Using Communications Technology to Improve Dealership Operations and Your CSI. Published by Vertical Communications July 2013
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1 Usig Commuicatios Techology to Improve Dealership Operatios ad Your CSI Published by Vertical Commuicatios
2 CONTENTS 2 U.S. Auto Idustry Back o the Road 3 Drivig Out Costs to Icrease Profitability 5 Solutios for Survivig i Today s Automotive Market 6 Improve Geeral Busiess Maagemet 6 Evaluate your techology ad CRM optios 7 Covertig calls to sales 7 Wave Call Classifier 9 Wave Call Recordig 10 Cotrol Expeses 11 Wave Campaig Tracker 12 Reduce Employee Turover 12 The ew mobile buyer 13 Wave ViewPoit Mobile 14 Icrease Service Departmet Reveues 14 Appoitmet Remider 15 Coclusio U.S. Auto Idustry Back o the Road Thigs are lookig great for the U.S. auto idustry. Improvig ecoomic coditios ad risig cosumer cofidece have helped push auto sales upwards. So much so, that several big U.S. automakers have experieced somethig ot see i more tha 20 years gais i market share. Despite the ligerig effects of the recessio, U.S. automobile sales are brisk largely due to pet-up demad. Risig average vehicle age ad higher prices for used vehicles have fueled this spike i sales. What s more, as the ecoomy improves ad the housig market stabilizes, auto sales will likely cotiue to rise. Other idustry highlights iclude: A much healthier automotive idustry has emerged from the bakruptcies ad restructurigs of a few years ago. Maufacturers (particularly the Detroit 3 ) ad suppliers are ow able to operate profitably while sellig fewer vehicles. Growth i North America light vehicle productio is ot just beig drive by a cyclical recovery i domestic vehicle sales, but also by sigificat oshorig of capacity by foreig OEMs ad risig export opportuities. By 2025, auto maufacturers will be required to produce vehicles that deliver 54.5 miles per gallo. This will result i better-desiged powertrais, alterative fuel vehicles ad other iovatios. Eve with this positive outlook, competitio for buyers remais kee as dealers cotiue to adjust sales models to accommodate cosumer buyig patters ad prefereces. While the majority of sales are still coducted i the showroom, accordig to a survey by AutoTrader.com ad auto market iformatio firm Polk, 1 early 70 percet of car buyers rely o the Iteret to research, pricecompare ad/or complete most or all of their car purchase olie. Ad may of those buyers are doig so with the use of mobile apps ad literal drive-throughs of dealer lots, clickig o vehicle QR codes ad scaig dealer mobile ladig pages to quickly compare deals. 2
3 Whether olie or o the lot, however, cotrollig operatioal costs ad improvig customer service still remai the two top drivers i icreasig Customer Satisfactio Idex (CSI) scores to attract more factory dollars ad esure greater dealer profitability. Drivig Out Costs to Icrease Profitability Top Drivers for Icreased CSI 1. Cotrollig operatioal costs. 2. Improvig customer service. Accordig to StrategicSource, which provides purchasig ad audit services for the automotive ad other idustries, dealerships purchase supplies ad services i over 130 expese categories, ad sped betwee 4% to 8% of their aual reveues o these supplies ad services just to keep their doors ope. I 2012, StrategicSource reported that while improvemets were made i most categories over 2011, there are still sigificat opportuities for dealerships to reduce costs ad improve profitability. Not surprisigly, telecommuicatios, marketig ad dealer maagemet systems still represet some of the greatest opportuities for wrigig out costs ad drivig efficiecies ito the busiess. Sample 2012 Auto Dealership Cost Reductio Opportuities (by %) Expese Category % Opportuity Commets Telecommuicatio (Local & LD) 48% Results slightly lower tha 2011, but still a strog opportuity to reduce fixed costs. Marketig Products 38% Agai, a sigificat improvemet over 2011 results. Sigificat competitio exists i this space. Dealer Maagemet Systems 32% Much improved results over 2011 ad also reflects the growig competitio ad willigess of cliets to move to ew providers. Records Maagemet 31% Results just slightly uder 2011 results, but reflects a competitive idustry. Telecommuicatio (Cellular) 31% Results dow from 2011 but still oe of the best cost savigs opportuities across a orgaizatio. Source: 2012 StrategicSource Sourcig Results by Doug Audi. Dealer Commuicatios, April 2,
