On today’s show, we welcome back Bill Wittenmyer, partner and Vice President of sales and operations for Elead CRM, a CDK Global company. Jim and Bill discuss why the majority of dealers aren’t utilizing their CRMs to their fullest capabilities. They also tackle what makes a good CRM, how to grow your dealership’s BDC and the industry trends that dealers should pay close attention to.
Jim Fitzpatrick: On today’s show we welcome back Mr. Bill Wittenmyer. Partner and Vice President of Sales and Operations for ELead1One CRM which, as you know, is now a division of CDK. Glad to have you back, Bill.
Bill Wittenmyer: Thanks, Jim. Always great to be on.
Jim Fitzpatrick: Sure. Let’s dive right in with CRMs. Why don’t dealers utilize their CRMs more? Or, maybe they’re utilizing it but they’re not using it to its fullest capabilities.
Bill Wittenmyer: I think that’s probably a very well-worded question. Every dealer uses a CRM at this point, and probably on their third or fourth one in most cases. In a lot of cases it has to do with, turnover’s a big area. You’ve got to have good support in order to continue that training, that’s something that’s not always dedicated to it. So, with the high turnover rate you’ve got a lot of new people coming in and you’re constantly having to introduce them to the system, whatever system it may be, and get them trained up on it. Then you start to look at, by nature I think humans are, we’re shortcut. We like to do things as quickly as possible, and certainly in our business, in automotive retail. So we shortcut a lot of things, so sometimes we missed out on those details that we need to put in there, which later on affects us because then we can’t actually utilize that data if it’s not there.
It’s a little bit of that, and then, finally, I think that there’s also the overwhelming factor. I think in today’s business and certainly the last few years, in a lot of stores you’re getting an overwhelming amount of information. There’s a lot of customers coming from various sources, certainly from the internet and inbound phone calls. Look, there’s a lot of data that goes in and again, back to that shortcut, we tend to want to, okay, let’s figure out who’s really a buyer and who isn’t, and that can hurt us. I think that we can use it, I just think that all these other mitigating factors that we don’t necessarily concentrate on or try to improve, really hurt some dealers in order to fully utilize whatever CRM that they’re on.
Jim Fitzpatrick: What makes a good CRM? If I’m a dealer today and I’m looking at different opportunities out there in the CRM market, what makes a good one, in your opinion?
Bill Wittenmyer: One that gets used.
Jim Fitzpatrick: Yeah, there you go.
Bill Wittenmyer: It’s all about execution. I think with today’s CRMS, and certainly the top ones that are out there, there’s a lot of great feature sets to them. I think you certainly have to be mobile, I think that goes without saying in today’s market. I think it has to be easy to use. I think you have to have those … OEM integrations are really key. Really what you’re looking for is all those agnostic integrations that are out there. What I mean by that is, there’s so many different tools, it’s really difficult for the average sales manager or GM or GSM, or really anybody in the store, to require them to log into five or six different systems to get a car deal done. I think you have to be as agnostic as possible. I think you have to have those integrations, and as many of them as possible, so you can curtail yourself around what the dealer’s need is, to really ultimately shorten the buying process and the process with inside the store. That’s a good CRM.
A good CRM does all of those things and it’s open to other APIs and can have that facilitation where, if there’s a new tool that comes out that the CRM company doesn’t have, then at least they can connect into it and make that available so we can keep it all in one area. I would say that.
Jim Fitzpatrick: Do have clients that have, maybe, 15 or 20 or more sales associates, where they just have a CRM manager, and that’s the only thing that that person does on the showroom floor or in the dealership?
Bill Wittenmyer: The larger groups you’ll tend to find, or the larger stores you’ll tend to find that they’re gonna have that one throat to choke. They’re gonna have that single person that you can go to that is the master of the domain, and they’re responsible … It’s not from an IT standpoint, Jim. It’s really more from the standpoint of activities, ensuring that they’re getting done, management. It almost becomes a sales manager of the CRM, using that data and that’s really crucial. Because then you can start to tie in, what are those activities that are important to that store? It could be appointment generation, it could be appointment followup, it could be business development, it could data mining, or any of the different various pieces that are in a strong CRM.
So, yes is the short answer. The long answer is, if you’re going to do that, make sure that it is that one throat to choke. Don’t try to multitask them. Make sure that they have their concentration with a really clear, defined set of activities that you’re expecting to get out of your CRM, and it makes for a really successful [inaudible 00:05:03].
Jim Fitzpatrick: Sure, right. Let’s switch gears a little bit and move over to the BDC, and how to grow a BDC and whether or not a dealership should even have a BDC. We were just having this discussion with another guest yesterday. We made the statement that one of our guests made here not to long ago that, he said that he sees as many funerals for BDCs as he sees births. Can you appreciate that comment?
Bill Wittenmyer: Yeah, absolutely. I’ve not heard it put that way, but that’s fantastic.
Jim Fitzpatrick: Neither had I.
Bill Wittenmyer: Yes, 100%. I had a great mentor who runs a large automotive group now, and he told me it takes … he had to build three BDCs to make the fourth one work, so he went through three before that. Look, there are good ones out there and, again, it’s kind of back to your question on CRM which is, what’s a good one? It’s one that executes. My recommendation is, if you’re going to have one, obviously, execute on it, and start small. Don’t try to go all the way into the pool without learning how to swim first. A great suggestion is start with inbound calls, both sales and service. It’s a huge area of opportunity in most stores. It’s a great opportunity for the store to improve.
