Automotive CRM: Customer Relationship Management for Automotive Shops

Customer Relationship Management (CRM) is basically what you do to maintain your customer base, keeping it “alive” if you will, functioning as a source of steady revenue. CRM for auto repair shops can include any number of activities from a simple follow up call after someone brings their car in, to some more strategic processes put together by CRM companies like CustomerLink or InfoLab. In between there are many options, website driven mailing services and even some limited follow-up programs through shop management software (SMS) like Mitchell or other less common brands.

That answer is simple: repeat business is more profitable than new business. It’s true. Repeat customers spend much more money than new customers do on an invoice-by-invoice average, and not just a little bit.

While it can be said that acquiring new customers is part of developing customer relationship management, it’s not really the key idea. Getting new customers is part of what a shop spends advertising dollars on; it’s part of the marketing budget, true, but that’s only the leading edge of what repair facilities really need. Real and consistent profits do not come from acquiring new customers. Consistent profit, profit that you can rely on steadily, comes from having a solid base of customers who come to your shop over and over again. They know you, they trust you, and they will pay a fair price for the good service you provide.

Too many shops find themselves struggling to fill the bays. Hourly mechanics are pissed because you have them running a mop (or you’ve sent them home), and flat-rate guys are going home early and sending out résumés. So for too many shops, their answer is to send out a wad of coupons in the mail, newspaper or some other media. Pretty soon, if they’re lucky, they get a spurt of response, and suddenly their bays are busy doing $19.00 oil changes. Great. How much did they lose on that? Three bucks per car? Five?

Ok, so hopefully they up-sold some brake jobs and belts and cover the cost of their advertising, hopefully they made a profit in the end. Kind of a crapshoot, but, hey, that’s how advertising works, right? Right. Single digit response rates to “fishing” ads are standard, and usually down pretty low, like 1% or 2%.

Yes, a shop needs to do that sort of thing, some fishing to keep the customer base stocked with fresh business. But the mistake most shops make is to think that this is how spending marketing money is suppose to work. They spend all their marketing dollars on new acquistions and NONE of it on maintaining those people they spent so much money bringing it. They’re missing almost all the point.

And that is why things start to go wrong, and that’s why those shops are going to have empty bays again next year when the busy summer season ends. Unless they employ some good, well thought out automotive CRM.

It all comes down to slicing off a portion of your marketing money for CRM. The return on a per dollar basis is astronomically higher for this money. The shop that spends around 70% to 80% of it’s marketing money on finding new customers and the other 20% to 30% on CRM is the shop that is going to see less highs and lows in their over all traffic count. There are a number of reasons why.

The first is simple human behavior. To explain this, I want to tell you a little story, which is going to seen like I’m wandering off the subject just a bit, but just hang with me for a moment, please:

My first day of college psychology class was like every other one. I went in, found a seat, looked around to see how many pretty girls were going to be in the class, and then sat through the professors long boring explanation about how the class works, what to expect, etc.

The second day of class, learning begins, and the professor started off our unit on human behavior by asking for a show of hands based on this question: “How many of you are sitting in the same seat you sat in when you came in the first day of class?”

Everyone in the room except for about three people raised their hands, including me.

“So why is that?” he asked. “Did you find the best seat when you came in the first time?”

In short, what he proved to us was that people are totally subject to habits. We love familiar routines. We feel comfortable in places we’ve already become acquainted with. What customer relationship management programs do is tap into that basic and very, very powerful human force of pattern-making behavior.

When you employ CRM, you are utilizing a systematic approach to helping your customers develop that pattern as it pertains to their vehicle repair, have them creating a pattern that has them naturally inclined to coming to your shop. They know what it looks like; they know where the driveway is; they know where to park; what to expect… the whole deal. It’s a familiar experience. This is HUGE when it comes to getting a car fixed for most people, because most people HATE doing that, which you already know. CRM helps you capitalize on this advantage you have over other automotive shops. The fact that, once you have them in once, you are now “familiar.”

Since CustomerLink is the one I know best, I’ll explain the details via what they do. Since they’re the top-end CRM company, this is probably just as well, and you can get an idea what is actually possible if you want the most bang for your buck. Other CRM companies can do a lot of this stuff though, so, depending on what you want and how much increased business you can handle, you can work out what you want to do.

Basically they use your customer database to gather information and generate service reminders and various other forms of communication from your shop to your customer. If you get the core program, that will including the ability to send thank you cards (yes, your shop is actually going to start showing your customers that you are grateful for their business, AND your CRM company expects you to pay them for sending them out. Get over it: trust me, it works). They will send out mileage based L.O.F. and/or tire rotation reminders, factory based service recommendations based on vehicle year, make and model, and a prompt to come back to customers that haven’t been in your shop for a while. There are some additional things you can utilize like newsletters and website hosting, but perhaps best of all, they can send out technician recommended service reminders so that if your shop is doing a good job inspecting vehicles that come in, you get a second shot at that business down the road.

(How many times have you seen some guy you recommended something to who said “no” at the time, come back six months later for another $19.00 oil change and he’s got those damn struts you recommended brand new from some other shop? That is a stand alone piece of evidence proving that you need CRM.)

Each one of the various prompts mentioned above is a message urging your customer – the one that knows you and your shop already, remember – to come back. They know they are supposed to maintain their car; they simply procrastinate because they don’t really like doing it all that much. But, the experience isn’t so bad in a familiar place. It’s even “less bad” in a familiar place that seems to be taking an active interest in having them come back, one that says “thank you” and one that sends them service reminders regularly.

It’s really very simple. I doubt there are very many shop owners out there who have not been to some form of sales training in the past where they were told repeatedly that “you have to ask for the sale.”

Well, you do have to ask for it, and part of that is that you have to ask for them to come back to your store.  If you aren't doing CRM, you aren't asking them to come back. 

The last thing I’m going to say on this is that I know you are busy.  A lot of shops try to do their own CRM.  Normally, this happens when it’s getting slow and they have time to do it.  Unfortunately, the reason they are slow is because they didn’t do their customer relationship management when they needed to.  CRM is not a reaction to being slow.  It is how a shop prevents themselves from being slow.  It’s a way to turn the peaks and valleys of car-count into something more like a gentle ebb and flow.  But to do that requires consistency, which means, the odds are you probably need to hire someone.  You can bring in someone to do it, or you can just hire a company like CustomerLink.  Either way, you need to do it.  Especially now, when the dealerships are closing and all their customers are out there looking for someplace to take their cars to.  Now is the time to start using good automotive customer relationship management techniques so you can get your traffic flow stable for once.  Do some research, see what’s out there, and make the plunge.  If you are consistent, you will absolutely get your marketing investments back highly multiplied.