1. Fleet-ing Thoughts: September 2006
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Fleet-ing Thoughts
Adventures in the World of Automotive Fleet & Vehicle Remarketing
Friday, September 15, 2006
Vol. 2 No. 30
E.N.G’s 3rd Annual Executive Summit “Next Generation
Automotive CRM”: Identifying, Attracting and
Retaining Customers through Search Strategies, Online
Marketing and Targeted Campaigns
Recently I was fortunate enough to attend the European Networking Group’s 3rd Annual Executive
Summit “Next Generation Automotive CRM,” August 15th & 16, at the Marriott Manhattan Beach,
Manhattan Beach, California. The program focused on Internet-related customer relationship
management in the automotive sector, with seminars that included expertise and “best practices” from
both the manufacturer, media/consulting and retail dealer perspective. Not long ago customer
relationship management itself was a new topic for automotive retailers, so to have a conference on
Internet-enabled CRM shows you how far dealers have come. Five years ago the manufacturers looked at
the Internet as strange new world, and dealers were outright hostile to those “twenty something” led
companies who were going to replace the franchise dealer. And for good reason – remember the lunacy
of “CarsDirect”, with a business model to buy vehicles from franchise dealers, replace the new car dealer
in the consumer service model and sell direct to the public and somehow make money, hence the name
“CarsDirect”…I couldn’t listen to it with a straight face back then even after it raised $195M on the
concept, one of the largest amounts raised for a the start-up company back in 1999 if I’m not mistaken.
That business model crashed and burned before the Penske folks quietly brought it back to reality as a
dealer lead generation tool.
This “Next Generation Automotive CRM” conference certainly updated me on the tremendous evolution
and advancement in using online and emerging media tools to refine and enhance customer relationship
management. In what seemed a very short time, we as an industry have gone from skepticism of the Web
to the “state of the art” in using online leverage to build relationships, solicit new business and cost
effectively manage growth and build brand identity.
An Interesting Keynote (from an Interesting Company) and then Vehicle
Manufacturers’ Developments
The jury is still out on Malcolm Bricklin’s latest venture, Visionary Vehicles, which plans to import a US
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2. Fleet-ing Thoughts: September 2006
version of the Chinese Chery cars. Bricklin was a founder of Subaru, and has since had a string of less
successful automotive ventures, including the ill-fated Yugo. But the keynote address by Paul Lambert,
President of the new company and a veteran marketing executive, was very interesting.
Most of the rest of the day focused on how automotive manufacturers are using new media as a method
to communicate to, and build, customer and prospect interest and loyalty, and the ability to measure the
results of their new media programs. Christine MacKenzie, Executive Director, Multi Brand Marketing &
Agency Relations, Daimler Chrysler, gave a presentation entitled “Emerging Media…The Leading Edge”
with examples of what Daimler Chrysler is doing in that regard (I like those bobble head Jeep
commercials she ran, that now seem to be everywhere on television). Patrick McFarland, Head of
Customer Knowledge Services from Ford Motor Company, had an informative presentation on “Customer
Lifetime Value – Predicting and Applications to Automotive Marketing”…this, although not mentioned
directly, has aggressively filtered down to the dealer level, with even the major dealer computer vendors
building in an easy way for service writers in the dealer service shop to calculate, with a keystroke, the
gross revenue each customer has generated for the dealership over a multi-year period. This last point I
picked up not from a presenter, but from some dealer people I had lunch with that afternoon; seems a
simple obvious thing to want to do, but it was impossible back when I was a dealer.
