Every dealer knows that a well-functioning CRM reduces the more tedious aspects of car buying and selling. It creates better leads, records customer service issues, and even assists with marketing campaigns. However, a lot of dealers are not using their CRM to its fullest capability. To find out more, we recently spoke with Greg Uland, Marketing Director for Reynolds & Reynolds, who gave us some insight into the challenges dealers have been facing this year.
VIDEO TRANSCRIPT:
Jim Fitzpatrick: Today, we’re joined by Greg Uland, who’s the marketing director for Reynolds & Reynolds. Welcome to the show, Greg.
Greg Uland: Thanks Jim, appreciate it. Thanks for having me down.
Jim Fitzpatrick: Yeah, so headed into the NADA show that’s coming up, talk to me about what you see as the biggest challenges that dealers face today with regard to their CRM.
Greg Uland: Sure. Well, it definitely depends on the dealer.
Jim Fitzpatrick: Yeah.
Greg Uland: Right? And what their focus is.
Jim Fitzpatrick: Sure.
Greg Uland: We’ve seen a lot of changes and some mounting challenges in used cars, and we’ve seen some things in fixed ops that are adding to struggles in the business. But from a new car perspective, the big thing is really it’s just starting to feel harder and harder to sell cars.
Jim Fitzpatrick: Yeah.
Greg Uland: Don’t get me wrong, business is good, right?
Jim Fitzpatrick: Yeah.
Greg Uland: Last year we sold about 17 million cars.
Jim Fitzpatrick: Sure.
Greg Uland: 2018, 17 million cars, 2017, 17 million cars.
Jim Fitzpatrick: It’s getting boring now, right?
Greg Uland: Yeah. 16 and 15.
Jim Fitzpatrick: Sure.
Greg Uland: We really haven’t seen a five year stretch quite this good.
Jim Fitzpatrick: Yeah.
Greg Uland: Where we’re pretty much in the glory days when it comes to selling cars.
Jim Fitzpatrick: That’s for sure.
Greg Uland: But it just feels hard.
Jim Fitzpatrick: Sure. Certainly with the margin compression, that doesn’t help matters either. You’re selling the same amount of cars as you did years ago, but you’re making a whole lot less money. Right?
Greg Uland: For sure.
Jim Fitzpatrick: Yeah.
Greg Uland: I mean margins are tiny compared to what they were just a few short years ago.
Jim Fitzpatrick: That’s right. Yeah, that’s right.
Greg Uland: Then you have more educated consumers.
Jim Fitzpatrick: Yep.
Greg Uland: And you have really expensive cars today-
Jim Fitzpatrick: That’s right.
Greg Uland: – compared to what they used to be.
Jim Fitzpatrick: Yeah.
Greg Uland: The dealership business is more complex than it’s ever been.
Jim Fitzpatrick: That’s right.
Greg Uland: Think about all the jobs that exists in dealerships today that weren’t there 15 or even 10 years ago.
Jim Fitzpatrick: Yeah.
Greg Uland: Everybody’s got an internet department.
Jim Fitzpatrick: That’s right.
Greg Uland: Everybody has a BDC.
Jim Fitzpatrick: That’s right.
Greg Uland: Everybody has a social media marketing manager. When you go back in time and you look at the last time business was similar to what it is today, you go back to 2007.
Jim Fitzpatrick: Yeah.
Greg Uland: Selling 16 million cars and the average dealership had about 53 employees.
Jim Fitzpatrick: Right.
Greg Uland: Fast forward to today, selling 17 million cars.
Jim Fitzpatrick: Right.
Greg Uland: And the average dealership has 68 employees.
Jim Fitzpatrick: Wow. That’s incredible.
Greg Uland: That’s a 30% increase.
Jim Fitzpatrick: Yeah, yeah, it’s huge.
Greg Uland: Our business just keeps getting more and more complicated and it feels harder to sell cars.
Jim Fitzpatrick: Yeah. Yeah. And why is that? What do you point to as a reason for something like that?
Greg Uland: Well, everybody needs to look at really what they can control, right?
Jim Fitzpatrick: Sure.
Greg Uland: And that’s the interaction with the customer.
Jim Fitzpatrick: Mm-hmm (affirmative).