4 NADA Survival Checklist These opportuities dovetail with recommedatios i the Natioal Automobile Dealers Associatio (NADA) Dealer Survival Checklist. 2 Desiged to help dealerships sustai profitability i ay ecoomic eviromet, NADA s checklist focuses o strategies dealers ca use i eight key areas to cotrol their receivables ad ivetories ad better maage cash, as well as to maximize efforts i areas that produce the most reveue. Effective use of today s advaced uified ad IP commuicatios techologies, such as those available through Vertical Commuicatios, ca directly impact several of these key areas ad eable dealerships to: Covert more calls to sales Improve busiess maagemet with reliable busiess itelligece Cotrol advertisig ad other expeses Retai ad trai persoel to be more efficiet ad productive Icrease profitability of Service ad Parts departmets Improve Customer Satisfactio Idex scores 4
5 Solutios for Survivig i Today s Automotive Market As a result of today s tighter ecoomy, the idustry sees the cotiuatio of the cosolidatio of smaller dealers ito larger dealer groups to reduce costs, maximize efficiecies ad streamlie busiess maagemet. Whether for a sigle-site or multi-locatio dealership, Vertical Commuicatios is the oly telecommuicatios vedor that offers solutios specifically desiged for automobile dealers. Vertical offers a full rage of uified commuicatios (UC) applicatios, mobility tools ad other productivity features to optimize ad help streamlie busiess processes all o oe platform. The Vertical Wave IP uified commuicatios system is ideally suited to meet the auto idustry s evolvig demads. The oly true hybrid system with both digital ad full Voice over Iteret Protocol (VoIP) capabilities, the Wave IP comes complete with embedded telephoy, collaboratio, presece maagemet ad eterprise mobility applicatios that are easy to use ad deploy. Ulike other solutios that offer support for addig IP applicatios but which require extra hardware ad software at a additioal cost the Wave IP already has everythig today s successful auto dealership eeds for cost-effective commuicatios ad ehaced busiess processes built right i. Survivig i Today s Auto Market The Vertical Wave IP uified commuicatios system helps auto dealers address areas critical to daily busiess operatios with cost effective, embedded features icludig: Mobility Istat Messagig Messagig O Hold Advaced Call Routig Marketig Campaig Reportig Custom Software Itegratio Outboud IVR Call Recordig & Loggig Vertical Wave IP 500 TM 5
6 Improve Geeral Busiess Maagemet Icreasig sales ad CSI scores begis with the first ad every call ito your dealership. The ability to gather, maitai ad report o data from customer calls provides the busiess itelligece you eed to cotiually ehace your busiess processes ad provide the best customer experiece possible. Evaluate your techology ad CRM optios Well-ru Busiess Developmet Ceters (BDC) are emergig as the lichpi for dealership Customer Relatioship Maagemet (CRM) ad Sales Force Automatio techologies. Together, the right CRM tool, itegrated with your phoe system, other busiess programs such as your accoutig software ad ERM, ad BDC, provide a greater opportuity to retai customers throughout the owership life cycle. Itegratio of your phoe system with your BDC ad the right CRM tool is a key factor i improvig ad optimizig your dealership s geeral busiess maagemet practices. At a miimum, telecom features worth cosiderig for a efficiet BDC should iclude ACD (automatic call distributio, which routes calls to the first available staff member) ad call moitorig/recordig (for quality assurace, as well as employee traiig). The Vertical Wave IP seamlessly itegrates with popular dealer CRM packages to improve efficiecy by automatically routig calls while simultaeously trackig ad capturig call data for valuable busiess itelligece. Itegratio with your CRM tool should also provide customizable reports so your dealership maagemet team ca make real-time, fact-based decisios ad adjustmets to critical busiess maagemet processes. Your sales maager eeds to uderstad what the BDC does, or the ball will be dropped whe the customer comes ito the showroom. Each day, he or she should kow the total volume of leads, icomig calls ad appoitmets set. The geeral maager should also have first-had kowledge of the BDC process (icludig what s beig said to customers ad customer expectatios), ad be reviewig daily, weekly ad mothly iformatio o iboud ad outboud sales ad service calls with the BDC maager. 6
