Carfax needed a CRM solution that could help convert inactive dealers into loyal users of its vehicle report history service. Oncontact Software helped Carfax achieve its primary goal to strengthen its relationship with estranged customers. The $3 million in increased revenue was just an added bonus.
Carfax - The Customer
Carfax has revolutionized the used car industry with its Vehicle History Reports. The reports reveal background information and unearth "hidden problems" in a car's past that may affect its resale value and safety. Thanks to Carfax, used car buyers can regard their purchase as a solid investment rather than a crapshoot.
Our Challenge
Carfax's primary customer is the car dealership.
Carfax is a driven company with an ambitious business model. So when Carfax discovered that its low customer retention numbers were weighing on its growth potential, the company made customer loyalty a top priority. After all, acquiring a car dealership as a customer is no small task for Carfax and the process is extremely costly. Keeping a dealership a customer, of course, is a lot less costly but Carfax did not have a good system in place to ensure customer loyalty.
Determined to uncover the factors that were hampering customer retention, Carfax studied the history of its customers and found that a major indicator of customer longevity was usage. Those who subscribed to the service but did not use it at a certain level were the most likely to unsubscribe. A customer who regularly uses the service is worth approximately 550% more per year than a non-user because an active customers pay a fee each time it accesses a report, while the inactive customer only pays a monthly subscription fee
Carfax found that once a customer gained experience with the service, they used it more often and remained customers for longer. That's when Carfax decided to employ a solution that could revolutionize the company's customer service approach and, in turn, develop solid relationships with its dealer customers. Carfax's logic was that, by sustaining sound relationships and regular contact with dealers, it could greatly boost customer retention numbers. They were right.
How We Helped
Carfax uses Oncontact Software's customer relationship management (CRM) application to cultivate relationships with the car dealers who are its customers. Having one comprehensive system that allows all users to share customer contact and usage information, comments from interactions, customer demographics and marketing collateral helps Carfax communicate better internally, build strong bonds with dealers and provide top-notch customer service. The data Carfax captures in CRM really lets the company get to know the customer and thus be able to accurately gauge their wants and needs.
Carfax has customized Oncontact's CRM application to track basic demographics, state auto dealer association affiliations, franchises carried (i.e. Ford, Honda, Subaru), affiliations with large dealer groups (i.e. Carmax, AutoNation, Sonic), call history and number of vehicle history reports run in current, most recent and all previous months. This process helps Carfax identify at-risk customers and develop strategies to increase their usage of and satisfaction with their Carfax subscription. Oncontact's CRM application also creates a complete history of every account to track each customer interaction, purchase and support incident. Carfax's users report their findings directly in Oncontact's CRM system, which allows Carfax's marketing information group to immediately aggregate and analyze the data, then advise the customer service team how to act on it.
Oncontact's CRM application helps Carfax execute proactive customer service. Carfax has set up CRM to remind customer service reps to routinely call contract signers and users to outline new service elements that they might not know about, such as 24-hour phone-in service, reduced access fees for new customers and co-op advertising opportunities.
Carfax has also programmed Oncontact's CRM application to let customer service reps know when an at-risk customer runs a Carfax report revealing a problem with the vehicle the customer is considering, thereby rescuing that customer from buying a vehicle with hidden problems. This alert allows the rep to contact the dealer right away to reiterate the value of the service and the importance of using it on a regular basis. The dealer benefits because it is more likely to use the service in the future and thus "save" itself from investing in faulty vehicles. The call positions Carfax as a company that cares about its customers and is very much in touch with their business. This could explain why 21% of formerly at-risk customers today are satisfied Carfax subscribers.
The Payoff
After only a year of use, Carfax's customer retention was up 3.2 percent. Although 3.2 percent might not sound like much, to Carfax every six-tenths of a percent difference in customer retention adds up to approximately $1 million in annualized revenue. So 3.2 percent actually translated into a $2.5- to $3-million revenue increase for Carfax in one year. This figure doesn't even include the additional revenue the company sees from increased use of Carfax products.
Oncontact's CRM application has boosted productivity among Carfax's customer service reps. The same 10 reps now service 33 percent more customers than they could a year ago. By increasing the ground the customer service reps can cover, Oncontact's CRM system is helping Carfax convert more and more at-risk customers into happy users. As we mentioned earlier, 21% of formerly at-risk customers are now satisfied Carfax subscribers.
More Information
Oncontact Software Corporation develops, markets and supports a customer relationship management (CRM) application suite that automates the field sales, inside sales, marketing, customer service and call center functions for mid-market companies.
Oncontact's CRM application is a "one solution, one price" integrated application that enables sales, marketing and customer service professionals to take better care of their prospects and customers through seamless communication and rapid productivity. Oncontact's CRM application is based on network and Internet technologies and provides today’s companies with integrated, flexible and mobile software solutions to meet their advanced business goals. Oncontact's CRM application is a 32-bit, Microsoft BackOffice certified application and has been optimized to run natively on the Microsoft SQL Server and the Oracle, Sybase and Informix platforms.
Oncontact Software is a privately held company whose applications are marketed, installed and implemented throughout North America, Europe and the Asia/Pacific region.
Oncontact Software's products are available through its corporate headquarters in Wisconsin and an international alliance network of value-added resellers, system integrators and distributors.
Oncontact Software has 200 customers worldwide, including Johnson & Johnson, Sears, Blue Cross-Blue Shield, Summit Bank and Mercedes-Benz.