Greg Uland: When you start to look at those interactions, you really start to see a bunch of different individual pieces of software and tools that all require manual processes to make them really work well, really hum.
Jim Fitzpatrick: Right.
Greg Uland: And right in the middle of it, when it comes to selling cars at least, is the CRM.
Jim Fitzpatrick: Mm-hmm (affirmative).
Greg Uland: And CRMs have come a long way in the 40 years that they’ve been around.
Jim Fitzpatrick: Now that’s for sure.
Greg Uland: Yeah. But you know, they’ve gotten to the point where they’re so cumbersome-
Jim Fitzpatrick: Yeah.
Greg Uland: – that we really have to incentivize salespeople to use them to make them work well, and really what ends up happening rather than incentivizing them, we end up punishing them for not using them. Right?
Jim Fitzpatrick: Yeah.
Greg Uland: That phrase, it’s not in the CRM, it didn’t happen. Pretty much rules every sales departments.
Jim Fitzpatrick: That’s right. Why is it you think that salespeople don’t use the CRM more?
Greg Uland: Well, it doesn’t add value for them.
Jim Fitzpatrick: Yeah.
Greg Uland: I mean, at the end of the day it doesn’t make their job easier. I mean the CRM as we know it, it just doesn’t work.
Jim Fitzpatrick: Yeah.
Greg Uland: It’s not making their job easier and for that matter, it’s not making the sales manager’s job easier either.
Jim Fitzpatrick: Right.
Greg Uland: It’s actually doing really the opposite. It’s adding a bunch of inefficiencies that result in really an unproductive sales force.
Jim Fitzpatrick: Yeah.
Greg Uland: Think about a salesperson gets a phone call, right?
Jim Fitzpatrick: Right.
Greg Uland: And they have no idea who’s on the other end of the lines.
Jim Fitzpatrick: Right.
Greg Uland: Or what they’re calling about.
Jim Fitzpatrick: Mm-hmm (affirmative).
Greg Uland: They spend some time figuring that out, and then as they’re talking through, they’re going to take notes on their pad of paper on their desk.
Jim Fitzpatrick: Right.
Greg Uland: Right.
Jim Fitzpatrick: Right.
Greg Uland: Then when the call is over, if they think it’s important enough to log it in the CRM, then they’re going to go over to the CRM and type everything in there.
Jim Fitzpatrick: That’s right.
Greg Uland: Well, and let’s take a step back. They’re not going to type everything in.
Jim Fitzpatrick: That’s right.
Greg Uland: They’ll type in-
Jim Fitzpatrick: You know the sales department that’s for sure.
Greg Uland: Right. They’ll type it enough where they’ll get credit for the interaction.
Jim Fitzpatrick: Sure.
Greg Uland: But not so much that somebody can cherry pick their customer in their office.
Jim Fitzpatrick: That’s right.
Greg Uland: Right.
Jim Fitzpatrick: That’s right.
Greg Uland: So they get that in there, and then they’re going to create their followup event, and then they’re probably going to add it to their hot sheet, maybe in a spreadsheet or something like that.
Jim Fitzpatrick: Sure.
Greg Uland: Realistically they’re probably going to give themself a little sticky note and put it on the monitor on the desk too.
Jim Fitzpatrick: Yep. Yep.
Greg Uland: It’s crazy how hard it is to use a CRM.
Jim Fitzpatrick: Yeah.
Greg Uland: Then you flip over to the followup, right, and making sure customers get followed up with, and that adds even more manual work. I think back to when I was selling, and every night before I was done for the day, I’d line up my next day-
Jim Fitzpatrick: Right.
Greg Uland: – and what I had to do, I’d pull everything down, either print it out or write it down out of the CRM, out of my outlook calendar, out of my hot sheet and manually prioritize everything.
Jim Fitzpatrick: Right.
Greg Uland: Then I’d go back into the CRM and I’d reorganize my day so that I knew what I was doing when I came in the morning.
Jim Fitzpatrick: Mm-hmm (affirmative).
Greg Uland: Today you walk around, when I’m walking around a sales department today, I see the same thing happen.
Jim Fitzpatrick: Yeah.
Greg Uland: That’s crazy. It might be in the morning instead of at night.
Jim Fitzpatrick: Yeah.