7 Covertig calls to sales Trackig every detail of the relatioship with prospective customers is critical to sales. Accordig to a study by Marchex Call Aalytics, 77% of customers call a car dealership before they step foot o the lot. Of those calls, 23% are callig for geeral iformatio such as service hours, locatio, etc., but more tha half 54% are callig to iquire about ew cars ad quotes with the itetio of buyig. Yet 20% of those calls go uaswered! 3 Trackig ad covertig those calls to sales is the differece betwee success ad failure for dealerships. The Vertical Wave IP ca be itegrated directly with stadard dealer CRM packages, icludig DealerSocket ad Higher Gear. Icomig calls are itelligetly routed to their destiatio through the Wave IP s embedded Call Classifier applicatio, so you ever miss a call or sales opportuity. A simple data coectio allows you to create a query that simultaeously pushes call data to your existig CRM system for easy trackig, follow-up ad accoutability. Wave Call Classifier The Wave IP s built-i Call Classifier applicatio ca immediately impact the effectiveess of your staff ad BDC agets by empowerig them with iformatio about a caller or the origi of a lead source before they eve aswer the call. Wave Call Classifier provides agets with detailed caller iformatio from ay Ope Database Coectivity (ODBC) compatible database, ad itelligetly routes calls based o who is callig or what they are callig about. With it, you ca ehace customer service by automatically routig calls to a customer s salesperso or service advisor. Wave Call Classifier ca idetify ad search icomig calls based o: Icomig Number Called (DID) Caller ID Number Caller ID Name Accout Code (etered by user) Call Notes (a memo field) Custom Data (a variable to assig to the call) Skill (used i advaced call ceter routig) Call Classifier automatically delivers caller iformatio to your agets screes so they re ready to respod to each caller s uique eeds i real time. 7
8 Through the Wave IP s ViewPoit UC iterface, caller iformatio automatically appears i ViewPoit s Call Moitor view, or i a pop-up scree usig ViewPoit s built-i custom Pop-up Box otificatio feature, so agets are ready to respod as soo as they pick up the phoe or click o the call. Call Classifier uses idustry-stadard ODBC to coect to databases ad stadard SQL so you ca quickly create advaced coectios to other data sources through Call Classifier s graphical iterface. With the ability to coect Call Classifier to ay data source, you ca maximize the Wave IP s busiess beefits ad ehace the customer experiece by beig able to easily: Coect to your accoutig software to: Flag ad automatically redirect customers o credit hold to your accoutig departmet. Iclude a recorded otificatio about outstadig ivoices whe a customer calls i. Vertical Wave IP 2500 TM Coect to your CRM or customer database to: Check a customer record for specific laguages or skills ad assig the call to a aget with the same oes. Add customer iformatio (such as locatio or cotract umber) to a log etry to make reportig easier. Coect to your ERP to: Idetify stage of workflow that a customer is i ad route to correspodig call recipiet i the workflow. Attach real-time order iformatio to call data so that the call recipiet has iformatio for the customer. Coect to a custom database to: Iclude a call script based o what phoe umber is called ad display it to the call recipiet. Assig a higher priority to VIP customers so their calls get aswered sooer. Coect to public records databases to: Idetify what regio of the coutry a caller is from ad assig call to the right sales team. Qualify a prospect based o public iformatio (such as loa data) ad add that data to the call. 8