There was a presentation on maximizing the profitability of customer interaction – “A Strategic
Framework for Driving and Leveraging a Profitable and Effective Customer Experience” by Michael
Fitzpatrick, Chief Marketing Officer of Harte-Hanks. This was followed by the first panel discussion of the
day, moderated by my old friend Cliff Banks, Director, Editorial Development, Ward’s Dealer Business (a
dealer trade magazine I’ve been reading now for at least 16 or so years), entitled, “Moving Your Business
Online – is Search Engine Marketing the Answer to Declining Sales.” This presentation was the first to
directly apply the applications of search engines and new media to automotive retailers, and, as such
was of the most interest to me. The panel included representatives of some of the “best and the
brightest” marketing, communications and customer retention dealer group managers, with Richard
Fisler, Corporate Marketing Director for the C.A.R. (Conant Auto Retail) Group, Erin Touponse, Director
Development & Communications, Harte Auto Group, and Cassie Broemmer, Director of Customer
Retention and Marketing, Van Tuyl/Automotive Investment Group.
One of the things that is clear to me, at least, from listening to his panel, is the fact that the most
advanced and effective dealers using the Web are creating their own leads through things such as search
engine marketing, and the role of the “third party” customer lead generators (the Autobytels and the
like) is being greatly reduced, if not marginalized completely. The handwriting is certainly on the wall
when the general metrics are revealed, that, indeed, when closing ratios are considered, the least
expensive Web based leads for a dealer are those that are self-generated (through things such key word
purchases), the next least expensive are those generated from the various manufacturers (such as
through FordDirect), and, by far, the most expensive leads are those generated by the many “third
party” vendors – who in many cases generate their dealer leads through the same key word
purchase/search engine technologies that are available to dealers directly (that is, those that know how
to use them correctly), and their only addition is a cost mark-up.
That Afternoon, I Couldn’t Resist Listening to How Ferrari Targets their
Prospects…(my Road Rally invitations must have been lost in the mail)
The afternoon had a couple of break out sessions and I had a choice on which to attend. One choice was
listening to David Kain of Kain Automotive, who I heard gave an excellent presentation on utilizing search
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3. Fleet-ing Thoughts: September 2006
engine marketing (and I know this to be true, having heard David speak before at a JD Power Roundtable
as well as some other venues – David is one of the best known speakers on this topic). The second, and I
have to admit, the one I succumbed to my temptation to hear, was given by Paul Montopoli, Director
CRM & Marketing Planning from Ferrari North America. Just to hear how the Ferrari folks treat and
nurture past and potential owners was a trip…when you sell a few hundred cars a year at ultra high
prices, to people, who, I learned, more likely than not have a whole fleet of super luxury expensive
vehicles (and private jets and yachts as well) you have to be very generous for your “lifestyle” exclusive
cocktail events and “road rallies”…but unfortunately for guys like me they are also very selective…
The first day closed out with a presentation by Dan Keller, General Director, Marketing GM/CRM, General
Motors, on how he uses technology to coordinate and leverage all of the various company contact points
for a typical GM/GMAC customer – with a company as large as General Motors (all the vehicle brands,
GMAC, GMAC Mortgage, GMAC Insurance, OnStar, etc.), the coordination alone is an serious task.
Being a Former Car Dealer who Leveraged “Old World Off-Line” Customer
Leads, Ralph Paglia’s Case Study on Day II was Far and Away my Favorite Part
of the Whole Conference…
Day two started out with a presentation by
Aaron Smith, Interactive/CRM Marketing
Manager for Hummer, on “Empowering the
Customer” and matching dealer inventory
customer demands. Then my old friend Ralph
Paglia, CRM/eBusiness Director, Courtesy
Chevrolet shared with the group the strategy
and technique that produced his phenomenal
success at Courtesy Chevrolet in Phoenix, AZ,
and made Courtesy the leading Internet
retailer of new and certified used Chevrolet
vehicles in America, in a presentation entitled
“Integrating the Internet Department into our
Retail Strategy.”
Frankly, Ralph’s presentation, and the whole
CRM/eBusiness organization and their results to date are so impressive that I immediately looked to do a
podcast for the blog with Ralph, to give a more direct experience for those blog readers interested. Even
with something like 38 people in his department, organized into three fully staffed business development
centers, an eBusiness finance team, and four distinct Internet sales teams operating out of four separate
buildings, Ralph is still rapidly growing his Internet operation, through a state of the art interactive
marketing strategy (creative key word purchases, site creation etc.) strategically coordinated with
traditional off-line media marketing.