Greg Uland: But it’s the same process.
Jim Fitzpatrick: Yeah.
Greg Uland: Why in the world are sales people telling the CRM what to do when it should be the other way around.
Jim Fitzpatrick: It’s a good point. That’s a very good point. Yeah. You had mentioned salespeople and managers earlier. Do you think CRMs make his or her job as a sales manager easier?
Greg Uland: No.
Jim Fitzpatrick: No.
Greg Uland: No. Don’t get me wrong, I’ve seen some dealer groups, especially larger ones that do a good job of enforcing manual processes.
Jim Fitzpatrick: Sure.
Greg Uland: So that they get valuable reporting and measurement tools out of the CRM.
Jim Fitzpatrick: Right.
Greg Uland: But that’s the exception.
Jim Fitzpatrick: Yeah.
Greg Uland: And again, it’s only by forcing manual work on your salespeople that you really get anything of value out that out of that CRM.
Jim Fitzpatrick: Yeah.
Greg Uland: I mean, as a sales manager, your training interactions, the time that you have with your salespeople usually ends up being focused more on how you want them to use the CRM-
Jim Fitzpatrick: Right.
Greg Uland: – than on sales skills and going and finding more deals to work.
Jim Fitzpatrick: That’s right.
Greg Uland: Your interactions with your salespeople, are usually your sales people telling you what they think you want to hear-
Jim Fitzpatrick: Yeah.
Greg Uland: – and what’s going to get them out of that uncomfortable conversation the quickest.
Jim Fitzpatrick: That’s right.
Greg Uland: Right. You’re really only adding value to the dealership when either customer is walking out the door without a car.
Jim Fitzpatrick: Yeah.
Greg Uland: Right. Or you’re negotiating.
Jim Fitzpatrick: Yeah.
Greg Uland: And negotiating is important and it’s fun, but it doesn’t really help improve your sales team longterm.
Jim Fitzpatrick: No, it doesn’t. It doesn’t. The CRM, as we know it has some major issues. Talk to us about that.
Greg Uland: Let me tell you a story about the last time I bought a car.
Jim Fitzpatrick: Okay.
Greg Uland: Okay. I’m going to start at the point where I submitted a lead on the dealership’s website.
Jim Fitzpatrick: Okay.
Greg Uland: A ton of stuff happens before that, as we all know.
Jim Fitzpatrick: Yeah.
Greg Uland: But that point is really when my personal interaction with the dealership started.
Jim Fitzpatrick: Mm-hmm (affirmative).
Greg Uland: I submit the lead online, and the sales person texts me.
Jim Fitzpatrick: Yeah.
Greg Uland: Right. You know, thanks so much for your interest.
Jim Fitzpatrick: Yeah.
Greg Uland: Let me know if you have any questions. I needed to know which wheels were on the car.
Jim Fitzpatrick: Okay.
Greg Uland: I couldn’t tell on the website.
Jim Fitzpatrick: Sure.
Greg Uland: So he went out, he took pictures for me, he texted them to me. Over the next couple of days we kind of went back and forth on some features and some options.
Jim Fitzpatrick: Mm-hmm (affirmative).
Greg Uland: Then we actually started negotiating via text.
Jim Fitzpatrick: Okay.
Greg Uland: And once we agreed on a price, we set a time for me to come in and take delivery of the car.
Jim Fitzpatrick: Mm-hmm (affirmative).
Greg Uland: At what point do you think that salesperson entered all those interactions into the CRM and at what level of detail?
Jim Fitzpatrick: Yeah. Right.
Greg Uland: Right.
Jim Fitzpatrick: Exactly.
Greg Uland: It was probably when we set the appointment.
Jim Fitzpatrick: Yeah.
Greg Uland: And where was all my contact information stored?
Jim Fitzpatrick: Right. In his phone?
Greg Uland: Personal cell phone. Yeah, exactly.
Jim Fitzpatrick: Right.
Greg Uland: What’s the turnover for salespeople right now? 70%.
Jim Fitzpatrick: Pretty good.
Greg Uland: Yeah, exactly. My point is-
Jim Fitzpatrick: Wow, think about all that data walking around.
Greg Uland: Right.
Jim Fitzpatrick: It’s nuts.