9 AUTO WHITE PAPER Wave Call Recordig & Loggig I order to efficietly operate ad maitai a successful automotive dealership, emphasis must be placed o liability maagemet, regulatory compliace ad, most importatly, customer service. The cotiued success of a dealership largely depeds o the advatage gaied over its competitors i these areas. Call recordig is a essetial tool for esurig quality assurace ad gaiig a competitive advatage. Oe immediate advatage is that Wave Call Recordig is icluded as part of the Wave IP s core applicatios set, so there is o eed for additioal hardware or software, or expese of a outside call recordig service. Customer Service Capture every call i detail to esure accuracy ad quality of service, ad to help quickly resolve disputes if they arise. Compliace Record, archive ad quickly search for ad retrieve calls to stay i compliace with idustry stadards ad regulatios. Traiig Supervisors ca record all calls for a specific departmet, or specific employees, makig it easy to track ad review performace over time. Wave Call Recordig features allow users to easily record coversatios from their ViewPoit iterface. Wave Call Recordig lets you cotrol which calls you wat to record o a compay, departmet, or idividual employee basis. Automatically record every call, or just o a call-by-call basis. Recordigs ca be accessed usig the same cotrols as listeig to voice mail. Users ca add otes to recordigs ad recordigs to a third party. Recordigs also ca be forwarded or shared so every member of a team ca liste to them. There is o limit to the umber of recordigs you ca log ad store with Wave Call Recordig. All recordigs, icludig mobile coversatios, are stored directly o the Wave IP server. With the Wave Archived Recordig browser, users ca search millios of recordigs from aywhere o the etwork i secods, usig criteria such as who was o the call, CallerID, call date, truk umbers, call time, or call otes. 9
10 Cotrol Expeses With the eed to maitai a large, expesive ivetory that depreciates rapidly, keepig operatig costs dow is the oly way auto dealers ca keep margis from shrikig. NADA recommeds regular reviews of all vedor services ad expeses, icludig telecommuicatios, to esure you re ot payig for services you do t eed ad to maximize those you do. The cost-savigs of IP telephoy have bee well documeted. With it, the Wave IP ca help reduce dealership telecommuicatios costs icludig the reductio ad/or elimiatio of log distace ad cellular charges by hudreds of dollars mothly with direct, extesio-to-extesio dialig throughout your dealership s etwork o desktop as well as mobile phoes. The Vertical Wave IP s uique, dual-plae architecture provides a virtually seamless voice gateway betwee digital (POTS) ad IP etworks, so dealerships ca migrate to advaced IP commuicatios services at their ow pace while protectig existig commuicatios ivestmets. I additio, the Wave IP s uique, dual-plae architecture provides a virtually seamless voice gateway betwee digital (POTS) ad IP etworks, so you ca migrate to advaced IP commuicatios services at your ow pace while protectig your existig telecommuicatios ivestmet. Vertical also simplifies ad reduces the cost of owership with its uique, sigle licesig model by chargig a flat fee for its etire stack of UC applicatios. Amog them is the Wave Campaig Tracker, which ca save dealerships literally thousads i oe of their highest expese categories. 10
11 Wave Campaig Tracker At a average sped of $6.37 billio a year, oe of the largest expese areas for dealerships is advertisig. That s about 10% of average total dealer reveue ad a prime area for cotrollig costs. May dealers use outside marketig trackig services such as Who s Callig, which provide 800 umbers to use for marketig campaigs. Calls to those umbers go first to the service provider, which logs it ad the passes the call o to the dealer. Dealers ca pay more tha $1,000 a moth for these ad trackig services. The embedded Wave Campaig Tracker applicatio elimiates these ogoig marketig costs. Campaig Tracker s Web-based iterface eables dealerships to: Quickly set up ad track their ow prit, electroic ad direct-mail marketig campaigs with the click of a mouse. Assig a specific direct-dial umber to each campaig so calls are automatically routed to the right perso i your BDC. Preset campaig scripts to agets aswerig calls. See exactly where ad how calls are beig hadled. Use XML-based reportig for viewig campaig results, categories of campaigs ad comparig costs versus uique calls. The Wave Campaig Tracker software lets you easily track advertisig costs ad results, elimiatig the eed for ad ogoig expese of mothly outside marketig reportig services. 11
