Customer Case Study

Carvana

The month before we launched Salesforce, we had about four million dollars in monthly revenue. Less than three years later, we have 80 million dollars in monthly revenue and Salesforce has really enabled that.

— Janette Blatz, Product Track Lead, Carvana

 
 
 

How Service Cloud Helped Carvana Move Into The Fast Lane

One of the most complicated things to buy is a good used car. The whole buying process broke down sometime in the last century, leaving the used car business like a stranded motorist in need of roadside assistance. Enter: Carvana, a trailblazing tech startup based in Phoenix, Arizona with a fun, online way to shop, finance, and trade-in cars on their website.

Carvana has focused relentlessly on using technology to bring back the joy of the car buying experience. The company’s website provides 360 degree views of the interior and exterior of each car so customers can inspect dozens of potential cars from the comfort of their living room. In their determination to create more fun for their customers, Carvana also created something entirely new: a giant car vending machine. The company came up with the idea early on and partnered with design firms in Germany and the United States to make it a reality.

In 2014, Carvana introduced the first one of these machines in Atlanta, Georgia to rave reviews. The structure provides a signature experience for customers who, after going through the purchase process online, show up and drop a one-pound golden coin into the vending machine that delivers the customer’s car. As you can imagine, tech-obsessed consumers have been beating a path across the information superhighway straight to Carvana’s incredible vending machines. The resulting fast growth has been amazing for the company but it hasn’t come without challenges.

“Carvana launched in 2013 and at that time we were very much a startup — we didn’t even have a CRM,” says Janette Blatz, Product Track Lead at Carvana. “So we just relied on our employees to text, email, and call each other. They all had to work really hard to create a good customer experience.”

That initial homegrown approach to customer relationship management had Carvana’s leadership team doing a U-turn shortly after the giant vending machine launched. Customers were given the choice of home delivery of their car or, if they lived in Atlanta, they could go to the vending machine to pick it up. Carvana’s new vending machine proved so popular that people would travel from neighboring states just to have the experience. The company implemented a new service called Fly and Drive where customers could fly into the airport and Carvana would pick them up and bring them to the vending machine so they could more easily experience the unusual apparatus firsthand.

“We had no CRM at the time so everything relied on our Phoenix and Atlanta offices texting, calling, and emailing each other — and it wasn’t too long after we launched the Fly and Drive program that we started running into problems,” said Blatz. “When we left a customer stranded at the airport we knew we needed a CRM solution — and Salesforce was the obvious choice. We had to have something that was easy to set up, easy to maintain, and could really scale with us.”

In addition to the challenges managing Carvana’s Fly and Drive program, the company was seeing too many customers abandon the online shopping process halfway through. Employees realized that customers need updates at each stage of the car buying experience in order to have peace of mind and ultimately complete the sale, especially when financing is part of the process. Without a CRM, Carvana couldn’t organize and track those kinds of communications — and there was no effective way to start building lasting relationships with the company’s customers.

Shifting Into A Higher Gear

"Not everyone is comfortable buying a vehicle 100 percent online,” said Teresa Aragon, Assistant Director of Customer Advocates at Carvana. To help create trust and affinity between the company and its customers, Carvana started using Salesforce. Service Cloud was deployed to log customer interactions, next steps, issues, and purchases. Messaging for SMS, Service Cloud's conversational messaging channel, was also rolled out to send SMS notifications with delivery details, confirmations, and any changes so customers are reassured throughout the process. And if those customers need to respond, they can do so with a text message that connects them to an agent for a real-time message conversation. With Salesforce, employees are now able to build the sort of rapport that was once found only with in-person communication.

“Salesforce has enabled us to incorporate the human element with our state-of-the-art technology, and it helps customers be more comfortable buying a car entirely online,” continued Aragon. “With Salesforce, we’ve been able to tailor each customer’s experience to make sure that when you visit our website you’ll get exactly what you need.”

Using Service Cloud, Carvana put sales and service onto a single platform — and began to glean better insights from all the data that was being  created with each interaction. During a three month test on a specific set of users, the sales team saw a 16 percent increase in sales using a combination of SMS, phone, and email communication as compared to just using a single channel. Looking at this kind of data, the team is now able to optimize sales in a way they couldn’t before. By streamlining the process, the company has trimmed the overall customer journey and increased service velocity by 7.4 percent during a 6-week test of a subset of users. And after just three months of using Messaging for SMS, Carvana improved lead conversion by up to 22.5 percent.

“The month before we launched Salesforce, we had about four million dollars in monthly revenue,” said Blatz. “Less than three years later, we have 80 million dollars in monthly revenue and Salesforce has really enabled that.”

Life In The Fast Lane

Carvana’s approach to selling used cars has really been embraced by a new generation of consumers. “When we launched, very few customers were interested in a mobile purchase flow where you’re buying a car entirely online from your phone,” said Blatz. “Now over half of our purchases come through our mobile ecommerce site, aided by things like Messaging for SMS. Salesforce has tons of different features that allow us to experiment and keep up with a changing industry.”

Even with the world’s number one service platform, selling cars entirely online still comes with a great deal of complexity. The product team spends a lot of time studying user behavior so they understand every area of the business. They continue to create a smooth customer experience by adding Salesforce products and building simple solutions inside of Salesforce that help various departments communicate seamlessly. Service Cloud has enabled Carvana to break down the silos that existed between sales and service — and turn customer service into a profit center rather than a cost center.

Looking Down The Road

As Carvana grows, the company is finding new use cases for Salesforce products. Greater sales volume means that scheduling car deliveries is becoming too complex for manual processes so Carvana is investigating the possibility of using Field Service Lightning to help calculate routes and build schedules for the employees. And with increasing traffic to the website, Service Cloud Chat for Web will help the company facilitate a real-time chat communication with customers across their website, deepen relationships, and ultimately capture more business.

“We live in a dynamic world and consumer expectations are constantly changing,” said Blatz. “In order to compete, we need to change just as quickly and adapt to new market conditions.”

Using Salesforce has helped Carvana blaze new trails through an old industry. In the process, they’ve created a loyal customer base and succeeded in setting a new standard for the whole car buying process. In the words of Teresa Aragon, “We’re venturing into something totally new and exciting which wouldn’t be possible without Salesforce.”

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