Greg Uland: Not only is that CRM as we know it kind of broken.
Jim Fitzpatrick: Yeah.
Greg Uland: It’s actively avoided.
Jim Fitzpatrick: Right.
Greg Uland: The salesperson just uses his phone because it’s easier.
Jim Fitzpatrick: That’s right.
Greg Uland: He’s actively avoiding using the CRM, and then the dealership’s customer information walks out the door every time a sales person quits.
Jim Fitzpatrick: Yeah, for sure. And the turnover continues to be high in the auto industry, so you’ve got all of these salespeople walking around, obviously with dealers data in their back pocket. And sometimes they’ll go to another dealership to work and what happens? They take their phone out and go, oh, you know, here’s Greg that needed a car from me over at ABC Chevy, and now I’m over at XYZ Chevy. I think I’ll give him a call because I have all of his information. And ABC Chevy doesn’t have the information. Right?
Greg Uland: That’s right.
Jim Fitzpatrick: What’s the solution to something like that?
Greg Uland: Well, that’s a big question.
Jim Fitzpatrick: Yeah, it is.
Greg Uland: Because it’s something that I don’t think there’s a single fix to.
Jim Fitzpatrick: Right, right, right.
Greg Uland: But you know, a lot of the, when you look at fixing something, if you go back to the cause, right? What’s really driving it? Again, a lot of things, but one of them is certainly what we’re talking about today.
Jim Fitzpatrick: Right.
Greg Uland: Right. When it feels hard to sell cars, when tools are complicated to use-
Jim Fitzpatrick: That’s right.
Greg Uland: – and when sales people don’t feel like they’re getting the training or the coaching that they want or they think they need-
Jim Fitzpatrick: That’s right.
Greg Uland: – they’re going to start to look for something else.
Jim Fitzpatrick: Yeah.
Greg Uland: I mean, this is retail. It’s hard.
Jim Fitzpatrick: Sure. Right?
Greg Uland: And until we fix some of these root issues in CRMs, we’re going to keep seeing this vicious cycle of hire, train, quote unquote coach, which is really us telling them how we want him to use the CRM.
Jim Fitzpatrick: That’s right.
Greg Uland: Then they quit.
Jim Fitzpatrick: Reynolds & Reynolds is on the forefront of all of this and they come to you for the solutions. What kind of solutions can you provide them?
Greg Uland: Yeah, so when we talk to dealers about this, we really kind of talk to them about looking at two things.
Jim Fitzpatrick: Mm-hmm (affirmative).
Greg Uland: The first one is we need to stop forcing salespeople to use tools that slow them down, and give them things that make their job easier.
Jim Fitzpatrick: Right, absolutely.
Greg Uland: Salespeople come in in the morning and they have 68 incomplete tasks that they have to go figure out what to do with it.
Jim Fitzpatrick: Yeah. It’s crazy.
Greg Uland: Yeah. It ranges from happy birthday reminders-
Jim Fitzpatrick: Right.
Greg Uland: – to, I don’t know, vehicle purchase anniversaries-
Jim Fitzpatrick: Right, right.
Greg Uland: – to follow ups that probably don’t even need to be done anymore.
Jim Fitzpatrick: Right.
Greg Uland: You look at a lot of these time based activities that get created.
Jim Fitzpatrick: Right.
Greg Uland: Half of them don’t end up getting done anyway.
Jim Fitzpatrick: Yeah.
Greg Uland: Right.
Jim Fitzpatrick: Yeah.
Greg Uland: And you need to take the work, and frankly, the judgment off the salesperson to go and prioritize their day, and start telling them exactly who to call based off of who’s most likely to buy right now.
Jim Fitzpatrick: Sure.
Greg Uland: You hear terms like predictive analytics and artificial intelligence thrown around a lot-
Jim Fitzpatrick: Yeah, sure.
Greg Uland: – and kind of buzz words.
Jim Fitzpatrick: We talk about it all the time on CBT.
Greg Uland: Yeah. But this stuff is completely doable and manageable today.
Jim Fitzpatrick: Yeah, yeah.
Greg Uland: You just need the right technology and it’s actually pretty easy to cut through all that clutter.
Jim Fitzpatrick: Yeah.