12 JUly 2013 Reduce Employee Turover Employee turover is aother major expese for auto dealers. losig a ew sales perso withi the fi rst 90 days ca cost a dealership $12,000 dollars or more. The umber oe way to retai sales staff is to make them successful. Beig successful i today s mobile sales eviromet meas beig available wherever ad wheever a customer calls ad is ready to close the deal. That kid of access icreases the chace of closig sales by 20-30%. The Wave IP provides your sales staff with the tools they eed to make their jobs easier, provide better customer service, close more deals, ad subsequetly, reduce turover. It s the idustry s oly platform that offers 100% mobility to everyoe i your orgaizatio, so your salespeople ever have to risk losig aother sale because a customer walks out while waitig for a aswer. With its built-i ViewPoit Mobile applicatio, salespeople are always available to their customers, while beig able to collaborate at the same time with fi ace, service ad other support staff to close the deal. The ew mobile buyer It used to be that the hadshake ad meet-ad-greet was the most importat part of the sale. Not so much today. Cosumers prefer to shop o their ow terms ad oly talk to a sales rep whe they re ready to buy. Whe shoppers pull ito a dealership s lot ad immediately whip out their phoes as they browse, it s a clear sig they do t wat salespeople hagig over their shoulders. The cosumer is ot iterested i that face-to-face. They just wat iformatio. A recet study by Nielse for Cars.com foud that 83% of ew-vehicle shoppers ow a smartphoe, ad 43% of those cosumers more tha a third of all carshoppers cosult their device o the dealership lot. They are also several times more likely to tur ito customers tha those usig desktop computers. The high rate of employee turover i the car busiess just might be the sigle greatest source of aggravatio i the idustry... Turover makes every job at the dealership more diffi cult to accomplish, drives up operatig costs ad drives dow profi ts. Most importatly, turover impacts customer satisfactio ad loyalty. Bob Tasca, III Vice Presidet Tasca Ford Mobile devices have take o a major role i the car-buyig process, especially i the critical later stages. The ubiquity of mobile devices meas shoppers ca fi d out easily if a store across tow offers a better deal. I this age of trasparecy, oe upside for dealers is that o loger do customers eed to go home ad thik about it, because they ca do more research without leavig the showroom. 12
13 Shoppers are ot the oly oes with a smartphoe at the ready. At may dealerships, staff members ow coduct early all busiess o ipads ad iphoes. The oly computers i the stores are o sales maagers desks. Dealers who embrace the accessibility of real-time iformatio especially those who ca provide it ed up with more satisfied, well-iformed customers ad lose fewer shoppers to competitors. Wave ViewPoit Mobile Of the top 10 reasos reported by car buyers who leave a auto dealership without buyig, the umber oe reaso is salespeople ot beig respectful of the customer s time because of back ad forth commuicatio with the sales maager. Buyers are fed up with sittig for hours o ed, hagglig over price ad waitig o aswers to every questio they have. ViewPoit Mobile ehaces the customer experiece ad icreases the chace for closig the deal through every step of the sales process. Iitial Cotact Whe purchasig a car, customers ask a lot of questios: Do you have it i blue? What would the sports package cost? Ca we reduce the cost if I pay cash? To get the right aswer, you ofte eed to leave the customer to talk to the sales maager, check ivetory, or cotact the fiace team. Every time you step away from the customer, there s the chace of losig them ad the sale. With ViewPoit Mobile, you ca quickly ad uobtrusively sed those questios to the right perso via secure Istat Messagig (IM) without talkig o the phoe or leavig the prospect s side. So there s o chace for them to ru out or have secod thoughts. Follow-up Because prospects do t always buy o the first visit, it s importat to keep your dealership i frot of the customer so whe they are ready to buy, they come back. ViewPoit Mobile makes it easy for you to stay i cotact with prospects ad be available wheever ad wherever they are whe they re ready to sig o the dotted lie. ViewPoit Mobile features: Sigle-umber cotact so prospects ad customers ca reach you aytime, aywhere i the office, o the lot, or offsite; Ehaced call-hadlig features with the ability to set otificatios ad prioritize customer