quantitative data collected by CRM, CXM takes into account all the channels and touchpoints involved in the consumer experience to ensure customers are interacting with brands, when they want and how they want. This concept is so critical that General Motors recently created an executive position focused solely on CXM.
An important tenet of CXM is to develop an emotional connection with customers through consistent and open communication. A strong CXM strategy will engage at touchpoints throughout the customer lifecycle and react to feedback, ensuring customers feel heard and valued.
That means more than just answering a phone call or email. In fact, NADA Data reports a majority of consumers prefer self-service options to speaking with a representative. Post-experience surveys, a vital CXM tool, can provide the data essential to learning from previous successes and failures. With that knowledge in hand, customer-centric business practices can be improved or added to create unique customer experiences.
Essentially, capturing data is no longer the endgame. It’s merely a steppingstone to providing the personalized service and experiences that will differentiate a dealer from their competition and keep their customers coming back.
A Strategy That Pays Dividends
According to a 2018 Econsultancy/Adobe study, organizations that classify themselves as “very advanced” in CXM were nearly three times more likely than their competitors to significantly exceed their annual sales goals.
Why? Because buyers are loyal to brands they trust. A recent survey conducted by iperceptions found 67% of customers say that their standard for good experiences is higher than ever, and 32% of customers say they will stop doing business with a company after only one bad experience.
That’s why CXM is so effective: it maximizes the investment of any up-front advertising costs associated with winning a new customer — and that can add up.
For example, in 2018, NADA reported that the average advertising expense for dealerships was $642 per vehicle sold. If you average 150 sales per month, that’s over $1 million dollars per year to attract customers to your dealership. A strong CXM strategy aims to make these customers loyal, repeat buyers, meaning you get more bang from your marketing buck.
Ignore CXM at Your Own Risk
As the buyer landscape rapidly evolves, creating a great customer experience keeps customers loyal. On the flipside, they also won’t settle for less. Just as great CXM can boost revenue and foster loyalty, bad experiences cost dealerships dearly. The aforementioned iperceptions study found that not only will a third of customers abandon a brand after only one bad experience, 67% will share bad experiences with other people.
All dealerships have access to the same vehicles. It’s not the product that sets a dealership apart but their unique services and experiences.
Tune in next issue for part two of this series. We’ll discuss how certain products and approaches help enhance and develop a robust CXM strategy, turning dealership customers into steadfast, enthusiastic promoters of the brand.
Dean Harrison is the president of Maximus Auto Group, a customer service-focused F&I product provider and administrator to some of the nation’s largest dealer groups.