Greg Uland: At the end of the day, you really need to redefine what a CRM is and what a CRM does. Stop looking at what’s already happened.
Jim Fitzpatrick: Sure.
Greg Uland: And start looking at what’s happening right now, and what’s going to happen next.
Jim Fitzpatrick: Right.
Greg Uland: That’s the first thing. The second big thing is we really need to stop looking at CRMs in isolation, right.
Jim Fitzpatrick: Mm-hmm (affirmative).
Greg Uland: We’ve talked today about the new vehicle sales department for the most part, but we all know customer relationship management, it’s dealership wide and it’s ongoing.
Jim Fitzpatrick: Yeah.
Greg Uland: We need to tie, it’s really only when you can tie all your silos together and you get out of this world, you stop having all these different tools and pieces of software that are each managing a part of your business.
Jim Fitzpatrick: That’s right.
Greg Uland: You tie it all together that’s when you can get the most out of what’s possible through technology.
Jim Fitzpatrick: Sure.
Greg Uland: Once you do those two things, and you kind of refocus on what you’re trying to accomplish, taking advantage of this high demand for vehicles that we have today, it gets a lot easier.
Jim Fitzpatrick: Mm-hmm (affirmative). There’s dealers out there that are listening right now that say well I’ve got a CRM company that talks to my DMS system out there, and I know you guys, you’ve got your hands all over that.
Greg Uland: Mm-hmm (affirmative).
Jim Fitzpatrick: In a perfect world, isn’t it way better to have a program that is built and managed by your DMS provider? Well, with regard to the CRM?
Greg Uland: Sure. There’s a lot of factors that go into it obviously.
Jim Fitzpatrick: Yeah.
Greg Uland: But yeah, I mean perfect world when you have a single data source, and you have a single unique identifier for every customer, regardless of whether they’ve done business with you or not.
Jim Fitzpatrick: Mm-hmm (affirmative).
Greg Uland: But you can start to tie all these pieces of information together, and you can really start to get a holistic picture of each individual. And then it gets really cool when you can start to take all that data and pull it together and figure out what they’re going to do next.
Jim Fitzpatrick: We were talking to one dealer, the guy who’s got 18 stores in the Northeast and he said, I wish I could get my sales department or my managers to use our CRM to the extent of 45 or 50%, if they’d even use it to that level, he said, I’d probably double my business. Do you find that to be the case with dealers around the country, that they complain that they’re CRMs are just not being utilized the way that they should be or we’re designed to do?
Greg Uland: Yeah, I mean that’s a core problem is utilization.
Jim Fitzpatrick: Yeah.
Greg Uland: Absolutely.
Jim Fitzpatrick: Yeah.
Greg Uland: And that’s where shifting the focus from forcing people to use it-
Jim Fitzpatrick: Mm-hmm (affirmative).
Greg Uland: – to having a tool that actually enables their workflows.
Jim Fitzpatrick: Right, right.
Greg Uland: When you shift that lens that you’re looking at it through, you get a lot more out of it.
Jim Fitzpatrick: Yeah.
Greg Uland: When you have to force people to use something and they want to use it, or they don’t have to do a lot of manual entry to use it.
Jim Fitzpatrick: Right, right. That is the key because I think for salespeople, and I spent a few years in the showroom floor myself, you’re always going to take the path of least resistance. Right. And to your point, when you say the individual jotting down notes or putting them on their cell phones or what have you, before it even goes into the CRM that’s happening as we speak around the country a million times. Right?
Greg Uland: Yeah.
Jim Fitzpatrick: Yeah. And the consumer wants that seamless transaction, that seamless sales process. To have that information in a CRM done properly really speaks to that, right, at a dealership. Rather than somebody walking in and saying Mr. Johnson and the process starts all over again. Right.
Greg Uland: Yeah.
Jim Fitzpatrick: Because somebody didn’t utilize the CRM the way they were supposed to.
Greg Uland: Yeah, absolutely.
Jim Fitzpatrick: Right.
Greg Uland: It’s got to be a single, really a single system to flow all the way through the transformation.
Jim Fitzpatrick: That’s right. That’s right. Many dealers will tell you that I buy programs and then I’m not supported by the company in the way of training, and what have you. Talk to me a little bit about the importance of that. Obviously Reynolds & Reynolds has been known over the years for a company that supports what they sell with dealers. Talk to us about the importance of that.