Of course, part of Ralph’s advantage is that he has always been in the forefront of automotive retail
Internet and interactive marketing, as a consultant or practitioner, since the science (or art depending
on how you look at it) began, now probably close to ten years now. And clearly, part of his success has to
be his unique insight and energy. But I have to tell you, seeing Ralph’s phenomenally successful results
on leveraging new technology (not to mention the fun he has with it on leading the pack in the online
dealership environment with a single point store), more than anything else out there, makes me wish I
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4. Fleet-ing Thoughts: September 2006
was back in the retail car dealership environment. Way back when, before there was an Internet, I had
some decent results in leveraging “old world” direct marketing (direct mail, telemarketing, etc.) - as the
Internet geometrically expands this reach, as no better an example than Ralph has proven, it makes me
wonder how I would fared in the online environment today as a car retailer. The Internet truly is a great
“equalizer” in a lot of ways for car dealers, and, I think, in many respects one is limited only by one’s
imagination, creativity and drive in leveraging its use for results, rather than in the old world limitation
parameters of physical location, number of franchises and locations, etc.
A Research Analyst, a Few More Manufacturers, and Close Out with a Car
Dealer
Later in the day, Ron Rogowski from Forrester Research, made a presentation entitled “Building Your
Automotive Brand Online” mostly aimed towards manufacturers, while Valerie Fuller from FordDirect
(the manufacturer/dealer cooperative site from Ford created to drive Internet traffic to Ford dealers)
addressed the group with “Supporting Dealer Operations Through Customer Intelligence.” Also, Mike
Musich from Toyota Motor Sales USA had a presentation on “Working Together for the Ultimate Customer
Experience – How Toyota and the Dealer Organization Can Drive Higher Customer Satisfaction Toward
Improved Customer/Owner Loyalty.
The last presentation of the day, however, was of greater interest to me than the manufacturer centered
presentations, as it was conducted by a car dealer principal addressing a issue that, although focused on
Internet-based sales, certainly addressed a problem that pre-dates the Internet inside car dealerships,
namely, how to recruit, train and retain good sales representatives. The case study presented by Mike
Johnson, the owner of Antelope Valley Ford/Shuttle Lincoln Mercury entitled, “Training Staff for
Professional Online Service” began with the fundamentals of how to hire and train “green peas” (car
lingo for people hired with no experience in car sales) – in this he had an advantage, as an ex-
schoolteacher he developed a training/tracking program from the start. He also outlined the “bad
habits” all dealers went through before terms like “CRM” were important, such as relying on “ups” (again
car lingo for someone who walks through the showroom door inquiring about a car), and promoting the
practice of doing everything possible (advertising & promotion, manipulating phone inquiries, etc.), to
drive the prospect physically into the facility before any serious interaction took place.
Johnson then outlined how Internet sales, and indeed, the development of CRM in general, required a
very different culture for success – one of his presentation bullet points, “determine when, not if a
separate sales staff for Internet customers is needed,” kind of says it all. In an era where the average
dealer spent $565 per retailed vehicle in advertising (NADA data for 2004), Mike Johnson’s emphasis on
hiring, training and accurately measuring the performance of sales personnel, particularly in the
emerging Interactive media area, not only makes sense, but probably will dictate which dealers survive
and prosper in the years to come.
Although this was the third in the series, I had never been to one of these manufacturer/dealer E.N.G.
