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Friday, July 01, 2005

Automakers, Collaboration & CRM

I have seen from close quarters how the forward supply chain operation of automobile makers work – myriad issues & complexities – region, language, culture, business procedures, financing , servicing options added to that complexity on acquisitions and mergers, regulatory requirements all make this one of the most complex process in the value chain. Tony Kontzer points out that lack of coordination between automakers and their dealers is an obstacle in the auto industry's efforts to make customer-relationship-management investments pay off. The challenges of getting manufacturers and dealers on the same page with CRM efforts are numerous. CRM tools that can effectively serve both the big-business demands of automakers and dealers' small-business setups look to be nonexistent. Getting dealers to standardize on tools used by the automakers to manage sales leads is difficult. And because dealership groups often sell multiple brands of cars, their mixed allegiances further frustrate the efforts.
Dealers have to do a better job of sharing data and extending their systems to dealers if they hope to develop more-cohesive CRM programs. But technical coordination is only the beginning. Rethinking the processes manufacturers and dealers rely on to collaborate also is key
. Caterpillar realized that the long-standing practice of filtering leads from manufacturing down to sales outlets was creating that black hole, so it's letting sales outlets dictate how many leads they need to meet predetermined business objectives. That way, they only receive leads they will act on, preventing them from being overwhelmed by large numbers of leads that are likely to stagnate. Suzuki Motor Corp. has chosen a different approach, creating a portal where dealers can pick up leads. Suzuki also has established what it calls a jump-ball strategy in which leads that aren't picked up by the targeted dealership within a certain amount of time are made available to competing dealerships on a first-come, first-served basis. Even more important is making sure the data in those leads is complete and that the CRM program nurtures that lead until it evolves into a sale.
Volvo had standardized on one software tool for all of its dealers to receive and manage leads, but it discovered that many dealers were going their own way, resulting in 38 different lead-management tools in use and undermining the parent company's standardization attempts. Now, Volvo has created a program for certifying dealer tools that will give it more control over how leads are managed at the dealer level, CRM manager Volvo seems to be addressing the crux of the problem - its not only technical standardization - it’s buy-in, by letting dealers to own the decision and implementation of the choice platform, Volvo is clearly showing the way to success.

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"All views expressed are my personal views are not related in any way to my employer"