We know, on our side of the business, that if we take an inbound service call, 72% of those are gonna turn into appointments. So that ability is there, and I start with the low hanging fruit. Then you start to merge out from there, depending on A, what’s your appetite, B, what’s your success level, et cetera. To the question of do dealers need one? Look, I think dealers need to have full followup, and however that looks to them. That may be an internal BDC, it may be an external BDC outsourcer, it may be a hybrid of both. Whatever it is, we have to execute.
Jim Fitzpatrick: What role do you think the BDC will play as consumers trend more towards digital retailing and buying the car, or at least doing a tremendous amount of the process online, before coming to the dealership?
Bill Wittenmyer: At the end of the day we look at digital retailing, and you and I have talked before, it’s really just another avenue, it’s really just another option to give consumers. My thought on it, which is, if you’re not giving it and somebody else is, then they’re gonna go there. So whether you believe in it, whether it’s gonna have legs long-term, whether five years from now whatever’s gonna happen. I still think brick and mortar dealerships are gonna be there, and that’s important. I just think you have to have the option there. So then that translates back to the BDC in A, how is it working now? B, they have the appetite for it, do you have the bandwidth for it, or do you really want them involved in that? If you’re looking for a one person, one experience, which is where a lot of the digital retailers are going. That’s where a lot of the dealerships that embraced it are going, is to try to speed that process up. Maybe that’s not a BDC function. Maybe that’s a salesperson or a sales team function, specifically.
Jim Fitzpatrick: Yeah, that’s true.
Bill Wittenmyer: So that I’ve got that one person, one experience. Again, I think it really boils down to, what can you execute successfully inside of your store and your culture. I certainly wouldn’t go build a BDC just to do digital retaliating, I think I would concentrate on that one person, one experience.
Jim Fitzpatrick: Right, right. Should the BDC, in your opinion, be staffed with salespeople from the showroom floor that take turns, or a separate staff entirely that just works inside the BDC?
Bill Wittenmyer: That’s a good question. I’ve not seen a tremendous amount of business development centers that were successfully run by bringing in salespeople on, what I would like to call, a part-time business. You end up creating sales jail, which is, they’re forced to go on in there, maybe for two hours or three.
Jim Fitzpatrick: And they’re prisoners.
Bill Wittenmyer: Right. For two or three hours a day, and it’s purgatory, and they just have to check the box. I think that you’ve gotta have dedicated staff if you’re really gonna empower people to get the job done, and get the job done correctly. My own personal opinion, it’s a separate staff. And look, to add to that, I know a lot of great salespeople who are awesome face-to-face, and they are absolutely terrible on the phone.
Jim Fitzpatrick: That’s a good point.
Bill Wittenmyer: And vice versa, I know a lot of really good salespeople that are awesome on the phone, and they are absolutely terrible face-to-face. It’s really difficult to find that person that’s a hybrid for both, so I think it’s better to probably put a dedicated team together, as opposed to a sales jail.
Jim Fitzpatrick: A sales jail, I love it. You heard it here, folks. What other trends do you see in retail, that dealers should be aware of in 2019 and beyond? We’re just coming off of a tough quarter. It looks like sales are still sluggish for new car dealers out there. Might have dipped again for March, and you’ve got some concern out there, right? You’ve got the whole tariff thing that’s kind of looming over the industry, and then just a lightening up of new car sales.
Bill Wittenmyer: Sure. Control what you can control. That’s number one. The big factors to control are gonna be inventory, and particularly pre-owned. If you’re successful in pre-owned and fixed ops, the rest of it’s gonna take care of itself. You certainly have to be striving, and/or above 100% absorption in the service department for your dealership. That’s gonna give you an insurance policy. Then you focus on your pre-owned inventory and turn, as well as what you’re selling there. That’s where you can control your gross margins, as opposed to on your new car inventory. Every vehicle you have on your pre-owned lot is, obviously, unique. That’s not widely held, so it’s not like we have to look through, there’s no used car factory I can go order his specific car from. I think those two areas are huge areas for dealers to concentrate on, and then, finally, I think we have to start looking at our new inventory and how do we manage that?
You went from, at one point, where you could actually make money on a floor plan if you did it right and you turned the vehicles quickly enough, and you had good process. Now it doesn’t matter. You’re paying for a floor plan, and it’s an expense. Those are areas that you really have to concentrate on. And understand that, again, let’s not wait till … I don’t want to call it the big one, but the big one happens, and all of a sudden we’re looking back and saying, “Geez, we should have done these things.” I think dealers are starting to trim down a little bit. They’re starting to make sure that employees are doing more than one job. They’ve gotta have two to be employed there, and they’re doing them well. So, all of those factors, right? We just have to keep tightening up.
Jim Fitzpatrick: Well, Mr. Bill Wittenmyer, thanks so much for joining us on CBT News. It’s always a pleasure and your insights are invaluable, so thanks so much for joining us.
Bill Wittenmyer: Thank you, Jim. Always great to be on. Appreciate everything you guys do over there at CBT.
Jim Fitzpatrick: Thank you.
This has been a JBF Business Media Production.