Next Generation Automotive CRM conferences before, and was very impressed with the information
presented and the quality of the presenters and audience. At the end of the day (literally), I’m more
convinced than ever that the automotive retailer world is rapidly dividing up into those that “get it” and
those that don’t (or refuse to…sometimes clinging to old past practices as doggedly as the venture
capital folks a few years ago were blindly convinced that Internet-based “bubble era” companies were
going to replace the automotive retailer). It’s clear to me, at least, that with new technologies,
automotive retailing is evolving and changing more rapidly today in prospect lead generation and
customer relationship management than at any time in its 100+ year history – the message is “keep up
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5. Fleet-ing Thoughts: September 2006
with the latest developments, or lose the race to the competition…”
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About me
q John Possumato
q Philadelphia, PA, Chicago, Il, United States
q They say once motor oil’s in your blood and you’re exposed to the car business, you can never
go back to normalcy. I went to business school, law school, and did a stint as a trading VP at
Janney Montgomery Scott, the stock brokerage in Philadelphia. But once I got into the retail
end of the car business, I never really could get out. Ever since I managed to take a tiny
Chrysler-Plymouth store that never sold more than 160 cars a year and make it the third
largest fleet dealer in the U.S., I’ve been hooked. I sold the store and developed dealer-based,
small fleet sales pilot programs for Ford, GM, and Jaguar. I veered off the track only once and
did a telecom start-up during the tech bubble years ‘99/00, but soon found my way back to the
car business, creating Driveitaway, the first Web-based “upstream” remarketing product,
selling cars before they come off lease, saving process costs to reach a sale. I’m on the road a
lot, visiting fleet clients and vendors, attending at least 30 trade shows and vendor meetings a
year. I’ve seen good auto-related blogs out there, but none that focus on the areas of fleet or
remarketing, so I thought I’d take a shot. After all, I’m a car guy…
Last posts
q Vol. 2 No. 31 The Automotive Fleet entertaining....
q Vol. 2 No. 30 E.N.G’s 3rd Annual Executive Summit...
q Vol. 2 No. 29 2006 IARA Summer Roundtable:I’m a...
q Vol. 2 No. 28 2007 Ford Fleet Preview – Simply the...
q Vol. 2 No. 27 Independence Day CEO of Nissan Mot...
q Vol. 2 No. 26 2007 Chrysler Fleet Preview – At Le...
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6. Fleet-ing Thoughts: September 2006
q Vol. 2 No. 25 NVLA and NIADA: Doing the Vegas/Ft....
q Vol. 2 No. 24 iRem@rketing 2006 –Technology Chang...
q A Not-to-Be-Missed Podcast with John Manchin, Rema...
q Vol. 2 No. 23 iRem@rketing 2006: The Technology C...
Archives
q December 2005
q January 2006
q February 2006
q March 2006
q April 2006
q May 2006
q June 2006
q July 2006
q August 2006
q September 2006
q October 2006
Links
q Fast Lane
q Auto Blog
q Vehicle Info
q Car Point
q Auto Guy
q Just Auto
q Auto Prophet
q Carpundit
q emercedesbenz
q grants auto rants
q Truth About Cars
q Fast Company
q Future Cars
q Motoralley
q Fleet Central
q Automotive Digest
q AFLA
q IARA
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7. Fleet-ing Thoughts: September 2006
q NAFA
q NVLA
q dealer counsel
Podcasts
q John Possumato interviews John Manchin, Remarketing Manager, Subaru Auto Leasing, Ltd.,
June 19, 2006
q John Possumato interviews Theresa Ragozine, Worldwide Director, Travel and Fleet, Johnson
& Johnson, June 8, 2006
q John Possumato interviews Scott Mayo, Fleet Director for Wendy's, May 31, 2006
q John Possumato interviews Sherb Brown, vice president group publisher of Bobit Business
Media, April 19, 2006
q John Possumato interviews Rod Smith, president of Arelco, Inc. April 10, 2006
q John Possumato interviews Charlie Vogelheim, Master of Ceremonies CAR April 7, 2006
q John Possumato interviews Tom Kontos, Vice President, Adesa Analytical Services, March 29,
2006
Syndication
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