Greg Uland: Sure. We take a tremendous amount of pride in our support organization.
Jim Fitzpatrick: Yeah.
Greg Uland: We have all of our support done in the U.S and Canada. We do that on purpose, right? It’s a conscious decision. It costs us probably a little bit more.
Jim Fitzpatrick: Sure.
Greg Uland: But we think it’s important. It’s important for a lot of reasons.
Jim Fitzpatrick: Right.
Greg Uland: It’s important for the communities that we’re part of.
Jim Fitzpatrick: Right?
Greg Uland: It’s important for us as a company, and not least of all those things, it’s important for our dealers, right?
Jim Fitzpatrick: Sure.
Greg Uland: We feel that they deserve to be helped and helped very quickly when they need it.
Jim Fitzpatrick: Mm-hmm (affirmative).
Greg Uland: We do take a tremendous amount of pride in our support.
Jim Fitzpatrick: Yeah.
Greg Uland: We also do a lot of work to make sure that support is almost never when things are broken, right.
Jim Fitzpatrick: Yeah.
Greg Uland: Nothing’s ever broken that we build.
Jim Fitzpatrick: Yeah, that’s a good point.
Greg Uland: Support is, hey how do I pull this report?
Jim Fitzpatrick: Yeah.
Greg Uland: Right. It’s those simple things.
Jim Fitzpatrick: Yep.
Greg Uland: Then we worked through utilization specialists both remotely and through field visits with dealerships to make sure that our customers are always up to speed on what’s possible and how to use the tools to the best of their ability.
Jim Fitzpatrick: Yeah, yeah. And with the data that you guys have from dealers all over the country, you’re knowing at any given time what the consumers are looking for, what the dealerships are looking for, and then building in engineering to that. Right?
Greg Uland: Yeah, absolutely. We really do talk to our customers a lot. I don’t know if a lot of companies do this, but we have a customer advisory board that we bounce a lot of ideas off of-
Jim Fitzpatrick: Sure.
Greg Uland: – and we’re always-
Jim Fitzpatrick: Made up of dealers.
Greg Uland: Absolutely. Yeah, so all of our-
Jim Fitzpatrick: These are our pain points.
Greg Uland: Sizes and yeah. Good users and some that maybe aren’t so good to users, just so that we can get different feedback from different perspectives.
Jim Fitzpatrick: Sure.
Greg Uland: But it’s very important to us to understand, because you can develop anything you want. You talk to a lot of people, right?
Jim Fitzpatrick: Right.
Greg Uland: You can come up with the best idea, but if that’s not how it’s used, it doesn’t matter.
Jim Fitzpatrick: That’s right.
Greg Uland: So we are always making sure to stay in communication with our dealers to understand how things are being used. Not necessarily how we designed them, but how they’re being used. Because we need to make sure that we’re able to adjust to that.
Jim Fitzpatrick: Yeah. For sure. The designer, if the designer hasn’t spent time on the showroom floor either as a manager, as a sales person, they could be in trouble if they’re not listening to that, that advisory board. Right?
Greg Uland: Absolutely.
Jim Fitzpatrick: Yeah, for sure. Talk to us a little bit about NADA that’s coming up. What can dealers expect when they stop by your booth?
Greg Uland: Well, I mean, as every year we’ll be busy, right.
Jim Fitzpatrick: Yeah.
Greg Uland: And everybody going to be chasing everybody around.
Jim Fitzpatrick: Oh absolutely.
Greg Uland: But we actually have some really fun, cool stuff this year, stop by and see it. It’ll be well worth your time.
Jim Fitzpatrick: Okay, cool.
Greg Uland: There’s three or four big things that we’re very excited to kind of show off with the world.
Jim Fitzpatrick: Oh, that’s neat. Yeah. You guys always come with your A game to NADA every year. That’s phenomenal. Well, Greg Uland, marketing director for Reynolds & Reynolds. I want to thank you so much for joining us on CBT News, this has been very enlightening, and I’m coming by the booth to check it out.
Greg Uland: Please do.
Jim Fitzpatrick: Great. Thanks.
Greg Uland: Thanks so much.
Jim Fitzpatrick: Thank you.
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