calls; ad Visual Voice Mail where you ca see all of your office ad mobile messages i a sigle voice mail box right o your mobile phoe, so you ever miss a call. Closig the deal Whe you re ready to close the deal, you eed to give that customer your udivided attetio. With ViewPoit Mobile s presece maagemet features, you ca quickly set your status to Do Not Disturb so you wo t get iterrupted by other calls, ad still esure they re hadled properly by directig them to voice mail or forwardig them to a co-worker. ViewPoit Mobile also helps dealerships cotrol operatioal costs by elimiatig the eed, expese, or iterruptios from overhead pagig or cordless phoe systems. All calls iside ad outside of the system s firewall are also logged ad routed back through the Wave IP server to cotrol callig costs ad keep busiess ad persoal calls separate. 13
14 Icrease Service Departmet Reveues Across the atio, auto dealers are begiig to recogize the eed to stregthe their CRM efforts for the Service Departmet, especially as fixed operatios are beig leaed upo more ad more to help compesate for shrikig ew vehicle profit margis. With repairs averagig $240 per customer, service departmets accout for about 14% of a average dealer s reveue. But the profit impact is much higher, as margis are greater o service work. Keepig that reveue locked i ad avoidig the loss of a repair to someoe else is critical to maitaiig your Service Departmet s profitability. Vertical s exclusive auto budle ca help esure your Service Departmet has a full workload every day by automatig routie service call remiders ad cofirmatios, ad automatically reschedulig o-shows. Appoitmet Remider The Vertical Wave IP icludes two customizable outboud Iteractive Voice Respose (IVR) applicatios for Appoitmet Remiders ad Customer Surveys to save service departmets time ad moey. The average Service Departmet schedules 45 repairs a day. At 4-5 miutes per call, cofirmatio calls take service maagers or staff about four hours a day; addig o-show calls, it is closer to five hours. With service hours available six days a week, that s 30 hours of labor a week just makig calls! With the Wave IP, i just miutes, service maagers ca geerate a CSV file to ru each day, so calls are placed automatically, freeig up staff ad/or elimiatig the cost of a outside callig service. The Appoitmet Remider applicatio also eables Service Departmets to: Icrease reveues by reducig missed appoitmets Schedule remider calls for best time to reach customer Automatically re-call customers if cofirmatio ot received Offer customers opportuity to reschedule o the call (reducig lost busiess) Geerate easy-to-use reports showig cofirmatios ad cacellatios 14
15 Coclusio I order to capture more market share ad remai profitable, auto dealerships must cotiue to be vigilat i cotrollig operatioal costs without sacrificig customer service ad satisfactio. Sigificat cost ad productivity efficiecies, as well as overall improvemets i geeral busiess maagemet, ca be realized by implemetig a commuicatios ifrastructure that ca be itegrated with other critical busiess systems icludig CRM programs to help meet sales quotas, improve factory dollars ad maitai a high CSI. The Vertical Wave IP uified commuicatios platform provides such capabilities i a sigle solutio without the eed for ivestmet i additioal hardware ad software to miimize a dealership s cost of owership while geeratig a quicker retur o ivestmet. For more iformatio o Automotive Solutios from Vertical Commuicatios, call VERTICAL, or visit 1 Polk View: The Role of the Iteret i the New ad Used Vehicle Purchase Process. Polk & Co. Feb AutoTrader.com Research Reports. 2 NADA Maagemet Series BM 39, published Savvy K post October 29, Call Trackig For Auto Dealerships. Corporate Headquarters 3940 Freedom Circle Sata Clara, CA Phoe: (408) FAX: (408) Sales ad Techical Support 4717 East Hilto Aveue Suite 400 Phoeix, AZ Phoe: (480) FAX: (480) Europe Vertical Commuicatios GmbHDomagkstrasse Kirchheim Germay Phoe: Fax: Vertical Commuicatios, Ic. All rights reserved. Vertical Commuicatios ad the Vertical Commuicatios logo ad combiatios thereof, Wave IP, Comdial, Vodavi are registered trademarks of Vertical Commuicatios, Ic. All other brad ad product ames are used for idetificatio oly ad are the property of their respective holders. Part No
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